INFRASTRUCTURE ENGINEERING AND MANAGEMENT,

SCHOOL OF TECHNOLOGY,
PANDIT DEENDAYAL PETROLEUM UNIVERSITY

Health Care, Oil and Gas Sector

P R E PA RE D BY, Submitted To,
DH RUV IL (15MCL006) Dr. Debasis Sarkar
G ORSAWAL A
RUS H I M O DI (15MCL009)

JI S H N U G O E L (15RCE006)
Introduction
The oil and gas industry ranks amongst Indias six core industries.
In 199798, the New Exploration Licensing Policy (NELP) was envisaged to fill the ever-increasing gap between
Indias gas demand and supply.
A recent report points out that the Indian oil and gas industry is anticipated to be worth US$ 139.8 billion by 2015.
Indias economic growth is closely related to energy demand; therefore the need for oil and gas is projected to
grow more.
The Government of India has adopted several policies to fulfil the increasing demand.
The government has allowed 100 per cent foreign direct investment (FDI) in many segments of the sector,
including natural gas, petroleum products, and refineries, among others.
Today, it attracts both domestic and foreign investment.
 Share of each fuel in total energy production and consumption

Source: Twelfth Five Year Plan, Volume-II

 Trends in supply of primary commercial energy

Source: Twelfth Five Year Plan, Volume-II

 Household Access

Source: Twelfth Five Year Plan, Volume-II

The oil and gas industry is usually divided into three major sectors:
Upstream
Midstream
Downstream
Upstream
The upstream sector includes the searching for potential underground or underwater crude oil and natural gas
fields, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the
crude oil and/or raw natural gas to the surface.
Exploring Oil:
The only sure way of finding hydrocarbons is to drill through
maybe thousands of metres of rock and see whether oil or gas can
be detected.
Almost without exception, hydrocarbons are found in
sedimentary basins.
These are huge areas throughout the world, which can either be
on land, or below the sea.
Today, the most important techniques that are used to locate oil
and gas fields are called geophysical surveys such as seismic
surveys.
Upstream (contd.)
Drilling:
Drilling wells is the only sure way to find oil and gas, determine the
size of a field, assess whether it can be produced profitably, and finally,
produce the oil or gas.
On-shore drilling:
Drillers have to prevent high pressure water, oil and gas
unexpectedly moving violently up the hole to the surface, causing
what is called a blow-out.
Upstream (contd.)

Offshore drilling:

When drilling at sea, equipment similar to that shown and described above is mounted on a floating vessel,

together with accommodation for the geoscientists, engineers, and crew.

In shallow water, jack-up rigs are used.

In deeper water, semi-submersible rigs are used.

In very deep water, typically greater than 1500 m, drilling ships are used.

At the bottom of such wells, perforations or meshes are constructed using special tools, which allow the oil

and gas out of the rocks and up the well bore to the surface, where they may be produced and transported to

the refinery or gas plant for processing.

