Context: Oil and Natural Gas Corporation (ONGC) has started crude oil production from its massive deep-sea project in the Krishna-Godavari (KG) basin, which was hit by multiple delays and deadline extensions over the past few years. It is located around 35 km from the coast of Andhra Pradesh.
- This project is expected to add 7 percent each to India’s current production of oil and natural gas.
- Large projects like KG-DWN-98/2 are critical to the country’s objective of reducing its reliance on oil and gas imports to meet its rapidly growing energy needs.
- India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85 percent of its requirement.
- The country is also a major importer of natural gas, as domestic gas output is able to meet around 50 per cent of the demand.
- The location of the oil well is 30 km in the Bay of Bengal off the coast of Kakinada.
Significance of oil production in Krishna-Godavari Basin
India is the third largest consumer and importer of crude oil in the world.
The oil production at KG basin will help in:
- Significant reduction of import bill
- Boosting India’s energy security
- Providing boost to India’s economy
As evident from the above graph, India’s domestic crude oil production has been on a decreasing trend since 2011-12. In this situation, the start of crude oil production from KG Basin will significantly enhance India’s domestic crude production.
About Krishna-Godavari Basin
- Krishna Godavari basin refers to extensive deltaic plain formed by two rivers Krishan & Godavari formed on the coast of Andhra Pradesh and the adjoining areas of Bay of Bengal.
- KG Basin is a proven petroliferous basin of continental margin located on the east coast of India.
- The onland area of KG Basin covers an area of 15,000 sq km and offshore part covers an area of 25,000 sq km up to 1000 m isobath.
- The basin contains about 5 km thick sediments with several cycles of deposition ranging from Late Carboniferous to Pliestocene.
- KG basin is also rich in Shale Gas.
Major sedimentary basins of India
- India has an estimated sedimentary area of 3.36 million sq km comprising 26 sedimentary basins. Of this 1.63 sq km is on land, shallow offshore upto 400m - isobath have an areal extent of 0.41 sq km and deep water beyond 400m isobath having sedimentary area of 1.32 sq km.
- Of the total sedimentary area, 49% of total area is located onland, 12% in shallow water and 39% in the deepwater area.
Basins are categorised as follows:
Category I : (Basins with reserves being produced and potential to be exploited at increased recovery)
| Basin Name | Area On-land | Area Shallow-water | Area Deep-water | Area Total |
| Krishna-Godawari | 31,456 | 25,649 | 1,72,895 | 2,30,000 |
| Mumbai Offshore | – | 1,18,389 | 93,611 | 2,12,000 |
| Assam Shelf | 56,000 | – | – | 56,000 |
| Rajasthan | 1,26,000 | – | – | 1,26,000 |
| Cauvery | 37,825 | 43,723 | 1,58,452 | 2,40,000 |
| Assam-Arakan Fold Belt | 80,825 | – | – | 80,825 |
| Cambay | 48,882 | 4,618 | – | 53,500 |
Category II : Basins with contingent resources to be developed and produced
| Basin Name | Area Onland | Area Shallowwater | Area Deepwater | Area Total |
| Saurashtra | 75,076 | 42,617 | 76,421 | 1,94,114 |
| Kutch | 30,754 | 20,500 | 7,300 | 58,554 |
| Vindhyan | 2,02,888 | – | – | 2,02,888 |
| Mahanadi | 15,500 | 14,211 | 69,789 | 99,500 |
| Andaman-Nicobar | – | 18,074 | 2,07,844 | 2,25,918 |
Category III : Basins with only prospective resources to be explored and discovered
| Basin Name | Area Onland | Area Shallowwater | Area Deepwater | Area Total |
| Kerala-Konkan | – | 90,380 | 4,89,620 | 5,80,000 |
| Bengal-Purnea | 42,414 | 33,465 | 46,035 | 1,21,914 |
| Ganga Punjab | 3,04,000 | – | – | 3,04,000 |
| Pranhita Godavari | 30,000 | – | – | 30,000 |
| Satpura-S.Rewa-Damodar | 57,180 | – | – | 57,180 |
| Himalyan Foreland | 30,110 | – | – | 30,110 |
| Chhattisgarh | 32,000 | – | – | 32,000 |
| Narmada | 95,215 | – | – | 95,215 |
| Spiti Zanskar | 32,000 | – | – | 32,000 |
| Deccan Syneclise | 2,37,500 | – | – | 2,37,500 |
| Cuddapah | 40,100 | – | – | 40,100 |
| Karewa | 6,671 | – | – | 6,671 |
| Bhima Kaladgi | 14,100 | – | – | 14,100 |
| Bastar | 5,360 | – | – | 5,360 |
Directorate General of Hydrocarbons (DGH)
- DGH is a regulatory body under the administrative control of Ministry of Petroleum and Natural Gas (MoPNG) established in 1993.
