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India Programme - Decommissioning of oil and gas assets and Site restoration in India: assessment of best practices relevant to India's context and priorities

Descriptions

The Oil and Gas sector in India is critical to support India's economic growth and poverty reduction efforts. However, India does not produce enough domestic crude oil or gas to meet its demand and hence has to import most of it ($ 87.6 billion in 2017-18) from other countries. With the recent rally in crude oil prices, it is expected that this may result in substantial increases in energy costs. As such, there is an urgent need to promote efficient practices and polcies which will help improve productivity and self reliance through -enhanced energy security -enhanced domestic production of essential energy resources -reduced dependence on expensive oil imports which are crippling the balance of payments, allowing resources to be used elsewhere. There co-exists a need to safely and economically decommission and abandon fields which are either ageing or have a significant drop in reserve and production. For decades, billions of dollars have been invested in India in creating the assets required to extract and transport oil and gas. Many of these assets are now reaching the end of their economic lives. Decommissioning of oil and gas assets and site restoration is at infancy stage in India. Though in infancy, this is a growing sector in the Indian market. Till date, few projects have been conducted on Decommissioning and site restoration and as such there is little experience on the Indian regulatory and industry framework on this subject. The concerns cover both the short-term planning and the long-term site remediation work that is required to return the areas of activity to future, alternative use. The policy makers have also expressed a need to study the best policies, regulations, industry practices and institutional arrangements for safe, environmental friendly and economical decommissioning activity. Considerable experience on decommissioning and site restoration exists internationally. An exercise of this sort would help inform UK's thinking on potential solutions for India, including the role that the UK could play in supporting India to develop its decommissioning model.