Oil & Natural Gas: News & Discussion

Klaus · Post by **Klaus** » 30 Mar 2014 10:37

It appears that naturally occurring Carbon Dioxide inside deepwater reservoirs can be used as a primary drive mechanism (gas cap or dissolved gas) to obtain increasing amounts of free gas. Future projects may even involve sequestered Carbon Dioxide being employed in artificial lift systems.

Austin · Post by **Austin** » 30 Mar 2014 11:13

Klaus wrote:Thanks for the report! In the American & European sense of the word 'reserves', as it was developed in the O&G lexicon has come to mean the Economically Viable & Recoverable portion of the OOIP in the field/reservoir.

I believe in those presentation they are talking of recoverable reserves ( audited ) .... and the 1/10 is to give an idea of what it takes to invest versus recover when it comes to offshore.

So the approximation for offshore is for every $2.5 trillion worth of Oil you end up spending $400 billion to recover not cheap considering most of investement is what you do is initial.

The slight discrepancies in reserves between your approximation & those in the report could be owing to the now-traditional practice of gas lift (in place of water injection used elsewhere). Gas lift seems to have become economical in Russia.

My understanding is discrepancies is mostly due to when the report was generated and the year ...I think the presentation was based on 2012 resources estimates and what they mentioned in Japan 2 weeks back was based on 2013 estimates.

For eg check this link http://www.rosneft.com/news/today/21012014.html

The reserve replacement ratio is 180 % for 2013 and total Hydrocarbon Resources Reach 339 billion BOE

Also, I remember reading a report where Russia was apparently taking it slow with the development of shale gas projects as their estimates states that they will not be needing its augmenting impact until the later decades of the 21st century. It is to be noted that shale gas estimates & deep water estimates may not be included in the reserves quoted. One gets the feeling that the Russians are lukewarm towards the prospects of deep water exploration but it could just be an initial impression. The Russian O&G scenario seems to be a 180 degree turn from the North American one, where there are raging debates on almost every form of unconventional reservoir, be it tar sands, shale oil, deep-water or shale gas.

Indeed they say No to Shale Gas as the conventional reserves of Gas ( excluding Arctic ) is good enough for this century but they are working on Shale Oil Bazhenov Formation with Total and Exxon.

For North America Shale is the darling right now as cheap gas makes their industry competitive

Geopolitically, $2.5 Trillion is significant in the development of a truly Eurasian centered world order.

Pretty Much even with conservative estimates.

Klaus · Post by **Klaus** » 31 Mar 2014 11:01

Austin wrote:
My understanding is discrepancies is mostly due to when the report was generated and the year ...I think the presentation was based on 2012 resources estimates and what they mentioned in Japan 2 weeks back was based on 2013 estimates.

For eg check this link http://www.rosneft.com/news/today/21012014.html

The reserve replacement ratio is 180 % for 2013 and total Hydrocarbon Resources Reach 339 billion BOE

Thanks, that report does state:

Reserves growth was achieved primarily due to the delivery of the geological exploration program, drilling and bringing into development new sections of the Company's key fields, wellwork performed to maintain base production, and due to increase of stakes in...

Also,

The volume of proven reserves is, to a large extent, based on the results of the existing fields’ development, including their geological and technological potential. At the same time, the Company is working actively to commission in 2016 – 2019 the new large fields in East and West Siberia, including Suzun, Tagul, Lodochnoe, Yurubcheno-Tokhomskoye, Russkoe, and Kynsko-Chaselskaya group of fields. In addition, implementation of new technologies, such as drilling the wells with long horizontal sections with multiple stage hydraulic fracturing

I'd mentioned directional drilling as a factor in improved reserve estimates in a draft of my earlier post, it seems to have been erased, perhaps due to forum update in the interim duration.

Austin · Post by **Austin** » 06 Apr 2014 18:25

India exploring new investments in oil and gas projects in Russia

Austin · Post by **Austin** » 06 Apr 2014 18:37

Klaus , The infograph should give you an idea on production and demand up until 2035 also the players in the business

http://wpmedia.business.financialpost.c ... _c_jr.jpeg

article

Klaus · Post by **Klaus** » 10 Apr 2014 11:21

Austin wrote:The infograph should give you an idea on production and demand up until 2035 also the players in the business

Thanks. There are high performers like Novatek out there who specialize the entire gambit of gas operations, yet may not be known very well outside Russia & CIS.

Austin · Post by **Austin** » 24 Apr 2014 10:47

Eight Energy Myths Explained

vic · Post by **vic** » 24 Apr 2014 11:47

Klaus wrote:West Qurna-2 field in Iraq begins production

Fakhr told reporters initial production was about 120,000 barrels per day (bpd) but that output would rise to 420,000 bpd by the end of the year.

Lukoil President Vagit Alekperov said in a statement the target was initially hit on Friday at West Qurna-2, one of the world's biggest undeveloped oil fields with known reserves of 12.9 billion barrels.

The Russian firm had initially partnered with Norway's Statoil on the West Qurna-2 field, signing a 20-year deal in early 2010 under which they were to increase production at the field to 1.8 million bpd, with fees of $1.15 per barrel extracted.

In May 2012, however, the Norwegian company sold its stake to Lukoil, and the production target was later lowered to 1.2 million bpd.

Are we talking about USD 70 Billion dollar worth of crude oil per annum production from a single oil field?

