Oil & Natural Gas: News & Discussion

[Theo_Fidel]

Switch to LPG would be better, less evaporation problem, but back then and even now LPG is relatively less available. I suspect subsidy levels would be even higher. Bit if nothing else it will get rid of that infernal smell of kerosene cooking that permeates all the dhaba food in desh. Even worse is cooking using Diesel, which I have had the dubious distinction of sampling in TopSlip once. Truly revolting.

[Prem]

Oil India Said to Consider Purchase of Maurel’s Gabon Fields
http://www.businessweek.com/news/2011-0 ... ields.html

July 21 (Bloomberg) -- Oil India Ltd., the nation’s second- biggest state-run oil producer, is in talks to buy a stake in Etablissements Maurel & Prom SA’s assets in Gabon, three people with direct knowledge of the matter said.

Oil India is studying the fields and plans to appoint banks for financial due diligence soon, two of the people said, asking not to be identified because the talks are private. Maurel wants to sell a controlling stake in the fields, which may be valued at more than $1.5 billion, one person said.Oil India and Oil & Natural Gas Corp., the country’s biggest explorer, are seeking access to deposits as energy demand in the world’s second-most populous nation rises. Oil India wants to buy shale gas assets in Canada and Australia and has held initial talks with Calgary-based Americas Petrogas Inc. about acquiring the company’s shale gas fields in Argentina, two of the people said.

[Theo_Fidel]

http://www.moneycontrol.com/news/busine ... 62864.html

State-run Oil and Natural Gas Corporation ( ONGC ) is all set to start production of natural gas and oil from its offshore blocks, G1 and GS15, in the KG basin by month end and is awaiting a nod from the PMO for formal inauguration, sources said.

As this is the first offshore block of the PSU in the Krishna-Godavari basin being put into production, it is apt for Prime Minister to inaugurate the facility, a senior official, who did not want to be quoted, said.

"As the first offshore block of the country, Mumbai High in the West Coast was inaugurated by then PM Indira Gandhi, we want the present PM Manmohan Singh to inaugurate the East Coast offshore field," the official said.

With the new facility, the initial production of gas is set to touch two million standard cubic meters (SCM) and that of associated oil to 9,400 barrels per day, sources said.

The oil and natural gas major, which has 24 blocks in the basin, currently produces 840 tonnes of oil per day and 3.8 MMSCD of gas from its onshore blocks.

While, the G1 is located 28 kms off Amalapuram coast in water depths ranging from 135 to 500 meters, the GS 15, in shallow waters, is located at 5 kms from the coast in KG basin.

The project is almost five years behind schedule with the cost overruns following delay on part of the Australian contractor Clough Engineering who eventually quit the project.

The production of the gas was originally scheduled to start from the integrated field way back in April 2006, at an estimated cost of Rs 1,200 crore

[Prem]

http://www.marketwatch.com/story/india- ... 2011-07-22
India clears BP's $7.2-billion deal with Reliance

(MarketWatch) -- India's government on Friday approved BP PLC's $7.2 billion deal to purchase a 30% stake in 21 oil and gas blocks owned by Reliance Industries Ltd. The deal between the two firms was made in February for 23 blocks, but the government held back approval for now over two non-producing blocks. Under the February deal, the two firms also agreed to set up a joint venture to market natural gas in India. Reliance Industries /quotes/zigman/1650175 IN:500325 +1.49% , controlled by billionaire Mukesh Ambani, has been struggling recently due to lower gas production and said it expects to benefit from BP's deepwater expertise. BP /quotes/zigman/247026/quotes/nls/bp BP -0.28% /quotes/zigman/210014 UK:BP +0.07% , for its part, has been looking for areas to expand exploration and production, with drilling in the Gulf of Mexico still halted since the massive oil spill there last year.

[Theo_Fidel]

There have been Earthquakes in Texas as well.

http://online.wsj.com/article/SB1000142 ... 41882.html

Quakes Push Arkansas to Limit Gas-Waste Wells

When hundreds of small earthquakes began shaking central Arkansas last year, many residents suspected the disposal facilities were to blame. In January, the state ordered a six-month moratorium on new disposal facilities in the area, and in March operators agreed to shut two disposal wells while the state investigated.

Most of the quakes were too small to be felt by residents, but a few were more significant. In February, a 4.7-magnitude quake near the town of Greenbrier, about 45 miles north of Little Rock, caused minor damage and could be felt in Memphis, Tenn. "They just became very, very intense and very frequent all of a sudden," said Sam Lane, a 28-year-old Greenbrier resident who says the quakes cracked bricks and drywall in his home. "We got to the point where we took all the big mirrors and pictures off the walls." Mr. Lane is one of several residents suing the companies that operate the disposal wells. The companies dispute his claims.

Geologists have long known that injecting liquid into the ground can induce earthquakes along existing fault lines. The fluid acts like air on an air-hockey table, allowing rocks to flow past each other more easily.In 2010, researchers at Southern Methodist University in Dallas found that a series of quakes at Dallas-Fort Worth airport were likely related to by nearby disposal facilities associated with the Barnett Shale gas field. Two disposal wells were shut down following the quakes. Scientists with the Arkansas Geological Survey found a correlation between the quakes and the disposal facilities, and noted the quakes slowed after the wells were closed. Disposal-well operators say a clear link hasn't been established and note Arkansas had earthquakes before drilling began.

