Carbon Management in Upstream Oil & Gas Sector- ONGC Experience

1. Carbon Management in Upstream Oil & Gas Sector- ONGC Experience

2. Carbon Management- Imperatives Global warming or Climate Change due to the anthropogenic activities is a fact of life No business would remain insulated from the effect of climate change Urgent work is necessary to arrest this biggest challenge of mankind Solution lies in Carbon Management

3. Carbon Management–Drivers • Globally • Shift of world economy towards low carbon growth • Global warming is now a global warning • Climate change - a global business risk factor • Economic risks significant • Risk reduction & business implications • No sector is immune to effects of climate change

4. Carbon Management–Drivers For ONGC • Increasing Stakeholders expectation • ONGC’s mission to be carbon neutral • On the occasion of our 53rd foundation day, Aug 14, 2008, ONGC publicly communicated through mainstream print media, the intention to become carbon neutral. • Later ONGC adopted the mission to be carbon neutral • Preempting regulatory risk

5. ONGC Experience

6. Content A brief about ONGC Carbon Management Activities GFR Projects CDM Projects Energy Efficiency Improvements Program Green Building, Wind Mill & Solar Initiatives Other Initiatives Conclusions

7. To be a World-Class Oil & Gas Company Integrated in Energy Business with Dominant Indian Leadership and Global Presence Vision ofONGC One of the 6 Missions of ONGC Continually strive to reduce CO2 emissions across its activity chain with the objective of achieving carbon neutrality

8. ONGC... Platt’s Top 250 List–2009 Ranked 3rd E & P company in the world and 26th Global Energy Major PFC Energy 50 Ranked 24th among the Global Publicly listed energy companies Global presence in 15 countries with 40 Assets Forbes Global 2000 list 2010 of the world's biggest companies Ranked 155th Reserve Replacement Ratio of more than 1 for the last consecutive 5 years Finance Asia ranks ONGC as Numero Uno among Indian Blue Chips Net Profit & Net Worth steadily increasing

9. Carbon Management in ONGC • A Structured Approach • Mission of ONGC commits the Company to be “Carbon Neutral” • Formation of Carbon Management group • Management System in place • All ONGC installations are 100% QHSE certified, • ISO 9001 • ISO 14001 • OHSAS 18001

10. Carbon Management in ONGC Mandate • Develop Green House Gases (GHG) inventory, accounting and information system, developing GHG mitigation programmes and identifying projects • Carbon disclosure in the Company Balance Sheet. • Identify and develop GHG programs and projects • Monitor the registered and under development clean development mechanism (CDM) projects. • Develop climate protection strategy and policy • Develop Sustainability Reporting

11. Carbon Management Activities • Policy development towards achieving Carbon Neutrality • Development of CDM projects • GHG accounting & mitigation programmes for ONGC • Sustainability Reporting • Consultancy to ONGC JVCs on CDM Projects • M2M (Methane to Markets) Program

12. Activities Developed Corporate policies on Climate Change and Sustainability Greening the Vendor’s Chain

13. Path to carbon neutral Know your carbon footprint Develop GHG inventory Plan your carbon footprint Plan GHG inventory Minimize carbon footprint Manage GHG inventory Become zero carbon or carbon neutral Register with international organizations

14. CDM Projects • CDM Projects development • Identification • Development • Monitoring • Types of project • Reduction of Gas Flaring • Fuel substitution • Renewable energy • Energy efficiency • Fugitive emission

15. CDM Projects ONGC has developed 17 DNA approved CDM projects, Six of which have been registered by the UNFCCC. Besides, there is another 10 projects under various stages of development. ONGC’s Registered CDM Projects are as under;

16. Activities • GHG Accounting • Develop Green House Gases (GHG) inventory (Carbon Footprint), accounting and information system of ONGC • Identify and develop GHG programs and projects • ONGC’s carbon footprint from its domestic operation stands at 8.25 Million ton of CO2e

17. GHG Mitigation programs of ONGC • GFR Projects • M2M Programs • Energy Efficiency Drives • Green Building projects • Wind Power projects • Solar Initiatives • Other initiatives

18. GFR Projects • Gas flaring in Onshore Assets has gradually been reduced from555 MMSCM in 2001-02 to 72.2 MMSCM in 2009-10

19. M2M Programs Oil and Gas Systems Coal Mines Landfills Agricultural Waste M2M Program in ONGC is an Initiative in collaboration with USEPA towards mitigation of Fugitive Methane Emissions Methane to Market (M2M): M2M is one of the most promising global initiatives on the environmental front in recent years. 19

20. Methane to Market Project • The goal of the Partnership is to reduce the methane emissions in order to: • Enhance economic growth, • Strengthen energy security, • Improve air quality, • Improve industrial safety, • Reduce emissions of greenhouse gases.

21. ONGC’s M2M Program: Achievements • Four Technology Transfer workshops in Dec 2007 • Conducteddesktop pre-feasibility analysesto estimate emissions sources at 13 sites (in 2008 & 2009) • EPA and ONGC conducted sevenonsite measurement studiesto assess key methane emission sources and potential mitigation measures (4–May’08) & (3–Nov’09).