Bade · Post by **Bade** » 25 Apr 2014 06:36

http://www.fool.com/investing/general/2 ... -thro.aspx
Russia, India Planning $30 Billion Oil Pipeline Through Xinjiang

panduranghari · Post by **panduranghari** » 25 Apr 2014 14:01

This is an incredible essay. Please read it in full.

global crude oil supply 2014 review

Austin · Post by **Austin** » 12 May 2014 05:44

Informative Read

Everything You Wanted To Know About Global Oil Fundamentals

Austin · Post by **Austin** » 21 May 2014 16:03

Russia and China seal historic $400bn gas deal

After 10 years of negotiations, Russia's Gazprom and China's CNPC have finally signed a historic gas deal which will provide the world's fastest growing economy with the natural gas it needs to keep pace for the next 30 years.

The total value of the contract is $400 billion, Gazprom CEO Aleksey Miller said. However, the price of gas stipulated in the document remains a "commercial secret."

Assuming the overall price of the contract includes only the cost of supplies of Russian gas, than the $400 billion price tag means China will pay about $350 per 1,000 cubic meters.

To date, this is the largest contract for Russia's largest gas producer which has no such contract with any other company.

Russia will supply China 38 billion cubic meters of gas per year via the eastern 'Power of Siberia' pipeline, which crosses Siberia and reaches China's populous northeast regions.

Austin · Post by **Austin** » 29 May 2014 14:11

via RT http://rt.com/business/

Russia's reserves to provide 600mn tons of oil annually for 30 years

Russia’s oil reserves are enough to provide a yearly extraction of 600 million tons of oil for the next 30 years, RIA Novosti quoted Natural Resources Minister Sergey Donskoi as saying on Wednesday. Russia “has a substantial potential to expand its oil reserves – the most reliable prospective oil resources found in the country make up 12.5 billion tons,” Donskoi said. “The less carefully studied forecast resources are estimated to have 50 billion tons,” he added.

panduranghari · Post by **panduranghari** » 05 Jun 2014 02:39

New Energy Report from I.E.A. Forecasts Decline in North American Oil Supply

And this group predicts the United States will have to rely more heavily on Middle East oil in the coming years, as North American sources start to dry up a little bit. U.S. energy production has boomed recently, much of it coming from oil and gas extracted from shale. But the IEA says U.S. production will start to lose steam around 2020, and that would put more bargaining power back in the hands of OPEC countries, such as Saudi Arabia.

This is quite interesting, given that in 2012, the IEA forecast that the U.S. would overtake Saudia Arabia in oil production by 2020, and would be a net oil exporter by 2030. The International Energy Agency (I.E.A.) is a watchdog organization considered the world’s leading energy analyzing institution. This new stance coincides with a similar about-face from the U.S. government’s EIA (Energy Information Administration), which suddenly downgraded its assessment of the Montery Shale “tight oil” fields by 96%.

The fun bit

The report itself (disclaimer: so far I’ve only looked at the accompanied introduction, fact sheet, and powerpoint) notes many risks and difficult achievements that will be necessary. To note just a few:
•The middle east may or may not increase oil supply.
•Depletion of conventional fossil fuels force reliance on more challenging fields which puts pressure on upstream costs.
•The larger share of the trillions in investment would go just toward replacing existing production that is in decline, and not toward demand growth.
•Nearly two-thirds of the investment will take place in emerging economies in Asia, Africa, and Latin America.
•There are many political and regulatory uncertainties that will be difficult to navigate.
•Financing the transition to a low carbon energy system is a major challenge (to put it mildly).
•Getting the world to a 2 degree emissions path would mean a different investment landscape (and a breakthrough at the Paris 2015 COP).
•Households need to make about half of the investment, with 40% coming from business, and 11% from government.
•“The supply of long term financing on suitable terms is still far from guaranteed” – “the banking sector…may be constrained…in the wake of the financial crisis.” (to put it mildly)

Austin · Post by **Austin** » 05 Jun 2014 21:57

Initial recoverable resources in Russian Arctic amount to 106 billion

The initial total amount of recoverable resources in the Russian Arctic is estimated at 106 billion tonnes of oil equivalent, including 69.5 trillion cubic meters of gas, Russian Gas Society President Pavel Zavalny said.

According to the expert, the U.S. Geological Survey estimated the Russian Arctic’s resources slightly higher at 150 billion TOE.“So far, 60 large hydrocarbon fields have been discovered in the Arctic, of which 43 are located in the Russian sector,” Zavalny said.According to him, the Arctic is home to 30% of the world's undiscovered recoverable gas reserves and 13% of oil reserves.

Austin · Post by **Austin** » 06 Jun 2014 14:17

panduranghari wrote:New Energy Report from I.E.A. Forecasts Decline in North American Oil Supply

And this group predicts the United States will have to rely more heavily on Middle East oil in the coming years, as North American sources start to dry up a little bit. U.S. energy production has boomed recently, much of it coming from oil and gas extracted from shale. But the IEA says U.S. production will start to lose steam around 2020, and that would put more bargaining power back in the hands of OPEC countries, such as Saudi Arabia.

