Oil & Natural Gas: News & Discussion

sudarshan · Post by **sudarshan** » 20 Aug 2013 04:10

^^^ While I won't make the presumption that the above post is directed at me, thank you for at least putting forth facts and informed opinions, as opposed to sarcastic one- and two-liners.

Yes, India needs to get into shale drilling, however, with eyes wide open to potential dangers. I'd say the foremost concern for India would be the water issues. It seems that the major additive to water used for fracking purposes, is ordinary sand. But there are other volatile chemicals that go into the mix, and it is these chemicals which pose a hazard to groundwater. Fracking depths are supposedly much deeper than groundwater depths (or it could be the other way round - I'll have to look it up again), but that doesn't stop people in towns close to fracking areas from claiming that their groundwater supplies have been ruined, and that their tap water stinks and tastes funny. God knows who is right.

I could post some of the contrarian views on the shale drilling in the USA here if needed. They are freely available on the web, however. Well yield drop-offs are dismissed by some, exaggerated by others. If the output is non-sustainable, that runs the risk of promising energy independence from the Arabs, then the output falters, and the Arabs say "aha!" and come back with a vengeance.

Most people right now are pretty upbeat about shale oil and gas, and jobs are booming in those parts of the USA where drilling and extraction are going on. So too is real estate. Hopes are surging too, as is a notion of American pride. In the USA, major shale areas are in Montana and North Dakota, Pennsylvania and West Virginia, then down in Texas. The UK is also getting into the field now. Probably also Australia. The more the better, greater shale output would serve to put the Arabs in place. But let's not dismiss the negatives outright on that score.

Austin · Post by **Austin** » 20 Aug 2013 07:14

For India Ground water contamination is a major concern and these shale companies dont share the composition of chemicals they use stating its proprietary so no one know what happens if it seeps through ground water.

Some of the countries like US , Australia , Russia have huge lands where no body stays and they can afford to do the shale experiments without worrying about ground water contamination.

According to US EIA Russia has the largest Shale Oil Reserves and China the largest Gas and they go in trillions cubic meter , the kind of deposit Shale in Oil and Gas form seem to be under mother earth would put the conventional oil and gas reserves we know today into shame.

My personal view is its an interesting phenomena , it could provide long term energy security and bring down oil/gas prices considerably but we need to wait and see .... things wont remain hidden and if its indeed a bubble it would eventually crash.

I have rarely come across any reports from ME which states they are worried about Shale or how Shale revolution would make them obsolete in couple of years ....... I personally think it is a good indication on what ME folks think about it and all the MNC who have stake in bringing oil and investing in ME Oil in big scale even today , Either ME folks are just too naive or they know something we don't

sanjaykumar · Post by **sanjaykumar** » 20 Aug 2013 09:36

Gosh, never considered the water contamination aspect nor the potential for geologic instability. I just skip those unpleasant paragraphs and mostly read the rosy headlines. Golly.

vishvak · Post by **vishvak** » 20 Aug 2013 09:47

What we should be thinking is how to provide indegenous methods - chemicals etc - which is where skill part comes in. Water we can't manufacture but there are ways to obtain fresh water for benefits are huge.

There are few rivers in India that flow just for one or two months during monsoon - especially at regions where hills are not as high as mighty Himalaya and can't store water as snow. Tbere could be dams made in hilly region to store rain water - even when the water can't be used for harvesting and only for a few months. Why can't we save forex for that much time - that is a limited way to think about it perhaps.

Javee · Post by **Javee** » 20 Aug 2013 10:05

Even in countries like US, a lot of people oppose shale drilling in major water catchment areas. The contamination is real. It has been documented across Pennsylvania where bore wells across the areas leak combustible gases. There are videos in youtube where they have combustible gases in coming out of their faucets along with water.

Here is a tidbit from DOE where their studies show no contamination to ground water.
http://www.syracuse.com/news/index.ssf/ ... nsylv.html

But unlike US, in India we have bore wells digging all the way to 1000 to 1200 feet already in certain water deficient states. So the fracking areas will have to be constantly monitored and they should not give leases to water catchment areas. We also have a problem with water requirement for fracking. Most states in the south are already fueding for water and this would just compound that.

But knowing fully well how our enforcement works, we should think really hard before allowing large scale fracking by private and public companies.

Prem · Post by **Prem** » 20 Aug 2013 10:07

Theo_Fidel wrote:Oil shale facts have changed the situation on the ground. From negative I have moved to mildly positive.
Without India drilling quite a bit we are never going to find out. If there are problems we should deal with them, but we definitely can't hang around and wait forever. I say give it a shot right now....

I read some where that Indian Shale formations are the thickest found do far and have better prsospects. Water and polution not doubt are the issues but India dont have many good options. Import lobby in Dilli is too entrenched. They did not allow any meanigful research and exploration afer Bombay High. We will be spending close to 2 Trillion$ in next decade for energy import. This kind of investment at home in Energy field can do great for Bharat in both economic and national security arena.
OTOH, Shale revolution might cause price crash in Oil and Gas( as in US) which will benefit the importing countries. Ocean floor Methane harvesting too will come to play in near future of which Hindu Mahasagar has plenty .

sudarshan · Post by **sudarshan** » 20 Aug 2013 18:14

Point to consider - what is the purpose of those volatile chemicals added to the fracking water? Can those chemicals be replaced with less harmful or bio-degradable ones? That would be a breakthrough, if so. What would happen, for instance, if the fracking were done simply with water and sand, minus those additives? Is it simply a question of improving the effectiveness of the technique? If so, can one get by with a somewhat lower yield, and avoid the pollution effects?

