Oil & Natural Gas: News & Discussion

Prem · Post by **Prem** » 24 Sep 2008 05:22

http://www.washingtonpost.com/wp-dyn/co ... 03898.html
A Few Speculators Dominate Vast Market for Oil Trading

Using swap dealers as middlemen, investment funds have poured into the commodity markets, raising their holdings to $260 billion this year from $13 billion in 2003. During that same period, the price of crude oil rose unabated every year.

CFTC data show that at the end of July, just four swap dealers held one-third of all NYMEX oil contracts that bet prices would increase. Dealers make trades that forecast prices will either rise or fall. Energy analysts say these data are evidence of the concentration of power in the

( these greedy ******** will make another Hitler kind rise)

Vipul · Post by **Vipul** » 03 Oct 2008 20:32

GAIL foresees surplus natural gas in India by 2012.

GAIL India Ltd, the nation's largest gas firm, on Friday predicted the country becoming surplus in natural gas by 2011-12 and called for stepping up investments in creation of infrastructure for taking the fuel to the markets.

From a deficit situation now, the country will turn surplus in 2011-12, GAIL Chairman and Managing Director U D Choubey said at the India Energy Conference here.

While the current availability of 103 million standard cubic meters per day of gas met just half of the demand, natural gas supplies are projected to rise to 279 mmscmd by 2011-12.

"This does not include imports from Iran or Turkmenistan through proposed pipelines," he said.

Besides production from currently operational fields and LNG imports, the projections include 80-90 mmscmd gas from Reliance Industries' eastern offshore D6 fields, 10 mmscmd from GSPC's Krishna Godavari basin fields and 25 mmscmd from Oil and Natural Gas Corp's new fields.

"The demand which can be met through the infrastructure already in place to deliver the fuel would be 250 mmscmd," Choubey said stressing the need for stepping up investments in laying new pipelines to connect gas sources to consumption centres.

"We need to evolve policies to deal with the surplus situation," he said.

Choubey wanted government to keep control over natural gas prices for another five years as the market was not mature enough. "We cannot allow auctioning of natural gas. The market is not homogeneous. There are small and vulnerable players and there are bid consumers who can afford to bid very high."

ashish raval · Post by **ashish raval** » 05 Oct 2008 03:57

More black gold found...

http://finance.indiainfo.com/2008/10/04 ... andey.html

SSridhar · Post by **SSridhar** » 18 Oct 2008 06:21

Doubts expressed over TAPI project

Not only would the TAPI pipeline travel through a troubled Afghanistan, experts express lack of confidence in sufficient gas reserves with Turkmenistan to meet all its assurances to China, Russia as well as Pakistan and India.

Angre · Post by **Angre** » 21 Oct 2008 01:53

ashish raval wrote:More black gold found...

http://finance.indiainfo.com/2008/10/04 ... andey.html

Isn't 100m a realy really shallow depth? Is this why gas replacement (carbon sequestration) recovery is being contemplated? I have my fingers crossed against dumping EU CO2 in these wells.

abhischekcc · Post by **abhischekcc** » 23 Oct 2008 16:09

Angre,

We are well on our way to produce copious amounts of CO2 on our own, using the Fischer Tropsch process.

GOI is processing tenders for 3 coal blocks of 1 to 1.5 billion tonnes each

, for producing 80,000 barrels of petrol each. Or about 240,000 bpd in total. (10% of imports)

FT process is notorious for producing CO2. I guess all of this will be used in sequestration process.

Take a look at this:
http://www.greencarcongress.com/2005/12 ... arded.html

A computer simulation of the process yielded the following:

5,550 tons per day (tpd) coal gasified with 3,091 tpd water and 4,806 tpd oxygen. The coal (Pittsburgh #8) is 74.16% by weight carbon.

After quenching and cleaning, 47.2% of the syngas flows to an FT reactor to produce 6,000 barrels per day of liquids and tail gases.

FT tail gases and the other 52.8% of the syngas are mixed with 233 MMSCFD of steam and sent to a low-temperature shift reactor.

Gases leaving the shift reactor are on a volume basis approximately 38.0% hydrogen, 37.5% CO2, 23.0% H2O and less than 1% of CO, CH4 and N2.

Carbon capture removes 11,300 tpd of CO2.

The H2-rich gas used as fuel in the combustor produces approximately 349 Mwe in the combined cycle unit.

3.5% by weight of the carbon in the coal fed to the gasifier is present in the flue gases emitted into the atmosphere.

6000 barrels of oil = 11,300 tpd of CO2 captured.

So, 240,000 barrels of oil = 452,000 tpd of CO2 captured.
Or, 165 million barrels pa.

Not bad hunh.

Angre · Post by **Angre** » 23 Oct 2008 23:55

Thanks Abhishek.
The capture part is key, we do need the infrastructure to capture carbon for seqeustration. But it's a start nonetheless.

VinodTK · Post by **VinodTK** » 30 Oct 2008 04:48

India plays at Russian Imperial roulette

Arya Sumantra · Post by **Arya Sumantra** » 30 Oct 2008 14:44

Angre wrote:Thanks Abhishek.
The capture part is key, we do need the infrastructure to capture carbon for seqeustration. But it's a start nonetheless.

Wonder if the green algae photobioreactors have been looked at for carbon capture.

http://www.youtube.com/watch?v=yij_RtRI ... re=related

and

MIT Algae Photo-bioreactor
http://www.youtube.com/watch?v=EnOSnJJS ... re=related

VinodTK · Post by **VinodTK** » 11 Nov 2008 08:09

RIL gas to flow from Jan.

Hyderabad, Nov. 10: The state government has finally clinched the deal with Reliance Industries Limited (RIL) by convincing it to join the gas grid in the state. RIL will get 67 per cent of equity in the Krishna-Godavari Gas Network Limited (KGGNL) while the remaining 33 per cent will be equally distributed between the state government, IDFC and the Gujarat State Petroleum Corpo-ration (GSPC).

RIL had been reluctant to join the consortium as it had qualified to bid for the city gas distribution (CGD) project on its own. The government could not bid for the project on its own as it needs to have gas reserves to qualify. “At last we convinced RIL to join the corporation. The Infrastructure Corporation will represent the government in the new company and the IDFC would join with private equity,” said a senior government official.