Exploration and Production Life Cycle
Midstream

The midstream sector involves the transportation (by

pipeline, rail, barge, oil tanker or truck), storage, and
wholesale marketing of crude or refined petroleum
products.
Pipelines and other transport systems can be used to move
crude oil from production sites to refineries and deliver
the various refined products to downstream distributors.
Natural gas pipeline networks aggregate gas from natural
gas purification plants and deliver it to downstream
customers, such as local utilities.
Downstream
The downstream sector commonly refers to
the refining of petroleum crude oil and the
processing and purifying of raw natural gas,
as well as the marketing and distribution of
products derived from crude oil and natural
gas.
The downstream sector touches consumers
through products such as gasoline or petrol,
kerosene, jet fuel, diesel oil, heating oil,
fuel oils, lubricants, waxes, asphalt, natural
gas, and liquefied petroleum gas (LPG) as
well as hundreds of petrochemicals.
Fractional Distillation of Petroleum
Statistics
India was the fourth largest consumer of crude oil and petroleum products in the world in 2013, after the United
States, China and Japan.
Oil imports constitute over 80% of Indias total domestic oil consumption as of May, 2014.
Oil and gas contribute 39.2% to primary energy consumption.
During 2013-14, natural gas constituted about 7.8% of the energy mix.
India had 47 Trillion cubic feet of proven natural gas reserves at the beginning of 2014.
Investments worth USD 70 Billion are expected across the oil and gas value chain during 201217.
At the end of 2013, India had 215.066 MMTPA of refining capacity, making it the second largest refiner in Asia
after China. Private joint venture companies own about 41% of total capacity.
India increasingly relies on imported LNG; the country was the fourth-largest LNG importer in 2013 and
accounted for 5.5% of global imports.
Indias crude oil pipeline network spans just under 9,460 miles and has a total capacity of 129.4 MMTPA.
Growth Drivers
India held nearly 800 MMT of proven oil reserves at the beginning of 2014, mostly in the western part of the
country.
About 44% of reserves are onshore resources, while 56% are offshore. The countrys natural gas pipeline
network amounted to over 15,340 km in 2013 and a proposed expansion of 30,000 km is envisaged by 2018-19.
The government has decided to set up strategic storage of 5.03 MMT of crude oil at 3 locations Visakhapatnam,
Mangalore and Padur.
The government unveiled plans to add another 91 Million barrels to its crude oil capacity to protect India from
supply disruptions by 2017.
India projects an increase of the countrys refining capacity to 307.366 MMTPA by 2017 based on its current Five
Year Plan (2012-17) to meet rising domestic demands and export markets.
The government is in the process of determining the structure of petroleum contracts between the government and
companies. The current system includes a production-sharing mechanism, allowing producers to recover
exploration costs during production before sharing profits with the government.
In recent years, major discoveries in the Barmer basin in Rajasthan and the offshore Krishna-Godavari basin by
smaller companies such as the Gujarat State Petroleum Corporation and Andhra Pradesh Gas Infrastructure
Corporation hold some potential to diversify the countrys production.
Government Initiatives
India and Norway have discussed bilateral relationship between the two countries in the field of oil and natural gas
and decided to extend cooperation in hydrocarbon exploration.
To strengthen the country`s energy security, oil diplomacy initiatives have been intensified through meaningful
engagements with hydrocarbon rich countries.

PAHAL - Direct Benefit Transfer for LPG consumer (DBTL) scheme launched in 54 districts on November 11,
2014 and expanded to rest of the country on January 1, 2015 will cover 15.3 crore active LPG consumers of the
country.
24 x 7 LPG service via web launched to provide LPG consumers an integrated solution to carry out all services at
one place, through MyLPG.in, from the comfort of their home.

