Indian oil and gas thread

[Yagya]

Cairn India's Rajasthan block has record 7.3 billion-barrel oil reserve

NEW DELHI: Cairn India's Rajasthan block is now estimated to hold a record 7.3 billion barrels of oil reserves that can produce 15 million tonnes of oil, the highest by any field in India, the company said.

The crown-jewel Rajasthan block is now estimated to hold discovered and yet to be discovered reserves of 7.3 billion barrels of oil equivalent, an increase of 12 per cent over previous estimate, the company said in its fourth quarter earnings announcement.


Of these, 3.1 billion barrels of reserves are yet to be discovered. Considering risk prospectivity, 530 million barrels have potential to be recovered.

Cairn India Managing Director and CEO Rahul Dhir said: "The ONGC-Cairn Joint Venture has reached a major milestone of achieving 175,000 barrels of oil per day production from Rajasthan" on April 20.

This production comprises of 150,000 bpd (7.5 million tonnes a year) from Mangala and 25,000 bpd from Bhagyam, the second biggest of 25 oil and gas finds in the Rajasthan block.

Production from Mangala, the largest onland oil field in India, was hiked by 20 per cent within a day of approval.

Cairn had on April 19 secured government approval for hiking Mangala output from 125,000 bpd to 150,000 bpd.

"Positive results of the enhanced oil recovery (EOR) pilot, re-evaluation of the exploration potential in Rajasthan along with the discovered resource support a basin production potential of 300,000 bpd," Cairn said.

Cairn is the operator of Rajasthan block with 70 per cent interest while state-owned Oil and Natural Gas Corp (ONGC) holds the remaining 30 per cent.

"We continue to add value and to contribute to our nation's energy security. Last year, we have reduced oil imports by $ 6 billion and have contributed $ 2.4 billion to the national exchequer," Dhir said.

Mangala field, the largest discovery in Rajasthan commenced production in August, 2009, following a period of five years from discovery to production. The field has consistently produced at its previously approved rate of 125,000 bpd for over one and a half years. Post higher offtake approval, production has been ramped up to 150,000 bpd.

Oil production from Bhagyam commenced on January 19, 2012 and is currently producing 25,000 bpd. Marginal oil field Raageshwari also commenced production on March 8, 2012 and is currently producing in excess of 250 bpd. The Saraswati field commenced production on May 27, 2011 and has produced over 75,000 barrels of oil till date.

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[jinka sreekanth]

Petronet to start work on third LNG terminal, signs pact with GPL

Petronet LNG, India’s biggest liquefied natural gas (LNG) importer, on Wednesday signed an agreement to invest Rs 4,500 crore in building a five-million-tonne import terminal at Gangavaram Port on the Andhra coast. This will be the country’s fifth LNG terminal after Dahej, Dahbol, Hazira and Kochi.

Gangavaram will be Petronet's third LNG import terminal. The company, at present, operates a 10-million tonne facility at Dahej in Gujarat and is building another five-million tonne terminal at Kochi in Kerala, to be ready by the year-end. A steep decline in domestic gas output, led by declining volumes from Reliance Industries-operated KG-D6 field, has made LNG imports an attractive business.

“Petronet LNG and Gangavaram Port Ltd (GPL) on Wednesday signed a firm and binding term sheet for developing a land-based LNG terminal at Gangavaram Port, Andhra Pradesh with a capacity of five-million tonne per annum,” the two firms said in a joint press statement.

The term sheet was signed by Petronet managing director and chief executive A K Balyan and Gangavaram Port Ltd (GPL) chairman and Managing director D V S Raju. The LNG terminal at Gangavaram Port will comprise facilities for receiving, storage and regasification of LNG and would be built in 42 months. “The terminal at Gangavaram Port would have the provision for further expansion, like the flagship Dahej LNG Terminal of Petronet,” it said. The company would import LNG from gas-rich nations like Australia to meet the growing energy demand in Andhra Pradesh and other eastern and central part of India.

“The construction work on the terminal is expected to start within a year and it should be ready to commence operations by 2016,” Balyan said.

“We are eager to have our presence on the east coast and are exploring various possible options to bring gas earlier than 2016 at Gangavaram Port.”

Gas imported at the terminal would provide feedstock to refineries, power and fertiliser plants.

The time of arrival of LNG at Gangavaram port is likely to be advanced as the company is looking at integrating various other facilities with the project, Balyan told Business Standard.

GPL would be holding seven-eight per cent equity in the project towards the land provided to set up the terminal, according to Petronet chief. On the likely source of LNG to be imported to this facility, he said there had been several sources on the company's radar and it has enough time to finalise the same.

source

[kalkibhagwan]

Iraq topples Iran, becomes 2nd largest crude oil supplier to India

Supplies from Iraq and Kuwait have seen a significant increase, even as Saudi Arabia maintained its position as the largest supplier. Till now, Iran was India's second-biggest crude oil supplier after Saudi Arabia, meeting about 12 per cent of the country's needs, but the position has been taken over by Iraq.

