Exploration & Production Business

ESSAR OIL AND GAS EXPLORATION AND PRODUCTION LIMITED

INDIA’S LARGEST
(EOGEPL)

UNCONVENTIONAL
E&P PLAYER

April, 2019
Ranchi
June, 2018
June 2018
www.essar.com
www.essar.com
Global Portfolio
Mehsana
Rajmahal Vietnam
 4 Oil Fields  100% interest in  50% interest in block 114
 Potentially significant CBM block
CBM and Shale play

Nigeria

 Essar 100%,

Sohagpur
 100% interest in Unconventional
CBM block
Mumbai Offshore Conventional
Production
 30% interest

Raniganj CBM Production

 100% interest
 Producing Asset
 Shale Gas Upside

Unconventional Gas In Place of 18.5 TCF & Conventional resource of ~700 mmboe
Equity investment of ~ US$ 1 Bn
Earth Mass Extinction Cycle

66??
Moving towards Sustainable Energy

Source: https://goo.gl/images/UC9KRN
Unconventional Gas Resources

Renewable Natural Gas ('RNG') is

an ultra-clean and ultra low-carbon
natural gas alternative.

Gas Hydrates
 India Energy Sector Overview
World (2017) India (2017) India (2040)
Fuel type
13,511 MMTOE 754 MMTOE 1921 MMTOE
34% 30% 23%
Oil
Coal 28% 56% 48%

Natural Gas 23% 6% 7%

Renewables and Hydroelectricity 10% 7% 19%

Nuclear Energy 4% 1% 3%

Source: BP Statistical Review of World Energy June 2016, BP Energy Outlook 2018 Government target for increasing
gas share to 15%

 India’s energy consumption expected to grow by ~4.2% p.a and gas consumption by ~5% till 2040 – to
account for 11% world’s energy consumption
 Target to increase share of gas to 15% by 2030 by creating a “Gas Based Economy” – challenging but
achievable

Increase in gas consumption can potentially further reduce the share of coal and oil in India’s energy mix …

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 India Moving towards Gas Based Economy
Why Natural Gas

o Environment Friendly
o Cheaper than liquids
o Enabler for commitments on COP21
o Policy initiatives

• India is targeting to increase share of gas from 6.2

% to 15% to transform to a ‘Gas Based Economy’

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Positive Triggers – Unconventional Gas Development
 Expected Gas market of 15.0 mmscmd to be
connected to the Urja-Ganga (JHBDPL) pipeline
grid
 City Gas Distribution (CGD) 9th Bid Round
completed in May, 2018 (Access to Gas in 86
geographical areas across 174 districts in 22
states (24% of National area and 29%
population).
 10th CGD Round also launched.
 Marketing and pricing freedom to CBM
contractors
 SIMEX – Simultaneous Unconventional
Exploration & Exploitation Policy (August 2018)
 GAIL National Natural Gas Pipeline Grid (Urja
Ganga) connection (upto Durgapur by Jul., 2019)
 CIL also to extract CBM from its Coal MLs.
 Policy Reforms to incentivize E&P

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Gasification - Benefits
Environmental Impact of Gasification
a. Use of natural gas is clean
b. Natural gas is 40% less polluting than coal and 25 % less polluting than Oil
c. Methane is 28 time more potent than C02- use of CBM is beneficial
d. COP21 environment commitments

Financial Impact of Gasification

India imports close to 5 million Barrels per day
 1$ increase in crude oil price impacts import bill by Rs. 13000 Crore annually
 8.5 mmscmd of Gas expected from 5/6 CBM development blocks
Cumulative – Saves $ 250 million annually on imports (1% reduction in Imports)
1% import reduction possible from CBM
There are potential of further upside in reduction of imports from Shale development

Social Impact
a. Rural gasification would lead to replacement of firewood
b. Reduction in ailments likes cataract, Respiratory Ailments
c. Rural Gasification would impact women
i. Reduce cooking time from 3 hrs to 90 mins
ii. Increased time would be invented in Family welfare/ secondary income
 Damodar Valley Basin – Prolific CBM and Shale Area
• The Damodar Valley Basin of Eastern India has been nationally and internationally accepted as one of
the most prolific Coal bearing master-basin
• EOGEPL discovered prices with GAIL will encourage and fast-track the activities in the region
• Six CBM blocks in development Raniganj East (Essar) and Raniganj South (GEECL) in Raniganj Coalfield
are actually in commercial production,
• ONGC gearing up for CBM fray (4 blocks)
• Coal India Ltd. also in the lookout
• Excellent demand and evacuation infrastructure to tap each molecule of gas.