Special dispensation for North East Region: For incentivising exploration and production in North East Region,
40 per cent subsidy on gas price has been extended to private companies operating in the region, along with
ONGC and OIL.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Mr. Narendra Modi, has
approved a mechanism for procurement of Ethanol by Public Sector Oil Marketing Companies (OMCs) to carry
out the Ethanol Blended Petrol (EBP) Program.
Auto Fuel Policy
The Government of India constituted a Committee of Experts under the chairmanship of Dr. R. A. Mashelkar,
DG, CSIR to recommend an Auto Fuel Policy for the country.
The Committee recommended the following road map for upgradation of fuel quality in the country:
BS-III standard auto fuels for 13 identified cities and BS-II standard auto fuels for rest of the country w.e.f.
01-04-2005.
BS-IV auto fuels (MS/HSD) in NCR and 13 identified cities and BS-III auto fuels in the rest of the country
w.e.f. 01-04-2010.
MoP&NG has decided to go beyond Auto Fuel Policy recommendations and to expand BS-IV auto fuels to 50
more cities by March 2015 with preference to most polluted cities, state capitals and cities with million plus
population subject to logistic constraints.
NELP (New Exploration and Licensing Policy)
New Exploration Licensing Policy (NELP) was conceptualised by the Government of India, during 1997-98 to
provide an equal platform to both Public and Private sector companies in exploration and production of
hydrocarbons with Directorate General of Hydrocarbons (DGH) as a nodal agency for its implementation.
It was introduced to boost the production of oil and natural gas and providing level playing field for both public
and private players.
Licenses for exploration are being awarded only through a competitive bidding system and National Oil
Companies (NOCs) are required to compete on an equal footing with Indian and foreign companies to secure
Petroleum Exploration Licences (PELs).
Nine rounds of bids have so far been concluded under NELP, in which production sharing contracts for 254
exploration blocks have been signed.
NELP (contd.)
Need for NELP:
With the introduction of the New Exploration Licensing Policy (NELP), the introduction of much-needed capital
and state-of-the-art technology to explore the sector could be made possible.
With the policies and regulations being some of the most transparent in the world, the NELP has revived a healthy
spirit of competition between National Oil Companies and private and multinational companies.
Salient Features:
100% FDI is allowed under NELP.
Blocks to be awarded through open international competitive bidding.
Freedom to the contractors for marketing of crude oil and gas in the domestic market.
Royalty at the rate of 12.5% for the onshore areas and 10% for offshore areas.
Companies to be exempted from payments of import duty on goods imported for petroleum operations.
No signature, discovery or production bonuses.
Contracts to be governed in accordance with applicable Indian Laws.
OALP (Open Acreage Licensing Policy)
The NELP series of auctions of oil and gas blocks would be replaced by the Open Acreage Licensing Policy
(OALP), under which upstream oil companies would be permitted to put in bids for securing oil and gas blocks
throughout the year, instead of waiting for the government to identify and put resources on the auction block.
The contours of the new policy regime would essentially have three elements; open acreage, uniform licensing
enabling companies to explore and produce all forms of hydro-carbons from a single block, and revenue-sharing
to replace the current production sharing regime.
Under OALP, prospective upstream oil companies would be provided all data related to oil and gas blocks prior to
putting in bids, which could be anytime throughout the year.
But with differences, legal challenges and companies claiming lower recoverable resources after recovering costs
of exploration and production, the last auction round would be held under revenue-sharing agreement, and the
successful bidder would be selected on the basis of commitment to revenue sharing and an amount of gas and oil
the bidder would offer from the very first day of production.
Coal Bed Methane Policy
Government has been awarding CBM Blocks in a transparent manner through a process of International
Competitive bidding similar to NELP Blocks.
Under this policy, Government has awarded 30 CBM Blocks.
Salient Features:
No signature bonus.
Royalty at the rate of 10% on the value of CBM in accordance with Oilfields (Regulation and Development) Act,
1948.
Freedom to market gas in domestic market at market determined prices.
No customs duty on imports required for CBM operations.
Arbitration provisions governed by Arbitration and Conciliation Act, 1996.
Corporate income tax payable as per the Income Tax Act, 1961.
One time lump sum Commercial Bonus of US $ zero point three (0.3) million by foreign companies or equivalent
amount in Indian Rupees by Indian companies, after declaration of commerciality of CBM.
FDI Policy
FDI upto 100% is permitted under automatic route in exploration activities of oil and natural gas fields,
infrastructure related to the marketing of petroleum products and natural gas, marketing of natural gas and
petroleum products, petroleum product pipelines, natural gas/pipelines, LNG re-gasification, market study and
formulation and petroleum refining in the private sector.
FDI in the above activity is subject to the existing policy and regulatory framework in the oil marketing sector and
the policy of the government on private participation in exploration of oil and the discovered fields of national oil
companies.
FDI upto 49% is permitted under automatic route in petroleum refining by Public Sector Undertakings (PSUs),
without any disinvestment or dilution of domestic equity in the existing PSUs.
Financial Support

KEY PROVISIONS OF THE 2O14-2O15 UNION BUDGET:

Cut in excise duty of branded petrol from INR 7.50 per litre to INR 2.35 per litre.
An additional 15,000 km of gas pipeline will be developed using appropriate PPP models.
Reduction in fuel subsidies through appropriate measures.