[Prem]

http://www.reuters.com/article/2011/08/ ... QK20110808
Iran says has not reduced oil exports to India for August

Aug 8 (Reuters) - Iran has not reduced its oil exports to India for the month of August, Deputy Oil Minister Ahmad Qalebani said at a news conference on Monday.
Indian refiners had said the National Iranian Oil Co (NIOC) halted supplies in August because no solution had been found to a sanctions-related payment problem which has prevented them from getting funds to Tehran this year, a problem which both sides said appeared to be over on Monday

[Prem]

http://www.celsias.com/article/beginnin ... ollar-oil/
The Beginning of the End of the Supremacy of the US Dollar in Oil

India’s government has decided to pay for its imports of Iranian oil in rupees.
The decision by one of the world’s strongest emerging economies, represents yet another undermining of the both the sanctions currently imposed on Iran by both the United States and the United Nations Security Council and the fiscal hegemony exercised over global oil trade by both New York and London.According to a report in India’s The Telegraph newspaper, "Through this method, the path for India's national currency to enter the international currency market will be paved. India's Ministry of Finance has considered a method to resolve the tension over currency with Iran.According to this proposal, oil buyers are allowed to open Letters of Credit in rupees and this Letter of Credit can be used by Iran to buy Indian productsUnder terms of the arrangement, Iran can buy Indian commodities including tea, rice, machinery, and engineering and technical services instead of using dollars, while Iran under terms of the arrangement can convert its surplus currency revenues from selling of oil to India into euros. Should Tehran endorse the arrangement it will mark the first time that the rupee will be utilized as an international currency beyond the dollar/euro zone

[Prem]

http://online.wsj.com/article/SB1000142 ... 95748.html
Greater Game for India's Energy A Instead of racing against Beijing to buy oilfields overseas, New Delhi should get out of the way at home
By ABHEEK BHATTACHARYA

A new version of the Great Game is afoot. Or so New Delhi believes, as it has nervously watched Beijing acquire energy assets from Africa to Central Asia over the past decade. Now India is belatedly trying to get into the same game. The latest gambit came last month when Montek Singh Ahluwalia, India's Planning Commission head, said the government was looking into forming a sovereign wealth fund (SWF).
That might make good politics at home. But is it good business sense from the perspective of how best to secure India's energy needs in the future? Almost certainly not.
To be sure, India's private-sector energy companies have enjoyed success venturing overseas. Reliance Industries has taken stakes in U.S. shale gas ventures to gain know-how about the latest revolution in global energy. Adani Power has gotten into deals with coal-miners in Indonesia to beef up its supply chain against the possibility of supply disruptions within India.
But that's very different from the Chinese model some in New Delhi now want to emulate of foreign investment driven by state-owned companies for strategic aims. India has tried this by mobilizing the state-owned Oil and Natural Gas Corp., or ONGC, with far less success than the private sector. An SWF would likely meet the same fate.The first problem is state capacity. India lacks China's top-down culture, which can mobilize the state's diplomatic and financial wherewithal to lobby a foreign government for a big asset. Hence ONGC has lost when bidding in Kazakhstan and elsewhere.The predicament of the two other fossil fuels—oil and gas—is similar, with administered prices and excessive regulation dissuading producers. No surprise that 34% of India's sedimentary oil basins lie unexplored or poorly explored, according to Gokul Chaudhri of BMR Advisors. India has 50 trillion cubic feet (tcf) of proven natural gas reserves and 300-1200 tcf of shale gas, according to exploration firm Schlumberger's initial estimates in December. Yet global majors stayed away from an exploration auction this year. Exports of oil and gas produced domestically are forbidden, so multinationals would be forced to market the product within India at uneconomical prices.

Beijing is making a costly bet that it can't trust markets to meet China's energy needs. But India doesn't have to play the same game. Rather than racing against China in a futile effort to gain access to every last oilfield abroad, India would be better off playing to its strengths as an increasingly market-driven economy. That includes encouraging the development of a true market for energy.

[nithish]

ONGC to spend Rs 1000cr on exploration in Guj, Rajasthan

The western onshore basin of ONGC plans to spend Rs 1,000 crore on exploration in Gujarat and Rajasthan in two years, Basin Manager P B Pandey said today.

Talking to newsmen here on the occasion of 56th foundation day, Pandey said, "The basin has a target to drill 49 exploratory wells this financial year and also to deploy two 3D-3C, 5 3D and one 2D seismic crew for acquiring high resolution seismic data".

The target for drilling of wells is higher this year due to success in drilling of 43 exploratory wells last year, 21 of which were hydrocarbon bearing.

The success percentage of wells drilled to hydrocarbon bearing was 55.6 per cent which means that for every 1.8 wells drilled, one well was proved successful, said Pandey adding this ratio was considered quite creditable in the hydrocarbon industry.

The significant new finds of the basin in 2010-11, include Vadtal 1, Vadtal 3 and Aliabet 2, of which Aliabet promises to be good find for ONGC, Pandey said.

After failure of GSPCL in finding oil and gas from shallow water in Aliabet, ONGC took it over and started drilling wells there.
"We have started getting about 1.5 lakh cubic meter gas per day from two drilled wells in Aliabet, which promises to be a good find for us," Pandey said.
"Now we will take up a cluster of four wells in this region to save expenditure being incurred on exploration and will start commercial production from it after getting oil from it first, said Pandey.