Recycling the water is another option, but the water, it seems, picks up all kinds of stuff from those depths. Heavy metals, radium(!), and other radioactive compounds. So it's not just a question of what's put into the water, but also what it picks up from deep underground. It depends on the location, obviously.

That still leaves the issue of groundwater depletion.

Austin · Post by **Austin** » 20 Aug 2013 22:15

Poland is one country where according to EIA estimates they had some 300 years of gas reserves and then the companies moved to realise that it was not feasible and moved out

Poland’s Shale Gas Bubble ‘Bursting’

sudarshan · Post by **sudarshan** » 20 Aug 2013 22:48

Speaking of Alberta tar sands:

Alberta: jobs, services, and despair

Seems like the jobs and the oil output are definitely there. These are the pluses. On the negative side, the locals are concerned about destruction of lifestyle and culture. Some might argue that this is not an issue in India, and that we have no choice. Fine, that can be conceded, in a way. But the loss of habitat for animals, extinction of species, pollution, and spikes in cancer rates are causes for concern.

Theo_Fidel · Post by **Theo_Fidel** » 20 Aug 2013 22:54

IIRC correctly one of the major chemicals used is Guar gum from India!
-------------------------------

Also one little factoid.

Number of wells drilled in Bakken formation alone over past 4 years. - 5000

Number of wells drilled in Mississipi deep water. > 100,000

Number of wells planned to be drilled over ALL of India from 2012-2017. - 1300.

Javee · Post by **Javee** » 21 Aug 2013 09:33

Bakken is a poorly inhabited area, look at Marcellus shale drilling in Upstate NY, people who are against this are not just the tree huggers but average joe's. It is also a fact that a lot of other joe's want to lease out their lands and get royalty payments from the gas companies.

Here is the list of chemicals used in Fracking.....the known 78 of them.
http://marcellusdrilling.com/2010/06/li ... nsylvania/
http://toxmap.nlm.nih.gov/toxmap/news/2 ... uring.html

Look at the water cycle, very similar to textile dyeing. We have been pleading with the government to have safe waste water removal (from dyeing factories) for over 25 years, we have not found a workable solution. Orathupalayam dam is still full of effluents. So, unless all the safety, enforcement and recycle mechanisms are in place, there should be no fracking in the water deficient Cauvery basin.
http://www2.epa.gov/hfstudy/hydraulic-f ... ater-cycle

Do we want this near our monsoon fed rivers or water sources? Hell, no.
http://sites.lafayette.edu/egrs352-fa12 ... -frack.jpg

sudarshan · Post by **sudarshan** » 21 Aug 2013 19:49

I don't think they use all of those chemicals on every single well. More like those chemicals are on the "menu," and whoever is in-charge can put a "meal" together based on need (and taste?). Like "hmm, I need a little acid on this here well - how about formic and sulphuric acids? Or wait - let's use HCl for a change this time." Not exactly like that, but something like it. Glad I didn't see NaCN or KCN on the list

. The worst stuff seemed to be HCl, H2SO4, and formic acid. Other toxins like cyclohexane or butanol might be carcinogenic. And these are just the 78 *declared* chemicals. A lot more could be undeclared, because they're "proprietary." But a lot of stuff on this list might actually be food grade - guar gum, polysaccharides, citric acid, ethylene glycol.

The site points out that the chemical soup is less than 1% of the mix, the rest being water and sand, most of which is pumped back up. The remaining chemicals stay a mile deep, far from groundwater sources. Fine. But what about the water which comes back up? Treatment is lacking in the Indian context. Plus, we also have to contend with the nasties that the water picks up underground.

member_27444 · Post by **member_27444** » 21 Aug 2013 20:29

Shale leaves Shingles on the surface of the earth

Austin · Post by **Austin** » 24 Aug 2013 15:36

Shale Gas Bubble ?

http://shalebubble.org/

Fracking and the Shale Gas “Revolution”

http://www.globalresearch.ca/fracking-a ... on/5345815

Austin · Post by **Austin** » 26 Aug 2013 07:57

Rupee crisis cripples Indian fuel importers

vishvak · Post by **vishvak** » 26 Aug 2013 11:47

About UPA not able to open up gas and oil reserves

http://forums.bharat-rakshak.com/viewto ... &p=1500663

Why can't people take morcha to DGHC - especially opposition - when it can save huge amount of CAD every year - especially when needed. 51 billion $$ out of 71billion $$ is huge by any standard, and people need to know.

Any connection of international players to this domestic situation? Since at times JVs are made as per convenience.