FISCAL INCENTIVES:
All exploration and drilling costs are 100% tax-deductible. Such costs are aggregated until the year of
commencement of commercial production.
A special deduction is available for provisions made for site restoration expenses if the amount is deposited in a
designated bank account. The deduction is the lower of the following amounts: the amount deposited in a separate
bank account or site restoration account, or 20% of the profits of the business in the relevant financial year.
Financial Support (contd.)

EXPORT INCENTIVES:
Under the Exports Promotion Capital Goods Scheme, the import of capital goods at a zero basic custom duty is
allowed for export purposes.
Capital goods for the pre/post production stage are also permitted. The exports are to be effected equivalent to six
times the duty saved on capital goods. Exports are to be completed in 6 years.

FOCUS MARKET SCHEME:

The basic objective is to offset high freight cost and other externalities to select international markets.
A benefit of 3% transferable duty-free credit entitlement for specified countries has been envisaged; special focus
markets get 4% benefits.

AREA-BASED INCENTIVES:
Incentives for units in Special Economic Zones (SEZs) and National Investment and Manufacturing Zones
(NIMZs) are specified in respective acts.
Plans have been made for the setting up of projects in special areas such as the North-east, Jammu & Kashmir,
Himachal Pradesh and Uttarakhand.
Investment Opportunities

SHALE:
India has technically recoverable shale gas resources of nearly 96 Trillion cubic feet.

UNDERGROUND COAL GASIFICATION:

Coal gasification has been identified as one of the end uses under the governments captive mining policy.

OPPORTUNITIES FOR E&P SERVICES AND EQUIPMENT COMPANIES:

48% of the countrys sedimentary area is yet to be explored.
The city gas and distribution sector offers opportunities for both incumbents and new companies.
The Petroleum and Natural Gas Regulatory Board allows the following incentives to authorized entities:
The infrastructure exclusivity is available to the authorized entity for a period of 25 years.
Exclusivity for the activity of marketing of natural gas is allowed to the authorized entity for a period of 5
years. For incumbents, the marketing exclusivity extends to a period of 3 years.

OPPORTUNITIES FOR PIPELINE TRANSPORTATIONS:

Compared to advanced economies like the US, where more than 60% of petroleum product movement happens by
pipeline, in India, currently, only 35% of product movement happens over pipelines.
Investment Opportunities (contd.)
THE REFINING SECTOR:
India is already a refining hub with 22 refineries and expansions planned for tapping foreign investment in export-
oriented infrastructure, including product pipelines and export terminals.

OPPORTUNITIES FOR FOREIGN INVESTMENTS AND TECHNOLOGY

PARTNERSHIPS IN THE UPSTREAM SECTOR:
Securing supplies is expected to remain on top of Indias energy agenda for the foreseeable future.
While exploration activity has taken place on land and in shallow basins across the country, it is believed by many
that deep water and ultra-deep water oil and gas resources hold the key to substantially increasing domestic
production.
This creates a plethora of opportunities for strategic investors having relevant technical expertise and financial
muscle.
THE PRESENTATION SEQUENCE
Introduction
Current Scenario
Current Practices
Basic health care & primary education
Mid-day meal scheme
Conclusion
Future Scope
Promotion of healthcare for next 5 to 10 years 30
Introduction
Definition: Health should be viewed as not merely the absence of disease but as a state of
complete physical, mental and social well-being
Approximately 1.72 million children die each year before turning one.*
More than 2 million children die every year from preventable infections.*
Reduced funding for immunization leaves only 43.5% of the YOUNG people fully
immunized.*
Infrastructure like hospitals, roads, water and sanitation are completely lacking in rural
areas.*
Over 50% of the population (638 million) defecate in the open.*