Domestic refiners such as Hindustan Petroleum Corporation, Mangalore Refinery and Petrochemicals Ltd and Essar Oil are expected to cut sourcing from Iran by at least 10 per cent. Bharat Petroleum Corporation has already stopped sourcing.

According to industry observers, Iraq has emerged as the next major supplier as two big domestic refiners — Indian Oil Corporation and Reliance Industries — source their crude oil from there.

Sourcing from Iran may see a further drop after June, unless there is a diplomatic intervention. India is hosting the US Secretary of State, Ms Hillary Clinton, starting Sunday (in Kolkata) followed by two days in New Delhi, sources said.

Indian refiners imported 171.41 million tonnes of crude oil in 2011-12. Of this, 32.63 mt came from Saudi Arabia, 24.51 million tonnes from Iraq, 17.67 mt from Kuwait, and 15.79 mt from UAE (14.706 mt in 2010-11).

PAYMENT WOES

The sanctions also made payments for supplies from Iran difficult. A third-country payment mechanism was worked out. Indian refiners paid for their Iranian oil imports through Turkey's Halkbank. But, there is a fear that this system may collapse because of the new US sanctions.

A method was also worked out wherein National Iranian Oil Company would accept a share of the payments in rupees in an account opened in UCO Bank. However, the 40 per cent withholding tax component made the mechanism a non-starter. Domestic refiners had refused to shoulder the additional tax burden, which made sourcing from Iran very expensive.

TAX EXEMPTION

In the Budget for 2012-13, the Government stepped in to exempt tax on payment received by a foreign company in Indian currency on account of sale of crude oil to any person in India.

However, certain conditions would have to be met before benefiting from the tax exemption.

[anni125]

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[Yagya]

[wO_Ow]

ONGC Q4 net profit seen up 100%, subsidy sharing eyed

NEW DELHI: ONGC Ltd is expected to report a 100 percent YoY increase in its fourth quarter net profit to Rs 5,600 crore against Rs 2,790 crore in the year-ago period, according to ET Now estimates.

Net sales are seen at Rs 15,200 crore, or a 5.6 percent fall from Rs 16,107 crore in the corresponding period a year ago.

Indian Oil net profit up 224% at Rs 12,670 crore, beats estimates

NEW DELHI: Indian Oil Corporation on Monday announced a net profit of Rs 12,670.43 crore for the quarter ended March 31, 2012, a 224 percent YoY increase from Rs 3,905.16 crore in the year-ago period.

Analysts expected the company to post a net profit of Rs 9,400 crore during the quarter, up 140.70 percent YoY, according to ET Now estimates.

Total income increased to Rs 1,30,305.35 crore in the fourth quarter from Rs 99,130.03 crore for the March 2011 quarter, the company said in a BSE filing.

The group posted a net profit after tax & minority interest of Rs 4,225.98 crore for the year ended March 31, 2012, compared to Rs 7,830.72 crore for the year ended March 31, 2011.

Total income increased to Rs 4,12,111.16 crore for the year ended March 31, 2012, from Rs 3,13,244.71 crore in the previous year.

BPCL Q4 net at Rs 3,963cr, in line with expectations

NEW DELHI: State-run oil refiner BPCL on Friday said its net profit for the quarter ended March 31, 2012, rose 323.83 percent to Rs 3,962.83 crore from Rs 935 crore in the year-ago period.

The results were largely in line with estimates. Analysts on an average expected the company to post a net profit of Rs 4,053 crore during the quarter. BPCL's net profit was seen increasing 333 percent YoY to Rs 4,053 crore, according to ET Now estimates.

Total sales increased nearly 43 percent to Rs 64,642.18 crore in the fourth quarter from Rs 45,251.51 crore for the March 2011 quarter, the company said in a BSE filing.

The average gross refining margins (GRMs) for the current year ended 31 March 2012 at $3.16 a barrel compared to $4.47 per barrel in the previous year.

The board announced a bonus issue in the ratio of 1:1 and a dividend of Rs 11 per share.

The stock closed 0.7% higher at Rs 731.10 on the Bombay Stock Exchange. The scrip hit an intraday high of Rs 742 and a low of Rs 715.85.

OIL net profit down 21% at Rs 445 cr

New Delhi: State-owned Oil India Ltd (OIL) Monday reported 21 percent drop in net profit at Rs 444.81 crore for the quarter ended March 31, 2012.

Net profit dipped after the government asked upstream firms Oil and Natural Gas Corp (ONGC) and OIL to make good 39.7 percent of the Rs 1,38,541 crore revenue that fuel retailers lost on selling diesel, domestic LPG and kerosene at government controlled rates in 2011-12.

Their share was 36.75 percent in the previous year.

Net profit in January-March quarter at Rs 444.81 crore was down from Rs 1,013.98 crore in the same period a year earlier, OIL said in filings to the stock exchanges.

Sales dipped to Rs 1,802.12 crore from Rs 2008.28 crore.