Bokaro CBM
N-Karanpura CBM Jharia CBM
 6 CBM Blocks in Development
GEECL ONGC ESSAR
 48 TCF Shale Gas in-Place (Schlumberger) Raniganj CBM
 Pipeline and Infrastructure by Q2 2019

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Clean Development – Crucial for India
Every cubic meter of CBM will result in
 Rs. 8.00 subsidy saving to the Fertilizer sector
Coal based Industry cape - Durgapur
 Rs. 1.6 of Royalty to State Govt.
 Rs. 22 of FOREX saving (considering LNG landed and
transported price)
 30 Tons of equivalent CO2 emission (CG4 is ~25
times potent GHG than CO2)
 Direct Investment in excess of Rs, 10,000 Crs
 Indirect Investment of approx.. Rs. 18-20,000 Crs.
 In addition there will be direct socio-economic CBM - Usage
benefits to the local population
Benefits of CBM CBM 0.17

 Highly clean fuel

 Wide Sector usage
 Exhausts
 No H2S
 No SOX
 No NOX
 Less CO2
EOGEPL - Focus on Unconventional Hydrocarbons

Pioneers of CBM in India

First CBM wells drilled and tested in early 90’s
(Gujarat-Mehsana lignites)

Prolific Blocks/Assets
 One Production Asset (CBM Raniganj East)
 Upside in Shale Potential
 Three Exploratory acreages
 Total un-conventional gas resource of ~18.5 TCF
 Estimated recoverable resources of ~5 TCF

Strategic Location
 Proved coal basins
 Gas Evacuation Infrastructure in place
Internal Enablers ExternalEnablers
External Enablers
Expertise in CBM
CBM learning curve in place a. Highly remunerative
Gas Price (New Policy,
Development benefits 2017)
 2017 CBM early monetization policy b. Urja Ganga pipeline
 2018 SIMEX Policy c. Strong Gas demand
d. SIMEX Policy (July, 18)

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Raniganj East project – A Pioneer in CBM

 Located in and around Durgapur, WB.

 Project commissioned with 348 wells
and related facilities as on April 1, 2018
 Gas Compression facilities for 2.2
mmscmd & 3 mmscmd MCS in place
 300 KM of pipeline network
 Production of 1.0 mmscmd achieved
(First in any CBM Block in India)
 Long term GSPA with GAIL (India)

Main Compressor Facilities

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 Raniganj Asset – KPIs
 Incorporated good practices in well drilling like Pad Drilling, Optimized well
and fluid design etc.
 Drilling time optimization from 30 to 12.8 days.

 Optimized Well completion system and Well site facility development such
as
 Optimized Pump size & Completion string
 Skid based design for well site facility
 VFD controlled dewatering pumps
 Water tank facility for efficient water transportation as against
conventional water pits

 Developed in-house monitoring system like IPDMA for close monitoring of

wells and SCADA for online monitoring

 Optimally designed compression facilities having higher efficiency and less

methane emission

 Has achieved cost optimization from well drilling to facility development

 Robust surface facilities, concept to commissioning done in-house

Essar’s Resilience

Investments during Industry Downturn

2014-2017 (In last 03 Yrs. ~200 Million USD invested)

Key Milestones
 165 wells drilled
 193 wells hydro-fractured
 201 wells were put on production
 123 Kms pipeline laid and commissioned
 Low Pressure Compression capacity augmented from 0.9 to
2.1 MMscmd
 1.5 MMscmd booster compression at MCS commissioned in
2017, increased to 3.0 MMscmd
 Water treatment capacity augmentation from 700 cmd to
5100 cmd
Raniganj East - Well head to Market

Drilling Rig PC Pumps running at Well site Separators installed at Well site
For CBM

GAS

First Gas
Pipe line Construction
Matix plant Gas Gathering Station

WATER

Plantation at Well site RO Plant Produced Water

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Upside Potential
A. Shale Gas in Raniganj CBM Asset

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Shale Gas Upside - Raniganj CBM Block
 Simultaneous Exploration & Production Policy provides
exploitation for all hydrocarbons.

