New Delhi: State-run Oil India Limited’s (OIL) journey towards net zero will see the youngest Maharatna PSU ramping up gas production aggressively, converting crude oil pipelines, wherever possible, to natural gas and capturing and monetising gas that is usually flared and wasted during crude oil production, said Chairman and Managing Director Ranjit Rath. Addressing the media on Thursday, Rath said, “. The government has plans to increase the share of natural gas from 6 percent to 15 percent. So, in the North-east, we would see more use of natural gas because the region has bountiful natural gas. And we are planning to expand our gas production aggressively.”
As part of a roadmap chalked to increase production, called Mission-4Plus, Oil India is planning to reach over 4 MMT crude oil production and 5 BCM of natural gas production by FY25. The company is expecting three gas fields being operated by private entities under the Production Enhancement Contract (PEC) to go live, enhanced gas production from Lakwagaon field and Sesabil area and is planning to explore the Baghjan fields extensively.
In order to transport natural gas produced in the Kumchai field in Arunachal Pradesh as well as gas that is flared in order to maintain or enhance crude oil production, Oil India is laying an 80-km-long pipeline at its own cost between the field and Duliajan. “Net zero is part of our operation. As part of our operation, a lot of natural gas is flared to enhance or maintain the production of crude oil. And sometimes gas is flared because there is no evacuation infrastructure. However, with an active approach, firstly, to reduce the flaring of natural gas which contributes to carbon emissions, we are laying an 80-km pipeline at our own investment from Arunachal Pradesh to Assam. That will enable us to bring gas that is produced in Kumchai field in Arunachal Pradesh to our field headquarter in Duliajan, from where gas will also go to the North-East Gas Grid and the National Gas Grid as well,” said the CMD. In order to reduce the emission of its operations, the company will also convert its diesel engines to gas.
“We also want have compress stations in stranded gas fields. So, the approach is we would compress the gas, put it in canisters and cater to the CNG and PNG needs of the geographical area,” said Rath.
Remarking on the potential for gas production from Oil India Limited’s Western Asset in Lakwagaon field, the CMD said that the company is looking at the conversion of one pipeline from crude oil to natural gas. “We are also looking at the conversion of some pipelines, where it is technically possible and statutory compliances allow it, that were used for carrying crude oil to natural gas. In Western asset of Oil India Ltd, we are looking at converting one pipeline. Since the Lakwagaon field has a lot of potential, we are enhancing development drilling. We would need some statutory clearances for the conversion of the pipeline. Once it is established, we would explore the possibility of replicating it,” said Rath.
Oil India is expecting several new oil and gas fields to go into production in Assam and Rajasthan soon and is targeting to produce 3.8 million metric tonnes (MMT) of crude oil in the current year, which will be 20 percent higher than the 3.18 MMT of oil produced in 2022-23,” said the CMD. He added that the company is using a variety of Enhanced Oil Recovery (EOR) techniques to increase production of crude oil from maturing fields. “As part of Enhanced Oil Recovery (EOR) practices, artificial pressure is created through injection of steam, low-salinity water or carbon to get the hydrocarbon moving. In fact, I must share with you that we are successful, and probably one of the first entities to be able to do so in the globe, in injecting steam for a continuous 21 days in our Rajasthan field. We are also doing hydro fracking to maintain and enhance oil production.” Rath said that 16 wells in Rajasthan would soon be put under a Cyclic Steam Stimulation Technology initiative.
Responding to a question on windfall tax on crude oil, he said, “Oil India is very keen to keep our efforts towards exploration and production on. Higher crude oil prices give us better revenue and so, it’s a welcome thing. The windfall tax is a well-structured mechanism in place which gets reviewed every fortnight. However, increase in crude oil prices enables the upstream players to invest in high-risk exploration projects.” Oil India plans to drill up to 60 new wells in FY23. In 2021-22, OIL had undertaken the drilling of 38 wells.
OIL is planning to invest around Rs 25,000 crore to achieve net-zero by 2040 and is also considering advancing the target by two years. The spending would cover a wide spectrum of areas such as green hydrogen, compressed biogas, solar energy, geothermal energy, zero-flaring initiatives, transitioning from diesel-fired engines to gas engines and 2G ethanol refinery. In the 2G ethanol segment, OIL is looking at spending Rs 8,000 cr, Rath said. In addition, the company has plans to set up 20 kilotonnes per annum (KTPA) of green hydrogen production with a total estimated investment of Rs 2,000 crore. The company has also received a mandate from the government to set up 25 CBG plants. And it is setting up a 640 MW solar power plant in Assam and a 150 MW solar plant in Himachal Pradesh.