Oil & Natural Gas: News & Discussion - VI

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Re: Oil & Natural Gas: News & Discussion - VI

Postby SSridhar » 26 Jul 2004 00:04

That is the most retrograde step. A country like India, whose demand-supply gap is leapfrogging day-by-day and whose hydrocarbon reserves and exploitation are still meagre, needs to take all measures including building strategic reserves. This is especially important as we are situated in a hostile environment surrounded by some of the hugest energy-consuming countries as well. With oil prices likely to remain high for a long time and the likelihood of oil-shocks in future, we need to have sufficient reserve capacities to smooth out adverse impacts on our rapidly growing economy. First, the UPA starts to pursue vigorously the most dangerous project, a pipeline thro' TSP and then this. :mad:

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Re: Oil & Natural Gas: News & Discussion - VI

Postby Div » 26 Jul 2004 01:17

You can try to hedge yourself with futures but when push comes to shove, the futures contract can't be used as a source of fuel. It is much better to have fuel at hand in the form of a reserve than a piece of paper.

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Re: Oil & Natural Gas: News & Discussion - VI

Postby SSridhar » 26 Jul 2004 12:26

LNG imports have to be on f.o.b. basis - to help Indian shipping tonnage.

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Postby SSridhar » 30 Jul 2004 18:40

The Sui gas field attacks will continue come hell or high water, forum or no forum :D

See this

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Postby SSridhar » 31 Jul 2004 17:26

Last Wednesday, it was 30 rockets and yesterday, Friday, it was 23 RPGs.

See this

the troops fired in the direction from where they believed the rockets were fired

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Postby putnanja » 03 Aug 2004 00:33


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Postby Suraj » 03 Aug 2004 00:50



More than three decades after they were nationalized, the wheel turns a full circle. Does anyone recall what PSUs were created from the nationalization of Shell, Esso etc by Indira Gandhi ? Burmah Shell = BPCL, Esso = HPCL ? Were there more ?

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Postby svinayak » 03 Aug 2004 00:57

British Petroleum - Bharat Petroleum
Shell - Indian Oil Corp?

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Postby putnanja » 03 Aug 2004 01:19


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Postby SSridhar » 03 Aug 2004 16:22

Esso = HPCL ?


Was it not Caltex that became HPCL ?

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Postby SSridhar » 03 Aug 2004 16:25

Balochistan Insurgency Rekindling

A good read for those who advocate gas pipeline.

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Postby putnanja » 04 Aug 2004 04:11

Oil ministry plans grandma of mergers

Though it is early days yet, one major option being examined is to merge Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) with Oil and Natural Gas Corporation (ONGC); and Oil India Ltd (OIL) with IndianOil Ltd (IOC).

In this scenario, gas utility Gail is to be re-integrated with ONGC, from which it had been carved out in 1984.

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Postby SSridhar » 04 Aug 2004 14:11

A good move by GoI.

GAIL monopoly to go for buiding gas trunk pipelines

The earlier move to give sole responsibility to GAIL came in for much criticism and rightly so.

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Postby SK Mody » 04 Aug 2004 19:59

Some old articles from financial express and economic times.

Merger of GAIL, ONGC and IOC

Also:
On Slippery Ground

Posting in full as original article has disappeared.

First Published in the Economic Times 7 April, 2002

Given the government's dismal performance on the reform front, we tend to cheer and amplify every small success. However, this only lulls us into believing that the government is serious about its efforts to reform the Indian economy and that it has some "master" plan or strategy. However, the reality is quite different, and it is becoming increasingly obvious that there is no clear direction, and for every step forward, we seem to take a step back.

Recent events in the petroleum sector exemplify this piecemeal and ad-hoc approach. When the government announced the partial divestment of major oil PSUs like IBP, BPCL and HPCL, coupled with the relaxation of the Administered Pricing Mechanism (APM), it was considered a strong signal that reforms would continue.

However, the subsequent purchase of IBP by another PSU, Indian Oil Corporation (IOC) at a highly inflated price showed that there is some hidden agenda. Later, when reports appeared in the press that the government was planning to merge IOC, ONGC and GAIL, these concerns were proved true.