This is quite interesting, given that in 2012, the IEA forecast that the U.S. would overtake Saudia Arabia in oil production by 2020, and would be a net oil exporter by 2030. The International Energy Agency (I.E.A.) is a watchdog organization considered the world’s leading energy analyzing institution. This new stance coincides with a similar about-face from the U.S. government’s EIA (Energy Information Administration), which suddenly downgraded its assessment of the Montery Shale “tight oil” fields by 96%.
The fun bit

The report itself (disclaimer: so far I’ve only looked at the accompanied introduction, fact sheet, and powerpoint) notes many risks and difficult achievements that will be necessary. To note just a few:
•The middle east may or may not increase oil supply.
•Depletion of conventional fossil fuels force reliance on more challenging fields which puts pressure on upstream costs.
•The larger share of the trillions in investment would go just toward replacing existing production that is in decline, and not toward demand growth.
•Nearly two-thirds of the investment will take place in emerging economies in Asia, Africa, and Latin America.
•There are many political and regulatory uncertainties that will be difficult to navigate.
•Financing the transition to a low carbon energy system is a major challenge (to put it mildly).
•Getting the world to a 2 degree emissions path would mean a different investment landscape (and a breakthrough at the Paris 2015 COP).
•Households need to make about half of the investment, with 40% coming from business, and 11% from government.
•“The supply of long term financing on suitable terms is still far from guaranteed” – “the banking sector…may be constrained…in the wake of the financial crisis.” (to put it mildly)

Very Interesting but those who have followed Shale boom have known that much of it has to do with QE and companies could afford to extract gas and oil via shale even though it meant being in significant loss and extraction cost of shale oil is $60 compared to $2-3 in Gulf.......keeping Oil Price above $100 to make shale look profitable but with significant downgrading of Shale reserves even the fig leaf has dissapeared.

The Arabs were not duly worried about it ( i mean the OPEC ) and Media used Russia as the convenient scapegoat to beat them with Shale Shoe every now and then.

Now with the real story coming out with tapering and we might hear more in the future , every one will realise the bankers made most money from Shale Revolution .....and talk of Energy Independence and Shale Revolution was just talk to hide inconvenient facts.

Austin · Post by **Austin** » 09 Jun 2014 15:47

India Energy Resource is worth 3x of its GDP

http://www.businessinsider.in/The-17-Co ... .cms[quote]

5.7 billion barrels of proven oil reserves (#22)

47 trillion cubic feet of proven natural gas reserves (#20)

60,600 million tons of proven coal reserves (#5)

$6.5 trillion value at current prices

India is the fourth largest energy consumer in the world, trailing the United States, China, and Russia. Currently, India is not able to consistently meet domestic energy demands, which makes securing energy sources one of India's top priorities. India's petroleum minister recently announced an action plan to make India energy independent by 2030, through increased hydrocarbon production, coalbed methane, and shale gas. Currently, India's largest energy source is coal.[/quote]

SSridhar · Post by **SSridhar** » 16 Jun 2014 09:10

Kuwait & Abu Dhabi may store 2 million tonnes of crude oil in Indian caverns - Economic Times

Oil-rich Kuwait and Abu Dhabi are in talks with India to store about 2 million tonne of crude oil in Indian caverns, which the country could use during emergencies such as supply constraint due to geo-political turmoil in producing countries.

Kuwait Petroleum Corporation (KPC) and Abu Dhabi National Oil Company (ADNOC) have confirmed that they are willing to fill crude in two compartments of caverns at Visakhapatnam and Mangalore, government officials and industry executives said.

"This is a win-win proposition. We will have crude oil stored in our country, which can be used whenever we face any supply disruption or sudden spike in oil prices. KPC and ADNOC will be free to trade their inventories but during emergencies, India will have the first right of refusal," an official said requesting anonymity. Countries such as South Korea and Japan, which are hugely dependent on energy imports, have strategic oil storage facilities for secure supplies.

India, which is the fourth biggest energy consumer in the world after the US, China and Russia, has been constructing three facilities with combined capacity of over 5 million tonne and planning to construct four such facilities of 12.5 million tonne in Orissa, Gujarat, Rajasthan and Karnataka, officials said.

India, which imports 80% of crude oil it processes, is the regional refining hub with over 215 million tonne annual capacity, and it can't afford any crude oil supply disruption. In order to ensure energy security of the country, it is planning to significantly augment inventories, which is currently not enough for 30 days.

KPC and ADNOC are keen on storing crude oil in India to tap vast Asian markets because energy imports of America are on a decline due to availability of shale gas at relatively cheaper rates, officials said. "India itself is a vast market for oil producers and they do not want to keep all eggs in one basket by relying on only American demand," an official said.

KPC and ADNOC are interested in twothree storage compartments of the three underground rock caverns that can store about 5.33 million tonne of crude. The capacity of Visakhapatnam storage facility is 1.33 MT, Mangalore cavern can store 1.5 MT of crude and Padur, 2.50 MT. Hindustan Petroleum Corporation Ltd and Mangalore Refinery and Petrochemicals Ltd have already booked two compartments of 0.3 MT each in Visakhapatnam and Mangalore, respectively.

KPC and ADNOC may not pick up any equity stake in the storage facilities, but they would stock fuel by paying a rent, officials said. "The government has constituted a working group comprising members of all stakeholders, which will finalise commercial details soon," a member of the group said.

Caverns are developed by Indian Strategic Petroleum Reserves Ltd (ISPRL), which is a special purpose vehicle of the Oil Industry Development Board, a statutory body created for India's energy security. According to ISPRL, the capital cost in creating three storage facilities is about Rs 3,958 crore and filling of the 5.03 million tonne of crude would require about Rs 26,400 crore.

Commissioning of Visakhapatnam facility is expected in September this year and Mangalore and Padur projects will be ready by October next year, officials said.

Austin · Post by **Austin** » 16 Jun 2014 10:35

I wonder why these country wont build a reserves in their own country , If there is oil spike they are use it and if there is a geo-political problem then they are better chance to get hold of Oil Reserves in their own country then transport from India.

In any case this deal is good for India and for its energy security.