The GSPC, which was included with an view to getting its share of gas in the K-G basin, had stated that it cannot start supplying gas till 2011-12, which means a further delay of CGD project in the state. “We decided to go with RIL as it had announced commercial production in January,” said Mr Mohd Ali Shabbir, energy minister.

RIL officials have informed the Chief Minis-ter, Dr Y.S. Rajasekhar Reddy, that they are ready to allot 8 million square metres of gas per day from the first day of production. That gas will be used to fuel power plants. “All the 2,000-odd MW gas-based projects would be given gas in the first phase,” said Mr Shabbir. Gas will be given to the city distribution project later. The government hopes that the gas supply will help it boost power supply ahead of the elections.

SSridhar · Post by **SSridhar** » 15 Nov 2008 11:03

India to take up Turkey-Israel pipeline with Turkish PM

This is for getting Russian & Central Asian oil through Israel.

Vipul · Post by **Vipul** » 20 Nov 2008 20:42

CCEA okays Nelp VII award, to attract $1.5 bn investment.

The Cabinet Committee on Economic Affairs (CCEA) today approved the award of 44 oil and gas exploration blocks, which is expected to attract investments of $1.5 billion.

Of the 45 blocks that received bids in the seventh round of auction under the New Exploration Licensing Policy (Nelp VII), the CCEA did not award a deepwater block in Mumbai basin to Cairn Energy India as it bid too low and said it would be "detrimental to the government's interest in future in terms of profit petroleum". Cairn was the sole bidder for the block.

Oil and Natural Gas Corporation (ONGC), India’s largest oil and gas producer, and its partners bagged the maximum number of 20 blocks in India’s largest ever bid round that closed on June 30. Australian mining major BHP Billiton and its partner GVK Power, bidding for the first time, won seven deepwater blocks.

Reliance Industries, India’s largest company by market capitalisation, in partnership with British Petroleum, the world’s third-largest oil company, won one block in the Krishna-Godavari basin off the Andhra Pradesh coast.

Minister of State in the Prime Minister's Office Prithviraj Chauhan, told reporters after the CCEA meeting that the production sharing contracts for the 44 block would be signed in a month.

“It is expected that the award of the blocks under Nelp VII will result in more discoveries, further investments in development of oil fields leading to higher reserves accretion and eventually, production of oil and gas,” he said.

The government had offered 57 oil and gas exploration blocks under the Nelp VII auctions. However, 12 blocks did not receive any bids.

Officials with oil companies and the petroleum ministry say that the 12 blocks did not receive any bids as oil companies were not sure if they will be eligible to claim a seven year income tax holiday for the oil and gas they produce from blocks under Nelp rounds.

Earlier, this year, the finance ministry had withdrawn this benefit for gas production but allowed it for oil. The petroleum ministry had also issued a clarification in June this year, three days before the bidding closed.

The CCEA today also allowed the petroleum ministry to issue the tax holiday clarification as an appendix to the production sharing contracts for Nelp VII.

The Nelp VII auction also resulted in many blocks receiving single bids. Analysts said that since almost 80 per cent of the total number of blocks on offer were “recycled” from previous Nelp rounds, companies were not confident of making discoveries.

Government officials, however, cite numbers to prove that the Nelp VII round was successful. “181 bids were received from public sector and private/foreign companies for 45 blocks (12 deep water blocks, 7 shallow water blocks and 26 on-land blocks). A total of 95 companies, including 74 Indian companies and 21 foreign companies had submitted bids for 45 blocks,” the petroleum ministry said in a statement.

“This round drew the maximum number of bids per blocks. If that is not success, what is?” said an official in the ministry.

Raj Malhotra · Post by **Raj Malhotra** » 21 Nov 2008 02:29

What is cost of extraction of gas from deep water wells like in KG Basin? Will the gas fields remain viable even after the current fall in crude oil prices?

Avinash R · Post by **Avinash R** » 25 Nov 2008 10:25

ONGC strikes oil in eastern offshore of AP
Monday, November 24, 2008
http://www.dnaindia.com/report.asp?newsid=1209124

NEW DELHI: State-run Oil and Natural Gas Corp on Monday said it has made a significant oil discovery in an eastern offshore acreage in Andhra Pradesh it had got from government on nomination basis.

ONGC struck oil at Block IG at a water depth of 225 meters in well G-4-6, 15 kms off Yanam coast in Andhra Pradesh, the company said in a press statement here.

"Three hydrocarbon bearing sands have been encountered in the gross interval 3,757 meters to 4,185 meters based on geological data, log evaluation and one mini-Drill Stem Test carried out on September 30 and October 1, 2008. The thickest sand interval (4,1084,185 meters) comprises 55 metres of net oil pay," it said.

The company, however, did not state the quantum of in place reserves it had encountered.

The discovery is the most significant find after the ultra-deep sea UD-1 gas discovery in Krishna-Godavari basin in December 2006.

The discovery at G-4-6 "augurs well as it marks the ONGCs determined efforts to put the KG offshore to new and higher levels of oil production," it said.

ONGC plans a fast-track hub development programme, clustering geographically proximal encouraging finds including a mix of older finds like G-2 & GS-29 with latter finds like Padmawati, Kanakadurga, and a slew of other discoveries using a common production facility like an FPSO.

This is expected to be on course with an initial rate of 20,000 barrels per day by 2012-13, which is expected to peak to around 150,000 barrels per day by 2016-17, ONGC said.

ONGC strikes oil in KG nomination block
Tuesday, Nov 25, 2008

http://www.thehindubusinessline.com/200 ... 940200.htm
Our Bureau

New Delhi, Nov. 24 ONGC has struck oil in its nomination block in Krishna-Godavari Basin. Though this is not the first success of the exploration major in the east coast, this is a fresh block, a new prospect, a senior company official said.

Oil has been struck in nomination block-IG in well G-4-6, 15 km off Yanam Coast, Andhra Pradesh, he said. “The well is still under drilling. The discovery has been notified to the Directorate-General of Hydrocarbons,” he told Business Line.