Thick Barren Measures in Gondwana CBM blocks

 Thick extensive shales in Raniganj (Barren Measures
 TOCs measured in the range of 5%.
 Potential Gas in Place of ~8 Tcf (Recoverable1.6 TCF @
20%) (ARI-Invenire, 2015)
 EOGEPL has already commissioned a reputed
international consultant firm for a through exploration
program design towards assessment of shale potentiality.
 Plans in place to drill 4-5 exploratory wells and expand to
20 pilot wells to understand actual potentiality
 Environment Clearance for above 20 wells is already in
place (14th Feb., 2019). Barren
measure Target
 EOGEPL envisages an initial cost of upto US$ 60 mm for
the initial 20 wells
 A full field development will involve a CAPEX expenditure
in excess of US$ 1 Bn.
Raniganj Coalfield section - schematic
 Synergy for shale E&P in Raniganj Coalfield
 3 CBM operators Essar, GEECL & ONGC
 Central Institute of Mining and Fuel Research
(CIMFR)
 Geological Survey of India (GSI)
 The DG, DGH has advised to constitute a Joint
Group amongst these operators as a platform of
exchange to expedite shale development (Synergy)
Summary of parameters Barren Measure Shales
(Dr. VA Mendhe*)
 High in TOC max-18% (+4% considered favorable)
 High in maturity
 Good gas storage capacity
 In pyrolysis S1>1(good amount of free gas)
 Most of the pores are meso pores
(good for gas storage)
Key Information
 In a meeting by the various CBM operators convened by DGH Essar, Essar based on extensive review of
database and studies so far suggested
a. Flagging of Raniganj Coalfield as the most prospective area for shale
b. A fast track establishing of potential can be achieved by synergy between the above operators.
 It is a welcome news that the DGH has endorsed both the above factors and has issued a letter for focusing
on Raniganj and coming together of all the companies/agencies as a synergic venture for shale.
CIL & CBM - Safe Mining & Lower Emissions
 Lower emissions and environmental USEPA
pollution from mining.
 Degasification would reduce the
mining risks and possible fire hazards in
these mines, as and when they are
mined.
 The mining activity would be cost
effective due to lesser CAPEX & OPEX
on ventilation and safety systems
 Access to additional resources in
regional catchment.
 Fast-track development possible with
partnership of CBM and Coal Mining
companies with mutual expertise.
 Benefits at Federal and State levels
from additional fiscal flows.
 Such projects will also be showcase to
the country’s hydrocarbon
securitization initiative
CBM Development in CIL leasehold
 It is a welcome move that the CIL is also
keen to start CBM development and has
rightly identified the Damodar Valley
Basin, particularly focused on Raniganj
Coalfield.
 This is pursuant to the CBM Exploitation
rights accorded by the GoI in its
November, 2015 Policy.
 In April, 2018 there was a cabinet
approval granting with amendment
giving CIL freedom for engaging CBM
developer is a welcome news.
 Coal India has initiated action for
exploitation of CBM from some of
mining leasehold areas of Eastern Essar is keen to engage with CIL in
Coalfield Limited.
 ECL area is Raniganj Coalfield is the
successful CBM development and
primary target (a total around 650 sq exploitation.
km is under ECL leasehold).
 For CBM development, initial exercise
has identified certain areas in the
southern part of the Raniganj Coalfield
with higher gassiness (Saha, CIL).
Essar Benefits
 Unique leadership position in
unconventional hydrocarbon space in India Factors
with a CBM learning curve in place.
 We would like to leverage this learning for CBM Learning Curve
efficient and effective development of
Experienced Manpower
future Unconventional pursuits and
partnering with other investors in the
Services / Contracts
region for fast track CBM development.
This is keeping in view our commitments Operation Hub Proximity
towards import dependency reduction goal set
by our Hon. Prime Minister. Regional/Local Influence

KPIs
 Pioneers in CBM E&P in India.
 Our First successful CBM wells way back 1992/93 in North Gujarat.
 Foot-print across all key CBM prospective basins.
 Presently, among the largest CBM acreage (2800 sq. km) & resource holders (>10 TCF)in the
country
 Successful CBM Anchor Asset at Raniganj East currently producing in excess of 1.0
mmscmd of gas.
Truly Sustainable Development – “Beyond Domain”
ESSAR OIL AND GAS EXPLORATION AND PRODUCTION LIMITED
(EOGEPL)

June,
June 20182018
Novenber,
www.essar.com 2018
www.essar.com
 Corporate Social Responsibility
CSR addresses the needs of the people and not the demands. However, CSR plays a vital role in keeping the action
area of Essar, operation-friendly and in mitigating issues by identifying and addressing such needs of the stakeholders
that are philanthropic in nature and are abiding the norms Schedule VII, Companies Act 2013.