SSridhar · Post by **SSridhar** » 16 Jun 2014 16:15

I think Kuwait & UAE can't have caverns because of their landscape. KSA can have on its west coast

Cosmo_R · Post by **Cosmo_R** » 16 Jun 2014 17:03

Austin wrote:India Energy Resource is worth 3x of its GDP

http://www.businessinsider.in/The-17-Co ... 355958.cms

5.7 billion barrels of proven oil reserves (#22)

47 trillion cubic feet of proven natural gas reserves (#20)

60,600 million tons of proven coal reserves (#5)

$6.5 trillion value at current prices

India is the fourth largest energy consumer in the world, trailing the United States, China, and Russia. Currently, India is not able to consistently meet domestic energy demands, which makes securing energy sources one of India's top priorities. India's petroleum minister recently announced an action plan to make India energy independent by 2030, through increased hydrocarbon production, coalbed methane, and shale gas. Currently, India's largest energy source is coal.

The NGOs will make sure this does not happen.

panduranghari · Post by **panduranghari** » 16 Jun 2014 17:38

Austin wrote:I wonder why these country wont build a reserves in their own country , If there is oil spike they are use it and if there is a geo-political problem then they are better chance to get hold of Oil Reserves in their own country then transport from India.

In any case this deal is good for India and for its energy security.

The cost of building these reserves is enormous. India currently has 10 day strategic oil reserve. China has almost reached US level by having 220 day strategic oil reserve.

Prem · Post by **Prem** » 21 Jun 2014 02:16

India overtakes US as biggest importer of Nigerian crude oil

http://www.usnews.com/news/business/art ... ertakes-us

India now imports 800K Barrels a day from Nigeria.

Prem · Post by **Prem** » 21 Jun 2014 06:44

http://www.marketwatch.com/story/asia-i ... atest_news
Asia is soaking up oil displaced from the U.S.

producers of displaced oil for now can draw comfort from not having to compete internationally with shale oil, as the severe restrictions on U.S. oil exports are unlikely to be eased any time soonRising North American oil production will disrupt international crude trade flows for the rest of this decade, the IEA commented. "If the last five years seemed eventful for the oil market and industry, there is every reason to believe that the next five will be no less transformative," it said, noting that by 2020, Asia's imports will represent 65% of internationally traded crude, and that the region will absorb 27% of world oil output.In the next three to four years, North American oil production will force out a total of 2.3 million barrels a day of seaborne oil that normally would have been imported from other countries, said Mark Chung, senior manager of energy analysis at Bentek Energy, a unit of McGraw Hill Financial. This is in addition to the 2.9 million barrels a day, or approximately 30% of U.S. seaborne oil imports, that were displaced between 2010 and 2014.Oil producers at the highest risk of being ousted from the U.S. are West African countries, whose light crude is similar to that produced in North America. Also threatened are suppliers of heavy crudes from Latin America, which may be completely displaced by Canadian production growth by 2018, Mr. Chung said.
Even Middle East oil producers are having to give way, said David Wech, managing director of Vienna-based consulting firm JBC Energy, who said that some U.S. buyers and Middle Eastern producers have agreed on lower volumes in recent talks.U.S. oil imports have fallen since 2009 to less than eight million barrels a day from about 10 million barrels a day, though deliveries from the Middle East are stable near two million barrels a day.China and India so far have been the main buyers of oil displaced from the U.S., and also of Middle East crude diverted from economically struggling and contracting Japanese and European markets. Elsewhere, demand in major refining hub South Korea is near-stagnant but energy demand in Southeast Asia will rise by over 80% by 2035, equivalent to current demand in Japan, the IEA says."Since 2007, Africa's light, sweet crude exports to Asia have increased and are expected to reach three million barrels a day by 2015," said Victor Shum, president of oil consulting at IHS.

Austin · Post by **Austin** » 24 Jun 2014 12:47

Gas pipeline to China: India to talk to Russia for extension

India is set to start negotiating with Russia the extension of a $30-billion gas pipeline Moscow plans to build to China till the Indian border. If the proposed pipeline from Russia via China's Xinjiang province materialises, it will be among the world's most expensive gas pipelines.

Sources said given Narendra Modi government’s intent to bolster sourcing of oil and gas to meet the country’s rising energy demand, an Indian delegation would take up discussions on the proposed pipeline’s extension with Moscow and Beijing during the BRIC summit in July.

The proposal would also be in focus when Russian President Vladimir Putin visits India later this year.

“India is a large importer of energy — in FY14, its net energy imports were 6.3% of the GDP. Without energy imports, we calculate it would have run a current account surplus of 4.6% of the GDP,” the Goldman Sachs said in a recent report.

India is also working on the $9-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

During the World Petroleum Congress held in Moscow last week, petroleum minister Dharmendra Pradhan is learnt to have discussed the possibility of the pipeline with his Russian counterpart, Alexander Novak. India is looking to set up a pipeline from Russia either through China or the same route as TAPI.

Recently, Russia and China signed a 30-year gas contact worth $400 billion. GAIL (India) has already tied up 2.5 million tonne of liquefied natural gas (LNG) from Russia; the supply will commence from 2020. OVL managing director SP Garg said India is surrounded by countries rich in oil and gas. “Russia is one such country, which has surplus oil and gas. It will be a very good idea to build a pipeline from Russia to India,” Garg said.

Goldman Sachs said energy imports can be reduced further by switching from oil to natural gas and improving conservation.

“Reforms in the energy sector could reduce India’s annual energy import bill by $40 billion by FY23. Energy imports in a reform scenario could come down to about 4% of the GDP, from 6.3% currently,” it said.

vic · Post by **vic** » 01 Jul 2014 16:01

I was just wondering as to what is the comparative equivalence of various energy sources. I was given to understand that :-

Gas at delivery point of USD 10MBTU is equivalent to getting energy thorough
Crude Oil at delivery point at the rate of USD 50 Per barrel which is equivalent to
Energy produced by Power grade coal at the rate of USD 100 per ton

Can somebody give a better idea of comparisons, so we can understand what is viable price for Reliance Gas compared to international crude and Indian Coal?