[Yagya]

Oil reserves found in Jaisalmer

Jaisalmer: Public sector company Oil India Ltd (OIL) has for the first time found oil reserves at Poonam Singh ki Dhani in Nachna area of Jaisalmer 1,230 metre below the ground.

According to sources, digging of oil well is going on at the allotted block RJON 2004/2 NILP/16 in Nachna area for the last few days and good quality oil reserves have been found at a depth of 1,230 metre. Samples of the findings have been sent for testing. OIL will also dig one more well near the existing well to find out if there are more reserves, company officials said.


Sources said this is the first success of finding crude oil in Rajasthan by OIL. Prior to this, the company had found large oil reserves in two wells dug at Bagewala in Nachna area. However, it was heavy oil and required advanced technique of exploring with higher cost, the pilot project had to be abandoned.

Oil India is producing seven lakh cubic metre of gas from the wells in Jhandewala area of Tanot. The gas through GAIL India is being supplied to gas based-thermal power project at Ramgarh.

ONGC is also exploring for gas and oil in Gotaru sector, but has found only a few gas reserves and small quantity of condense oil and could not get any big success in its efforts.

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[Licit Mortal]

Originally Posted by Yagya

Oil reserves found in Jaisalmer

something tells me that Gujarat, Rajasthan and Karnataka have huge(I mean really really huge) reserves of oil, yet to be discovered. These are the driest regions and most of the dry regions in the world are rich in oil. BTW, I ain't talking about the deccan traps at all.

[Gudavalli]

Insurance deal lets India resume shipping Iran oil

MUMBAI, India — India has joined Japan in offering government-backed insurance for ships carrying Iranian crude in order to bypass European sanctions that have nearly halved Iranian oil exports to key markets.

The first Indian ship to carry oil from Iran with Indian insurance is scheduled to load up in Iran on Wednesday, a shipping company executive said. This is a breakthrough for the Indian government, which has scrambled to maintain vital Iranian oil imports after European sanctions blocked third-party insurance in July.

The MT Omvati Prem – a tanker contracted to carry 85,000 metric tons of crude oil from Iran for Indian state refiner Mangalore Refinery and Petrochemicals Ltd. – is scheduled to arrive in India by Aug. 25, said Kowshik Kuchroo, president of shipping for Mercator Ltd., an Indian shipping company.

"This being a government of India cargo, it has a different sense of importance. We're not doing it just for business," Kuchroo said Monday. "India is in definite need of the crude. At a short notice, we can't just snap the supply."

Mercator is insuring the ship with $50 million in hull and machinery insurance, which covers physical damage to the ship, from state-owned New India Assurance Co. It's insuring the vessel with another $50 million in protection and indemnity insurance, which covers a broad range of liabilities, including environmental pollution and cargo damage, from government-backed United India Insurance.

That is a far cry from the $1 billion in coverage Indian companies like Mercator got from European insurers, which used to underwrite most maritime coverage. European Union sanctions that prohibit EU companies from offering insurance on tankers carrying Iranian crude took effect July 1, part of the U.S.-led effort to tighten sanctions on Iran to cut off funds for its nuclear program.

Imports of Iranian oil by major consumers plunged to 1 million barrels a day in July from 1.74 million barrels a day in June, according to an Aug. 10 report from the International Energy Agency.


Mercator aside, most Indian shippers don't like the terms of the insurance coverage and have declined to send tankers to Iran.

Sabyasachi Hajara, chairman and managing director of Shipping Corp. of India, said the current package was "inadequate."

"The coverage modalities are yet to be worked out," he said. Once mutually acceptable terms can be reached, he said his company would be happy to haul Iranian oil. No shipments are now scheduled, he said.

China, India, Japan and South Korea are among Iran's most important oil export markets. The Obama administration exempted all four countries from U.S. sanctions after they significantly reduced their imports of Iranian oil.

Japan was the first country to devise a workaround to the EU sanctions, offering its shippers a robust $7.6 billion per tanker in government-backed insurance for oil cargo from Iran. Japan's Parliament passed the emergency measure in late June to avoid a disruption to critical oil supplies due to actions against Iran.

Iran has offered to deliver crude on its own ships to China, South Korea and India. But Iran's fleet size is limited and some companies are skeptical about the viability of Iranian insurance cover, analysts say.

"The complications in securing alternative arrangements to continue importing Iranian oil in view of tanker insurance problems are prolonging import problems for some countries, who are looking toward alternative suppliers," said Tom Grieder, Asia-Pacific energy analyst for IHS World Markets Energy. "While Japan has provided state-backed insurance cover, Indian insurance cover is not particularly large and refiners still face import risks. More broadly, there continue to be concerns about the viability and validity of Iranian insurance cover, which has been offered to China and South Korea."

South Korea stopped importing Iranian crude in July, when the insurance sanctions hit. Two refiners told The Associated Press on Monday that they were in talks with the South Korean and Iranian governments about using Iranian tankers under Iranian insurance cover to import oil.