Because of infrastructure problems and non-availability of shallow rig, the work of drilling of wells in Aliabet is getting delayed, he said.
After Ankleshwar and Gandhar oil and gas field, both Aliabet and Vadtal may turn out to be prospective oil and gas fields, Pandey hoped.

Pandey said a proposal has been sent to the government for increasing production of gas from the gas fields located at Gandhar, about 100 km from Vadodara.

The discovery of huge quantity of gas from the fields in Gandhar in 1983 changed the industrial scenario in Gujarat and other parts of the country as it turned out to be the best region for gas production in the country.

After 28 years since its inception, the production of gas from the Gandhar fields has started declining.
The same is the case with wells drilled in Ankleshwar region in neighbouring Bharuch district from where oil was struck in 1960.
Pandey said that wells are being drilled in the area to get more oil.

Meanwhile, commercial production of gas from three wells dug up in Kayavarohan village,about 15 km from Vadodara, will start soon, Pandey stated adding the company has also taken up of drilling of 8 wells in Padra taluka of the district.

[Klaus]

Oil leaks from tanker stuck on North Island reef.

The salvage operation also includes plans to move the containers off the ship to lighten the load and refloat the vessel, he told reporters.

The ship was listing at an 11-degree angle and was full of containers, so it was a "very, very difficult" task, Capt Walker said.

On Sunday, teams will start working on moving things around the ship to create space for equipment to help salvage the containers.

Salvage teams have arrived from Netherlands, Singapore and Oz.

[Prem]

http://www.bloomberg.com/news/2011-10-2 ... ields.html
Oil India, Gabon Said to Hold Talks on $2 Billion Oilfields

Oil India Ltd. (OINL) has held talks with Gabon’s national oil company for a partnership to buy Etablissements Maurel & Prom SA’s assets in the African nation, two people with direct knowledge of the matter said.
India’s second-biggest state-run oil producer completed technical and financial assessments of the fields, which may be valued at more than $2 billion, the people said, asking not to be identified because the talks are private. Oil India and Gabon Oil Co. are yet to decide how much of the assets each will hold, the people said.
Oil India plans to spend as much as half of its 117.7 billion rupee ($2.4 billion) cash hoard to buy energy deposits overseas to meet demand in Asia’s second-fastest growing major economy. Sanford C. Bernstein & Co. and Goldman Sachs Group Inc. predict a surge of oil and gas takeovers after global energy shares fell last quarter to the lowest since December 2008. “Oil deposits around the world are a must-have if India is to keep growing its economy,” said D.K. Aggarwal, New Delhi- based chairman of SMC Investments and Advisors Ltd. “Now would be a time to buy as oil assets will get more and more expensive in the future. Tying up with the national oil company will give them that strategic edge.”

[Prem]

New Technologies Redraw the World’s Energy Picturehttp://www.nytimes.com/2011/10/26/busin ... .html?_r=1

In the last couple of years, vast amounts of natural gas have been found deep under Israel’s Mediterranean waters, and studies have begun to test the feasibility of extracting synthetic oil from a large kerogen-rich rock field southwest of Jerusalem. Israel’s swing of fate is just one of many big energy surprises developing as a new generation of unconventional fossil fuels take hold. From the high Arctic waters north of Norway to a shale field in Argentine Patagonia, from the oil sands of western Canada to deepwater oil prospects off the shores of Angola, giant new oil and gas fields are being mined, steamed and drilled with new technologies. Some of the reserves have been known to exist for decades but were inaccessible either economically or technologically. Use whatever hackneyed phrase you want, like tectonic shift or game-changer,” said Edward L. Morse, global head of commodity research at Citigroup. “These sources will dramatically change the energy supply outlook, and there is little debate about that.” The United States may now have the means to reduce its half century of dependence on the Middle East. China and India may have the means to fuel the development of their growing middle classes. Japan and much of Europe may have the chance to reduce dependence on nuclear power. And, at least theoretically, poor African countries might be able to lift themselves out of poverty.
For consumers around the world, the new fuels should moderate future price increases. In 2000, fewer than 20 vessels in the world could drill deepwater wells. Now there are nearly 200, and more almost every month. Global deepwater oil production leapt to roughly seven million barrels a day in the last 11 years, up from 1.5 million barrels, and now provides about 8 percent of the world’s oil supply. That production could double by 2020, according to experts. Most of the drilling is in the Gulf of Mexico, off Brazil, Australia and India, and along the west coast of Africa. But only about 10 percent of the world’s deepwater oil and gas fields have been extensively explored and drilled

Bakken field in North Dakota and Montana now produces 400,000 barrels a day, up from a trickle in 2007, and oil executives predict production could soar to a million barrels a day by 2015. The first well was drilled in the Eagle Ford shale field in south Texas three years ago; the field now produces more than 100,000 barrels a day, with 420,000 expected by 2015. There are 20 other shale and similar tight rock fields across the United States that could make states like Ohio and Michigan major producers. Exploration of such fields outside the United States and Canada is barely in its infancy, although there are major shale fields across Europe, China, Australia, Africa and South America. “It could change production forecasts around the world,” said Bobby Ryan, Chevron’s vice president for global exploration. “But we are still at the point of the spear. We have to shoot the seismic first to find out

The coasts of East Africa are rich in gas, and China, Indonesia, Malaysia, Australia and the Philippines also have significant deepwater potential. And India’s deepwater prospects could provide much of its gas needs as its economy grows. “We are just at the beginning of this story,” said William Colton, Exxon Mobil’s vice president for strategic planning. “It’s only likely we will find more deepwater resources.”

