Atanu Chakraborty, Director General, Directorate General of Hydrocarbons, says a mix of policy change and entrepreneurship will take the country towards oil security. Excerpts from an interview:

The Prime Minister has set a target of reducing import dependence by 10 per cent by 2022. Is it possible?

We have numbers and it is possible. We expect the import reduction to happen more on the gas side, while oil will remain largely stable. We would be enhancing gas production considerably from the current level by 50-55 million standard cubic meters a day (mmscmd). That’s a substantial enhancement keeping in line with the overall shift towards a gas-based economy.

That’s how it is likely to pan out unless we have a very large discovery of crude oil, we would be maintaining or slightly enhancing the production.

There is a general perception that India’s upstream segment has not seen much growth. The industry says that it is not right to compare India’s basins with Gulf of Mexico. How do you perceive the scenario?

Gulf of Mexico is much more explored. The opening of the National Data Repository will correct the perception that India doesn’t have prospectivity. We are also doing the resource reassessment and preliminary report showsan increase of 40 per cent over the 28 billion tonne of reserves assessed in 1995.

Regarding discoveries, gushers come rarely for any country. What happens is that there is a larger discovery and then one gets new pool plays and areas where smaller or medium discoveries are built up. For example: Cairn India’s Barmer has about 38 discoveries and the major ones are about 10, and then the smaller ones add up to make a fairly large one.

Right now the segment has been dominated by PSUs. Do you think national oil companies have become sedate?

National oil companies today have almost 87 per cent of the total mining lease area, but they produce 70 per cent of the total hydrocarbon in the country. So naturally, on the face of it, private sector has performed slightly better. The Government has decided to open up the entire sub-surface through the Open Acreage Licensing Policy, the Discovered Small Field Round, and possibly also bringing in investment in certain areas from the private sector where fields are declining, but have potential. So, one would see competition and cooperation in the sector and that would be the direction to follow. Then we are also going for sharing of facilities. It has started with Discovered Small Fields and recently was also carried out for another project in the Krishna-Godavari Basin.

There was a perception that policy was not in sync with execution. Do you see a change when you go on road-shows?

Overall, India is now seen as a low-risk area with a stable government and policies. This is necessary for investments to come. For oil and gas, globally there has been some tethering out of demand that is driven by the glut scenario.

This is because of electric vehicles and some production efficiencies along with a lower demand from the West.

India is one country where demand is growing. So if you produce something you can sell without any problem. There is marketing and pricing freedom, so there is no regulatory risk and demand risk is virtually zero. Produce any hydrocarbon anywhere in the county and it will get sold.

The industry has seen a lot of consolidation happening. Globally, there are a few large players left. Do you see a different scenario in India?

There are specialists who look at acreages which are declining or which are small or marginal. There are those that handle a particular type of acreage that are difficult, and then there are big players with skills across the board.

For some reason, attention has always been on the majors. There are now middle-level players with considerable financial muscle, and who want to enhance their acreage. At asset level, some amount of M&A has happened

Through the Discovered Small Fields rounds we are trying to create entrepreneurs in the sector. Some can go on to become larger players so we have a pool of Indian entrepreneurs.

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