Prem · Post by **Prem** » 27 Aug 2013 02:04

http://www.ft.com/cms/s/0/4ede7262-0de3 ... z2d6rnUndD
India’s ONGC takes stake in African gasfield

Anadarko Petroleum, the US independent oil company, has sold a 10 per cent stake in a gasfield off the coast of Mozambique to India’s Oil and Natural Gas Corporation for $2.64bn in a deal that highlights the value of the vast gas discoveries in the country’s waters.Anadarko will remain the operator of the Area 1 field and retain a 26.5 per cent stake. It plans to use cash from the sale principally in its onshore US oilfields, including the Eagle Ford shale and Permian basin regions of Texas and the Wattenberg field in Colorado.The deal underlines the unprecedented attention East Africa, and Mozambique in particular, has been garnering from the energy industry as the region becomes a focus of new natural gas discoveries. Some 110tn cubic feet of gas has been found off Mozambique’s Indian Ocean coast where Italy’s Eni and Anadarko are operating with predictions that the impoverished southern African nation could become a major LNG exporter.The sale to ONGC follows several other deals in the region after huge discoveries of gas off the coast of Mozambique in the past three years. Area 1 alone is believed to hold 35tn-65tn cubic feet of recoverable gas – enough to meet India’s entire gas demand at current rates for at least 15 years.
Eni, Anadarko and other companies with stakes in the fields are working on a joint plan for an LNG export project that would come on stream in 2018./b]SAs a state-run company, ONGC also is “taking into account the long-term energy needs of the country but that doesn’t mean this is good for minority shareholders”, said Dikshit Mittal, analyst at SBI Capital Markets. ONGC and Oil India earlier this year jointly bought a different stake in Area 1 from Indian conglomerate Videocon for $2.48bn.Analysts expect ONGC will fund the new purchase through dollar-denominated debt. In a note to clients last week Moody’s, the rating agency, said it expected the company to make further overseas acquisitions and that the resultant shift from a net cash position to a net debt position was not a concern for a group with “low debt leverage and good financial flexibility”.The stake sale to ONGC is expected to close around the end of the year.

Austin · Post by **Austin** » 18 Sep 2013 15:10

Iran's new government scraps oil and gas connections to India

The new government in Iran has withdrawn all crucial oil and gas concessions that had been promised to India by its predecessor.

Oil minister Bijan N Zangeneh, it is learnt, told Indian ambassador D P Srivastava on September 1 that Tehran would not accept the entire payment for crude oil imported by India in rupees as agreed in July.

India was banking on 100 per cent rupee payment for Iranian crude to cut its forex outflow. Petroleum Minister M Veerappa Moily had assured Prime Minister Manmohan Singh last month that an additional 11 million tonnes would be imported from Iran in 2013-14 to save $ 8.47 billion.

Iran has since stopped issuing invoices in rupees for the full quantity of crude and reverted to the old system of accepting only 45 per cent of the payment in rupees.

Zangeneh, it is learnt, told Srivastava that the new Central Bank of Iran governor had complained of difficulties in transferring money in euros from India to other countries to pay for food and medicines.

Iran, he said, needed help in resolving the problem with getting 55 per cent payment in euros, which was being routed through Turkey's Halkbank, and ended in February. Zangeneh wants India to renegotiate the terms and revert to majority euro payment.

Zangeneh also told the Indian envoy that the previous regime's offer to sign a production sharing contract (PSC) for the Farzad B offshore gas field was "not acceptable", as he could convince neither the government nor parliament to approve the PSC.

Under PSC, an operator gets a share of production or revenue in proportion to its investment. In a service contract, the Indian consortium would get a flat 15 per cent return on the investment for developing the field.

India had started work on floating a new government company to develop the field and keep out the existing contractor consortium of ONGC Videsh Ltd, Indian Oil Corp and Oil India Ltd to shield them from US sanctions.

The new regime has also reversed the offer of natural gas at a heavily discounted price of 84 cents per million BTUs for setting up a urea plant through Indian investment at Assaluyeh or Chahbahar.

Zangeneh now wants a product-linked gas price where Iran would calculate the price related to the international price of urea after taking into account investment, operation cost and expected returns.

