23rd December 2015

RIL CBM Business

Journey so far. . . .Experience & Learning

Block location

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SP (W) SP (E)

Current portfolio includes only first CBM round blocks

Relinquished Blocks

BS(1)-CBM-2003/II

BS(2)-CBM-2003/II

SH(North)-CBM-2003/II

Area overview

• Blocks located in tribal notified districts of

Shahdol & Annupur

• ~ 300 sq. kms out of total block area of 995 sq.

kms is occupied by forest

• Total population of Shahdol is 1,064,989 with

~79% people living in rural area

• District has coal mining & few industries

Journey so far. . .!

2005

Exploration Phase 1 completed for SPW & SPE: >1500 core samples studies

2007

Sohagpur blocks 1. Exploration Phase 2 completed: Air drilling for first time in

India. 2. Spent US$ 116MM (~₹ 750 Crores) in the Exploration Period 3. 3.65 TCF of GIIP resources 4. Development Plan submitted & approved

2009

1. Grant of PML for Sohagpur blocks 2. Commencement of development activities

2015

1. LAQ of >300 well sites and ROU acquisition of >150 kms for infield pipelines 2. Drilled ~250 wells 3. 2 GGS & 4 WGS nearing completion 4. ~300 lkms of infield pipelines 5. Invested ~US$ 416MM (~ ₹2700 Crores) in Sohagpur blocks till date 6. 302 kms 16” Shahdol-Phulpur pipeline (SHPPL) nearing completion with investment of US$

183MM (~₹1100 Crores)

2008

1. EC granted for Sohagpur blocks 2. Relinquished 2 blocks (BS1 & BS2)

2003

Awarded 3 blocks (BS1, BS2 & SHN)

Largest surface footprint E&P project in India

2012

Relinquished SHN block

Awarded 2 Sohagpur blocks (SPW; SPE)

2001

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1US$ = ₹65

Experience & Learnings (1/2)

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• Located in tribal districts ~300sq.km forest

• Isolated & marginal fields - lacks even basic infrastructure leave alone gas marketing infrastructure & gas markets

• Shahdol is 30kms from SPW & 70 kms from SPE

• From Shahdol district - Nearest airport Jabalpur (220kms), nearest railway junction Katni (130kms), District hospital Shahdol (22kms)

Infrastructure

• Heterogeneous reservoirs coupled with large number of faults

• Low recoverable resources similar to marginal fields

• 100’s of wells to produce same quantity of gas as in a conventional gas field – RIL CBM needs >1000 wells

• Continued investment - 10-30% additional top-up wells every year

Sub-surface

uncertainty

CBM project holds attributes similar to marginal field development

Experience & Learnings (2/2)

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• Wells at every 800m - large land footprint/ acquisition

• Land ownership disputes - poor revenue records & multiple land owners

• RIL CBM project ~2000 acres across 1000 independent locations

• Long drawn RoU process - >15 months from application to acquisition

• Dealt with >9,000 land owners while only half of the total project requirement of LAQ/ RoU is acquired

LAQ/ROU

• Dealt with 20,000 land owners spread across 50 villages

• Hostile local environment & manhandling of workforce resulting in fear factor

• Persistent vandalism & obstruction to work – local disturbances, agitation, violence & theft etc.

• Multiple CSR initiatives – health, hygiene, education, livelihood support

Community issues

Land acquisition & community management key to CBM success

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CBM well drilling

Rig-up Drilling operation

Electro-logging unit Hydraulic-fracturing

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Pipeline laying Welding Hydrotesting

CBM pipeline laying

CBM development facilities

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GEG foundations Compressor foundation

GGS 11

Major thrust on CSR activities

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Socio economic upliftment of the locals

• Health & Hygiene

o Two mobile medical units deployed in 44 villages benefiting >47,000 people

o Rs 89.60 lakhs donated for 64 toilets to Swachhta Kosh of Zila Shiksha Kendra, Shahdol

o Financial assistance to Government of Madhya Pradesh (GoMP) initiatives like “Lifeline Express

Health Camp” & “Nasha Mukti Abhiyan”.

• Education

o 29 education camps benefiting >2,300 students

o Distributed 50,000 notebooks among 11,000 students across 132 schools

o Established computer labs in 6 high schools benefitting around 550 students

o Conducted career counseling and vocational trainings sessions covering 700 students

• Livelihood & Agriculture support

o Mobile repairing & computer training center

o Distribution of 30 sewing machine among women

o Seed & fertilizer support provided to 500 farmers

Total CSR spend of ~US$ 2MM (~₹ 13 Crores)

Policy support to incentivize CBM (1/2)

• Operational freedom –

o CBM contract is revenue sharing with no cost recovery

o GoI is striving for improving ease of doing business

o Accordingly, certain procedures delaying projects like procurement procedures, budget approvals

and audit requirements should be removed.

o DGH/ GoI in any case is informed through various periodical reports on expenditure, production,

procurement, royalty, PLP, etc.

• Freedom for CBM gas marketing & pricing similar to marginal field policy and as promised in CBM Policy

• Provide relaxations for CBM Contracts similar to NELP and Pre-NELP PSCs policy of November 2014 -

o Grant excusable delays in all phase of the CBM Contract for circumstances beyond reasonable

control of Contractors

o Grant time extensions without setting off from subsequent phase

o Option to the Contractor for adjustment / waiver from MWP on account of excusable delays

• Unfinished MWP policy on dry hole basis, in consultation with stakeholders, to be formulated for CBM

Contracts similar to NELP Blocks

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Policy support to incentivize CBM (2/2)

• Framework for simultaneously coal mining and CBM (E&P) in the overlap areas. Priority should be given to

CBM as any coal mining without extraction of CBM will be a national loss and add to carbon emission.

• With no cost recovery, transfer of assets to GoI or any designated agency should be on commercial basis

• The application for forest diversion should be area wise rather than one application for the entire block

• PMP Act should also contain the provisions for acquiring RoU for laying pipelines for transporting natural

gas, including CBM, shale gas etc., including water and electric cables

• Standardizing format for Mining lease deed. The effective date of the commencement of Development

Phase should be from the date of receipt of Mining Lease from the State Government

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Thank You

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