What new initiatives is ONGC currently involved in?

VASUDEVA: We have two or three different challenges. One is to maintain production from existing fields. Nearly 70% of our production is coming from existing fields that are between 35 to 50 years old. So the biggest challenge for ONGC is to sustain production from these, for which we have 21 exclusive schemes of improved oil recovery and enhanced oil recovery, costing nearly $10bn. These are going to add about 150m tons of oil and oil equivalent between 2001 and 2013. 62m tons of oil has already come from these and the balance of about 90m tons will come over the next 20 years. Besides this, we have nearly 160 marginal fields. These are marginal because either the size of the field is small or the prices that we were getting for oil and gas was so low that the economics of production are marginal. Of late, we have started getting the international price of oil. Even the gas price in India has been improved from $1.8 per MMBtu to $4.2 per MMBtu. So with this, these price increases, projects have become viable. We are now in the process of developing 34 such marginal fields in Western and Eastern offshore blocks costing nearly $5bn. They will start producing in late 2011 and they will peak in 2013 to 2014 and that will add about 110 million tons of oil and oil equivalent. So these two initiatives are aimed at increasing oil and gas reserves.

We also have a focus on deep waters in the East coast adjoining Reliance’s discovery, which is yielding about 45 million cubic meters of gas per day. We have a block there and we are in the process of appraising it. Hopefully by 2016 – 2017 we will be able to start production. So that is our focus area. Besides these conventional means, we are also present in the unconventionals. We are working on shale gas R&D in India. We have already drilled 4 wells and we are in the process of appraising this. This is more of an R&D venture than a commercial kind of a project. We are also present in CBM. Besides unconventional sources, we are also present in alternate sources of energy. We have a 50 MW wind farm already operating. Another wind farm of 102 MW is planned to be installed. We are also working on the acquisition of a company that is involved in thin solar film to propagate this technology in India for effective harnessing of solar energy.

What international E&P ventures are you involved in?

VASUDEVA: We have been present in the global arena for a long time. ONGC’s precursor, Hydrocarbon India Limited, was set up in 1965. But, we had only 1 property until 2001. The first property was in Vietnam. Between 2001 and 2011, we have added 32 more properties. Today we are present in 15 countries with 33 properties in total. Out of this, 9 are producing properties, 4 are under development, and the balance are in the exploratory stage. We are producing about 9.5m tons of oil and oil equivalent per year, which amounts to about 10.5% of ONGC’s production. Knowing the daunting gap between the demand and supply of India, we have set a target of producing 20m tons of oil and oil equivalent by 2020. Internally, we are actually trying to achieve this goal before 2020. Today we are present in almost all of the continents of the world with the exception of North America and Australia. We have had property on the Gold Coast of Australia in the past, but today we do not have anything there. We are interested in the whole world, whether it is the oil sands of Canada, or heavy oil of Venezuela, or shale gas wherever we can get it. Wherever there are these types of opportunities, we are ready to go.

How would you describe the oil and gas relationship between India and the GCC countries?

VASUDEVA: It is excellent. In fact Saudi Arabia is the largest supplier of crude oil to India, Iran comes next, and Qatar is supplying a lot of LNG to India. So our relations with the GCC and Iran and the support we get from the GCC with regard to the supply of oil and natural gas is very important. We are trying to expand our relationship even beyond that.

What are the best investment opportunities in India’s energy sector today?

VASUDEVA: All of them. In fact, today, India has 3.4m sq km of sedimentary basin area. One third of that is still not explored or very poorly explored, so that is the first opportunity. India is going to become a refining hub. We have over 193m tons of refining capacity, which is going to increase to 341m tons by 2016-2017. We are also doing a lot of work in petrochemicals both in the private sector and the public sector. As far as pipelines are concerned in mid-stream, thousands of kilometers of pipelines are being planned to be laid. So wherever companies think they have the ability to fit into any of these schemes, they are welcome. Every country in the world today is facing a big crew change. In that context, India is very important. India is a young nation, we have very good educational facilities, people are eloquent in English, and their technical upbringing is very good. So not only can our people work in India, but if they are properly trained they can go and work in any part of the world. In the Middle East today, there are many Indians working. We are ready to expand this by opening specialized training centers.