Austin · Post by **Austin** » 23 Sep 2013 12:49

Shale: High depletion rates in Bakken

Prem · Post by **Prem** » 07 Oct 2013 02:01

http://finance.yahoo.com/news/india-fir ... 40213.html

India firms relying on foreign companies for domestic shale drilling

NEW DELHI, Oct 4 (Reuters) - India's Oil and Natural Gas Corp and Oil India Ltd will tap the expertise of foreign firms to hunt for shale oil and gas in the energy-hungry nation, officials at the two firms said. India, the world's fourth-biggest energy consumer, last month approved rules for drilling of the unconventional fuel as it wants to quickly tap its resources to cut a growing crude oil imports bill.
ONGC will be taking technical help from Houston-based ConocoPhillips for shale drilling, the Indian company's chairman, Sudhir Vasudeva, told reporters at an industry event on Friday.
ONGC plans to take up exploratory work in 10 wells in blocks spread across western Cambay and eastern Cauvery and Krishna Godavari basins, he said, adding commercial drilling would commence next year.India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand, according to the U.S. Energy Information Administration.The country, though, has been slow to open up the sector.India has not yet formally communicated the new policy to ONGC and Oil India, that have only been allowed to drill for shale oil and gas in old blocks."I have given them (the exploration team) a target of 10 wells...The day the policy is announced we will declare the first well is ready for spudding. We are all prepared," Vasudeva said.Oil India has identified the western state of Rajasthan and northeastern state of Assam for initial shale drilling and could align with Houston-based Carrizo Oil & Gas, said S. Rath, its head of operations.Oil India and Indian Oil last year acquired a 30 percent stake in Carrizo's Niobrara shale assets in Colarado for $82.5 million."We are planning to drill some wells. We may have a cooperation between Carrizo and Oil India..we are internally prepared," Rath said, adding his firm is waiting for the policy.

Javee · Post by **Javee** » 07 Oct 2013 17:27

Jhujar wrote:http://finance.yahoo.com/news/india-fir ... 40213.html

India firms relying on foreign companies for domestic shale drilling

NEW DELHI, Oct 4 (Reuters) - India's Oil and Natural Gas Corp and Oil India Ltd will tap the expertise of foreign firms to hunt for shale oil and gas in the energy-hungry nation, officials at the two firms said. India, the world's fourth-biggest energy consumer, last month approved rules for drilling of the unconventional fuel as it wants to quickly tap its resources to cut a growing crude oil imports bill.
ONGC will be taking technical help from Houston-based ConocoPhillips for shale drilling, the Indian company's chairman, Sudhir Vasudeva, told reporters at an industry event on Friday.
ONGC plans to take up exploratory work in 10 wells in blocks spread across western Cambay and eastern Cauvery and Krishna Godavari basins, he said, adding commercial drilling would commence next year.India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand, according to the U.S. Energy Information Administration.The country, though, has been slow to open up the sector.India has not yet formally communicated the new policy to ONGC and Oil India, that have only been allowed to drill for shale oil and gas in old blocks."I have given them (the exploration team) a target of 10 wells...The day the policy is announced we will declare the first well is ready for spudding. We are all prepared," Vasudeva said.Oil India has identified the western state of Rajasthan and northeastern state of Assam for initial shale drilling and could align with Houston-based Carrizo Oil & Gas, said S. Rath, its head of operations.Oil India and Indian Oil last year acquired a 30 percent stake in Carrizo's Niobrara shale assets in Colarado for $82.5 million."We are planning to drill some wells. We may have a cooperation between Carrizo and Oil India..we are internally prepared," Rath said, adding his firm is waiting for the policy.

Holy Fck..I hope they don't do it on the Cauvery river basin.

Austin · Post by **Austin** » 07 Oct 2013 19:31

Dont worry the Environmentalist will be camping soon near the Shale Sites ....there may be another Koodankulam protest in making.

Virupaksha · Post by **Virupaksha** » 07 Oct 2013 20:13

Austin wrote:Dont worry the Environmentalist will be camping soon near the Shale Sites ....there may be another Koodankulam protest in making.

those are the delta areas - the food of more than 40% India comes from those areas.

Austin · Post by **Austin** » 07 Oct 2013 21:06

^^ Which essentially means you dont want to do any fracking there and deplete/pollute ground water there

shale has its own pain spots.

Shale: High depletion rates in Bakken

Austin · Post by **Austin** » 17 Oct 2013 16:35

Peter Voser: cheap shale gas is a myth

Shale gas will not change energy pricing structures across the world, according to the chief executive of Shell

It is a "myth" that exports of cheap shale gas from America will cut gas prices in Europe and Asia, Peter Voser, chief executive of Royal Dutch Shell has warned.

America is sitting on a glut of shale gas that has seen prices plummet to as little as a third of UK prices. It is now in the process of developing export terminals where the gas will be cooled for shipping abroad as liquefied natural gas (LNG).

UK politicians have hailed the prospect of Britain importing cheap gas from the US as one solution to help consumers struggling with rising energy bills as domestic gas production dwindles.

But Mr Voser said that the idea of "cheap US gas going into the rest of the world and therefore changing the pricing structures across the world" was a "myth".

The price impact of US exports would be "not that significant" because the additional costs of liquefying, transporting and then re-gasifying the gas would mean its eventual cost was comparable to existing market prices, he said.

Earlier this year British Gas owner Centrica struck a £10bn deal to export LNG from the US, welcomed by David Cameron, the Prime Minister, who claimed that "future gas supplies from the US" would help provide British consumers with a new "affordable" source of fuel.

Former energy secretary Chris Huhne last month urged the UK government to pressure the US to allow more exports, which he claimed would "gradually equalise the gas price in the US with the rest of the world" and help reduce UK prices.

US benchmark gas prices are currently about $3 to $4 per million British thermal units, having dipped below $2 last year.

But Mr Voser said that while US gas might cost between $4 and $6 – Shell's assumption of longer-term prices – it would arrive in Europe at a cost of $8 to $10, comparable with European prices that have averaged between $6 and $11. Shell has repeatedly played down the prospects for shale gas development in Europe and the UK.