According to ONGC, three hydrocarbon bearing sands have been encountered in the gross interval 3,757 m to 4,185 m based on geological data, log evaluation and one mini-Drill Stem Test carried out on September 30 and October 1. The thickest sand interval (4,108–4,185 m) comprises 55 metres of net oil pay.
Fast-track hub

ONGC plans a fast-track hub development programme, clustering geographically proximal encouraging finds including a mix of older finds such as G-2 & GS-29 with latter finds such as Padmawati, Kanakadurga, and a slew of other discoveries using a common production facility like an FPSO, the company said.

“This is expected to be on course with an initial rate of 20,000 bbl a day by 2012-13 which is expected to peak to around 150,000 bbl a day by 2016-17,” ONGC said.

Avinash R · Post by **Avinash R** » 25 Nov 2008 10:26

SSridhar wrote:India to take up Turkey-Israel pipeline with Turkish PM

This is for getting Russian & Central Asian oil through Israel.

Follow up news.

Turkey offers to ship oil, gas to India via Israel
http://www.indiasnews.net/story/434111
Monday 24th November, 2008

Visiting Turkish Prime Minister Recep Tayyip Erdogan Monday offered to supply crude oil and liquefied natural gas (LNG) to India via Israel in a bid to boost bilateral trade between the two countries.

'To meet India's growing energy requirements, we are ready to ship oil and gas via Israel. We are planning an undersea pipeline between Turkey and Israel through the Mediterranean Sea. Supertankers will be able to carry the supplies to India over the high seas from the Ashkelong port in Israel,' Erdogan said at a business luncheon meeting here.

Petroleum and energy ministers of India, Israel and Turkey will meet in Istanbul in the next two months to work out the modalities, including quantum of supply, pricing and logistics.

Apart from diversifying its energy sources, India will also be able to reduce the shipping cycles by avoiding the crowded Suez Canal and the longer route around the Cape of Good Hope.

'During my meeting with Prime Minister Manmohan Singh in New Delhi last Friday (Nov 21), we have committed to increase the bilateral trade between the two countries to $6 billion by 2010 from $2.6 billion currently,' Erdogan said addressing captains of Indian industry and the 150-strong trade delegation accompanying him.

According to Turkish Energy Minister Hilmi Guler, the multi-purpose offshore pipeline project - Med Stream - between southern Turkey and Israel via the Mediterranean Sea is planned to transport oil, natural gas, water, electricity and fiber optic cables.

'India has expressed interest in the project to import oil from the line through the Red Sea with loading tankers from an Israeli port (Ashkelong). The project is estimated to cost about euro 8 billion (Rs.496 billion),' he said.

India can also ship crude oil by the shorter route from Ceyhan port in southern Turkey in less time (16 days) than through Turkish Straits, which takes around 39 days.

Turkish trade body president Rifat Hisarciklioglu said the Med Stream project involved a cluster of five pipelines to be built along the Ashkelong-Eilat route.

The route will travel from the Black Sea oil terminal, Samsun, to Ceyhan on the Mediterranean coast, and then through an undersea pipeline to Ashkelong port. It then takes the land route to Eilat in the Gulf of Aqaba.

Addressing members of the Federation of Indian Chamber of Commerce and Industry (Ficci), Erdogan said Turkey offered excellent investment prospects for Indian firms in diverse areas.

'About 60 Indian firms have already invested in Turkey and many more have expressed interest. We have a very favourable investment climate for overseas firms with incentives and investor-friendly schemes,' Erdogan noted.

Lauding the Bangalore-based GMR Infrastructure for bagging the $394-million (Rs 15.8-billion) contract to develop and modernise the Sabiha Gokcen airport in Istanbul, Erdogan said the Turkish construction industry was looking forward to participate in India's massive infrastructure projects in view of its domain expertise and ranking in the world.

'The Turkish construction industry has emerged as the third largest in the world after the US and China, with a turnover of $110 billion in 2007. We are upbeat about the prospects of our industry bringing its expertise for the various infrastructure projects in India,' he added.

Turkey has also expressed interest in exploring the mining industry in India.

Erdogon, who was on a two-day trip to Bangalore since late Sunday, also visited India's second largest IT bellwether Infosys Technologies' campus in the electronics city earlier in the day and the satellite centre of the Indian Space Research Organisation (ISRO) before leaving for Istanbul late Monday.

Shivani · Post by **Shivani** » 08 Dec 2008 12:24

RNRL refutes govt's stand on gas price

Business Standard wrote: Kalpana Pathak / Mumbai December 08, 2008

Anil Ambani-promoted Reliance Natural Resources (RNRL) has filed an affidavit in the Bombay High Court in the case involving Reliance Industries (RIL), refuting the petroleum ministry's stand that the government-approved price of $4.2/million metric British thermal unit (mmBtu) is the selling price of gas.

The affidavit, filed on December 4, also stated that according to the Directorate General of Hydrocarbons (DGH), the selling price for gas can be lower than the valuation price.

According to the Gas Sale Master Agreement between RIL and RNRL, the Anil Ambani-owned company is entitled to get 28 million cubic metres of gas per day from the Krishna-Godavari (KG) basin at a price of $2.34 per million British thermal unit (mBtu) for a period of 17 years. RIL had refused to supply gas at that price for that period. According to RIL, it is ready to supply the gas to RNRL at the government-approved price of $4.20 per mBtu.

In its fresh affidavit, the Anil Ambani group company said, “RNRL has relied on the ministry's own documents showing that the stand is contrary to the provisions of the Production Sharing Contract (PSC)."
It added that under clause 21.6 of the PSC, the government is only required to approve the formula for determination of the gas price and not determine or fix the sale price.

RNRL has also averred that the ministry had concealed the most important fact from the court earlier that the price formula approved by the government on September 12, 2007 has no impact on the agreement or commitment to supply gas by RIL to RNRL at $2.34/mmbtu as the decision was "without prejudice the RNRL vs RIL and NTPC vs RIL court cases" as stated in government’s press note of September 12, 2008.

Last week, the ministry decided to allot gas to the Dabhol power plant, operated by Ratnagiri Gas and Power, from the KG basin owned by Mukesh Ambani's RIL on a priority basis to help ease electricity shortage in Maharashtra. The government will have to buy gas from RIL at $4.20 per mbtu for Dabhol.

