Oil India - Towards fulfilment of Hydrocarbon Vision 2025
By B B Sharma,Chairman & Managing Director,Oil India Limited

1999-2000 - another outstanding year characte- rised by all round growth and signifi- cant achievements. In this year, oil India Ltd. (OIL) recorded highest ever natural gas production of 1729 MMSCUM. The Company also recorded the natural gas sale of 1170 MMSCUM which was the highest since the inception of the Company.

During the year oil India's exploratory effort led to the discovery of crude oil in two new structures viz., North Tamulikhat and Balijan. Additionally, oil was also struck for the first time in Chabua and Kusijan structures.One offshore block in Cauvery basin has been awarded to oil India under NELP Round of bidding and the Production Sharing Contract has already been signed with the Government of India. The net profit after tax has gone upto Rs. 409.79 crores representing an increase of 40.53% over the previous year. The net worth of the Company has increased from Rs. 2,48,129 lakhs to Rs. 2,76,682 lakhs and the return on net worth increased from 11.75% to 14.81%.

The Crude oil production of 3.283 MMT during 1999-2000 was only marginally lower than the target which is partly attributable to the continuous blockade in production from its Khagarijan oilfield in Assam and partly to repetitive environmental problems and bad road conditions. The constraints arising out of land acquisition problem also affected production during 1999-2000.

For the year 1999-2000 oil India has been rated "EXCELLENT" by Government of India for its performance during the year. It is worth mentioning that the Company has been able to maintain the "EXCELLENT" rating consecutively for the third year in succession. The above achievements were possible with the combined efforts of every member of the OIL family.

As a part of the exploration and development activities, a number of activities are under way or planned based on the projection of 9th Plan which includes endeavours to expand OIL's exploration and production business.

In the Northeast, oil India has taken up exploratory drilling in the North Bank of river Brahmaputra in addition to the traditional base at South Bank. During the 9th Plan period, there are plans to take up exploration work in the logistically difficult areas like Brahmaputra river bed, belt of Schuppen in addition to continuing exploration in the plain areas of South Bank of river Brahmaputra including drilling for deeper prospects.

The company has planned to carry out basin modeling study of the entire PEL area of Rajasthan to assess its prospectivity. Additional exploratory efforts have also been planned in the region. Two blocks in the region were awarded through Exploration Binding Round and seismic survey work was carried out in both the blocks. The operator has planned to drill one well in one of the blocks during the current year. Oil India is also on the lookout for suitable technology to produce heavy oil techno-economically and in this regard a high level team from OIL and Ministry of Petroleum & Natural Gas visited venezuela to discuss various issues related in this regard.

An integrated study has been recently carried out to evolve further strategy in the Saurashtra PEL area. Based on this extensive study as well as the views of the consultants, it has been planned to carry out 3-D seismic data acquisition and sub-basalt imaging programme in SEP block during the current year which will enable the Company to take decision on further exploratory drilling operations in the area. In addition, production Sharing Contract has also been signed for an exploration block in the area recently with M/s. Reliance Industries Limited.
In the Ganga Valley PEL area, after initial phase of seismic survey drilling of the first exploratory well in Ganga Valley in Kashipur area was completed, though no discovery was made. Further seismic survey has been planned during the current year in the region to identify more prospects.

The Company has been awarded one block in the Cauvery offshore basin and the Production Sharing Contract was already signed. Actions are already on hand to start the exploratory work in the area once the formalities relating the PEL is completed. In addition, Oil India is also keen to participate in the second round of NELP blocks if the areas offered are found to be techno-commercially viable.

Oil India is fully committed to make all endeavours towards fulfilment of Hydrocarbon Vision 2025. With this vision in mind, the company is also working out the possibilities to participate in deep water exploration through joint venture. In this connection, the company has shown interest to join hands with ONGCL for exploration in some of their deep water blocks. Furthermore, as a premier national oil company in the upstream sector, Oil India Limited will have to play a significant role in acquiring considerable geoscientific information of the unexplored areas so that the company is in a position to help the country achieve 100% appraisal of Indian sedimentary basins by the year 2025.

In order to remain competitive, maintain growth and remain an economically viable world class entity, Oil India is in the process of preparation of strategic and corporate plans for the company.

The Company recognises the need for constant upgradation of technology and absorption of the state-of-the-art technology and hence, increased emphasis is being given on upgradation of technology and information in all facets of its operations to keep pace with the rest of the world. Oil India is now equipped with the latest generation of seismic data acquisition, processing and interpretation tools.

Additionally, it has been decided to carry out a few very important geo-scientific studies namely Basin Modeling Studies for entire Upper Assam basin falling within OIL's operational areas, multidisciplinary integrated studies for revitalisation of old oilfields and study for Evaluation of Thrust Belt Prospects in Upper Assam which are at advanced stage of commencement. With the assistance of Oil Industry Development Board (OIDB), the Company will carry out R&D work in Development of Advanced Geo-Chemical Techniques for petroleum exploration and exploitation of alternative energy sources. We hope these important studies will enable us to optimise production.

The Company is working on some diversification plans considering the possibility of both horizontal and vertical integration. Already Government of India in order to ensure long term stability of Numaligarh refinery, set up in this part of the country, have approved the request of the company of 10% equity participation amounting to Rs.91 crores in the grass root refinery. With this association, Oil India will set its foot in the downstream industry and this will offer completely new opportunity to the company for its growth which will also include transportation of various finished products. The feedstock will in any case be supplied through OIL's pipeline from the existing oilfields of OIL and ONGCL in the northeast. 

Additionally, M/s. Petronet India Ltd. has been requested to allow equity participation in their proposedMangalore-Hassan-Bangalore Product Pipeline project. The company is hopeful that some favourable response will be received soon. Apart from above, the company is scouting opportunities abroad for having participating interest in exploratory and Production activities and some proposals are under active consideration.

The price of crude oil has increased phenomenally in the international market and our country being a huge importer, would adversely be effected by this in the form of higher import bill and payment in precious foreign exchange. Hence, it has become extremely important to increase the indigenous production. We, at Oil India Limited, are fully seized of the situation and trying our best to do whatever is possible.

Moreover, productivity in every facet of national activity will have to be increased if we are to compete successfully in the changed global environment. This requires a change of mindset involving on the one hand imbibing sense of responsibility and discipline and, on the other, drastically eliminating delay in decision making and in implementation alike. THE KEY IS TO RECOGNISE THAT TIME IS MONEY.

In recognition and appreciation of the Government's initiative of restructuring and reforming hydrocarbon sector, the company has initiated all necessary steps to augment its growth opportunity and with this dynamism, the company is poised to face all the challenges of the future more particularly after complete dismantling of administered price regime.

With the planned expansion in activities and constant thrust towards improving performance with cost efficiency, Oil India is looking forward to another year of fruitful operations combined with an overall improvement in efficiency in the future years to come.