Would it mean that even if we pay Domestic Gas producers (like Reliance, ONGC, GSPC etc) USD 10 MBTU then it is equivalent to getting crude at USD 50 per barrel.

Though domestic thermal power grade coal at USD 50 per ton is still better as it is equivalent to paying USD 5 MBTU and crude oil at USD 25 per barrel.

uddu · Post by **uddu** » 02 Jul 2014 07:24

To cool prices, govt likely to cut tax on petrol
http://www.hindustantimes.com/business- ... 34445.aspx

The government is mulling tax cuts on petrol and diesel to cushion consumers from rising crude oil prices and give relief to millions of inflation-hit car users. Sources told HT the special excise duty on petrol and diesel may be pared by Rs. 1- Rs. 2 a litre each. At present, this specific tariff on petrol is Rs. 9.48 a litre and Rs. 3.56 for diesel.

“A cut in excise duty on petrol and diesel in the budget is being examined,” said a source, who did not wish to be identified.

Currently, taxes and duties account for as much as 32.7% or Rs. 23.41 in a litre of petrol that consumers buy for Rs. 71.56 in Delhi. Likewise, these levies account for 19.8% or about Rs. 11.36 in a litre of diesel priced at Rs. 7.28 in the Capital.

Last year, the centre collected Rs. 64,335 crore from excise duty on petroleum products, which is more than a third (about 35%) of its entire excise collections of Rs. 1.79 lakh crore in 2013-14.

This is long overdue. Tax on petrol and diesel introduced during socialist times to get the money out of the rich pocket is being continued even today. Today the rich can fill as much as they want with crores in their hands while the common man has to pay through his nose for every liter he fills in his motorbike to travel to work. Even the state transportation companies run at huge losses and put the burden on the common man who travel by the ever crowded public transport. Its time to remove this burden put on the common man by the socialist elites. Petrol and Diesel be not taxed. To reduce the import burden, the government must immediately make it compulsory to vehicle makers to provide hybrid and electric vehicles and stop having pure diesel and petrol versions. Electricity production also need to be increased and made cost effective.

If that 32 percent of tax on petrol and diesel be removed and remove the subsidies. Still the petrol and diesel will be cheaper and let it be decided by the market conditions. No more ullu banawing.

dinakar · Post by **dinakar** » 05 Jul 2014 08:32

A very long read, but clearly explains what is happening in GOI's Milking cow 'ONGC'
Rigged

Who is undermining India’s national oil company?

Some excerpts

Like the board member, Raha had also heard that “secret information” about the sealed ONGC bids “had been leaked out, though he could not independently confirm who had done this and for whom.” When I asked a petroleum secretary from the pre-NELP era if he knew anything about this episode, he laughed. I got the sense he found me naive. He informed me that when Mukesh and Anil’s father, Dhirubhai Ambani, was active, it was said the country’s national budget could be in Dhirubhai’s hands before it was tabled in the parliament. “The ONGC bid is nothing compared to that.”

When I asked a petroleum secretary who served under Deora if the minister had ties to Reliance, he scoffed and said, “He was running the ministry for his nephew; Mukesh calls him uncle.” I asked him if he had heard the terms “R positive” and “R negative,” which a beat reporter had told me were used to describe petroleum ministry officers’ affinities with Reliance. He replied, “In that ministry, you can either be R neutral or R positive—not R negative.”

Paul · Post by **Paul** » 06 Aug 2014 18:25

Financial Express

Gas pipeline to China: India to talk to Russia for extension
Huma Siddiqui , Siddhartha P Saikia | Published: Jun 24 2014, 02:35 IST

SUMMARY
India is set to start negotiating with Russia the extension of a $30-billion gas pipeline Moscow plans to build to China...

India is set to start negotiating with Russia the extension of a $30-billion gas pipeline Moscow plans to build to China till the Indian border. If the proposed pipeline from Russia via China's Xinjiang province materialises, it will be among the world's most expensive gas pipelines.
Sources said given Narendra Modi government’s intent to bolster sourcing of oil and gas to meet the country’s rising energy demand, an Indian delegation would take up discussions on the proposed pipeline’s extension with Moscow and Beijing during the BRIC summit in July.
The proposal would also be in focus when Russian President Vladimir Putin visits India later this year.
“India is a large importer of energy — in FY14, its net energy imports were 6.3% of the GDP. Without energy imports, we calculate it would have run a current account surplus of 4.6% of the GDP,” the Goldman Sachs said in a recent report.
India is also working on the $9-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.
During the World Petroleum Congress held in Moscow last week, petroleum minister Dharmendra Pradhan is learnt to have discussed the possibility of the pipeline with his Russian counterpart, Alexander Novak. India is looking to set up a pipeline from Russia either through China or the same route as TAPI.
Recently, Russia and China signed a 30-year gas contact worth $400 billion. GAIL (India) has already tied up 2.5 million tonne of liquefied natural gas (LNG) from Russia; the supply will commence from 2020. OVL managing director SP Garg said India is surrounded by countries rich in oil and gas. “Russia is one such country, which has surplus oil and gas. It will be a very good idea to build a pipeline from Russia to India,” Garg said.
Goldman Sachs said energy imports can be reduced further by switching from oil to natural gas and improving conservation.
“Reforms in the energy sector could reduce India’s annual energy import bill by $40 billion by FY23. Energy imports in a reform scenario could come down to about 4% of the GDP, from 6.3% currently,” it said.