[svinayak]

Each oil well needs $10M to close it and seal , if is not going to be developed as a production well.
This is a very expensive affair

[Prem]

Pendulum swings on American oil independence
http://www.ft.com/intl/cms/s/0/65bfd07a ... z1cQVQ2aM5

Over the past couple of years, there has been a great U-turn in US oil supply,” says Daniel Yergin of IHS Cera, the research group. “Until recently, the question was whether oil imports would flatten out. Now we are seeing a major rebalancing of supplies.”Many analysts expect that in the coming decade the US will leapfrog Saudi Arabia and Russia to become the world’s largest producer of liquid hydrocarbons, counting both crude oil and lighter natural gas liquids such as propane and ethane. That optimism reflects the increasing flow of “tight oil” as well as gas from shale – rock formations holding reserves unlocked through new extraction technologies.
Hydraulic fracturing (pumping a mix of water, sand and chemicals underground at high pressure to crack the rock) and long-reach horizontal drilling (sending wells up to a mile sideways and more than a mile below the surface) have transformed US gas production, opening up reserves some estimate will last 100 years. Now these techniques, used in places such as North Dakota, are having a similar impact on oil output. Already, America has cut the share of its oil consumption met by imports from more than 60 per cent in 2005 to 47 per cent last year.Techniques such as those being used in North Dakota are being tried in tight oil reserves all over North America: in the Eagle Ford shale and Permian basin in Texas and the Utica shale in Ohio and Pennsylvania. IHS Cera forecasts that US tight oil production will rise from 900,000 b/d this year to 2.9m b/d in 2020 – roughly half today’s total US output.Meanwhile, in the same period, Canada could double production from the Alberta oil sands to about 3m b/d, as improved production techniques turn a marginal, high-cost resource into a more profitable commercial proposition. Canada, already a net exporter, overtook Saudi Arabia in 2004 to become the largest oil exporter to the US and its lead is set to grow.In 2010, the US and Canada produced almost 10m b/d and consumed about 22.5m b/d. Given the right opportunities and incentives – and the access to closed areas such as America’s east and west coasts for which the oil industry is lobbying – by 2035, the two countries’ production could rise to 22m b/d, the NPC suggested. If demand could be held constant, that would cut North America’s shortfall to just 0.5m b/d.

[Pratyush]

GAIL plans $1 bn more for shale gas shopping

[Pratyush]

Petrobras divestment: India invited

[Varoon Shekhar]

There's some unpleasant to bad news regarding Indian Oil Corporation. Losses to the extent of US $1.5 billion and talk of closing down one or two refineries.

Any updates, perspectives, solutions?

[abhischekcc]

Shale oil, deepwater drilling, synthetic oil (from wood, NG, garbage, or anything else), solar power, etc - all need oil prices to stay above USD 50-60 per barrel to be economically viable and to attract investors. It is not something that can be expected to bring prices down even if we find it in abundance. The only thing that can bring down oil prices is more oil wells in 'normal' areas are found, developed, and oil is brought to market. These kind of wells are what are found in Iraq and Libya - the ones that went offline because of the Anglo Saxon invasion. Amazing, isn't it!

[Austin]

How much oil is in the Arctic?

For years, experts believed that the Arctic Region contained about 20% of the world’s unexploited oil and gas reserves. Now, there are reasons to believe that the Arctic hides a much greater share of natural resources.

Due to the fact that over the past 15-20 years no large onshore oil or gas deposits have been discovered on the territories of the world’s principle oil and gas producers, Russia included, 30% of oil and gas production has been aimed seawards. This will make the Arctic Region a global oil and gas hub in the near future.

The Arctic has undergone severe geological changes in the past several million years. Oil and gas reserves have “migrated” with the permafrost ice cap exerting extreme pressure on the gas reserves. The subsequent melting of the Arctic ice has reduced this pressure, causing the formation of so-called gas pockets.

As oil reserves began to dwindle, natural gas reserves increased. In 2008, the UN Geological Service published the results of a five-year study according to which the bulk of gas rich areas in the Arctic are in the Russian sector.

The Kara and Barents Seas store between 65 and 215 billion barrels of oil equivalent. Gas accounts for 80% of the deposits, being a more functional fuel than oil. This is what has attracted international attention to the Russian sector of the Arctic. If Russian scientists prove that the Lomonosov and Mendeleev underwater Ridges are extensions of the Russian continental shelf, Russia will obtain the right to an extra 1.2 million square kilometers of oil and gas fields beyond the Arctic Circle adding billions to its reserves.

Russia began to explore the Arctic coast in the 19th century. The UN Convention on the Law of the Sea of 1982 provided the then Soviet Union and other countries of the Arctic Club, including the US, Canada, Norway and Denmark, with the right to extend their economic zones to the extent of their continental shelves. For years, none of the countries took any steps in this direction.

Even though present-day geological exploration gives no exact figures as to the amount of oil and gas in the region, the following data does exist. According to official reports submitted by the Russian Institute of Oceanic Studies, the western sector of the Russian Arctic has about 42 billion tons of oil and 71 trillion cubic meters of gas. The eastern Arctic seas contain about 9 billion tons of oil and 10 trillion cubic meters of gas. Gazprom estimates the resources of the Barents, Pechora and Kara Seas at around 70 billion tons of fuel oil equivalent.