* https://en.wikipedia.org/wiki/Health_in_India 31
THE PRESENTATION SEQUENCE
Introduction
Current Scenario
Current Practices
Basic health care & primary education
Mid-day meal scheme
Conclusion
Future Scope
Promotion of healthcare for next 5 to 10 years 32
Current Scenario
300 Comparative Chart
250
200
150
100
50
0
Proportion of
Infant Mortality Maternal mortality Institutional
Fully Immunized
rate ratio deliveries (%)
Children (%)
2006 57 254 54 59
Recent 44 212 72 73
Ideal 25 100 100 100

33
 Current Scenario
The number of doctors per lakh of
population: Required VS Available
45 whereas, the desirable number is 85 300 255
250
Nurse availability per lakh 200
75 whereas the desirable number is 255. 150 85 75
100 45
50
0
Doctor Nurse
s s
Available 45 75
Required 85 255

34
THE PRESENTATION SEQUENCE
Introduction
Current Scenario
Current Practices
Basic health care & primary education
Mid-day meal scheme
Conclusion
Future Scope
Promotion of healthcare for next 5 to 10 years 35
 Current Practice (Basic health-care & primary education)
Environment, Forestry and Wildlife
To reduce under-nutrition among children aged 03 years to half of the NFHS-3 levels by
the end of Twelfth Five Year Plan
Diseases such as malaria, yellow fever, dengue and cholera are all sensitive to climate
change.
The Indian Council of Medical Research (ICMR) has identified four areas of risks arising
from climate change:
(i) Climate Change and vector borne diseases,
(ii) aerosols and respiratory diseases,
(iii) UV-A and UV-B corneal damage and cataract and
(iv) environment and heart diseases.
36
 Current Practice (Basic health-care & primary education)
Science and Technology
Following this assessment, the ICMR has constituted Task Force Groups:
(i) Vector Borne Diseases and Climate Change
(ii) Respiratory Diseases and Air Pollutants and
(iii) Eye Health and Environment
The affordable health technology initiative with Welcome Trust will be launched. It will
have a pro-poor bias, focus on mass health impact and enhance our abilities to access
technology from overseas in addition to from within the country

37
 Current Practice (Basic health-care & primary education)
Science and Technology
Six new autonomous R&D institutions, namely
(i) Translational Health Science and Technology Institute, Faridabad;
(ii) Regional Centre for Biotechnology, Faridabad;
(iii) National Agrifood Biotechnology Institute, Mohali;
(iv) National Institute of Biomedical Genomics, Kalyani;
(v) Institute of Stem Cell Biology and Regenerative Medicine, Bangalore; and
(vi) National Institute of Animal Biotechnology, Hyderabad were set up.

38
Current Practice (Basic health-care & primary education)
Governance
Unlike rural residents, urban areas have access to private health care providers, but private
health care is costly and large numbers of urban slum dwellers cannot afford it.
Public health implications of unclean water are unacceptable:
Prime Culprits are:
children under the age of five
diarrhea and
other water borne diseases
The Twelfth Plan will focus on the need to invest in water and waste management in human
settlements based on a strategy that is both affordable and sustainable

39
 Current Practice (Mid-day meal scheme)
Governance
Every scheme under BSUP to be compulsorily equipped with atleast 1 UHC (Urban Health
Centre).
Every school under Sarva Siksha Abhiyaan to be equipped with MDM (Mid-Day Meal)
Kitchen
Mid-day Meal and Integrated Child Development Services Scheme- The total Government
expenditure as a proportion of GDP in the Twelfth Plan is likely to increase from 1.94 per cent
of GDP in the last year of the Eleventh Plan to 3.04 per cent in the corresponding year of the
Twelfth Plan.

40
Current Practice
Governance
In the Twelfth Plan, a 200-bed district-level hospital would serve a catchment area of about 810
lakh of population (20 lakh for a 300-bed tertiary care hospital). This will help families from the
economically disadvantaged groups get access to quality health care through hospitals set up
under this scheme, especially those who are covered under the Rashtriya Swasthya Bima Yojna
(RSBY).