The ministry had also said that the supply of natural gas from RIL's KG basin D-6 field would be made at a selling price of $4.2/mmBtu for all customers across all sectors, as decided in the Empowered Group of Ministers' (EGoM) meeting held in September 2007.

The decision came at a time when NTPC was fighting a case against RIL for buying gas for two of its plants — Kawas and Gandahar in Gujarat — at a price of $2.34 per mBtu.

The government in an affidavit filed in the RIL-RNRL case on November 14 had stated that sale at a price less than $4.20 per mmbtu is not envisaged by the EGoM in accordance with provisions of the PSC.

The Bombay High Court had asked the government counsel to file an affidavit making a categorical statement on the pricing of the gas — which is the most contentious issue in the case — and explain why the pricing is binding on all. The next hearing of the case is scheduled on December 11.

Vipul · Post by **Vipul** » 08 Dec 2008 21:23

Mukesh Ambani has inherited his fathers skill in wresting concessions from the Government, which is ofcourse always at the exchequers cost.Anil Ambani knew this would happen and had through Amar Singh already insinuated about Murli Deora(Beoda)'s proximity to Mukesh.

SSridhar · Post by **SSridhar** » 10 Dec 2008 04:46

IPI: a pipeline of risks

What we have discussed here threadbare 7 years back. Every terrorist attack on India from Pakistan is one more proof of why this project will only bring disaster to India.

Vipul · Post by **Vipul** » 12 Dec 2008 00:49

This is interesting.

In a sudden development, the Central Government on Thursday withdrew the recent affidavits filed in the Bombay High Court, wherein it had
asserted Reliance Industries cannot sell its Krishna-Godavari basin gas to anyone without its approval to the pricing formula.

Appearing for the Union Government, Additional Solicitor General Mohan Parasaran said that the affidavits filed by S M Sundaram, under secretary, ministry of Petroleum and Natural Gas, will be withdrawn.

The Government has intervened in the legal dispute between Mukesh Ambani-led RIL and younger brother Anil's group company RNRL over the gas supply agreement, by which RIL is supposed to supply gas to RNRL.

After Sundaram filed the affidavits, saying that as per the government's policy, the price of RIL gas cannot be less than USD 4.20 per million British Thermal Units, RNRL's lawyer Ram Jethmalani was pressing for his cross-examination.

Last week the court agreed to summon Sundaram so that Jethmalani could cross-examine him.

But today, the division bench of Justices J N Patel and K K Tated remarked that the government might think of withdrawing the affidavits, since it had intervened only for the purpose of assisting the court.

Parasaran said he was willing to do so and will file written submissions instead.

When asked whether the withdrawal of the affidavits means changes in the government's stand on the price issue, Parasaran told PTI, "You will come to know our stand on January 12 ... This is not a step backward."

Raju · Post by **Raju** » 21 Dec 2008 08:33

Where is Atish ?

Speculators are responsible for volatile oil prices, says India

Special Correspondent

NEW DELHI: As the slide in international crude oil prices continued amid production cuts by the Organisation of Petroleum Exporting Countries (OPEC), India has blamed speculators for the current situation stating that they are responsible for the escalation as well as the present four-year low of oil prices.

Demanding transparent regulations of futures markets, Petroleum and Natural Gas Minister Murli Deora, while addressing the Energy Ministers’ Meeting in London on Friday, said: “There was an unprecedented boom; then the collapse. Who imagined this? The steep rise in oil prices was distressful for the energy deficient economies, as their evolution, sustenance and the growth centred on oil.”

“In the recent past, with the sudden collapse of the crude prices, you would have realised that the speculators have been having a field day in causing extreme volatility in the prices. It is now evident that oil prices are being governed by the commodity exchanges. This is a dangerous sign,” he told the meeting.

....

http://www.hindu.com/2008/12/21/stories ... 120900.htm

sanjaykumar · Post by **sanjaykumar** » 21 Dec 2008 11:23

Just as India was stick-in-the-mud when wall street bankers were showing the world how to make money, so has India been outclassed by China paying a premium on its global oil sourcing sprees.

Bloody chankian Indians I tell ya.

Atish · Post by **Atish** » 21 Dec 2008 14:03

Right here.

Because Murli Deora says so. It must be true. QED.

Atish.

Prem · Post by **Prem** » 22 Dec 2008 01:48

Raju wrote:Where is Atish ?

Speculators are responsible for volatile oil prices, says India

Special Correspondent

NEW DELHI: As the
Demanding transparent regulations of futures markets, Petroleum and Natural Gas Minister Murli Deora, while addressing the Energy Ministers’ Meeting in London on Friday, said: “There was an unprecedented boom; then the collapse. Who imagined this? The steep rise in oil prices was distressful for the energy deficient economies, as their evolution, sustenance and the growth centred on oil.”

“In the....

http://www.hindu.com/2008/12/21/stories ... 120900.htm

Raju Sir , Funds like CALPER , even Harward University was buying oil and tune of the experts was playing on TV cying hoarse "FUNDAMENTALS". I was aghast to hear one expert explaining that prices has come down becuase of fundamentals i.e drying up of liquidity i.e banks wont extend loan to play in OIL market thus reducing the demand.

Vipul · Post by **Vipul** » 23 Dec 2008 03:35

Nelp-VIII likely to offer 100 blocks.

The petroleum ministry is planning to auction over 100 prospective areas for oil and gas exploration by March 2009 under the eighth round of New Exploration Licensing Policy (Nelp-VIII).

“It would be our endeavour to launch Nelp-VIII in first quarter of 2009,” petroleum minister Murli Deora said. He was speaking at the production sharing contract (PSC) signing ceremony for 44 oil and gas exploration blocks under the Nelp-VII.

Mr Deora said the government has started interaction with all stakeholders for bid evaluation criteria for the next auction round for both oil and gas exploration blocks and coal bed methane (CBM) assets.

“Efforts under Nelp have resulted in 68 discoveries of oil and gas in 19 blocks, establishing ‘in place reserves’ of 500 million tonnes of oil and oil equivalent of gas,” he said.