Even though there are no oil wells in the Laptev Sea, the East Siberian Sea or the Chukchi Sea, there exist a whole number of developed territories, including the northern shelf of Alaska and Canada in the Beaufort and Chukchi Seas, the south western part of the Russian Barents Sea and part of the Pechora and Kara Seas. The continuing melting of ice as a result of global warming may prove helpful, making it possible for geologists to expand exploration work to more territories.

By now, 8 of 13 known deposits in the Barents Sea are under exploitation. Gas reserves of the Barents and Kara shelf are estimated at 4.8 trillion cubic meters. According to current reports, the Barents Sea’s oil reserves, estimated at 450 million tons, are all being exploited.

Large volumes of oil and gas from the Arctic can be transported in tankers to countries of Asia and the Pacific. Sergei Naryshkin, head of presidential administration, said that energy cooperation with countries of the Pacific Rim is of strategic importance for Russia. The demand for oil and gas in this region is growing much faster than in Europe.

Scientists hope that the Arctic Region will soon turn into a major source of oil and gas. In 2012, the Russian government will adopt a program to tap the resources of the Arctic continental shelf. This will be followed by large-scale exploration work in the Russian sector of the Arctic. Since there is little hope of finding large oil and gas deposits onshore, offshore reserves are the only option to stake on in the years to come.

[Prem]

http://www.businessweek.com/news/2012-0 ... -plan.html
Reliance Said to Get Approval for $1.5 Billion Gas Plan

Billionaire Mukesh Ambani’s Reliance Industries Ltd. and BP Plc won government approval to spend $1.5 billion to develop four discoveries that may increase output from India’s biggest natural gas field, three people with direct knowledge of the matter said.A government panel endorsed the plan aimed at producing about 10 million cubic meters of gas a day from the satellite fields in the KG-D6 block off India’s east coast, the people said yesterday, asking not to be identified because the matter hasn’t been made public. Output from the area may start by 2015, one of the people said, behind the date of 2014 flagged by BP Chief Executive Officer Robert Dudley in September
Production at KG-D6 in the Bay of Bengal has been declining since 2010, and it’s operating at less than half the peak rate of 80 million cubic meters a day projected by the government and Reliance. BP had expected the approval last month, which would have allowed sub-sea work to be done from December to March, when waters are calmer, the people said.“Approvals after all this while are definitely welcome, but it ideally should have come quicker,” said Deepak Pareek, a Mumbai-based analyst with Prabhudas Lilladher Pvt., who has an “accumulate” rating on Reliance. “We still have to see how much work they can finish before the weather starts getting rough in the offshore field.”

[Vipul]

ONGC finds gas reserves off Daman.

State-owned Oil and Natural Gas Corp (ONGC) has discovered about 4 trillion cubic feet (Tcf) of gas reserves off the Daman coast, which can produce 7 million cubic meters a day of gas in four years time."ONGC has over past few years made several discoveries some 50-km off the Daman coast. These cluster together hold about 132 billion cubic meters (4 Tcf) of in-place reserves," a source close to the company said.

The Daman cluster fields constitutes the B-12 North & B-12 South, C-26 and SD. The exploratory efforts and drilling in the area is continuing.The company is currently working on a plan to develop the reservior found in the Arabian sea, he said adding ONGC may invest $4 billion in developing the reserves.

ONGC currently produces about 51 mmcmd of gas and the new reservior found in a block that the company had got on nomination basis, would help add over 13% to its output.Its biggest gas field, Bassein off the west coast, currently produces 31 mmcmd.

"The field found off Daman can typically produce for 15 years," the source said adding ONGC plans to construct a gas receipt facility some 100-km south of Mumbai for processing the gas before it can be sold to consumers like power plants.

Separately, ONGC in a statement yesterday said it has made four oil and gas discoveries in the country.Gas was found in a well drilled about 7 km from Karimganj town in Assam while oil flowed in an exploratory well near Mandhali village of Mehsana district in Gujarat.Also, oil and gas was would in a well in Nambar block, about 6-km from Noajan town in Golaghat district of Assam as well as in Viral block near Kadi town of Mehsana district of Gujarat.

"With these four discoveries, ONGC notifies 15 discoveries in three quarters of the Fiscal 2012," the statement said.

[chackojoseph]

Rajasthan Joint Venture starts oil production in Bhagyam

[Austin]

EU adopts oil embargo on Iran

British Foreign Secretary William Hague said the measure was part of an unprecedented set of sanctions. “I think this shows the resolve of the European Union on this issue.”

[dinakar]

Long time back Theo saar has said something about ONGC not developing the East coast field like Reliance... Here are some details regarding what the problem is....