Paul · Post by **Paul** » 06 Aug 2014 18:25

Financial Express

Gas pipeline to China: India to talk to Russia for extension
Huma Siddiqui , Siddhartha P Saikia | Published: Jun 24 2014, 02:35 IST

SUMMARY
India is set to start negotiating with Russia the extension of a $30-billion gas pipeline Moscow plans to build to China...

India is set to start negotiating with Russia the extension of a $30-billion gas pipeline Moscow plans to build to China till the Indian border. If the proposed pipeline from Russia via China's Xinjiang province materialises, it will be among the world's most expensive gas pipelines.
Sources said given Narendra Modi government’s intent to bolster sourcing of oil and gas to meet the country’s rising energy demand, an Indian delegation would take up discussions on the proposed pipeline’s extension with Moscow and Beijing during the BRIC summit in July.
The proposal would also be in focus when Russian President Vladimir Putin visits India later this year.
“India is a large importer of energy — in FY14, its net energy imports were 6.3% of the GDP. Without energy imports, we calculate it would have run a current account surplus of 4.6% of the GDP,” the Goldman Sachs said in a recent report.
India is also working on the $9-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.
During the World Petroleum Congress held in Moscow last week, petroleum minister Dharmendra Pradhan is learnt to have discussed the possibility of the pipeline with his Russian counterpart, Alexander Novak. India is looking to set up a pipeline from Russia either through China or the same route as TAPI.
Recently, Russia and China signed a 30-year gas contact worth $400 billion. GAIL (India) has already tied up 2.5 million tonne of liquefied natural gas (LNG) from Russia; the supply will commence from 2020. OVL managing director SP Garg said India is surrounded by countries rich in oil and gas. “Russia is one such country, which has surplus oil and gas. It will be a very good idea to build a pipeline from Russia to India,” Garg said.
Goldman Sachs said energy imports can be reduced further by switching from oil to natural gas and improving conservation.
“Reforms in the energy sector could reduce India’s annual energy import bill by $40 billion by FY23. Energy imports in a reform scenario could come down to about 4% of the GDP, from 6.3% currently,” it said.

Prem · Post by **Prem** » 09 Aug 2014 02:29

India takes in 46 pct more Iran oil in Jan-July -trade

http://www.reuters.com/article/2014/08/ ... 2O20140808

NEW DELHI, Aug 8 (Reuters) - India took about 46 percent more oil from Iran in January-July compared with a year ago as its refiners continued to lift higher volumes while world powers and Tehran work to resolve a decade-old dispute over the OPEC nation's nuclear programme.Six major powers and Iran failed to meet a July 20 deadline to negotiate a final agreement under which Iran would curb its nuclear activities in exchange for an end to economic sanctions that have crippled its economy.An interim deal that eases some sanctions while negotiations continue has been extended by four months. Senior U.S. and Iranian officials held "constructive" nuclear talks in Geneva on Thursday, and the major powers and Iran will meet again in advance of this September's U.N. gathering.Over the first seven months of the year, India's intake from Iran has averaged about 270,600 bpd, up from 185,700 bpd in the same period last year.In July, imports from Iran rose by about 26 percent from the previous month.January-July this year India's import of oil from Latin America rose by 1 percent, while that from Africa increased by about 10.5 percent, the data showed.Purchases from the Middle East declined by 6.2 percent over the period, the data showed.Overall, India shipped in 2.5 percent less crude in July than a year ago, the data showed. Total crude imports for the January-July period fell 1.2 percent.Iran's oil exports slipped for a second month in July to about 1.14 million bpd, still slightly above the limit set by the West under the interim deal aimed at curbing Iran's nuclear programme, according to sources who track tanker shipments.

panduranghari · Post by **panduranghari** » 09 Aug 2014 15:30

While Ukraine has long since ceased being a customer of Gazprom (for the simple reason being that it can't afford to pay for historical gas purchases let alone future ones, and with a long cold winter just 3 months ahead, Kiev is praying that its brand new Western "allies" will give it the loans it needs to buy Europe-sourced gas), the bulk of Russia-sourced gas into Europe still transits through Ukraine.

How to commit Economic Suicide

The Prime Minister estimates Ukraine could stand to lose $7 billion as a result of imposing sectorial sanctions against Russia, its biggest trading partner after the European Union.
“There is no doubt that Russia will continue its course in Ukraine it began a decade ago- banning Ukrainian goods, decreasing cooperation, pressure, and blackmail,” Yatsenyuk said.
On Monday the Ukrainian government said it plans to mirror Western sanctions and target Russia’s financial, energy, and military sectors.
Ukraine imports nearly 50 percent of its natural gas from Russia, which in 2013 totaled 27.7 billion cubic meters of natural gas.

If approved, a halt to Russian gas transit would hit Europe as the continent gets 15 percent of the energy it needs from Russia. In June Gazprom, Russia’s national gas company announced it was stopping deliveries to Ukraine, but would continue to ship 180 billion cubic meters of gas to Europe..

Kakkaji · Post by **Kakkaji** » 10 Aug 2014 09:28

Policy tweak to tap methane

New Delhi, Aug. 9: The government plans to amend the existing policy on natural gas to allow public and private sector companies to produce coal bed methane from their existing mines.

“The public and private sector firms, who have been allotted captive coal mines, would be allowed to produce coal bed methane from their existing coal blocks without competitive bidding. They would also be encouraged to sell the natural gas based on price bidding without following any allocation priority,” officials in the oil ministry said.

They said a note to make amendments to the existing coal bed methane policy would soon be moved to the Cabinet Committee on Economic Affairs to formalise the changes.