"Iran first made the offer," said Eom Ik-hoon, spokesman for South Korea's largest refiner, SK Energy, which imported 10 percent of its crude from Iran before the sanctions hit. "We are discussing details with the South Korean government, but we do not know when imports will be resumed."

Hyundai Oil Bank Co.'s spokesman Koh In-soo said the company was also reviewing using Iranian ships and insurance, but denied earlier news reports that the crude imports may be resumed as early as September.

[Gudavalli]

Gas based power in India Quantifying the quandary

It was only two years back that the future of domestic gas production looked bright with peak production from KG-D6 basin reaching 61 mmscmd. The production was expected to further ramp up to 80 mmscmd by 2012-13 and independent power producers (IPPs) were being encouraged to set up gas based power plants. Unfortunately, things have not panned out as envisaged. The gas output from KG-D6 has declined to 29 mmscmd today and the Ministry of Petroleum and Natural Gas (MoPNG) has projected a further decline over the next two years
By Girish Shirodkar
The reasons for the production decline are hotly debated and have led to a stand-off between the Government and Reliance Industries. While the Government believes that the decline is attributable to a shortfall in capacity development by RIL, Reliance cites difficult geology as the major hindrance in increasing production. There are also shortcomings in the contractual terms between the Government and RIL, particularly the production sharing contract (PSC). The PSC allows the operator to deduct capital and operating expenses from hydrocarbon sale revenues before sharing profits with the Government. Such contract terms incentivize developers to gold plate costs thereby creating distrust between stakeholders which eventually delays the ramp up of production.
Overall, the gas availability situation looks bleak over for the next two years. Even beyond two years, there is uncertainty since MoPNG has not given any projections for FY15 and FY16.
IMPACT ON THE VALUE CHAIN OF GAS-BASED POWER PLANTS
Of the current production of 29 mmcmd from KG-D6, 15.7 mmscmd is allocated to fertilizer plants. These plants have top priority in gas allocation and hence have not faced any cuts in gas supply. On the other hand, 25 gas based power plants, which had an allocation of 29 mmscmd are now receiving only 12 mmscmd of gas. These plants with an installed capacity of 18GW1 are now running at very low PLFs.
Through a recent order MOPNG has indicated that the 1967 MW Dabhol power plant would also be supplied its full allocation of 7.6 mmscd and would be treated as high priority at par with the fertilizer plants. This means that going forward, less than 5 mmscmd will be available to the balance 24 power plants.
With such low PLFs, operating efficiencies reduce significantly leading to increase in station heat rates. At low PLFs, disincentives also start kicking in further impacting cash flows. At the same time fixed operating costs and investments required for maintenance etc. remain the same. This puts severe pressure on profitability and cash generation of gas based plants. Once PLFs goes below a certain threshold, it becomes technically and financially unviable to continue operating the plant. If the gas availability continues to decline we could have a situation where a number of gas plants would have to shut operations. Since gas plants constitute about 10% of the countries installed capacity, such a shutdown would also have an adverse impact on the power shortages in the country.
This decline in gas availability is problematic not just for the power plants but also for other stakeholders in value chain. Increasing pressure on profitability and cash generation will impact IPP's ability to service debt obligations. Banks and other lenders having exposure to these plants may have to restructure loans to these assets. Discoms and end users are the worst affected due to lack of power supply and continued uncertainty on the same.
When faced with a similar situation in the coal power sector, wherein Coal India was unable to supply coal in committed quantities, the Government decisively stepped in. It directed Coal India to sign Fuel Supply Agreements with power plants as well as planning out a coal import strategy along with price pooling to ensure adequate coal supply. There is no reason why the government should not be feeling responsible for ensuring sustainability of the gas power sector.
The magnitude of the problem is such that it is imperative for both the Government as well as other stakeholders to come together and explore potential solutions both from a short term perspective to mitigate the immediate crisis as well as from a long term perspective to resolve the core issues.
POTENTIAL SHORT TERM SOLUTIONS
Both gas plant owners and the Government have been discussing this issue and some of the ideas currently on the table include:
Pooling of regassified LNG with natural gas: While this would improve total availability, RLNG prices are substantially higher and would lead to significantly higher tariffs which the distribution companies may not be able to afford.
Maintaining same allocations but parking gas and releasing it to power plants in larger volumes at a time: Under this mechanism whenever a plant would be operated, it would do so at a high PLF. While this would have some impact on improving heat rates, the net benefit would be minor since total gas supply to a plant remains the same and there is no impact on the fixed costs and investments required to continue plant operations.
While the Government needs to ensure maximum generation at favourable costs, the IPPs need to ensure positive cash flows and long term health of their plants. The stakeholders need to explore disruptive out-of-the-box solutions which can create win-win situations to take care of the interests of both the sides.
One such solution could be based on the fact that it is usually better to operate a few plants at optimal PLFs rather than to operate all plants at sub-optimal levels. The optimal solution would be to divert the available gas supply to the most efficient plants and operating them at optimal PLFs while temporarily shutting operations of other plants. Of course, this is only possible if there is a mechanism to ensure equitable distribution of the total benefits across all the plants.
This could be achieved by allowing gas based power plants to freely buy and sell gas to each other at a premium over the existing prices and ensuring that the plants which choose to shut down are not penalized by discoms. In such a system, each plant owner would evaluate the benefits of getting additional gas to determine the premium he is willing to pay. The owners of the most efficient plants would be willing to pay higher premiums since they would get maximum heat rate improvements. Owners of less efficient plants will prefer to shut down since they would save on fixed costs as well as get a premium for selling their gas supply. The free-market determined premiums would ensure that the overall benefits are shared equitably. The government and Discoms could insulate themselves by maintaining power tariffs based on the source price of gas and not on the transfer premiums.
Such a mechanism could be a true win-win solution by ensuring that:
* The Government / Discoms get more power at the same tariffsince the most efficient plants will operate at optimal PLFs
* The plant owners benefit either by shutting their plant and selling their gas supply for a premium OR by buying gas at a premium and increasing their plant PLFs to optimal levels
Of course any such solution is only a short term measure to mitigate the immediate shortage but in the long term the only real solution is to improve the availability of natural gas.
IMPORTS ARE UNLIKELY TO COME TO OUR RESCUE
Gas is currently imported into India only in the form of Liquefied Natural Gas (LNG). India has only two terminals to handle LNG imports 10 mtpa in Dahej and 2.5mtpa at Hazira, both of which are already substantially utilized. Hence, the ability to import LNG is limited by the re-gasification and storage terminal capacities which require heavy investments. Most of the 40 mtpa of planned capacity is currently only in planning stage. Also with increasing price expectations of import sources the viability of imported LNG as a long term solution for the power and fertilizer industry is uncertain.
The other import option is a transnational pipeline through which Natural Gas could be imported. Although India has been in talks with countries such as Iran, Turkmenistan, Afghanistan, Pakistan and Myanmar on laying of such pipelines, security concerns, geopolitical issues, uncertain completion timelines and lack of clarity on pricing have held back these ambitious plans. Moreover the cost of gas imported via these pipelines is also expected to be high.
Hence, imports of gas is unlikely to meet our core need of making available long-term gas supplies at reasonable prices to support India's fertilizers and power industries.
SHALE GAS AS OUR BEST LONG TERM BET
Though knowledge of shale gas reserves has been around since 1950's, technological advancements over the past decade have made it possible to tap into this resource.
Shale gas exploitation in the US has catapulted their declining gas production to records levels. It now represents 23% of US gas production compared to 1% in 2000. This has enabled US to shift from a net importer of natural gas to a potential exporter. Gas prices have plummeted from ~USD 13/mmbtu in 2008 to ~USD 2.5/mmbtu now.
India also needs to prioritise exploitation of shale gas resources. Although current estimates are still uncertain, EIA has estimated India's total technically recoverable shale gas resources to be 63 tcf which is almost twice the current natural gas reserves of 38 tcf.
The Government of India has indicated allocation of shale gas exploration licensees by next year end. It has also rightly laid down a production linked payment plan (PLP) instead of the earlier cost recovery/profit sharing plan. A number of Indian companies like RIL and GAIL have also acquired US shale gas ventures to develop technological know-how and gain expertise which they plan to leverage during the initial allocations.
A successful exploitation of the shale gas opportunity could even help us overcome the problems created by the shortfall in KG-D6 and provide a new dawn to the gas power sector in India.

