Lok Sabha Question No. 303 (STARRED), answered on 2015-12-21
Subject: Energy Outlook
Ministry: PETROLEUM AND NATURAL GAS
Asked by: GAJANAN CHANDRAKANT KIRTIKAR, ASHOK SHANKARRAO CHAVAN

## LOK SABHA

## STARRED QUESTION NO. 303 TO BE ANSWERED ON 21 ST  DECEMBER, 2015

## ENERGY OUTLOOK

## *303.  SHRI GAJANAN KIRTIKAR:

## SHRI ASHOK SHANKARRAO CHAVAN:

## isVªksfy;e vkSj izkÑfrd xSl ea=h

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a)  whether  the  World  Energy  Outlook  2015  brought  out  by  the  International Energy  Agency  has  reviewed  India's  energy  security  scenario  and  if  so,  the details of observations made in the report;
- (b) the present status of energy security in the county;
- (c) the per capita demand and imports of oil, gas, CNG, LNG and PNG at present and estimated by 2040, separately;
- (d)  whether the domestic oil/gas production being relatively expensive, increases the dependence on import and if so, the details thereof; and
- (e)    the  estimated  total  investment  required  for  stepping  up  of  exploration  and production along with the steps taken/being taken by the Government to provide universal access of reliable and affordable energy to the masses in the country?

## ANSWER

## isVªksfy;e vkSj izkÑfrd xSl ea=h ( Lora= izHkkj ) ¼Jh /keZsUnz iz/kku½

MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a) to (e):     A statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (e) of the Lok Sabha Starred Question No.303 asked by Shri Gajanan Kirtikar and Shri Ashok Shankarrao  Chavan  to  be  answered  on  21 st December,  2015  regarding 'Energy Outlook'.

- (a): International Energy Agency (IEA) has released India's energy outlook in the World Energy Outlook 2015. Some of the observations made therein are as follows:
- (i) For the entire period to 2040, India's economy will grow at a faster rate than any other country in the world, by an average of 6.5 % per year.
- (ii) India's  energy  demand  will  more  than  double  by  2040  as  economy  will grow  to  more  than  five  times  its  current  size.    A  6  mb/d  rise  in  oil  use  is  the largest  projected  for  any  country's  oil  demand  as  260  million  new  passenger vehicles will be  added,  LPG will  substitute  for firewood as a cooking fuel and industrial energy use will be buoyed by substantial growth in domestic manufacturing  encouraged by the  Make in India initiative.
- (iii) The demand for oil is projected to rise to 458 mtoe with a CAGR of 3.6% (2013 to 2040).
- (iv) Gas production will rise to 90 bcm in 2040, subject to  adjustment to the current  formula  that  determines  the  price  paid  to  domestic  producers.  The demand for natural gas is projected to rise to 149 mtoe with a CAGR of 4.6% (2013 to 2040).
- (v) India requires a cumulative $2.8 trillion in investment, an average of $110 billion  per  year,  to  meet  the  supply  projections,  75%  of  which  is  in  the  power sector,  and  an  additional  $0.8  trillion  to  improve  energy  efficiency.  Cumulative investment of $62 billion in upstream oil, $192 billion in refining, $127 billion in upstream gas and $11 billion in biofuels is projected till 2040.
- (b): The present status of energy security in the country is as follows:-
- (i) The refining capacity of the country is 215.1 MMTPA. During 2014-15, the total production of petroleum products in the country was 220.7 MMT against the consumption of 165.5 MMT, leading to surplus petroleum products of 55.2 MMT. During  the  said  period,  the  net  export  of  petroleum  products  was  35.1  billion USD.
- (ii) Indian oil  PSUs have  also acquired assets for oil and gas production in other countries such as Russia, Vietnam, Venezuela etc. Overseas production of OVL in 2014-15 was 8.9 MMTOE.
- (iii) To  boost  India's  energy  security  cover,  India  is  actively  pursuing  the Turkmenistan-Afghanistan-Pakistan-India  (TAPI)  gas  pipeline  which  will  bring gas  from  Turkmenistan  to  India.  Of  the  90  MMSCMD  of  gas  that  it  will  carry, India's  share  will  be  38  MMSCMD.    India  is  also  discussing  with  Russia  the possibility of a pipeline for natural gas.