The ostensible reason for the merger is that it will create a large, vertically integrated oil company, which will drill, extract, refine and sell petroleum products. Vertical integration will increase efficiencies, save costs and benefit the end user. There is nothing wrong with the concept, as world over, major oil companies are integrated from top to bottom.

However, does this make any sense in the context of the ongoing liberalisation of the petroleum sector in India? Unfortunately not!

There are two major issues here. The first is that of continuing government ownership and control, and the second is the creation of a lopsided, monopolistic market structure.

In general, the creation of such a monolith will allow them to exercise pricing power over the entire market, from raw materials to intermediates to retail products. This negates the very principles on which the dismantling of the APM was based. It is obvious that the government is reluctant to give up its control, and the merged entity would still be able to manipulate prices even in the so-called "free-market" scenario.

On the one hand the government plans to sell HPCL and BPCL in the near future. However, by creating a giant competitor, with interests in drilling and extraction, both these companies will be at a competitive disadvantage. Obviously, the attraction or value of these companies will be less, if their competitor also controls their raw material supplies.

Moreover, if one is looking at privatising the industry, then why go through this exercise. Why not sell ONGC, GAIL and IOC as well? Their reluctance to part with these assets, and indeed bolster their own presence by way of a merger, indicates that divestment is little more than a fund raising exercise disguised as reform.

If privatisation is to succeed, the government's policies must be transparent, and a level playing field must be provided to all. But here, not only is the government changing the rules, they are also creating unfair competition.

If it is viable for IOC to acquire or merge with ONGC or GAIL, then it should make sense for any other oil company. In that case, why not allow a privatised BPCL or HPCL, or even Reliance to bid for these companies? Or maybe a privatised and independent ONGC might want to acquire refineries and retail assets.

The argument against creating private sector monopolies doesn't wash, as they are only creating a public sector one. Ultimately, as the government keeps spending more than it earns, they will be forced to even this asset. Then they will end up selling a monopoly company to a private player.

All monopolies are bad, whether in the private or public sector. The excuse of retaining government control on prices for the "good of the common man" sounds good, but has proved to be disastrous for India and Indians. At the same time, the experience of other economies has shown that free markets have ended up providing the best deal for the consumer.

But "free" doesn't mean no regulation at all. All they need to do is enact sensible rules to avoid monopolies and give freedom to an independent regulator, who can check instances of unfair pricing. Beyond this the market should be free to evolve. Given free play of market forces, it is likely that four or five major companies will evolve, with various degrees of integration.

Rather than making markets more efficient, they are only distorting them further. And, needless to say, all this is only in the interests of continuing the privileges and interests of those who run the public sector in India. And as usual, they are hurting the interests of the true owners (the public and investors). This will limit not only the divestment values, but the long term opportunities for BPCL and HPCL.

Arun Jethmalani, jetu@valuenotes.com


Note that the mergers suggested this time around are different. Earlier it was GAIL, ONGC IOC, now it is BPCL, HPCL, ONGC.

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Postby SK Mody » 04 Aug 2004 20:13

The old merger plan was buried:-

IOC, ONGC, GAIL merger spiked

Interestingly the trade unions are in favour of the new merger while they were against the old one. Same appears to be true for the press (as yet).

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Niko and Reliance strike again!!

Postby Guha » 04 Aug 2004 21:42

From: www.nikoresources.com

Niko's Success Offshore India Continues With Another Large Discovery in Block D-6 and a Fourth Consecutive Discovery in Block NEC-25

AUGUST 3, 2004 - 16:09:04 ET


CALGARY, ALBERTA--(CCNMatthews - Aug. 3, 2004) - Niko Resources Ltd.
(TSX - NKO) is pleased to announce a new major gas discovery in the D-6
Block and another gas discovery in the NEC-25 block off the east coast
of India.

In the D-6 Block the M-1 exploration discovery well was drilled
approximately 19km SSE of the Dhirubhai field in 1327 meters of water to
a total depth of 2942 meters.