41
THE PRESENTATION SEQUENCE
Introduction
Current Scenario
Current Practices
Basic health care & primary education
Mid-day meal scheme
Conclusion
Future Scope
Promotion of healthcare for next 5 to 10 years 42
 Conclusion (Negative Inferences)
Acute shortage of health professionals.
Affordability of health care is a serious problem.
Reduce IMR to 25 and MMR to 1 per 1,000 live births, and improve Child Gender Ratio
(06 years) to 950 by the end of the Twelfth Five Year Plan seems a difficult task.
When broader determinants of health (drinking water and sanitation, Mid-Day Meal) are
added, the total public spending on health in Eleventh Plan comes to 1.94 per cent of
GDP, which was not enough so a revision plan is in action.
Lack of sound HR management policies results in irrational distribution of available
human resource and suboptimal motivation.

43
Conclusion (Positive Inferences)
The Twelfth Plan will therefore see the transformation of the NRHM into a National
Health Mission, covering both rural and urban areas.
Urban Health Initiative for the Poor, providing public sector primary care facilities in
selected low-income urban areas.
Introduction of MDM (this may be motivating and innovative concept to many but it has been
introduced in CHINA in the mid 90s)

44
THE PRESENTATION SEQUENCE
Introduction
Current Scenario
Current Practices
Basic health care & primary education
Mid-day meal scheme
Conclusion
Future Scope
Promotion of healthcare for next 5 to 10 years 45
Future Scope
Strengthening Data Collection and Management Systems is a must of health care
High level Expert Group on Universal Health Coverage
Healthcare conditions are improving in the country but its affordability and accessibility is
still an area to be focused on. Curative and preventive healthcare would help in increasing
general quality of life.
Focus on women and children is essential but importance to elderly class and handicaps in
order to achieve inclusive healthcare development is essential.
Shortage of qualified medical personnel at all levels is a major hurdle in improving the
outreach of the healthcare system, especially the public health facilities

46
Future Scope
To plan for an expansion of teaching and training programmes for healthcare
professionals, particularly in the public sector institutions
We also need to focus much more on a provision of clean drinking water and sanitation,
which can make a major contribution to improved health. (Article- 1.60 Twelfth Plan: An
Overview page no. 13)
Reduce under-nutrition among children aged 03 years to half of the NFHS-3 levels.
PPP in Health Care Services
The Twelfth Plan must make children an urgent priority

47
Present Complications
On the goal of raising child gender ratio & malnutrition NO DATA is still a certifiable
data!!!
Health Management Information System (HMIS) as recommended is still not formed
Nine AYUSH industry clusters through Special Purpose Vehicle having common
facility centres for manufacturing and testing of AYUSH medicines are to being set up
in eight States (but the work for none has still not even started)
Setting up of 6 AIIMS like institutes and upgradation of 13 medical colleges has been
taken up under Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) is only partially
fulfilled.

48
Present Complications
CHERG Child Health Epidemiology Reference Group >36 institutes related to
CHTWG Child Health Technical Working Group healthcare are present but
CHU Child Health Unit none is publicized
DAH Development Assistance For Health
HSS Health Systems Strengthening
IHME Institute For Health Metrics And Evaluation
MCDMCH Ministry Of Community Development, Mother And Child Health
MCHIP Maternal And Child Health Integrated Program
MIS Malaria Indicator Survey
MOHFW Ministry Of Health And Family Welfare
MOH Ministry Of Health
PHFI Public Health Foundation Of India

49
Present Complications
Different forms of malnutrition
Protein-energy malnutrition (PEM), also known as protein-calorie malnutrition
Iron deficiency : nutritional anaemia which can lead to lessened productivity,
sometimes becoming terminal
Vitamin A deficiency, which can lead to blindness or a weakened immune system.
Iodine deficiency, which can lead to serious mental or physical complaints
Foliate deficiency itself can lead to insufficient birth weight or congenital
anomalies such as spina bifida.

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References
MoP&NG
Make In India
Planning Commission
BP energy education program
http://www.miningweekly.com/article/india-to-shift-to-new-licensing-regime-for-oil-gas-blocks-2015-03-03
Thank You