It has shunned involvement in the embryonic UK shale industry – which the Prime Minister has also suggested will cut energy bills.

It is involved in shale gas exploration in other areas like China but Mr Voser said that Chinese shale gas would be consumed by the country's domestic gas market and would not "alter the pricing mix and the volume in Asia-Pacific".

Mr Voser was speaking to The Daily Telegraph in Geoje, South Korea, where the company is building a huge floating LNG plant.

He is due to retire from Shell at the end of March 2014 after 29 years with the company, and will be replaced by downstream director Ben van Beurden.

vishvak · Post by **vishvak** » 17 Oct 2013 16:49

CEO of Shell is more focused on profits by not reducing prices.

When more energy sources are available then market should be deciding on competition based pricing. This is how prices in US and Europe itself is decided. Nothing new there.

As CEO of Shell, he should not be speculating thus when shell is to profit from higher prices.

================
If this is state of international affairs in oil and gas prices then Indians should think of strategic oil depots - as many as possible using Indian crude. There is no point assimilating resources if there is no comparative advantage to sell oil from India to Indians at international prices.

Austin · Post by **Austin** » 18 Oct 2013 13:13

The problem with Shale Gas is the Hype Around it mostly created by Wall Street and Subsidy they receive and bankers who want to make quick profit till the bubble last.

Shale is a source of energy and depending on how profitable it is to extract it can be one of the long term sustainable source but till date all the Shale companies are in red but because of availability of cheap gas thats not really highlighted.

In the past decade of 90's Ethanol and Solar was also hyped as the next revolution in energy supply till the bubble busted.

As long as these source dont create a reasonable profit for the companies who extract them subsidies and Wall street can pull you that much also beyond the economics of it there are other technical issue with shale like quick depletion of well and environmental concerns ...... beyond the hype shale has a long way to go as sustainable fuel for the future.

Prem · Post by **Prem** » 26 Oct 2013 04:22

India's Slick Oil Scene:Investors Must Learn How to Tap Future Effectively
http://online.wsj.com/news/articles/SB1 ... 2042834706

BHPdecision to give up on oil and gas investments in India doesn't mean others don't have oil gushers in their future. India is making progress in letting some energy explorers get to work.The problem for investors is how to tap into that future effectively.BHP this week said it would give up nine oil and gas blocks in India because it can't explore them. While India's notorious red tape has tied up other natural resource investments, BHP didn't say what's stopping its exploration.Yet New Delhi knows it needs local energy production to fix a yawning trade deficit. In February, the government relaxed rules that used to stymie oil companies from exploring areas where they had already started production.The rule changes let it forge ahead with expansion in a rich oil block in northern India. Cairn said this week it's drilled six new exploration wells and found one commercially viable so far. The company says regulators are streamlining approvals that could halve the time it takes to monetize a discovery.Cairn's rich valuation reflects expectations it will soon find and recover more oil. Cairn reported disappointing oil output for the September quarter this week. That's likely because of routine maintenance, says Jefferies.And in the longer term, the upside from new exploration could pay off. According to the company, the north Indian fields potentially contain about four billion barrels of oil equivalent, though reserves so far are only about a billion.The problem is valuation—investors must pay a lot now for those potential barrels down the line.Cairn currently trades at an enterprise value, adjusted for net cash, of about $26 for every barrel of proven and probable reserves it owns. That's roughly double what Thailand's PTT Exploration & Production These firms are better diversified geographically, while Cairn—mostly operating in India—is too exposed to New Delhi's regulatory whims. Another worry: Cairn is majority-owned by London-listed mining company Vedanta Resources .Cairn's rich valuation reflects expectations it will soon find and recover more oil. But since it's hard to know exactly how much, investors should stay wary until the oil flows.That leaves Cairn dependent on New Delhi. India's government, back to the wall for its dependence on foreign energy, has opened up new possibilities for Cairn. But for now, they are just that—possibilities.

Prem · Post by **Prem** » 01 Nov 2013 01:58

http://www.financialexpress.com/news/go ... ck/1189262
Govt asks Reliance Industries to surrender 81 pc of KG-D6 gas block