The immense excitement over the KG basin deepwater block KG-DWN-98/2 from the time when ONGC began making discoveries in the block seems to be ebbing now. The excitement is now being transformed into frustration as the company is figuring out that the discoveries are too small to justify commercial production. Exploration is an uncertain science and while the adjacent D-6 block seems to be full of gas, the ONGC block seems to be run into no such luck.
*The block has turned out to be geologically much more complicated that what was assumed earlier. Keeping in mind the different geological structures of the two areas within the block, the entire area has been divided into two parts, the northern and the southern discovery areas, While the Northern Discovery Area (NDA) comprises of discoveries Annapurna, Kanakdurga, Padmawati, D-1, E-1, A-1, U-1 and W-1, the Southern Discovery Area (SDA) has an ultra deep discovery, UD-1 including its northern and southern extensions.
*But sadly enough, the NDA discoveries didn`t come up to much and the company had thought of abandoning plans of putting them to commercial use.
*Even for the UD-1 discovery, which was once thought to be highly prospective, the prognosis had turned out to be rather poor. The total GIIP was a mere 120.55 BCM (4257.1 Bcf) and at this level of reserves, the ultra deepwater discovery was perhaps not worth putting to commercial use.
*The company had thought of two scenarios going forward. One envisaged a standalone development of UD-Main area, while under Scenario-2, integrated development of the two areas (UD-Main and the contiguous North West Area) with sub-sea completed wells (in clusters) tied to a semi-submersible at the UD-Main structure and gas evacuation by a 140 km pipeline was envisaged.
*The expected peak gas production rate under Scenario-1 has been pegged at 565 MMScfd, while under Scenario-2, it has been estimated at 777 MMScfd. A total 8 development wells are planned for Case-1 and 11 wells for Case-2.
*Despite all the efforts going into hammering out a programme for the SDA, ONGC is still skeptical of the overall plan. The company is of the view that a concrete development plan of the project, at this stage, is not possible as it may change based on emergence of new data.
*Knowing that it is never going to be easy to have a breakthrough, the company had sought five years to submit the Declaration of Commerciality of the UD-1 discovery. This is something that the DGH cannot agree to as is far too out of line with what is prescribed in the PSC.

The UD-1 discovery gas a GIIP of just 120 BCF, not enough to justify commercialization.
*Clearly, current gas prices does not make exploitation of such reserves viable.
*Then again, UD-1 well is is an ultra deepwater discovery, at a depth of 2,841 metres. This is a rarefied space and there are technological limitations in the development of fields in the super-deepwater (water depth > 2500 mts) paradigm because there are problems in hydrocarbon gathering and evacuation from a Floating Production System. The present cost database available globally, has fair level of confidence upto the water depth of 2500m. Beyond this water depth extrapolation has been applied while estimating the capex and all of that becomes an uncertain science.
*The current record for the deepest steel catenary riser system installation for a gas field development is in water depths of 2,430 metres at the Independence Hub in Gulf of Mexico, wherein they have used Steel Catenary Risers for gathering and evacuation of well fluids. In this Hub development concept, the Floating Production System (FPS) is centrally located to maximize production from five satellite fields, one of it being the well known Cheyenne field, in 2,743 meteres of water depth. The well is tied back to a host platform (Independence Hub) positioned in water depths of 2,430 metres over a distance of 74 km.
*For development of UD-1, unlike the Independence hub, many of the technologies may have to be developed for positioning the FPS close to the field for favourable techno economics. Technological advancements in metallurgy to bring the riser hang off loads to within the allowable limits or alternate riser systems like the Free Standing Hybrid Riser systems as in ultra-deep Cascade and Chinook fields (installed in 2,600 m) may have to be evaluated. The pipeline installation vessels have to be upgraded or suitably adopted for laying larger diameter pipelines in a water depths of 2,800 m (current record is a 24-inch pipeline in 2,430 m of water depth at the Independence hub).
*Under the above circumstances, it would be difficult for ONGC to formulate a feasible development plan for UD discovery with no comparable development in such water depths at this point of time and with the current reserve base.
*In any case, it will be not at be viable to develop such a small GIIP base at the current prevailing gas price of $4.2/mmbtu

[Theo_Fidel]

^^^
Why don't they sell the block. Please give up.

They are sitting on roughly 90% of the Krishna acreage offered so far. It is obvious they don't have the technology, equipment, expertise or cash muscle to develop the block. Let someone else develop it and find the gas that is undoubtedly there and bring to market.

[dinakar]

Do you think the CAG or Parliamentary committee will be silent if they sell the block now even at a higher price. Even the MoP&G will not allow it.

[Kakkaji]

Reliance Industries's KG-D6 may see a further dip in output

The current output is less than half of the peak 80 mmcmd that RIL had projected as fewer wells were drilled than planned and six wells ceased to produce due to the entry of sand or water.

[uskumar]

Shale oil find in Argentina

Seems pretty big. Will this change the oil market, like in gas.

[Rishirishi]

They are reporting the Argentine find as 23 billion barrels. the question is how much of it is recovrable, how much is oil and how much the cost of production is?

In general terms, there gas finds does not lead to much change in prices, as the gas must be consumed near source.

[Vipul]

Hindustan Petroleum to construct underground storage facilities.

Public Sector Hindustan Petroleum Corporation Limited (HPCL) has taken up construction of underground storage facilities for keeping crude oil stocks which could be used to meet petroleum requirement during oil crisis, Union Minister S Jaipal Reddy said.

Addressing a gathering after dedicating the clean fuels project at the Visakha refinery of the HPCL here, the Union Minister for Petroleum and Natural Gas said HPCL had planned to construct an underground storage facility at Visakhapatnam and Mangalore.

"It will facilitate to keep 13 lakh tonnes of crude oil which would be sufficient for providing uninterrupted supply of petrol for 90 days during the time of international oil crisis," Reddy said. He said Visakhapatnam's underground storage facility would be completed within three months.

The Indian government has been taking all steps to upgrade fuel quality to meet Euro-3 and Euro-4 specifications with international standards, he added. According to him, oil companies are at present providing EURO-4 fuel in 13 cities in the country and the same will be supplied to Visakhapatnam city very soon as the city is facing pollution problem.