22. M2M Program: Achievements • Over 30 million m3 of Fugitive Methane identified for capturing from 7 installations • ONGC has reduced methane emission through DI&M activities • In 2008-09: 3.2 MMSCM • In 2009-10: 4.72 MMSCM Future Plan • ONGC M2M Program team formation: Core team (4 members) along with Asset coordinators (10 members) • Imparted training to the team • Procured the relevant state-of-art equipments • To undertake company-wide emission survey for Fugitive Hydrocarbon • Prepare Emission Inventory • Corrective actions, wherever necessary

23. Energy Efficiency Drives • Training of more than 18000 ONGC Officersthrough PCRA on “Energy Conservation Practices” • Use of Energy Efficient Lighting (HPSV, CFL, 28 watts retrofit tube lights etc) • Energy Audit • Reduction of Contract Demand and Improvement of Power Factor • Top drives fitted on Drilling Rigs to reduce overall drilling time.

24. Energy Efficiency Drives • Fuel Efficient 3512 B Caterpillar Engines have been installed • Fuel efficient KTA 50 G Cummins Engines installed • Structured initiatives to reduce GHG through induction of Energy efficient products viz. Green Building, Windmill and Solar Power • ONGC has adopted a philosophy of paperless office • Installed one of the largest ERP package in SAP Platform • Has achieved almost paperless working environment

25. Replacement of old Engines • ONGC undertook a corporate drive to replace around 300 existing Caterpillar and Cummins engines with new generation and efficient CAT 3512 B and KTA 50 G (Cummins) engines. This energy efficiency drive required a capital investment of more than Rs. 250 crores. The estimated fuel saving are around 28litres of HSD per hour per engine. • Once fully operational; this initiative would saves ONGC over millions of litres of HSD per annum.

26. Green Building • ONGC is constructing four green buildings for energy conservation, one each at: • Vasant Kunj – Delhi (36340 sq. mtrs.) • Mumbai (27862 sq. mtrs.) • Kolkata (20206 sq. mtrs.) • Dehradun (14600 sq. mtrs.) • The project activity has already started in Delhi and Dehradun. • The buildings are designed as a Green, Energy-efficient, Intelligent and Barrier-free. • Once operational it would reduce approx. 12000 tons of CO2 per annum

27. Green Building • These buildings will be constructed for the Platinum Rating under the LEED (Leader in Energy Efficiency and Environmental Design) rating system of USGBC (United States Green Building Code). • The building named as “Rajiv Gandhi Urja Bhavan” in Delhi being built on a plot area of 36,340 square meters at Vasant Kunj at a cost around Rs. 490 Crores. Rajiv Gandhi Urja Bhavan: ONGC’s first Green Building at Vasant Kunj, New Delhi

28. Rajiv Gandhi Urja Bhavan” in Delhi

29. Wind Power • ONGC has already set up 50 MW wind turbine project in the state of Gujarat • Initiated action for setting up wind farm of additional 102 MW in the State of Rajasthan. 50 MW Wind Power plant in operation at Kutch Region in Gujarat

30. Solar Energy Projects • 12800 LPD Solar Water Heating System installed/added in present system at ONGC Colony & Officers club at Dehradun. • Solar lights installed at GCS Gamnewala, Rajasthan. • Under National Solar Mission, ONGC has initiated action for setting up 5 MW solar power project in Gujarat.

31. Other Initiatives • Bioremediation • ONGC being an environmentally responsible corporate has adopted bioremediation technology to treat oily wastes and tank bottom sludge through OTBL – a JV between ONGC and TERI. • Plantation of Ringal Bamboo in Upper Himalayas • ONGC has undertaken plantation of Ringal bamboo plants in upper Himalayas in association with Uttaranchal Bamboo and Fiber Development Board (UBFDB). • 3 Lakh trees are being planted in Joshimath, Uttaranchal in an area of 100 Hectares at a cost of Rs. 3 Crs. • This will help in Biodiversity conservation.

32. Other Initiatives • Mangrove Plantation & Education Project • Presently being done in two phases • The phase-I has been done in Gandhar field at the mouth of River Dadhar in Gulf of Cambay • 1.2 million saplings have been planted in an area of 120 Hectares at a cost of Rs. 1.99 Crs. • The Phase-II is being done in Gandhar & Hazira • 0.5 million plants are proposed for plantation in 100 Hectares at a cost of Rs. 1.13 Crs. through Bombay Natural History Society, an NGO. • Helps in stoppage of soil erosion and develops breeding ground for various marine flora including fish

33. Other Initiatives • Soldiers of the earth initiatives with TERI

34. We have been investing in sustainable sources of energy and are working towards achieving our long term goal of Carbon Neutrality. Our pursuit of carbon management have resulted in a number of registered Clean Development Mechanism (CDM) projects under the Kyoto Protocol. We shall keep pursuing more projects as we explore newer and better ways of reducing our emissions. The live example is Petrotech-2010 – a Carbon Neutral Event and the Petrotech-2010 Exhibition – the first Carbon Neutral Exhibition.