The operator estimates M-1 exploration well has approximately 155 meters
of net pay making it one of the thickest net pay gas sections
encountered to date in the D-6 block. The well flowed 23.7 mmcf per day
from a 6 meter interval at a depth of 2750 meters.

M-1 is the 11th consecutive successful well drilled in the 1.9 million
acre D-6 Block. All drilling to date has occurred in the first 1800 km2
3D seismic program that covers less than 20% of the Block. An additional
2500 km2 3D seismic program is currently being processed and merged with
the original 3D survey.

In NEC 25 Block the A2 well was drilled in 70 meters of water and is
approximately 2.2 km from the A4 gas discovery well. The well tested at
rates up to 15.8 mmcf/d. The operator estimates the potential net gas
pay to be 40 meters.

This is the fourth consecutive exploration gas discovery in NEC-25.
Plans are progressing for fast track gas production in the NEC-25 block.
Further details on the discovery will be released when available.

Niko has a 10 percent working interest in both the D-6 and NEC-25 Blocks
with the operator Reliance Industries Limited.

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Postby SSridhar » 05 Aug 2004 21:17

OVL,GAIL want 50% share from Daewoo in Myanmarese A-3 block

"We are keen on a stake in A-3 Block as gas from the two blocks [A-1 & A-3] can be tied to make transporting it in the form of liquefied natural gas (LNG) by ships to India economically attractive," senior government officials said. "If our share from Myanmar is 10 million standard cubic meters per day, then shipping the gas as LNG would become economically viable," the officials said adding value-added products like C2/C3 and LPG can be extracted at Myanmar port before shipping the lean gas.

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The Balochistan Turmoil

Postby SSridhar » 06 Aug 2004 14:54

A good understanding of Balochistan problem is needed by Indian hydrocarbon managers before they embark on pipeline.

Balochistan Revisted by Najam Sethi in Friday Times.

The federal governments of Benazir Bhutto, Nawaz Sharif and General Pervez Musharraf were convinced that Nawab Bugti was extorting money from Islamabad ostensibly on behalf of the Bugti tribesmen who work the gas plants but actually for himself by nudging his fiercely loyal Bugti tribesmen to rocket the pipelines whenever the negotiations get bogged down against his liking. In this political seesaw, Mr Bugti was wont to bandy about terms like ‘gas royalties’, ‘provincial autonomy’, ‘constitutional rights’ etc while portraying himself as the great and patriotic Baloch nationalist fighting for the rights of his province rather than for his tribe.The future of the oil and gas pipelines that are being planned across the mountains and deserts and coasts of Balochistan for the prosperity and stability of Pakistan hinges on a sensible and inclusionary approach to Balochistan.


OTOH, the Nawab of Bugti has this to say.

The president of the Jamhoori Watan Party, Nawab Mohammad Akbar Khan Bugti, has urged the government to stop what he called a military operation launched in Balochistan , abandon its policy of suppressing the Baloch people and try to resolve the issue through dialogue. He said no lesson had been learned from the fall of Dhaka. The people of Bengal never wanted to secede from Pakistan but they were forced to take up arms.


The military action in Balochistan is condemned by "nationalist" parties and PONM.

Sindh National Front's condemnation
Condemnation by others

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Re: Niko and Reliance strike again!!

Postby Katare » 06 Aug 2004 21:13

Guha wrote:From: www.nikoresources.com

Niko's Success Offshore India Continues With Another Large Discovery in Block D-6 and a Fourth Consecutive Discovery in Block NEC-25

AUGUST 3, 2004 - 16:09:04 ET


CALGARY, ALBERTA--(CCNMatthews - Aug. 3, 2004) - Niko Resources Ltd.
(TSX - NKO) is pleased to announce a new major gas discovery in the D-6
Block and another gas discovery in the NEC-25 block off the east coast
of India.

In the D-6 Block the M-1 exploration discovery well was drilled
approximately 19km SSE of the Dhirubhai field in 1327 meters of water to
a total depth of 2942 meters.

The operator estimates M-1 exploration well has approximately 155 meters
of net pay making it one of the thickest net pay gas sections
encountered to date in the D-6 block. The well flowed 23.7 mmcf per day
from a 6 meter interval at a depth of 2750 meters.

