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India’s upstream oil and gas regulator Directorate General of Hydrocarbon (DGH) has invited comments from stakeholders on the feasibility of working out a new policy to promote and incentivize Enhanced Oil Recovery (EOR) schemes. The aim is to ramp up output and cut down the country’s energy import dependence by 10 per cent by 2022.
“DGH is in the process of examining the issue of Promoting and Incentivizing EOR in the Indian E&P sector for feasibility of developing a policy. The areas in focus include prevailing global best practices for implementing and incentivizing EOR technique, extent and scope of fiscal incentives to promote EOR and parameters to promote EOR application in mature and brown field,” the DGH said in a notice on its website.
Stakeholders have been asked to submit comments by 25 April. Enhanced oil recovery (EOR), is a special technique used by upstream oil and gas companies to increase the amount of crude oil that can be extracted from a field over and above what is recovered through basic water flooding method.
Application of EOR methods result in an additional 10-20 percent of oil extraction over and above what is extracted through water flooding. Basic EOR involves adding polymers to the injected water to increase its viscosity -- enabling it to move into seams of the reservoir which could not be contacted by plain water -- leading to enhanced recovery of oil. Also, small amounts of detergent-like surfactants are also mixed with polymer and water which help in scrubbing out more oil from the reservoir.
State owned oil and gas behemoth Oil and Natural Gas Corporation (ONGC) and Cairn India currently deploy EOR techniques in mature fields. State owned Oil India Limited had also recently signed a Memorandum of Understanding with the University of Houston to collaborate in the fields of improved oil recovery and enhanced oil recovery for production enhancement from matured fields.
Cairn India Acting CEO Sudhir Mathur had, in a recent interview to ETEnergyWorld, hailed the government’s proposal to incentivize EOR and Performance Enhancement Contracts (PECs). “All of these policies reflect a deep understanding of the industry -- that technology costs money and there is a need to incentivize tertiary recovery projects. If there is oil in the ground then there is no need to put exploration money at risk and if there is capital available then why not take it to the last mile? It is the government’s way of saying we are keeping pace with technology advancements and willing to look at existing contracts, which is the right thing," Mathur said.
He had called the proposal progressive and transformational. "Oil and gas contracts are written for 20-30 years and technology changes are very difficult to embed in policies and contracts. I think it is one of the most progressive and transformational things the government can do -- embedding technology changes into an existing contract to bring about efficiency across the sector."
The oil ministry has implemented a slew of initiatives focused towards increasing domestic production including bidding of discovered small fields, revamped bidding mechanism called open acreage policy, new Hydrocarbon Exploration and Licensing Policy, marketing freedom for sale of coal bed methane and extension of production sharing contracts governing ten blocks.
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