Discoveries have been made in Cambay onland, northern part of East Coast and Krishna-Godavari deepwater areas. Under Nelp, the committed investment on exploration is estimated at $8.3 billion, out of which about $4.5 billion has already been spent on exploration and about $1.5 billion on development of discoveries, he said.

The total committed investment for phase-I of exploration under Nelp-VII is about $1.5 billion. “Nelp-VII was our largest round so far with 150,000 sq km of area offered. Nelp-VIII would be even larger,” said director general of hydrocarbons (DGH) V K Sibal. He added 400,000 sq km of area roughly divided into more than 100 blocks would be offered in the next round.

The seventh round of auction that started in December last year attracted $1.5 billion in investment from oil companies. It offered 57 exploration blocks covering sedimentary basins in an area spread over 171,000 sq km. So far, 206 blocks have been awarded under seven rounds of Nelp bidding.

From these, 68 discoveries of oil and gas have been made in 19 blocks, establishing in-place reserves of 500 million tonnes of oil and oil equivalent gas.

Simultaneously, the fourth round of auction of coal bed methane (CBM) blocks would also be launched. In the previous three CBM rounds, 26 coal blocks have been awarded for exploiting gas lying below coal seams.

paramu · Post by **paramu** » 23 Dec 2008 04:54

This is a good time for GoI to build huge energy reserve. Are they doing it?

Yogi_G · Post by **Yogi_G** » 23 Dec 2008 10:25

paramu wrote:This is a good time for GoI to build huge energy reserve. Are they doing it?

We already have a strategic oil reserve, good enough for 2 weeks of supply in case of disruption. I am very disappointed with the size of our strategic reserve as it pales in comparison to that of China, Japan and USA....

I bet that the Govt is counting on our blue water navy to ensure unhindered oil supplies...

http://en.wikipedia.org/wiki/Global_str ... m_reserves

shyamd · Post by **shyamd** » 23 Dec 2008 17:09

They are building a gas reserve in Gujarat. If memory serves me right they are building another gas reserve on the eastern cost with the help of Total. It is being stored inside a huge rock or something like that. Look it up in google.

Suppiah · Post by **Suppiah** » 25 Dec 2008 07:07

http://timesofindia.indiatimes.com/Busi ... 888446.cms

The secu-liar yellow press refused to believe GSPC when it was announced..now truth is out..Good for Gujarat and India...another nail on ME barbarian terrorist coffin.

Shivani · Post by **Shivani** » 25 Dec 2008 15:59

Reliance to set world's biggest refinery

Indian Express wrote:
New Delhi: Reliance Industries is set to double its capacity by starting up its new 580,000 barrels per day plant (bpd) this weekend, creating the world's biggest refinery just as global oil demand collapses.

The $6 billion project will make the oil complex in Jamnagar in Gujarat the world's single biggest supplier of fuels to the global market, pumping out 1.24 million bpd of ultra-clean fuels to Europe, Africa and the United States.

The project is a triumph for Chief Executive Mukesh Ambani, who helped break India's heavy reliance on imported fuel a decade ago with Reliance's first 660,000 bpd plant, a cash cow for the firm during a profit boom over the past four years.

Trade and industry sources said it appeared likely the company would announce the refinery's commissioning within the next week, just in time for its year-end target, although the announcement may be little more than a formality since it will take months to get the full plant running.

For tax reasons it is not expected to begin significant exports until April, when the new fiscal year begins in India.

"Pre-commissioning activities are almost over. We hope to announce start up of the refinery on Dec. 28," a company official said, declining to be identified because of company policy.

A company spokesman declined to comment on the issue on Wednesday.

This Sunday is also the birthday of the late Dhirubhai Hirachand Ambani, Ambani's father and founder of the Reliance group, who turned his textile firm into a petrochemical-to- telecom conglomerate and India's biggest private company.

While the new refinery's low cost, high sophistication and global reach mean it should turn a profit by crowding out less efficient export-oriented rivals in Europe or Asia, it enters a market utterly different than Ambani would have envisioned three and a half years ago when he unveiled the project.

Run by subsidiary Reliance Petroleum Ltd, in which Chevron Corp holds a 5 per cent stake, the refinery will at a stroke more than satisfy the world's additional oil product demand next year, if indeed the International Energy Agency's current forecast is not further cut by a deep global recession.

It is not a circumstance Ambani will relish, but it is also not one that will be unfamiliar.

"When in 1999 we started our first refinery at Jamnagar, we saw a recession globally and when we are about to start our second refinery, history is repeating itself," he said last month.

Reliance has already missed a series of ambitious internal targets to launch the new refinery as early as July, but seems to have accelerated efforts recently.

The Jamnagar local government this month issued a "no-objection certificate" for Reliance to enable it get a licence from Commissioner of Explosives, which is required to start the new refinery, District Collector V. P. Patel said.

EXPORT ONLY, FOR NOW

Unlike a decade ago, when Reliance built its refinery to tap into India's growing demand for refined fuels, the new plant is geared entirely to the export market for now, avoiding the domestic market where the government still controls prices.

But the global refining industry has also changed dramatically as a surge in oil prices to nearly $150 a barrel and the worst financial crisis in nearly a century reverses steadily rising oil demand in the United States, Europe and even China.

Analysts at Credit Suisse warn that the refining sector is exiting its golden age and entering the Dark Ages, as China builds new plants quickly enough to meet its own demand while India and the Middle East vie for shrinking export markets.

But Reliance is better-placed than most to ride out the downturn, with a strategic position near Middle East crude supplies and an unrivalled capacity and complexity.

"It is basically a US Gulf Coast refinery that was built in India," says Al Troner, managing director of Asia Pacific Energy Consulting. "It is capable of producing large volumes of top quality product suitable for any market in the world."

It will play a swing supply role that will redraw traditional trade flows, and has already embarked on a robust marketing campaign in Europe, Mexico, East Africa and Asia, capitalising on delays and cost overruns faced by other big refinery projects.

Reliance has already leased clean oil products storage tanks in Singapore, the Mediterranean and Caribbean, industry sources have said, to boost its trading operations.