The government today asked Reliance Industries to give up 81 per cent of its KG-D6 gas block, including five discoveries, as the time allocated for producing from them had expired. "I think the notice (for relinquishment) has gone. If it hasn't yet gone, it will go today. We plan to send them the notice today," Oil Minister M Veerappa Moily said here. The Oil Ministry wants RIL and its partners BP plc of UK and Canada's Niko Resources to give up 6,198.88 square kilometres out of a total 7,645 sq km area in KG-D6 block, by retaining only the portions where regulator DGH-recognised discoveries have been made. The area sought is more than 5,367 sq km area that RIL had offered to relinquish and includes five discoveries – D4, D7, D8, D16 and D23 for which the Directorate General of Hydrocarbon (DGH) had opined that RIL missed deadlines for submission of investment plans. "We discussed the issue threadbare and after analysing it have reached to this conclusion that they (RIL) need to relinquish certain area as per the Production Sharing Contract (PSC)," he said. "We have followed a transparent process where we gave them due opportunity to present their case."
The five discoveries hold 0.805 trillion cubic feet of reserves, or about one-fourth of the restated reserves in the currently producing Dhirubhai-1 and 3 (D1&D3) fields in KG-D6 block, and are worth USD 10 billion at current imported cost of gas. lso, the Oil Ministry will be moving Cabinet soon to deny the new USD 8.4 per million British thermal unit price for gas from D1&D3. This would be done on the grounds that fall in output to 10 million standard cubic metres per day from 54 mmscmd achieved in March 2010, instead of rising to projected 80 mmscmd, was due to RIL's failure to drill the requisite number of wells. "The gas pricing note to the Cabinet will go shortly," he said. RIL will be allowed the new price only if its arguments of geological complexities being responsible for the fall in production are proved.This is the second penalty that is being sought tobe imposed on RIL. The ministry has already moved to deny USD 1.8 billion of its cost for the same reasons. The Ministry has, however, not indicated how it will compensate RIL for the period when it is forced to sell gas at USD 4.2 rate if it is proved at alater date that the company had not deliberately suppressed the output. Officials said the 1,4462.12 sq km area that the Ministry is allowing RIL to retain includes the currently producing D1&D3 gas fields and D26 (MA) oil and gas field. Besides, a cluster of four satellite fields (D2, D6, D19 and D22) and two other significant discoveries (D42 and D34) for which investment plans have already been approved, are also being allowed to be retained by RIL.
The area allowed to be retained also includes three yet-to-be-confirmed discoveries of D29, D30 and D31 with 0.345 Tcf of reserves, as Moily felt DGH had been unfair in denying their existance. Moily agreed with RIL's contention that the company should be allowed to conduct tests to confirm the three finds. RIL as per the contractual requirement of retaining only the area where discoveries have been made, had offered to give up or relinquish 5,367 sq km out of the total 7,645 sq km area in the Bay of Bengal KG-D6 block. However, the DGH wanted another 1,130 sq km of area, which contained these 8 finds, to also be taken away from RIL on the grounds that the timeline to develop the fields had expired. RIL and BP officials on September 18 made a detailed presentation to Moily, Oil Secretary Vivek Rae and DGH Director General R N Choubey contending that they had not deviated an inch from the Production Sharing Contract (PSC) and had the right to retain the 1,130 sq km area. "I have acted in all fairness" in deciding the contractor should be asked to relinquish corresponding areas pertaining to 5 discoveries (814 sq km) with immediate effect as RIL had not submitted the field development plan for these within the stipulated timeframe, Moily said. He wanted this area to be to be offered for bidding onFor the balance three finds covering an area of 316 sq km, Moily agreed with RIL-BP that the DGH had not been insisting on drill stem test (DST) for confirmation of a discovery in the past and had decided to rake up the issue of absence of DST in case of D29, D30 and D31 finds after 8 months of commerciality documents being submitted and around 40 months from the discovery. RIL has till date made 18 oil and gas finds and one oil discovery in the eastern offshore KG-D6.

Peregrine · Post by **Peregrine** » 03 Nov 2013 04:27

GAIL to charter LNG ships for transporting natural gas from US

SINGAPORE : GAIL (India) LtdBSE -0.71 % will be chartering six to seven LNG ships for transporting its natural gas cargoes from the US from 2017, a top company official said today.

The ships would be for transporting six million tonnes (MT) of GAIL's contracted LNG cargoes, which are on free-on- board (FoB) basis, company's Chairman and MD B C Tripathi said at a seminar on Indian energy sector at the Singapore Energy Week here.

GAIL would also be swapping its the US cargoes with those available from other destinations.

The shipping and trading would be handled by the Singapore subsidiary, GAIL Global.

Tripathi said the Singapore office would be trading its 1 MT of US LNG in the spot market.

The Singapore office would also be buying 7-8 LNG cargoes from the spot market over the next four months for India.

GAIL Singapore would be active in the spot LNG trade, buying some 34 LNG cargoes in the current fiscal year, and 34 to 35 next fiscal, he said.

GAIL bought 20 cargoes in the last fiscal year. Elaborating further, Tripathi said GAIL would participate in the entire chain of LNG from upstream to midstream and end delivery.

Tripathi stressed upon the importance of being lead player in LNG trade.

Indian companies participating at the seminar evinced interest in forming partnerships and collaborations to source LNG for the Indian markets.

The companies are also looking to gas prices delinked from crude oil-based indices.

Indian companies would also want to see the buyer-seller relationship turned into collaboration and partnerships, said Tripathi.

Cheers

Austin · Post by **Austin** » 03 Nov 2013 15:55

When will the Shale Bubble Burst?