- The body was created by a notification of Ministry of Petroleum and Natural Gas.
- DGH has an Advisory Council appointed by the Government who are eminent persons in the field of hydrocarbon exploration and production.
Functions of Directorate General of Hydrocarbons (DGH)
- Provide technical advice to MoPNG on issues relevant to exploration and optimal exploration and exploitation of hydrocarbons
- A nodal agency for implementation of NELP and CBM policy on behalf of Ministry of Petroleum & Natural Gas
- To review the exploration programs of companies operating under Petroleum Exploration Licenses granted under the Oilfields (Regulation and Development) Act, 1948 and the Petroleum and Natural Gas Rules, 1959 with a view to advising Government on the adequacy of these programs.
- To evaluate the hydrocarbon reserves discovered and estimated by the operating companies
- To advise the Government on the offering of acreages for exploration to companies as well as matters relating to relinquishment of acreage by companies
- To review the development plans for commercial discoveries of hydrocarbon reserves proposed by the operating companies and advise Government on the adequacy of such plans and the exploitation rates proposed and matters relating thereto
- To review and audit concurrently the management of petroleum reservoirs by operating companies and to advise on any mid-course correction required to ensure sound reservoir management practices in line with the optimal exploitation of reserves and the conservation of petroleum resources
- To regulate the preservation, upkeep and storage of data and samples pertaining to petroleum exploration, drilling, production of reservoirs etc. and to cause the preparation of data packages for acreage on offer to companies
- All other matters incidental thereto and such other functions as may be assigned by Government from time to time
- Assist Government in Contract management functions
- Exploration & Development of unconventional hydrocarbon resources like Gas Hydrate, Shale Gas/Oil and Oil Shale
- Issue Essentiality Certificate for indigenous procurement of goods used in E&P sector to avail GST concession.
- The Government of India in the interest of meeting the objective of the country's energy security, decided in 2004 to construct Strategic Petroleum Reserves (SPRs) facilities as well as a Special purpose vehicle (SPV) to build and operate the strategic crude reserves.
- Indian Strategic Petroleum Reserve Limited (ISPRL) is a wholly owned subsidiary of Oil Industry Development Board (OIDB), which is a Body Corporate.
- Under Phase-I of SPR program, ISPRL completed the construction and filling of strategic crude oil in underground rock caverns with 5.33 MMT capacity at three locations namely Visakhapatnam (1.33 MMT) in Andhra Pradesh and Mangalore (1.5 MMT) & Padur (2.5 MMT) in Karnataka which can be used in emergencies particularly from serious disruptions in global crude oil supply chain.
- Abu Dhabi National oil Company (ADNOC), National Oil Company from UAE, joined the Phase-I of India's SPR programme.
- Further, the Union Cabinet also accorded approval for establishing additional 6.5 MMT of Strategic Petroleum Reserves at two locations Chandikhol (4 MMT) in Odisha and at Padur (2.5 MMT) in Karnataka along with two dedicated SPMs for Padur and Chandikhol with associated pipelines, under Public Private Partnership (PPP) model under Phase-II.