Shivani · Post by **Shivani** » 25 Dec 2008 20:41

pandyan wrote: few things that work against reliance:
wild fluctuations in the cost of raw material...are they purchasing crude with long term contracts (at possibly higher rates per barrel) or are they simply providing refining capacity for whoever that wants it (i.e. just charge a flat rate for refining).

The thing that truly goes against them is that inspite of being an Indian company they are not allowed to participate freely in Indian energy market and supply to the domestic market.

Occupied as it is with protecting the PSU-babu nexus, balancing all the energy cross financing & subsidies, and settling political scores, the government does not have the will or the vision to figure out how to quit discriminating against an Indian company. It's a travesty.

We accept all the pollution and enviornmental consequences that come with this refinery, but do not get to use the finished products.

Suraj · Post by **Suraj** » 26 Dec 2008 04:13

I don't have a pointer to the source, but Reliance appears to buy on the crude spot market, but maintains longer term refined crude delivery contracts with companies like Chevron and Exxon-Mobil. They would obviously factor in the volaility of crude prices so as to always maintain their own margins. Thanks to the ability of the Jamnagar refinery to process heavy crudes, they can maintain amongst the best margins in the industry. While the domestic petroleum industry is affected by political interference, the export-oriented refinery strategy is still a good one, because it has proven a source of sustained growth in exports - refined petroleum export earnings now exceed the traditional export leaders - gems/jewelry and textiles, and are second only to engineering goods in the merchandise export basket.

vina · Post by **vina** » 30 Dec 2008 06:43

GazProm , Once Mighty, Now Reeling

I had warned even before oil took off vertically that Russia is in for a nasty suprise, I am sure our friend Igorr will remember. Just as day follows night, the high oil price will be followed by a bust. Now Russia is reeling and the classic case of doing stupid things by the govts in good times is coming true.

Gazprom has more debt coming due than the private sector debt of Brazil, India and China combined!.

The good side of the story is Soddy Barbaria is reeling too. Their 2009 budget has a $17b deficit!. Now you know why they cant oblige the Pakis by bailing them out, either with cash or with oil!.

Nothing like low oil prices to bring the mid eastern thugs back to ground. Soddy, Iran etc are screwed badly. Dubai has cratered. Last time , oil prices crashed in the mid 80s and early 90s, the Soviet Union imploded , becuase it went bankrupt.. Yeah.. The primary soviet export was oil and gas. Interesting stuff happens when oil prices collapse!

Vipul · Post by **Vipul** » 31 Dec 2008 02:18

Reliance set to knock out Asia-West fuel arbitrage.

The days may be numbered for Asian refiners and oil traders who have long profited from intermittent arbitrage for selling surplus regional motor fuel cargoes into Western markets — Reliance Petroleum has arrived.

India’s biggest private company formally commissioned its new 5,80,000 barrels per day (bpd) Jamnagar refinery last week, nearly doubling the company’s capacity and creating the world’s single-largest refining complex at 1.24 million bpd.

Once it hits full stride by the second quarter, when it is expected to begin exporting fuel to capitalise on an Indian fiscal-year tax break, it will add an enormous 8 million tonnes of gasoline and 12 million tonnes of diesel to the market every year, upsetting current supply flows, traders say.

Because of its location on India’s west coast, it’s in prime position to meet any unsatisfied demand that emerges from the mainstay European market or even the Middle East and Africa, where demand could continue to expand.

“When both its refineries are running... it looks likely that Reliance will offset or replace North Asian diesel barrels going West,” said a Singapore-based trader.

Already besieged by a demand slump on fears of a deep recession, that lost market has forced refiners such as top exporters Formosa Petrochemical Corp in Taiwan and SK Energy, South Korea’s biggest refiner, to sell at more competitive prices or even to cut runs in future.

And trading firms such as Vitol or Trafigura, which make much of their living on arbitrage, would need to overhaul their trading strategies to fit in Reliance’’s additional supplies through term contracts, for example.

Arbitrage under threat
The private Indian refiner, which commissioned the $6 billion plant last Thursday, may start large-scale exports only from April.

Having established a global trading network from Singapore to London to Houston, Reliance will be able to quickly reach the most profitable market for its ultra high-quality fuels, but distance and marketing networks will also be important.

Oil traders expect Reliance to export its gasoline mainly to Africa and the fast-growing Middle East — because of freight rate advantages — as opposed to United States, while low-sulphur diesel will be shipped mainly to Europe and the Mediterranean, where diesel is the preferred motor fuel.

Iran needs at least 4,50,000 tonnes of gasoline a month, while Singapore had moved about 45,000 tonnes of the auto fuel to the United Arab Emirates earlier this month, a timely relief for sellers which faced a tightly shut Asia-US arbitrage window.

“The new refinery will make it tough for sellers. Reliance will have to export one medium-range gasoline cargo a day when it’s at 100% capacity,” said a Northeast Asian trader. It can ship out daily an MR cargo of diesel from the new plant, equivalent to 30,000 tonnes in volume, traders said.

Reliance has already sold up to seven cargoes of 0.005% sulphur diesel to trader Vitol, and secured term deals to supply up to a total of 26 cargoes of 0.05% sulphur diesel to Trafigura, Kuwait’s International Petroleum Group and Dubai-based trader Galana.

The supplies are a mix of 40,000-tonne, 60,000-tonne and 80,000-tonne shipments.
Formosa and SK Energy together export around 300,000 tonnes of gasoline and some 700,000 tonnes of diesel a month in spot and term deals, some shipments of which are usually bound for markets that will now be targeted by Reliance.

The East-West gas oil arbitrage window last swung open in late-November, with at least 300,000 tonnes of diesel seen moving from Asia to Europe, traders said.

Back then, the EastWest spread — a measure of arbitrage economics with a wider spread indicating higher profitability — was at discounts of up to $40 a tonne for the front month.

At discounts narrower than $10 a tonne now, the arbitrage window is firmly shut, traders said.

Other exporting plants include the large facilities in Japan and those in Singapore run by ExxonMobil and Royal Dutch Shell, although the two retain an advantage serving the Australian market.

Tough at home
Given its targeted markets on gasoline, some traders are hoping Reliance will not try to sell directly into the US West Coast, leaving traders to handle the Asia-US arbitrage.But with global oil demand contracting this year for the first time in a quarter century, Reliance may find itself competing on Asian refiners’ home turf in the one region that economists are counting on to maintain some growth.