(iv) In the interest of our energy security objectives, the Government, through Indian  Strategic  Petroleum  Reserves  Limited  (ISPRL),  is  setting  up  Strategic Crude Oil Reserves with storage capacity of  5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam (storage capacity: 1.33 MMT), Mangalore (storage  capacity:  1.5  MMT)  and  Padur  (storage  capacity:  2.5  MMT).  The existing  gross  tankage  of  crude  oil  and  sensitive  petroleum  products  in  the country is 15.4 MMT and 14.9 MMT respectively.

(c): The per capita demand and imports at present and estimated by 2040 are as follows:

|             | Present (2014-15)   | Present (2014-15)   | Estimate by 2042*   | Estimate by 2042*   |
|-------------|---------------------|---------------------|---------------------|---------------------|
|             | Per capita Demand   | Imports             | Per capita Demand   | Imports             |
| Oil         | 0.1 toe             | 189 MMT             | 0.3 toe             | 488 MMT             |
| Natural Gas | 39.4 SCM            | 66.2 bcm            | 102.2 SCM           | 74 bcm              |
| CNG         | 39.4 SCM            | 66.2 bcm            | 102.2 SCM           | 74 bcm              |
| LNG         | 39.4 SCM            | 66.2 bcm            | 102.2 SCM           | 74 bcm              |
| PNG         | 39.4 SCM            | 66.2 bcm            | 102.2 SCM           | 74 bcm              |

SCM - Standard Cubic Meter

*Source: IESS, NITI Aayog

(d): Cost of production of domestic crude oil is interplay of various factors and varies from field to field, area to area, etc. At present, the price of domestic crude oil is as per the prevailing international crude oil prices.

(e): As per 12 th Plan  estimates,  Rs. 283788.52 crore has been proposed for exploration and production by Oil PSUs.  In first 3 years, these companies have made  an  investment  of  Rs.  180574.24  crore.    In  the  corresponding  period, Private/JV companies have invested approximately Rs. 52470 crore on exploration and production activities.

For  providing  reliable  and  affordable  energy  to  the  consumers  in  the country, following steps are being taken:-

(i) In order to accelerate the pace of exploration and production of oil and gas in the country, the Government has taken various policy initiatives which are as under:

-  Government  has  approved  Marginal  Field  Policy  for  monetisation  of  69 discoveries.
-  Appraisal  of  about  1.5  million  sq.  km  un-appraised  area  of  the  Indian Sedimentary Basins.
-  Re-assessment of Hydrocarbon Resources.
-  Setting up of National Data Repository.
-  Policy for exploration and exploitation of Shale Gas/Shale Oil resources by NOCs under the Nomination Regime.
-  Policy  for  exploration  in  the  Mining  Lease  (ML)  areas  after  the  expiry  of exploration period.
-  Offering of exploration blocks through bidding round.
-  Policy on Non-exclusive Multi-client Speculative Survey for assessment of unexplored sedimentary basins.
-  Policy  frame  work  for  relaxations,  extensions  and  clarifications  at  the development  and  production  stage  under  the  PSC  regime  for  early monetization of hydrocarbon discoveries.
- (ii) A detailed feasibility report has been  prepared  for construction of additional 12.5 MMT of strategic crude oil storages in Phase-II at four locations viz. Chandikhol, Padur, Bikaner, and Rajkot.
- (iii) Petroleum Conservation Research Association (PCRA), under the Ministry of Petroleum & Natural Gas, promotes conservation of petroleum products in the major  sectors  of  economy  like  transport,  industry,  households  and  agriculture. This  includes  conservation  of  energy  sources,  development,  evaluation  and commercialization of efficient equipment and additives, popularizing production of bio-fuels, environment protection etc.
- (iv) The  Government,  though  Oil  Marketing  Companies  (OMCs),  has  also been  implementing  Ethanol  Blended  Petrol  (EBP)  Programme.   Under  this programme, OMCs sell ethanol blended petrol with percentage of ethanol upto 10%  as  per  BIS  specification.   On  10 th August,  2015,  the  Government  also issued  notification  to  allow  the  direct  sale  of  Bio-diesel  (B100)    by  private manufacturers to bulk consumers with objective of promoting bio-diesel blending in HSD.
- (v) Oil  PSUs  are  implementing  expansion  and  modernization  projects  to increase domestic refinery capacity.
- (vi) Public Sector Oil companies have also made significant efforts to diversify their  crude  oil  supply  sources.  India's  crude  oil  import  basket  is  continuously expanding over last few years, with increased imports from South American and African countries.

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