[mihir1310]

Gazprom, GAIL agree 20-year LNG sales deal

(Reuters) - Russia's Gazprom Marketing and Trading has signed a legally binding agreement to supply liquefied natural gas (LNG) to India's GAIL for 20 years, the companies said on Monday.


Under the terms of the agreement, GAIL will receive 2.5 million tonnes of LNG sourced from Gazprom's own production facilities and global trading portfolio, they said in a statement.

The price GAIL pays the Russian gas giant will be based on an oil-indexed formula and the gas will be delivered to Indian LNG import terminals at Dahej, Dabhol and Kochi.

"We are looking forward to working together with GAIL to help meet India's expanding gas demand whilst securing a long-term market for Russian gas," Vitaly Vasiliev, CEO of Gazprom Marketing & Trading, said.



........

"The deal with Gazprom reinforces GAIL's commitment to facilitate the development of the Indian market," GAIL chairman B. C. Tripathi said.

"The deal also marks our efforts to create a well-diversified and secured supply portfolio."

http://in.reuters.com/article/2012/1...8900AB20121001

[karkal]

Gazprom in talks with IOC for Ennore LNG terminal stake

IOC says it is not aware of the Russian firm’s interest but didn’t rule out a partnership

Gazprom was earlier present in the Indian hydrocarbon space when it was awarded a block along with GAIL in the first new exploration and licensing policy (Nelp) round that was held in 1999.