"Oil companies in the country have to invest Rs 40,000 crore to upgrade fuel specifications from EURO-3 to EURO-4," the minister explained.He said oil companies in the country are incurring a loss of Rs 1.50 lakh crore at present. However, the government is not contemplating to increase the prices of petroleum products despite a hike in crude oil prices in the international market.Roy Choudhary, Chairman and Managing Director the HPCL, said the company had taken up the clean fuel project at a cost of Rs 2,200 crore.

[Katare]

Mukesh Bhai ne saare desh ko ***** ban diya, KG basin ke sapne dikha ke. Every single penny that is made by selling 20MMCMD of gas (1/5th of target) will go into Reliance's kitty to pay for the $5.00Billion (phoney) development expenses.....

KG basin seems as dry as rest of the mother India....

[Vipul]

GOI is abunch of ass****s, no surprises there.But Mukeshbai even took BP for a ride by getting a high valuation when he sold the stake in these (lemon) assets.

[Theo_Fidel]

KG basin seems as dry as rest of the mother India....

There is no evidence this is the case yet. Sand and water ingress in wells is a very common issue. Our sensationalist media plays it up. Less than 100 deep water wells have been drilled in an area of roughly 1.5 Million sqkm.

There is plenty of Gas there. The formations are right. We lack the technology and expertise to get at it. Our price of $4 per mmbtu is extraordinarily low by world standards. Europe for instance pays $10 per mmbtu for Russian and North Sea Gas. Japan pays well over $12 per mmbtu. If we pay more we will get better companies to stick their necks out and take the necessary risk. Even if our PSU babu's will not.

But yes Geologically India is very old rock. 2 Billion+ years old. We have Diamonds, Gems, Coal, Iron ore, Minerals and rich soil because of this, but little Oil/Gas. You get one or the other. Not both.

[SSridhar]

As soon as some prospective gas was struck, there were calls not to engage in getting gas from abroad because the logic that was extended was that we should soon be having surplus of it. Oil and gas wells are known for this kind of behaviour. Besides, estimating the size of the recoverable reserve is a risky business. We do not have extensive experience in managing large o&g acreages and their dynamic behaviour. Our experience in deep sea platforms is even less. Our economy was (has been and will be) growing rapidly and we will consume a lot of fossil fuel. Yet, the opinion that was freely voiced about foreign suppliers was 'let them keep their oil and gas'. We are coming a cropper now.

[Theo_Fidel]

Yes, I was one of those who expressed that opinion mostly because of the price the foreign suppliers were demanding. IIRC even Iran was demanding $10 per mmbtu indexed to oil prices which would have bankrupted us. Qatar wanted us to take LPG at Japan rates and Oman simply does not have enough gas for us. So who is left. Where exactly is this foreign supply going to come from, Sahib, and how were you going to get them to sell it to us for $4 per mmbtu, please answer jannab. BTW when Mani Shankar Iyer tried to smoke the peace pipe in TSP to sneak some Iranian gas in, many on this forum came down on him like a ton of bricks, calling him all sorts of unprintable names. Our only other option is LPG, which we import at great cost.

Is the answer to hock the family jewels to some foreign supplier or to get companies with the expertise to explore our acreage which is essentially untouched. The first contact produced D6. D1, D2 & D9 are on the way. 8-10 TCF more. From less than 1/10,000th the area of the East coast. And BTW D-6 is producing gas which none of those foreign deals from Bangladesh to Burma to Oman did.

BTW where are the PSU's in all this. Sitting on most of the allocated acreage and doing essentially nothing but crying....
There is plenty of Gas in India if the PSU's would get cracking.

[Katare]

Theo,
There is gas in that basin but it is evident now that it may not be anywhere near what it was made out to be, in early years of discovery. Besides Reliance a PSU from Gujrat also reported similar size gas discoveries but nothing came out of that either or atleast the news died down. I think unlike Reliance, the PSU guys were not able to BS there way to investor's money. In 2005-06 there were talks of India being a gas surplus country and all cities will be piped for domestic use in next 5 years. A gas authority was created and licenses were given for city gas supply infrastructure build up. Some hyper-yahoos even talked about chances of short term gas exports. All this talk was based on finding's of these two companies and reliance's find was declared as largest find for that year.

I hope these are short term technical glitches and we'll have decent quantities of gas extracted from KG by both companies.

[Theo_Fidel]

Katare,

I agree. Any gas we produce will be hard fought for and wrested from the basin with great effort. I have always said this, it is a curse of our Geology. Reliance's find was and is massive for our country. Without it we would be crushed by the LPG import bill, an import situation some here blithely advocate without bothering to do the math involved.

The thing we have to keep in mind is the production rate the GOI greedily foisted on the field operators. D6 was a 8tcf-10tcf type field. A gas field is typically planned for 30 years of life. This should have meant a ~ 0.250 tcf per annum or 250 million cubic feet or 6 MMSCMD. Instead the Babus decided to flog the field at roughly 60 MMSCMD per day. 10 times the carefully managed flow rate.

At a flow rate of 60 MMSCMD we are producing ~60x35 = 2100 MMSCFD ~ 2 Billion Cubic feet per day. Or roughly 2x365 = 700 Billion Cubic feet or 0.70 TCF per year. At that rate the life of the field is 10 years. Is it any wonder we are having trouble after 5 years of production.