Prem · Post by **Prem** » 13 Nov 2013 02:55

1-U.S. to become world's top oil producer in 2015 - IEA
http://in.reuters.com/article/2013/11/1 ... N320131112

LONDON, Nov 12 (Reuters) - The United States will stride past Saudi Arabia and Russia to become the world's top oil producer in 2015, the West's energy agency said, bringing Washington closer to energy self-sufficiency and reducing the need for OPEC supply.
But by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East will regain its dominance - especially as a supplier to Asia, the International Energy Agency (IEA) said on Tuesday.A boom in shale oil in the United States has reversed a decline in its oil output and the IEA, adviser to industrialised nations, predicted in its 2012 World Energy Outlook the U.S. would surpass Riyadh as top producer in 2017.Introducing this year's outlook at a news conference in London on Tuesday, IEA Chief Economist Fatih Birol said the agency now expects the re-ordering earlier.
"We expect in 2015 the U.S. to be the largest oil producer in the world," he said.
"We see two chapters in the oil markets," he told Reuters in an interview. "Up to 2020, we expect the light, tight oil to increase - I would call it a surge. And due to the increase coming from Brazil, the need for Middle East oil in the next few years will definitely be less.""But due to the limited resource base (of U.S. tight oil), it is going to plateau and decline. After 2020 there will be a major dominance of Middle East oil."Oil prices would continue to rise, the IEA said, and spur development of unconventional resources such as the light, tight oil that has fueled the U.S. oil boom, oil sands in Canada, deepwater production in Brazil and natural gas liquids.
The average crude import price of IEA members will climb steadily to $128 a barrel in 2012 terms by 2035 - up $3 from 2012's outlook. The nominal price by 2035 will be $216, similar to last year's assumption.Other nations are unlikely to match the success of the United States in tapping shale, the IEA said.While tight oil output is set to soar in the next few years, the Paris-based agency said the world was not "on the cusp of a new era of oil abundance" and repeated that investment in new supply needed to be kept up to avert any future supply crunch.By the mid-2020s, non-OPEC production will fall back and countries in the Middle East - home to core members of the Organization of the Petroleum Exporting Countries - will provide most of the increase in global supply.Birol said it was essential that investments continue to be made in the plentiful, low-cost resources of the Middle East in order to meet growing demand from Asia.

"The Middle East is and will remain the heart of the global oil industry for many years to come," he told Reuters."Giving the wrong signal to Middle East producers may well delay investment. If we want Middle East oil in 2020, the investments need to be made by now."
Rising U.S. tight oil production is for now helping to meet growing demand, which the IEA forecasts will reach 101 million barrels per day (bpd) in 2035, up from 86.7 million bpd in 2011 and up slightly from 99.7 million bpd expected last year.
"Shale oil is very good news for the United States and for the world. But the demand is in Asia," Birol said."First China, and then after 2020 driven by India. Therefore we need Middle East oil for the Asian demand growth."China is due to overtake the United States as the largest oil-consuming country and Middle East oil consumption is expected to surpass that of the European Union, both around 2030, the IEA said.India is forecast to become the largest single source of global oil demand growth after 2020.The share of the United States in global energy-intensive industries - chemicals, aluminium, cement, iron, steel, paper, glass and oil refining - will increase slightly thanks to cheaper energy. By contrast, the EU and Japan will lose one third of their current share.The IEA also said that up to 10 million bpd of global oil refining capacity was at risk as global refining centres were relocating closer to Asia. (

Prem · Post by **Prem** » 25 Nov 2013 05:21

Oil Is Tumbling
http://www.businessinsider.com/brent-cr ... al-2013-11

Brent crude futures fell as much as $2.50, about 2%, as Monday commodities traders digested the interim deal reached this weekend to curb Iran's nuclear activities.Analysts were predicting this kind of significant but not overwhelming market reaction. Western powers agreed they would begin lifting the ban on Iranian exports to their countries in six month's time. But Iran's oil sector has been hit hard by sanctions, and it may take some time for production to recover to pre-2010 levels.

Prem · Post by **Prem** » 27 Nov 2013 10:46

Cambay project puts Gujarat on global shale gas map
Shubh Lakshan Shuru

Gujarat now finds a place on the shale gas map of the world, after Union Minister for Petroleum and Natural Gas M Veerappa Moily on Tuesday dedicated the country's first shale gas exploratory well near Jambusar in Bharuch district to the nation. Oil & Natural Gas Corporation (ONGC) has started drilling the well in last week of October to exploit the natural gas trapped within the shale formations located in Cambay Basin which is estimated to have a shale gas potential of 20 TCF (trillion cubic feet). "This is our nation's dream come true. We are going to realise Mahatma Gandhi's dream of economic independence here in Gujarat," said Moily after dedicating the well to the nation. This well is part of the company's Ankleshwar Asset of ONGC. The well has a target depth of 3,300 metres. It is currently reached around 1,885 metres. According to Moily and other officials of ONGC, India has recoverable shale gas reserves of around 90 TCF, which can satiate India's energy demand for 26 years. In an attempt to emulate the success of shale gas discoveries in the United States, ONGC is now planning to dig 30 shale gas exploratory wells at the cost of Rs 600 crore by 2014-15. ONGC's chairperson and managing director Sudhir Vasudeva said, "Four years back, we had started drilling four R&D wells in Durgapur. Here we demonstrated that shale gas can be produced." "We will be investing Rs 38 crore in this well (at Cambay). This is no more than a research well. The data from this well will give us more leads for further exploration. It will help us ascertain parameters to take up commercial production," he said. ONGC officials felt that the results from the first exploratory well will "open a new chapter in shale-gas exploration in the countryWe will be drilling 10 such wells during this fiscal in Cambay, Krishna-Godavari and Cauvery basins. An additional 20 wells will be dug in during 2014-15," Vasudeva said, adding that ONGC will be spending Rs 600 crore on shale gas exploration by next fiscal. These explorations are expected to be carried out in alliance with ConocoPhilips, a US-based oil company that is leader in shale gas and deep-water exploration.