Updated: Wed, Dec 05 2012. 11 59 PM IST


Chennai/New Delhi: The Russian government-owned OAO Gazprom is in talks with Indian Oil Corp. Ltd (IOC) for acquiring a stake in the 5 million tonnes per annum (mtpa) liquefied natural gas (LNG) terminal planned at Ennore near Chennai.

Gazprom, the world’s largest explorer of natural gas, is interested in the Rs.4,320 crore terminal that is to be developed as a joint venture between IOC and Tamil Nadu Industrial Development Corp. Ltd (TIDCO).

“Talks are on between Gazprom and IOC for a stake in the Ennore LNG terminal. Gazprom is setting up a huge liquefaction facility at Sakhalin. It wants a gasification facility in India to cater to the growing demand here,” said a person aware of the development who spoke on condition of anonymity.

The terminal is planned at Ennore Port in Tiruvallur district of Tamil Nadu. IOC plans to invest Rs.56,200 crore during the 12th plan (2012-17), of which Rs.3,592 crore is earmarked for diversification.

IOC chairman and managing director R.S. Butola said he was not aware of Gazprom’s interest but didn’t rule out a partnership. “It hasn’t come to our level. We are talking to Gazprom for sourcing LNG for the Ennore project. We are open to partnerships. Whether it will be Gazprom or others has to be decided.”

A Gazprom spokesperson declined to comment.

A TIDCO spokesperson said the company wasn’t aware of an approach by Gazprom but added that it was “just an associate partner” and that Indian Oil didn’t have to inform it on “bringing in a new partner for the LNG Terminal at Ennore”.

Indian Oil, the nation’s largest refiner, is diversifying its business as there are limited growth opportunities in the oil retailing business. State-controlled refiners such as IOC continue to sell fuel below cost and are not sure about the extent to which they will be compensated by the government or when.

Natural gas is shipped as a liquid and is reconverted at LNG terminals. India has only two functioning LNG regasification terminals. They are located in Gujarat and are owned by Petronet LNG Ltd and Shell India. IOC in a consortium with GAIL (India) Ltd, Bharat Petroleum Corp. Ltd (BPCL) and Oil and Natural Gas Corp. Ltd (ONGC), already owns a stake in Petronet LNG. India currently has around 16 mtpa of LNG regasification capacity.

The country is facing a fuel scarcity as gas production from the Reliance Industries Ltd’s D6 field has dropped. According to the petroleum ministry, the country’s natural gas production was 130 million standard cubic metres per day (mscmd) of gas in 2011-12, a 9% decline from the previous year because of falling production of gas in the D6 field. The future for new power projects looks bleak as the projected gas production in the current fiscal is expected to be only 118.3 mscmd.

Gazprom accounts for 17% of the world’s total natural gas reserves and for around 70% of gas reserves in Russia. Gazprom Marketing and Trading Ltd (GM&T), a unit, has been engaged in LNG trading and marketing in Asia Pacific since 2009. It inked an agreement with GAIL for 2.5 million tonnes of LNG supply per annum for 20 years, starting in 2018-19. Last year, GM&T also signed an accord with IOC to supply 2.5 mtpa of LNG for 25 years from its projects such as Sakhalin.

JP Morgan Russia Equity Research in a report dated 8 November based on a conference call wrote, “Gazprom said up to 40% of its domestic contracts with energy and industrial companies expire by year-end and are being renewed right now....Gazprom believes contract enforceability remains low for the monopoly as well as for the independent players (Rosneft, Novatek) due to government’s initiatives during the crisis years, which remain in effect today. We see the high churn ratio of the contracts as an opportunity for the continued market share rebalancing, as Gazprom itself sees its domestic position as domineering.” IOC also recently signed an agreement with Korea Gas Corp. for “joint participation” in areas such as developing “natural gas infrastructure projects and LNG sourcing”.

Gazprom was earlier present in the Indian hydrocarbon space when it was awarded a block along with GAIL in the first new exploration and licensing policy (Nelp) round that was held in 1999. However, the block was eventually surrendered in the backdrop of a dispute between the companies over payments.

IOC operates 10 of India’s 22 refineries and has a 30.8% share of the nation’s 213.18 mtpa refining capacity.

[hakz2007]

ONGC, Oil India to benefit most from diesel price hike: Analysts

MUMBAI: Shares of companies from the oil & gas space continued to surge higher for the second consecutive session on Friday as sentiment turned bullish after the oil marketing companies (OMCs) hiked diesel prices following the government approval for the same.

The OMCs raised the prices by Re 0.51 paisa per litre for retail consumers. Prices for bulk buyers like defence, railways and state transport undertakings were raised by Rs 10 per litre.

Read more

[Yagya]

Oil India finds new oil reserves in Nachna area

Dec 6, 2012

JAISALMER: Public sector oil company Oil India Limited has discovered oil reserves in an oil well in the Nachna area at a depth of 1,229 metres. Two months ago also the firm had found oil reserves in a well. Oil found in both these wells comes in the category of heavy oil but India still does not have the technique to exploit heavy oil. Thus, Oil India has invited tenders from international consultants for the technique to exploit this type of oil.