“If the regions (that Reliance is eyeing) fail to absorb the products, then you will see them coming to the East,” said another trader.

Yet, the Asian spot market may not be welcoming. Economic slowdown has hit demand in the region’s top motor fuel importers Indonesia and Vietnam, the latter of which will fire up its first oil refinery come February, relieving the country of 30% of its domestic needs.

China, the world’s number two oil consumer, saw oil demand retreat for the first time in three years in November and has more or less halted any motor fuel imports after a surge in pre-Olympic demand in the first half of the year.

Dilbu · Post by **Dilbu** » 31 Dec 2008 15:34

ONGC Videsh LTD to takeover UK's Imperial as 96.82% shareholders

Ameet · Post by **Ameet** » 08 Jan 2009 06:50

First US commerical flight powered with biofuel takes off. Jatropha was used in the mixture. Hopefully some desi entrepreneurs take note.

http://news.yahoo.com/s/ap/20090107/ap_ ... al_biofuel

HOUSTON – Continental Airlines on Wednesday became the first U.S. commercial carrier to conduct a demonstration flight powered in part by alternative fuels, though large-scale use of such fuel is forecast to be several years away.

The Houston-based company, the nation's fourth-largest airline, made the flight with a Boeing 737-800 that left from Bush Intercontinental Airport, its large hub. The flight took about 1 hour, 45 minutes and had no passengers.

Continental chairman and chief executive Larry Kellner said the goal was to analyze technical aspects of using biofuels, including effects on the plane's mechanical systems. In this case, the alternative fuel was derived from algae and jatropha plants and used in only one of the plane's two engines.

Kellner and others acknowledged it will likely be several years, a decade perhaps, before biofuels make up a significant percentage of the fuel used by Continental and other major carriers. At present, adequate supplies — and the facilities to make them — simply aren't available.

"The challenge will be to produce it in an efficient way in the quantities we need," Kellner said.

Airlines have been experimenting with alternative fuels as a way to reduce carbon dioxide emissions and lower fuel bills, which hammered carriers in the first part of 2008 when oil prices spiked.

Last week, Air New Zealand tested a passenger jet powered partially with oil from jatropha, a bush with round, plum-like fruit that's found in parts of South America, Africa and Asia. Seeds from jatropha are crushed to produce a yellowish oil that's refined and mixed with diesel.

Continental said its flight was the first to use algae as a fuel source, and the first test involving a two-engine aircraft. One engine ran on a mixture of one-half biofuel and one-half traditional jet fuel. The other ran solely on jet fuel.

The biofuel exceeded specifications for regular jet fuel, and no modifications to the plane or its engines were needed.

Jatropha and algae are both considered sustainable, second-generation biofuels, which typically use a wider range of plants and release fewer emissions than traditional biofuels like ethanol. Other possible sources include switch grass and salt-tolerant plants called halophytes.

Wednesday's flight was a joint effort involving Continental, airplane maker Boeing Co., engine makers GE Aviation/CFM International and biofuel specialist UOP, a unit of Honeywell International Inc.

Jennifer Holmgren, general manager of renewable energy and chemicals at UOP, said one of the big obstacles facing the industry is finding enough affordable feedstock to produce the large quantities of biofuel needed.

Still, as production ramps up in the next few years, she predicts biofuel could amount to 3 percent to 5 percent of the fuel used by big airlines by 2012. By 2020, the level could grow to as much as 20 percent, she said.

For now, "the only bottleneck is not just having the facilities to produce it," Holmgren said. "There isn't enough sustainable feedstock at the right price point to able to be competitive with petroleum."

Shivani · Post by **Shivani** » 08 Jan 2009 23:02

Petrol pumps go dry, strike leaders go underground

IANS (sify) wrote: Thursday, 08 January , 2009, 20:52
Last Updated: Thursday, 08 January , 2009, 21:03

New Delhi: Most petrol pumps in the country started to run dry on Thursday, the second day of the nationwide strike called by employees of public sector oil companies, while many leaders of the agitating workers went underground fearing arrests under the Essential Services Maintenance Act (ESMA).

The oil sector officers' association, an umbrella organisation of 45,000 employees in the public oil sector companies, called for an indefinite strike from Wednesday to coerce the government to give them wage hikes.

On Thursday, Indian Oil chairman Sarthak Behuria indicated that stocks at retail outlets would run out in a day. But, petrol pump owners said the outlets had started to go dry right from Wednesday evening.

Petroleum Secretary R S Pandey said crude oil production was at 80 percent of normal, while refineries were 70 percent operational.

He added that the gas supply situation "has not worsened".

Meanwhile, most of the OSOA office-bearers went "underground" after warrants were issued for their arrests under the ESMA.

A meeting was held on Thursday morning between the senior managers of the oil companies and OSOA members, but did not yield any breakthrough.

The government remained firm on its position that the officers should place faith in the committee, chaired by Home Minister P Chidambaram, which has been tasked to examine the oil sector employees' demand for salary hike.

But the association leaders said the government has not fulfilled the previous commitments it made on the issue. They were also peeved at the arrest and suspension orders issued to their members by the employing oil companies.

The country's largest oil producer, Oil and Natural Gas Corp (ONGC), has terminated the services of 60 officers, while Indian Oil Corp and other companies were also contemplating action against "instigators".

The petroleum ministry admitted that the capital's outlets have been running out, but added that 300 petrol pumps were "fully operational".

But consumers have already started feeling the impact of the strike. A large number of petrol vends were not getting replenishments of stocks of petroleum products.

At a petrol vend on the Delhi-Gurgaon highway, employees had to turn away trucks and other vehicles as there were no stocks left of petrol and diesel. "We have gone dry since 4 pm yesterday (Wednesday)," said the manager of the Rajasthan Highway Service Station, Sunil Yadav.

At another outlet in north Delhi, manager Mahavir Jain feared that his stocks would be exhausted by evening due to the high demand. "All the three pumps nearby have gone dry and we have a demand which is three to four times the normal. I am afraid that our stocks will end by evening, but the next supply is doubtful," he said.

His words found an echo from petrol dealers in cities and towns across the country.