M-1 is the 11th consecutive successful well drilled in the 1.9 million
acre D-6 Block. All drilling to date has occurred in the first 1800 km2
3D seismic program that covers less than 20% of the Block. An additional
2500 km2 3D seismic program is currently being processed and merged with
the original 3D survey.

In NEC 25 Block the A2 well was drilled in 70 meters of water and is
approximately 2.2 km from the A4 gas discovery well. The well tested at
rates up to 15.8 mmcf/d. The operator estimates the potential net gas
pay to be 40 meters.

This is the fourth consecutive exploration gas discovery in NEC-25.
Plans are progressing for fast track gas production in the NEC-25 block.
Further details on the discovery will be released when available.

Niko has a 10 percent working interest in both the D-6 and NEC-25 Blocks
with the operator Reliance Industries Limited.


This gas field has big potential....heartning to know that only 20% of the block has been explored so far......also ONGC has adjoining blocks so finally we may find the fuel for our future growth on our land/water insted of paying for it to Sheikh Ji.

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Postby putnanja » 07 Aug 2004 01:49


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Balochisdtan Attacks

Postby SSridhar » 07 Aug 2004 20:55

From the horse's mouth

Mr {Faisal Saleh} Hayat {Interior Minister} also disclosed that 12 personnel of security agencies were killed and 22 injured while the gas pipeline was attacked thirteen times in 62 acts of terrorism during June and July.

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Pipes

Postby SSridhar » 09 Aug 2004 14:28

Pipe manufacturers adding capacity on demand

It is estimated that total demand from the oil and gas sector in India would be about 17,000 km of pipelines over the next 3-4 years. Even if 50 per cent of the projects fructify in the given timeframe, the domestic pipe companies will witness a quantum jump in business opportunity. A major portion of earnings for pipeline companies is expected from exports. While PSL claims its overseas earnings will contribute 50 per cent to its turnover two years from now, Welspun Gujarat Stahl Rohren Ltd has bagged a Rs 407-crore ($90m) order for supplying 3 LPE coated pipes in Libya.

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TSP & Pipeline

Postby SSridhar » 09 Aug 2004 19:42


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Cairn strikes again in Rajasthan!

Postby Guha » 10 Aug 2004 19:14

Cairn Makes Fourth Discovery in Northern Rajasthan

http://www.rigzone.com/news/article.asp?a_id=15444

"...The mean oil initially in place as currently mapped is estimated to be approximately 300 million barrels. .."

and more importantly:

"...This further demonstration of the widespread distribution of high quality reservoir sands bodes well for future exploration and appraisal success."

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Postby SSridhar » 10 Aug 2004 21:55

GSPC strikes oil in Ahmedabad

The company found 50 million barrels of oil on its on land block CB-ONN-2000/2. Exploration well PK-2 encountered oil and under test condition it flowed 1000 barrels a day. Geologists estimate a total recovery of five million barrels of oil. The well, sixth one by GSPC on the block, can produce 10,000 barrels per day in less than 3 years.

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Postby Vick » 11 Aug 2004 03:43


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Postby hanumadu » 11 Aug 2004 06:41

What is the biggest oil discovery so far in India?

TIA,
Ranadheer

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Postby Katare » 11 Aug 2004 17:13

Mumbai High

Produces 40% of domestic supply IIRC

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Some confusion over GSPC strike

Postby Guha » 11 Aug 2004 20:58

I think some news outlets are confused over units with regard to the GSPC
oil strike in onshore Gujarat. The news item above mentions inplace reserves as 50 million barrels while this news item:

http://news.newkerala.com/india-news/in ... ws&id=7145

mentions 50 million tonnes (~395 million barrels). I tend to believe the 50 million tonnes figure more, as it is the standard way of reporting for Indian oil companies (GSPC is state owned) and the news item has a direct quote from the DGH (Director General of Hydrocarbons).

-----------
Reading some more articles they quote a 50 million barrel figure from a Mr Koshy, chairman GSPC, which confuses me further. Or (not impossile) there is some mis-communication between GSPC and DGH. Looks like we may have to wait a while for this to clear up.