If and when approved, the move is likely to help power, cement and iron and steel companies that are holding mining rights for captive coal blocks.

According to existing norms, the government has to invite bids from public and private firms for producing gas trapped in coal seams under the CBM policy.

The government has already made an exception to the rule for CIL and its subsidiaries such as Eastern Coalfields, Bharat Coking Coal and Mahanadi Coalfields, which can produce natural gas from their blocks without any competitive bidding.

Finance minister Arun Jaitley in the budget said the country would now seek to double its existing gas pipeline infrastructure of 15,000 km as the government wanted to provide a clean energy source to consumers.

With the third-largest proven coal reserves, and the fourth largest coal producer in the world, India holds significant prospects for commercial recovery of CBM.

According to the Directorate General of Hydrocarbons (DGH), India has CBM reserves of 4.6 trillion cubic metres. The current CBM production is 0.45 mmscmd and is expected to go up to 4 mmscmd by 2016-17. Since 2001, 33 CBM blocks have been awarded in four auction rounds.

Two CBM blocks were awarded to ONGC and one to Great Eastern Energy Company on a nomination basis.

Many of the coal blocks are gaseous and unsafe, where mining of coal is possible only after the extraction of CBM. The extraction of CBM from these mines would help unlock significant quantities of coal in areas of Jharkhand and Bengal.

This will be a good move if it happens quickly, for West Bengal and esp for the city of Kolkata. Piped CBM from these coal fields can easily replace LPG for residential use. No more messing with LPG cylinders in Kolkata.

A number of coal beds that are now unsafe due to presence of gas, can become eligible for mining again.

panduranghari · Post by **panduranghari** » 14 Aug 2014 01:15

http://vimeo.com/album/2940900/video/99913495

A very short video but worth watching.

A good comment

I prefer to use the lens of Hanlon’s Razor for articles like these: Never attribute to malice that which is adequately explained by ignorance.

Like most people, your average journalist has deep seeded biases that run counter to the ecological realities of overshoot, EROEI, limits, and such.

Don’t get me wrong, they’re able to prod and question things and yield accurate conclusions on many topics; even on topics they have bias on. However, like what unfolds in Daniel Quinn’s philoso-fiction book Ishmael, the consequences of peak oil run directly counter to the progress paradigm. As we’ve all seen in our personal lives people, even highly intelligent people who usually demonstrate critical thinking skills, run mental gymnastics to avoid the very simple scenario lying before us.

People look at hundreds of years of challenges we overcame; challenges that on the surface seem more daunting than switching from one energy source to another, and conclude that human ingenuity has always won. Even people I know with degrees in the STEM field are blind to why energy is a unique challenge.

People first need to grasp how ubiquitous oil is in our lives (an easy task since everything from my toothpaste, walls, glasses, and windows are covered in it). That way they understand it is an especially large challenge, and it intrigues them by making it present instead of abstract.

Then, they need to see why energy is a unique challenge. It is the master resource. This is a bit more difficult, but I find people get it when it’s explained by referencing the Sun, photosynthesis, asking “why do we starve when we don’t eat”, and again taking energy from an abstract to a very present reality. They see that an organism can have all the “technology” (ie enzymes) in the world, but without energy it dies, nothing happens without energy, regardless of technology, intelligence, or other resources.

The last, and most difficult, thing for people to grasp is that global GDP grows because for 250 years growth in energy supplies allowed it to. Again making the abstract tangible is best – the connection between recessions and oil price spikes, oil prices in 2008 being higher than in the 1970s oil crises that caused severe recessions, the price NOW that is on average higher than 2008, and connecting that to slow global growth. A bit more difficult because people have already rationalized these events into ideology (it was the bankers, the politicians, OPEC/oil companies gouging on prices, etc).

Once all of that is laid bare, then the final dot is the inseparable link between exponential GDP growth and exponential debt growth; the need for the future to be bigger than the present to pay off interest in all levels of society – consumer, commercial, and governmental. That just a few years, or even quarters, of negative growth can cause the failure of markets, governments, and the entire financial system. Once that system breaks, then transitioning to another energy source “smoothly” is over.

We were so close in 2008. I find not many people grasp how truly dire the situation was in 2008. They rabble on about central banks flooding the system with money and TARP without realizing it is a far, far, far more preferable situation than what were on the cusp of. We are all truly lucky beyond any measure, and I wake up with gratitude every day. Yet, in explaining all this to others, they say it’s all so depressing. Difference in perspective I guess…

arun · Post by **arun** » 23 Aug 2014 13:30

Reliance Industries to import 1.5 Million Tonnes p.a. of Liquified Ethane from the US via 6 Very Large Ethane Carriers for which it has placed an order:

RELIANCE EXPANDS FEEDSTOCK SUPPLY OPTIONS FROM NORTH AMERICA FOR ITS CRACKERS IN INDIA

Mumbai, August 20, 2014: The Shale Gas industry, in North America has grown exponentially in the past 5 years. As a result Ethane has become the dominant feedstock for crackers replacing liquids. Reliance’s investments in Shale Gas and its existing crackers portfolio in India are a natural fit for sourcing Ethane from North America and shipping it to India to attain long term feedstock competitiveness. Reliance is implementing a project to source 1.5 MMTPA of Ethane from US to feed its crackers in India.

Reliance has now executed storage and capacity agreements for liquefaction and export of ethane with a North American Terminal, which is expected to commence operations in the second half of 2016.