"Since morning there is a rush at our petrol pump. If the strike continues, we might run short of supply by Friday," said Ajit Kumar, manager of Priyadarshini Service Station, affiliated to IOC, on Bangalore's Hosur Road.

In Lucknow, long queues were seen at petrol pumps. "In the ongoing strike, the best option is to store petrol as no one knows how long the strike would continue," Ranjeet Bhalla, a government employee who was in the queue at an outlet in Lucknow's Dandaiya locality, said.

In Tamil Nadu, long queues of agitated consumers arguing with harried employees of select fuel outlets were reported.

In Tripura, most of the depots of IOC have stopped supplying fuel to retail vends in many cities, including the capital Agartala. However, the Left Front-led state government said it would not invoke the ESMA to break the agitation.

Vehicle owners have had to rely on outlets of Hindustan Petroleum Corp (HPCL), whose officers have not joined the strike.

"I thought that due to a holiday, we would have low sales, as we do on Sundays. But, the demand has almost doubled. People must have heard that our pump is not running dry," said Satish Kumar, manager at a petrol pump in Bhikaji Cama Place, Delhi.

HPCL outlets in Bangalore were crowded since Thursday morning. "There is no dearth of supply, but demand for both petrol and diesel is soaring due to the strike," said Mohammad Sharif, an official of a HP petrol vend in Vijanagar.

The impact on the aviation sector has been minimal, as most of the senior managers have been put on the duty there.

But, the western region is the worst affected, with gas-run power plants shutting down. Over a dozen fertilizer plants have already closed down, which will impact the agriculture sector.

Shivani · Post by **Shivani** » 09 Jan 2009 16:55

This "normalcy" can't come soon enough. Here in Jaipur there is visibly less traffic on roads as people have either run out of fuel or are conserving what little they have. The regular restaurant (or dhabha to be more precise) has refused home delivery since there is no fuel.

BPCL workers call off strike, govt sure of normalcy soon

Moneycontrol wrote: Published on Fri, Jan 09, 2009 at 15:25 , Updated at Fri, Jan 09, 2009 at 16:19
Source : CNBC-TV18

Petrol pumps across the country are going dry with the truckers strike entering the third day. The meeting between striking members of the oil public sector undertakings and the Petroleum Ministry ended inconclusively. In Delhi, 85% of the pumps went without petrol and diesel, while in Mumbai up to 60% outlets put up no stock signboards.

As per the latest updates, RS Pandey said HPCL is fully working and BPCL workers have called off strike. BPCL near normal situation is expected by evening. IOC has witnessed about 30% dip in production and four refineries have been hit. In Mumbai, 15 CNG stations have started working.

Government is confident that the oil strike will be broken within next six to twelve hours. All oil companies will work on Saturday-Sunday and oil supply situation will normalise across country by Monday. Mathura, Panipat, Chennai oil refineries will be functional within next few hours. Only Barauni , Haldia refinery will take more time to open. Police is visiting homes of striking staffers to ask them to return to work, avoiding large scale arrest. Territorial army is also invoked to control strike. Resolution is still awaited and some development is expected by early evening.

Commenting on the oil crisis in the country, Home Minister P Chidambaram who cancelled his visit to Washington where he was to present evidence on the Mumbai attacks said he is ready to meet the Oil Minister. �The problem lies with IOC, ONGC and GAIL. It is most likely that BPCL will function normally. BPCL is operating at 70% and HPCL is functionally normally.�

On the strike by truckers, Chidambaram clarified that steps are being taken by the Secretary of road transport and issues regarding service tax are resolved.

Oil Minister Murli Deora said, "We have informed the Cabinet about the situation. We have also requested them to withdraw the strike as it is of no good to anyone. The strike is not in the interest of the country and they should withdraw it as soon as possible."

Oil Secretary RS Pandey said that Mumbai CNG supplies will be restored soon as per the latest updates. "Some power plants are affected due to shortage of gas. Army assistance might be taken to overcome the crisis." HPCL refineries are working at 120% capacity, he added.

India is going through a huge fuel crunch, with petrol pumps across the country running dry. This is because employees of oil PSUs like ONGC and IOC have gone on an indefinite strike demanding a revision in wages. The government is yet to make a breakthrough.

RS Pandey, Oil Secretary earlier said, "Compared to yesterday today in BPCL attendance has improved by 13%. But some petrol pumps have shown less availability of products. So there is plus, there is minus. Tomorrow let's hope the gas situation improves, let's hope the supply situation also improves, let's hope the strike fizzles out. Talks are going on, actions are being taken, and these are the measures. Contingency plans are being put in place; territorial army help has been taken. The help of people who are retired and not in service that is also being harnessed. But this is a very critical sector and we are in the hands of people who should behave very very responsibly, but unfortunaltely some of them are not doing so and instigating others."

negi · Post by **negi** » 09 Jan 2009 20:16

I wonder why of all the PSU's Oil and NG one's are cribbing about the hike, afaik they are most handsomely paid (specially when the package likes of ONGC offer to campus recruits is pretty good even when compared to Tier 1 IT companies).

Nikhil T · Post by **Nikhil T** » 09 Jan 2009 21:23

negi wrote:I wonder why of all the PSU's Oil and NG one's are cribbing about the hike, afaik they are most handsomely paid (specially when the package likes of ONGC offer to campus recruits is pretty good even when compared to Tier 1 IT companies).

You cant compare two sectors. If you want to compare, try comparing the entry-level chemical engineer salary at an Indian pvt sector company like Essar or RIL and the entry level salary of an IOC/ONGC recruit.

Point is that these companies are making profits since inception, have the resources to pay market determined wages and the top management including the Board is pushing for the same; but the Govt. is acting as a spoiler and keeping the salaries linked to what a Coal India Ltd. or a Steel Authority of India Ltd. (both recently profit making, but still heavily inefficient) person gets. If there is any Public sector that is transparent or capable and delivers in research; it is Oil sector (refer to International purchases in competition to China). It is the time for Indian Govt to reward the performers rather than linking them to the whiners.

negi · Post by **negi** » 09 Jan 2009 23:49

^^ Nikhil I do not wish to derail this thread, have posted the reply in nukkad.