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Postby putnanja » 12 Aug 2004 01:33

OVL transfers stake to Sudapet

NEW DELHI: ONGC Videsh Ltd (OVL) will transfer 3 per cent of its stake in two Sudan oil blocks to Sudapet, Sudan's national oil company.

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved OVL transferring 2 per cent of its stake in Block 5A and one per cent in Block 5B to Sudapet, officials said. OVL currently has 26.125 per cent stake in Block 5A and 24.5 per cent in 5B.


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Postby putnanja » 12 Aug 2004 01:42

India Kicks Off Strategic Oil Reserve Idea

NEW DELHI, AUG 11: The government will shortly come out with a new Bill for setting up strategic crude oil reserves. The draft has been been circulated by the petroleum ministry for comments from the ministries of finance, law and defence.



It is proposed to initially create 5 million tonnes (mt) of crude storages, which will give the country a 15 day cover. “Later, it is proposed to increase the reserves to 15 mt. This, along with a mandatory requirement for all oil companies to maintain crude inventories will raise the cover to around 60 days,” an official said.

The ‘Strategic Petroleum Storage Bill’ has three major provisions:

• A cess on all refineries and importers of petroleum products to cover the interest and operating cost of the Rs 8,000 crore plus debt to be raised from the market for constructing the storage tankages at three sites and filling them with 5 mt of crude oil.

• Mandatory inventory for all oil companies (the quantum is yet to be decided).

• Designating “Government of India” the sole authority to decide on the release of crude from the strategic reserves in times of emergency.

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Postby Neshant » 12 Aug 2004 04:31

> Cairn Makes Fourth Discovery in Northern Rajasthan

This company Cairn is perpetually in the news having discovered this and that. It must be making their stock holders reaaal happy.

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ONGC

Postby SSridhar » 13 Aug 2004 14:10


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It is Sui, again

Postby SSridhar » 14 Aug 2004 11:49

Main water supply pipeline to Sui plan blownup

The plant could be partially or completely closed if the water supply is not restored within the next 48 hours and the power supply across the country could be suspended if the situation persisted.

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Postby SandeepA » 18 Aug 2004 17:54

Not so long ago on this forum I predicted that Maithri Indhan or Sanjhautha Oil is a distinct possibility and the DDM would shout for it from rooftops...here you go...

http://us.rediff.com/money/2004/aug/18spec.htm

Cry my beloved country.. :( [url][/url]

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The usual stuff

Postby SSridhar » 24 Aug 2004 09:01


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Postby Rishikx » 25 Aug 2004 21:20

Just came back from an oilconferance in Stavanger, Norway. Mr. Mitra of ONGC informed about the activities of the company. Apperantly they have hired a drilling ship from Transceocen to drill in deep water (over 3500 meters) it is costing $365 000 per day. Each well costs $ 10-15 million. 2 of the wells have been dry so far, but there are good chances of discovery in the next one.

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Postby SSridhar » 30 Aug 2004 18:45

OVL acquires majority stake in a block in Oz.

"We have acquired 55 per cent interest in Block WA 306 P, located in the North West Shelf in offshore Australia, from Canadian firm Antrim Energy Inc," OVL managing director R S Butola said.

It {OVL} already has oil and gas assets in Myanmar, Vietnam, Iran, Iraq, Syria, Libya, Sudan and Angola.


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Gas hydrates

Postby SSridhar » 02 Sep 2004 13:05

Indo-Russian Gas Hydrates Research

"One cm of gas hydrate, when brought to the surface, is expected to yield 164 cm of natural gas. This can be utilised as a future resource," Dr Gupta {department of ocean development secretary Harsh K Gupta} told. "The preliminary assessment of geological condition and limited available seismic data suggests high possibility of occurrence of large quantity of gas hydrates within the exclusive economic zone of India," he said. "Under the technology component of the programme, two unique exploration tools, namely a multi-sensor and multi-activity survey tool and a remotely-operated coring system are proposed to be developed," he said.

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Pipeline

Postby SSridhar » 03 Sep 2004 07:24



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