Lets take the math further, to replace D6 with imports we would need 0.70x14 = $9.8 Billion or roughly $10 Billion annually. So our import bill will spiral by that amount. We are not that rich yet. These sorts of imports of Gas, Coal and Uranium will bankrupt us. We should be cautious and learn to live within our means.

I have been pointing out repeatedly that all this does is buy us time, we need to drill roughly 100,000 (yes, correct number of zero's) wells from Mahanadi to the Cauvery. To get at the estimated 1000 tcf of gas there. Even then we will never have surplus gas. Where are the PSU's in all this. They should be drilling like crazy and suffering a dry hole rate of 90%. Something the rest of the world deals with. Instead they sit on their butts and complain about Reliance.

[Prem]

Look where they find gas now! There is no way India has less than 1000TCF. Investing pennies wont do.

http://af.reuters.com/article/investing ... 2W20120224
Statoil's Tanzania find raises hopes for Africa gas

OSLO (Reuters) - Norwegian oil firm Statoil's recent huge gas discovery off the coast of Tanzania reinforces Eastern African hopes to become a gas production and distribution hub serving fast-growing Asian markets.
Statoil said on Friday its Tanzanian gas discovery, the biggest oil or gas discovery ever made in the country, has so far proven to hold up to 5 trillion cubic feet of gas, or about 891 million barrels of oil equivalents (boe).
"We have very good reservoir in this well, much better than we had thought, and there is more potential on this structure as well," Statoil exploration chief Tim Dodson told Reuters after announcing the firm's fifth big discovery worldwide in a year.Drillers encountered 120 metres of "excellent quality reservoir" with "high porosity and high permeability", in its Zafarani well, Statoil said, adding it will continue to drill on the structure before starting on another prospect off Tanzania.
Neighbouring Mozambique, the fastest growing energy player in the region, this month estimated that energy firms will spend $50 billion over the next decade to develop its liquefied natural gas (LNG) industry.Earlier this month, Italy's Eni said it had made a new giant offshore gas discovery in Mozambique with a potential capacity of 1.3 billion boe while Anadarko Petroleum last month made a discovery in a Mozambique well it called its best so far in the region.East Africa is definitely a hot spot at the moment and I guess our expectations had been growing before we drilled this, so.. . we are very pleased and see an upside potential both in Tanzania and in Mozambique," Dodson said.

[Prem]

http://www.marketwatch.com/story/us-chi ... 2012-02-26
U.S., China threaten Australia’s gas hopes

GLADSTONE, Australia (MarketWatch) — The global natural gas race is heating up, with Australia enviably placed to feed Asia’s growing appetite for energy. But rising threats from North America and China could frustrate Australia’s multi-billion dollar ambitions. More than 175 billion Australian dollars ($188.5 billion) has been invested in Australia’s liquefied natural gas (LNG) sector, in a bid to become the region’s clean-energy engine room. Ninety percent of new global capacity is being built in the country at a time when Asia’s demand for LNG is growing at around 10% a year. “There is this golden period for Australia,” said Simon Powell, head of Asian oil and gas at CLSA in Hong Kong. “But the two elephants in the room as far as Australian LNG is concerned are the U.S. and China.” The world’s two largest economies are sitting on massive shale reserves. The push by North America and China to become gas exporters — or in the case of China, a domestic supplier — could upset Australia’s longer- term gas ambitions. “It would mean that Australia is not as well placed as it likes to think it is,” Powell said. At present, LNG world-leader Qatar has around 80 million tonnes of installed capacity. Australia has close to 20 million tonnes, with this expected to ramp up to 80 million tonnes over the next five years.
Adding to strain in the supply market are LNG aspirants Canada and Russia, as well as Mozambique, Tanzania, Cyprus and Israel. Craig McMahon, head of Australasian upstream research at global energy consultants Wood Mackenzie, acknowledges that while global supply competition will stir over the next decade, Australia remains well-positioned. “Australia has made hay whilst the sun shone,” McMahon said. “But Australia’s window of opportunity could be narrowing. Energy companies are tapping into previously untouched North American gas reserves. Cheniere Energy Inc. /quotes/zigman/269665/quotes/nls/lng LNG +0.72% is moving closer to building a $5 billion liquefaction-export facility at its Sabine Pass site in the U.S. The U.S. could become a meaningful exporter in the next five years. The question is how big? North America is a meaningful threat to Australia’s aspirations,” he said.
“It’s not beyond the realms of possibility that the U.S. could be a 20 [million] to 30 million tonne per year exporter if it wanted to be,” Powell said. But the other creeping threat is China. The world’s fastest growing economy is sitting on significant coal-bed methane and shale reserves. “We’ve all been shocked at how much shale the U.S. fields have spat out. China might be sitting on a shale reserve that makes the U.S. shale reserve look small,” Powell saidIf the Chinese find out they have a lot of shale, you could see the Chinese say [to Australia]: Thanks a lot, we found the mother of all shale reserves, we don’t’ need you anymore,” he said. “If you look out to 2020, you could envisage a future where China’s producing a hell of a lot of shale gas of its own,” Powell said

[Klaus]

^^^ It is good if this is indeed the case. There will be meaningful and natural competition and vendors who just keep repeatedly banking on their 'geographical location' will have to rethink their stand. Either way, Australia has always punched above its weight and tried to stay relevant by charging top dollar on all its exports.