Austin · Post by **Austin** » 27 Nov 2013 11:54

^^ I hope its profitable to drill those Shale Gas and Oily Moily is not pushing Gandhi dream to play a Scam on the Nation

Prem · Post by **Prem** » 11 Dec 2013 00:05

http://m.economictimes.com/finmin-not-p ... 102616.cms

Finance Ministry not parting with cess for developing oil sector

NEW DELHI: India's oil industry has paid over Rs 118,500 crore cess on the output of crude oil and natural gas in three decades, but not even 1% of this could be utilised for developing the sector, an oil ministry note said. The oil ministry has asked the finance ministry to provide 75% of the annual cess collection to the board, officials said. The finance ministry, which shares a huge oil subsidy bill, is, reluctant to part with the cess money, said officials. "Nothing has been has been paid by the Central government to OIDB since 1992-93," the note said. OIDB, headed by the petroleum secretary, is an inter-ministerial board, which is responsible for utilising the cess for development of the oil and gas sector. The oil ministry wants the finance ministry to release funds to OIDB for investment in strategic oil reserves in and an oil insurance corpus. The board needs Rs 1,195 crore for investing in strategic oil reserves and Rs 1,000 crore for insurance fund, which was required after foreign re-insurers refused to provide cover to Iranian oil imports. "Through there is some respite from the US sanction, the proposed insurance fund plan is not yet shelved," one official said requesting anonymity.

Austin · Post by **Austin** » 20 Dec 2013 08:08

Cabinet okays higher gas price for Reliance Industries with rider

The Cabinet today decided to allow Reliance Industries to almost double the price of natural gas from April provided the firm gave a bank guarantee to cover its liability if gas-hoarding charges are proved

The bank guarantee, which will be equivalent to the incremental revenue that RIL will get from the new gas price, will be encashed if it is proved that the company hoarded gas or deliberately suppressed production at the main Dhirubhai-1 and 3 (D1&D3) fields in the eastern offshore KG-D6 block since
2010-11, sources said.

The government in June approved the Rangarajan formula for pricing of all domestically produced natural gas at an average of global gas hub rates and price at which India imports LNG (gas in liquid form).

The rate in April 2014, when the new pricing is to be implemented, will be about $8.4 per million British thermal units as against the current $4.2.

kish · Post by **kish** » 24 Dec 2013 00:12

Exploration in Gummidipoondi?

ONGC set to drill two exploratory wells in Gummidipoondi block

It is the northern suburbs of Chennai that beckon Oil and Natural Gas Corporation Ltd (ONGC), as the public sector giant gets ready to go deep down in its quest for hydrocarbon in the Palar Basin.

In a move which, depending on the level of success, may fetch an entirely different identity and value to those suburbs, the ONGC plans to drill two exploratory wells in the Gummidipoondi block, including in Manali village.

Located between two petroleum producing basins of the South – the Krishna Godavari Basin and the Cauvery Basin – the Palar Basin, spread over 1,800 sq km, was awarded to the ONGC and its partner, Tata Petrodyne Ltd, in the seventh round of the New Exploration Licensing Policy (NELP).

ONGC sources said each well would entail an expenditure of Rs.30 crore and take three months.

Wild cat’

About the significance of the work, Basin Manager of Cauvery B.S.Josyulu said: “Palar Basin is geologically classified as a Gondwana basin, which means that the deposits here are of a very ancient period. The drilling here is termed as a ‘wild cat’, where we hope to strike hydrocarbons and they could be oil, gas or both.

Prem · Post by **Prem** » 08 Jan 2014 04:31

Oil prices could 'crater' in 2014, Bremmer says: But 'dream' scenario could become a nightmare
http://finance.yahoo.com/blogs/daily-ti ... 07339.html

It what sounds like a dream scenario for U.S. consumers, Ian Bremmer, president of Eurasia Group, says oil prices could "crater" in 2014 and OPEC could "fall apart." But a serious decline in energy prices could lead to a nightmare for U.S. policymakers as "expanding unrest" in the Middle East is one of Bremmer's 'top risks' of 2014.First, the good news: If a comprehensive deal over Iran's nuclear program is reached -- and Bremmer sees a-better-than 50% chance it will -- "then oil prices are cratering through $80" (the presumptive floor currently set by the Saudis), he says. "OPEC falls apart in that environment."

Austin · Post by **Austin** » 08 Jan 2014 12:16

If Oil Prices Fall then Shale Boom will go burst as it depends on high oil prices.

Oil prices are controlled by OPEC cartel and if oil prices go lower they will simply lower the production target.

Oil Prices will only fall if there is a global recession like the one we saw in 2008 when Oil Prices fell low ..