During exploration works, oil and gas was found in many areas like Barmer, Jaisalmer and the Bikaner basin of Thar Desert.

Cairn India in Barmer after finding oil reserves has started producing 1.75 lakh barrels of oil, which is contributing 20% to the total consumption in India. After discovering new oil reserves, Cairn India has demanded permission from the union petroleum ministry for increasing oil production. Similarly, Focus Energy in Jaisalmer is locating new gas reserves continuously. The gas quantity is so high that that power projects of 1,000-1,500Mw can be established here.

Sources said that Oil India had recently dug a second well at a depth of 1,229 metres at Prayag Singh ki Dhani in Nachna area and last week oil reserves were found. The quality of oil is thick. In the same area, another well was dug and same kind of oil was found at 1,242 metres. Oil India is testing the oil.

Oil India Rajasthan project in-charge and general manager GK Bargoi said, "Oil testing is being done. Both the quantity and quality of oil are being ascertained."

He added, India does not have the technique to exploit this heavy oil and tenders have been invited from global players.

Bargoi said that few years ago, Oil India in Vaghewala area in Jaisalmer had dug wells and had found reserves of heavy oil. Help was sought from experts from Venezuela but oil could not be produced with that technique. Now tenders have been invited from international consultants. It must be mentioned that the Vaghewala area has 25 million tonne heavy oil reserves and 53 tonne bitumen reserves.

Principal secretary mines and petroleum Sudhansh Pant said, "Talks are on with the officers on how to exploit the heavy oil. Strategy to exploit oil will be decided after discussion with senior officers."

source

[wO_Ow]

ONGC's Rs 8K cr western fields to be completed this year

NEW DELHI: Oil and Natural GasCorp's (ONGC) over Rs 8,000 crore development of western offshore B-193 cluster fields will be completed this year that will add 28,000 barrels per day to peak oil production.

Singapore-based Swiber Holdings has installed a 13,000 tonne platform at the B-193 field in the Arabian sea, off the west coast, using float-over method that saved time and money.

The B-193 cluster field development includes eight marginal fields -- B-23A, B-28, B-28A, B-172, B-178, B-179, B-180 and B-193 -- off the west coast.

The project costing over Rs 8,000 crore would add 44 million barrels of oil production and 6 billion cubic meter of gas over the life of the field, said ONGC Chairman and Managing Director Sudhir Vasudeva.

[Yagya]

Cairn to begin gas production from Rajasthan by March-end

After giving the nation a massive oil discovery, Cairn India is now ready to begin natural gas production from its prolific Rajasthan block and has sought government approvals to begin sale to consumers by month end.

Cairn currently produces small volumes of natural gas along with crude oil from the fields in the Barmer basin block. The gas produced in used for power generation for internal consumption.

It, however, sees the resource base supporting commercial production of about 1 million standard cubic metres per day.

Anil Agarwal, Executive Chairman of Vedanta Resources, which owns majority stake in Cairn India, has written to Oil Minister M Veerappa Moily saying the company "will be ready to achieve sale of natural gas from the block in March 2013."

Cairn and its partner Oil & Natural Gas Corp (ONGC) "have been working towards ensuring development and commercial production of the natural gas resources in the block and have achieved substantial progress," he said.
Gas sales, he said, would begin upon "approval of price and gas allocation from Ministry of Petroleum and Natural Gas as per Gas Utilisation Policy.

The company has already sent a letter seeking approval of a price for the gas to the ministry on January 30, he said.

Agarwal invited Moily to the fields to inaugurate the sale of natural gas from the Rajasthan block.

Sources said Cairn is installing equipment to remove carbon-dioxide (CO2) from the gas before it is sold to consumers like power plants.

The companycurrently produces about 170,000 barrels per day of crude oil from Mangala and Bhagyam oilfields in the Rajasthan block. Mangala and Bhagyam are the biggest among the 25 oil and gas finds Cairn has made in the desserts of Rajasthan.

Aishwariya, the third biggest field, too is ready to begin production and will contribute about 10,000 bpd at peak.

Agarwal said the block had potential to reach 300,000 bpd of crude oil production besides holding substantial natural gas resources.

Cairn is seeking single window clearance for the Rajasthan project and plans to submit one integrated field development plan for all the finds instead of submitting

separate development plans for different discoveries.

Also, it wants work programme and investment budget to be approved for a rolling three years to provide continuity. Currently, the government approves yearly work programme and budget.

source

[Yagya]

Oil India reports 'significantly big' discovery in Rajasthan

Oil India Limited has reported a "significantly big" discovery in the Rajasthan field, sources told NDTV Profit on Tuesday. The discovery, christened as Punam-1, has been cleared as commercial by the Director General of Hydrocarbons, the sources added.

Shares in state-run Oil India, engaged in discovering and producing oil and gas, closed with over 3 per cent gains at Rs. 544.90 on the Bombay Stock Exchange. The stock was the top gainer on the BSE Oil and Gas index.