The thematic areas of execution are –

CSR Support for Road Safety
Health FOUR road divider-barriers were handed over to
Livelihood Molandighi PS.
Education (The dividers not only carries the Company logo & name but
Women Empowerment also messages on road safety practices. These barriers will
Sports & Culture be placed at different accident prone points on Muchipara-
Infrastructure development Shibpur road.)

Mobile Medical Unit

52 OPD camps in February 2018 reaching out to 607
beneficiaries

Other Highlights
 Anganwari base awareness programme on
adolescent issues
 ANC (Ante Natal Care) and PNC (Post Natal Care)
follow up
 Support and Convergence With Localities and
Govt. Representatives
Beyond Domain – Areas for better future
Essar's efforts beyond project domain to make SUFALAM NEELSHIKHA
a difference Initiatives include:
 Reducing methane emissions
 Flagship Projects
 Deploying a system of rice intensification Beyond
in nearby communities to help
Business
(SUFALAM):
 Increase yield while reducing costs
 Significantly reduce use of fertilisers
and agrochemicals
KAMDHENU
 Reduce use of irrigation water
 Enteric Fermentation support
(KAMDHENU)
 Installing bio-gas plants (NEELSHIKHA)
 Spreading awareness on biomass burning
 Supporting local administration in
controlling forest fires
 Creating vermicompost using animal
waste
CH4 Emission Reduction – SUFALAM (SRI Rice Farming)

Benefits of Systematic Rice Intensification (SRI) over

Conventional Methods
 Reduction of
a. Use of fertilizers and agrochemicals
b. Irrigation water
c. Overall cost of cultivation
 Increase in CROP YIELD by 40-45%
 Reduction in Methane emission

Implementation of SRI in Raniganj Block

Coverage - 37 demo plots of ONE BIGHA each (Total 5 Hectares)
Training – 150 farmers trained

Statement
 EOGEPL has helped to methane emission

Collaboration with Indian Grameen Services

Prashant Mondal, Molandighi –

Practising SRI on 14 bigha land
CH4 Emission Reduction - KAMDHENU (Enteric Fermentation)

“Feed Management is a effective tool for

reducing Methane emission & Increasing the
Milk Yield

 National Dairy Development Board

(NDDB) launched a Mobile App on 7th
July, 2015 called “PASHU POSHAN”
 Aim was to boost farmer’s income by
(a) Raising Milk Yield and
(b) Cutting feed cost
 The App recommends balanced diet for
cows and buffaloes spanning 2.4 million
heads of Indian Cattle.
 This is aimed to increase milk output
and reduce methane emission.

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Project NEELSIKHA : Biogas Plant
- The Blue Flame Revolution
 Biogas plant of approx. 50 kg capacity has been installed.
 Feed of Biogas plant: Kitchen waste & night soil of the
Company’s guesthouse, produces an avg. of 7-8 m3 of
biogas/Day:
 Replicate with small biogas in villages- 2 m3 of biogas/ day
 Substantial Socio-economic benefits.
Potential in Block Area: 100 biogas can be setup
(study undertaken)

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Global Clean Energy Award 2018
'Truly Sustainable Project’
 In Nov., 2018, EOGEPL honoured with
"Global Clean Energy Award 2018" for
developing Raniganj Asset as a
showcase of 'Truly Sustainable Project'
at the Gasification India 2018
conference in New Delhi.

Accolades
 Direct Environment, Economical and
Social benefits.
 Essar is actively contributing to
Gasification drive by enhancing CBM
production now and planning to begin
Shale exploration as well
 Key Note address has been made by our
MD & CEO and
 Head- production & highlighted the CBM
activities and its development.
Other Plans - Bio CNG
Purified Biogas is called Bio CNG
 Bio CNG is renewable Natural Gas
 Bio CNG is exactly similar to Natural gas in
composition and properties
 It is a direct replacement of Natural Gas and for
applications of LPG

Source: Green Brick eco-Solutions

www.gbes.in 32
Essar Exploration and Production India Ltd.
Essar House
11, K.K. Marg
Mahalaxmi, Mumbai 400034
INDIA
www.essar.com

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