For the purpose of transporting liquefied ethane to India in a safe and cost efficient manner, Reliance has ordered six state-of-the-art Very Large Ethane Carriers (VLECs) which will be the largest vessels ever built in the world. The ships are expected to be delivered starting last quarter of 2016 in synchronisation with the readiness of terminal in North America.

Reliance is also building a world-scale receiving and storage facility in India for liquefied ethane and pipeline to deliver ethane to our crackers.

Reliance will be upgrading its crackers to maximize cracking of Ethane, have maximum operational flexibility and capability to optimize feed stocks with complete control of supply chain.

The project will significantly improve the long term competitiveness of our cracker portfolio through dedicated feedstock, enhanced margins, higher capacity and end-to-end integration.

See here:

RIL Press Release

Klaus · Post by **Klaus** » 23 Aug 2014 16:01

^^^ I would assume that these VLEC's need transhipment facilities somewhere in India, something that doesnt yet exist. BTW these ships of 87,000 cubic meter capacity are being built at Jiangnan Shipyard.

RIL is already hedging its bets in case GOI forces redirection of the gas from KG-D6 to the GGU at Chennai.

arun · Post by **arun** » 02 Sep 2014 12:01

First strategic crude oil reservoir located at Vishakapatnam will be ready for filling by end of this year.
Vishakapatnam facility is one of three facilities with a capacity totalling 39 Million Barrels or 13 Days Imports that is coming up in Phase 1 of India’s strategic crude oil reservoir plan.
The Long term plan is to increase reserves to 90 days imports by 2020.
The next two facilities at Mangalore and Padur (near Udupi), both in Karnataka, to be ready by second half of 2015.
Survey identifying crude storage capacity for 92 Million barrels has been done:

India will be ready to fill its first strategic crude oil reservoir by the end of the year, the head of the project said, …………………..

“Two more storage facilities on the West coast are likely to be finished by the second half of 2015,” Rajan K. Pillai, chief executive officer of Indian Strategic Petroleum Reserves Ltd, said in a phone interview from a New Delhi suburb on Monday. The first reservoir is at Visakhapatnam in Andhra Pradesh state.

The three initial depots will have a combined capacity of about 39 million barrels, equivalent to 13 days of imports, oil minister Dharmendra Pradhan has said. The government plans to increase that to 90 days of imports by 2020. ……………………………

It will cost about $4.2 billion to fill the three reservoirs at an average Brent crude oil price of $108.04 a barrel this year.

To help reduce that number, the government plans to lease 15 million barrels of capacity in the reservoirs to companies including Abu Dhabi National Oil Co. and Kuwait Petroleum Corp., which they will fill at their own cost, Pradhan told parliament on 8 August. ……………………..

The petroleum reserve adds India to the group of developed nations and China that have such facilities. The US strategic petroleum reserve has a capacity of 727 million barrels, according to the Department of Energy. China, which imports more than half of its crude, had 141 million barrels of strategic storage capacity last year and plans to add a further 50.3 million barrels, according to data compiled by China National Petroleum Corp.

The storage reserve takes India closer to standards set by the Paris-based International Energy Agency, which mandates its members hold stocks equivalent to 90 days of imports.

State-run Engineers India Ltd has already completed studies on building new caverns in four locations with a total capacity of about 92 million barrels, according to the oil ministry. ………………….

See here:

Petroleum reserve to cut import-shock risks

panduranghari · Post by **panduranghari** » 02 Sep 2014 20:30

Klaus wrote:^^^ I would assume that these VLEC's need transhipment facilities somewhere in India, something that doesnt yet exist. BTW these ships of 87,000 cubic meter capacity are being built at Jiangnan Shipyard.

RIL is already hedging its bets in case GOI forces redirection of the gas from KG-D6 to the GGU at Chennai.

RIL has invested a lot in the Marcellus shale gas plant in US. Though this is currently the biggest shale producer in the US ergo the world, the long term view of industry insiders is the US shale gas production is in decline. The Haynesville, Barnett shale fields which were until last year the biggest in the US are apparently past their peak. In my uneducated opinion, the Marcellus shale gas plant has the capacity to bankrupt RIL.

svinayak · Post by **svinayak** » 02 Sep 2014 22:40

panduranghari wrote:
Klaus wrote:^^^ I would assume that these VLEC's need transhipment facilities somewhere in India, something that doesnt yet exist. BTW these ships of 87,000 cubic meter capacity are being built at Jiangnan Shipyard.

RIL is already hedging its bets in case GOI forces redirection of the gas from KG-D6 to the GGU at Chennai.
RIL has invested a lot in the Marcellus shale gas plant in US. Though this is currently the biggest shale producer in the US ergo the world, the long term view of industry insiders is the US shale gas production is in decline. The Haynesville, Barnett shale fields which were until last year the biggest in the US are apparently past their peak. In my uneducated opinion, the Marcellus shale gas plant has the capacity to bankrupt RIL.

The shale gas and fracking industry is a big hype and psy ops

Klaus · Post by **Klaus** » 03 Sep 2014 04:13

panduranghari wrote: RIL has invested a lot in the Marcellus shale gas plant in US. Though this is currently the biggest shale producer in the US ergo the world, the long term view of industry insiders is the US shale gas production is in decline. The Haynesville, Barnett shale fields which were until last year the biggest in the US are apparently past their peak. In my uneducated opinion, the Marcellus shale gas plant has the capacity to bankrupt RIL.

If the investment is only at the LNG terminal, then there is a possibility of using it for other purposes. However, investment in the gas-field is more riskier.

RIL could also be looking at the Canadian tar sands as an option to feed its thermal crackers.

One doesnt get to hear much about the much vaunted Eagle-Ford and Bakken fields anymore that were doing the rounds less than 2 years ago.