Oil India's discovery is reportedly close to Cairn India's Rajasthan oil block in which state-run Oil and Natural Gas Corporation (ONGC) is a junior partner. Output from the new discovery is likely to be 30,000 barrels per day, the sources said.

source

[Yagya]

HPCL to set up oil refinery in Rajasthan

Jaipur: Rajasthan government and Hindustan Petroleum Corporation Ltd (HPCL) would sign an MoU on March 13 for setting up an oil refinery in the state.

Petroleum Minister M Veerappa Moily would also remain present on the occasion, official sources said here.

The decision to set up the refinery was taken today at the board meeting of HPCL in Delhi, following which Moily congratulated Chief Minister Ashok Gehlot, the sources said.

The oil refinery was a long pending demand of the state and it will be the biggest investment in the district and accelerate economic development besides generating employment opportunities.

The state government last month had given its nod in principal to provide a financial package of Rs 3,376 crore to set up the refinery.

source

Oil is well: Rajasthan gets Rs 36,000-cr refinery boost

JAIPUR: In what will be the biggest ever investment in the state, the board members of Hindustan Petroleum Corporation Limited (HPCL) approved the Rajasthan government's proposal to set up the 19th oil refinery of the country in Barmer.

"The memorandum of understanding (MoU) to set up the refinery at Barmer will be signed in Jaipur on March 14 in the presence of Union minister of petroleum and natural gas Veerappa Moily," said a delighted state chief minister Ashok Gehlot. Talking to TOI, Gehlot said that the proposed refinery is a landmark achievement for the entire state and it will translate into revolutionary growth. "I immediately called Mr Moily and welcomed the decision," he added.

The estimated cost of the project is likely to be between Rs 36,000- Rs 40,000 crore. however the final figures will be revealed in MoU. "The refinery will have a production capacity of 9 million tonnes and the state will provide land for the project. Process of land acquisition is under way," said Sudhansh Pant, secretary, mines and petroleum.

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BIG NEWS: राजस्थान को मिलेगी पेट्रोलियम रिफाइनरी

जयपुर। हिंदुस्तान पेट्रोलियम कॉरपोरेशन लिमिटेड (एचपीसीएल) के बोर्ड ऑफ डायरेक्टर्स की मंगलवार को नई दिल्ली में हुई बैठक में राजस्थान में रिफाइनरी लगाने के प्रस्ताव को मंजूरी दे दी गई है। इस मंजूरी के बाद रिफाइनरी का प्रस्ताव पेट्रोलियम मंत्रालय को अनुमोदन के लिए जाएगा। मंत्रालय से मंजूरी मिलते ही राज्य सरकार और एचपीसीएल के बीच एमओयू की कार्रवाई होगी। संभावना है कि एमओयू अगले एक पखवाड़े में होने की उम्मीद है। बोर्ड ऑफ डायरेक्टर्स की बैठक की अध्यक्षता एचपीसीएल के सीएमडी एस.आर. चौधरी ने की।


राज्य के बाड़मेर में 9 मिलियन टन सालाना की क्षमता वाली रिफाइनरी लगना प्रस्तावित है। एचपीसीएल इस प्रोजेक्ट पर 37,230 करोड़ रुपए खर्च करने का प्रावधान कर रही है। इस राशि में लागत मूल्य बढऩे पर बढ़ोतरी संभव है। नवीनतम तकनीक वाले इस प्रोजेक्ट को रिफाइनरी कम पेट्रो केमिकल्स नाम दिया गया है।


रिफाइनरी लगने के बाद राज्य में 129 तरह के उत्पादों की सैकंडों औद्योगिक इकाइयां लग सकेंगी। इससे बाड़मेर, जोधपुर, पाली, जालौर और नागौर में औद्योगिक विकास हो सकेगा।

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[Yagya]

Cairn India finds oil again in Rajasthan’s Barmer basin

Jaipur, April 9 (IANS) Vedanta group firm Cairn India Tuesday said it has made the 26th oil discovery in its RJ-ON-90/1 block in Rajasthan’s Barmer district.

Technical evaluations indicate nearly 10 metres of gross oil column within Dharvi Dungar sands in Raageshwari-Tukaram area, the company said in a statement.

“We are delighted with the 26th discovery in the block. This reaffirms our belief that an aggressive exploration drilling programme will help harness the full potential of the Barmer Basin in Rajasthan. This is a step closer towards reserve accretion through exploration led growth,” said Elango P, board member.

The discovery was made after the government allowed oil firms to conduct exploration activities in development blocks.

“The Management Committee approved the exploration work programme for the RJ-ON-90/1 block on 14 February, 2013, post which Cairn India, the Operator of the block, commenced the drilling of its first Exploration well, Raageshwari-South-1, on 25 February, 2013 located in the southern part of the block,” said the company.

Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. Average daily gross operated production was 205,014 boe (barrel(s) of oil equivalent) in Q3 FY2012-13. The company sells its oil to major refineries in India and its gas to both PSU and private buyers.

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[mihir1310]

Great !!!