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May 2016
Public sector oil marketing companies have to be extremely careful while buying E&P assets outside of India.
8Buying reserves that have the possibility of getting stranded makes for bad economics.
8Most of the money made by oil marketing companies is hard earned.
8Companies such as BPCL and IOC, with little experience of the E&P industry, must be cagey while assessing an M&A target.
8The underlying assumptions on which OVL had traditionally bought E&P reserves have undergone a sea change and it will be a big mistake to follow the same route.
8Unless a discovered asset has a quick reserve burn plan, an investment proposal should be rejected. A look at the asset holdings of international oil majors will show that they have accumulated reserves which are slated for quick exhaustion.
8No one wants to hold on to long assets as the discount rates have gone up.
8Just getting an investment banker to run his traditional tools on an oil and gas M&A asset is not going to be good enough any more.
8Climate change compatibility will have to be rigorously woven into the sensitivity equation in the IRR models.
8Going further downstream, into chemicals and petrochemicals, is a safer bet for Indian refiners than going up the highly uncertain E&P value chain.
8That's the business they know well. In today's troubled times, playing safe is the best way to play the game
8The integrated full service oil company is a dead animal.
Click on Reports for more Details
8Buying reserves that have the possibility of getting stranded makes for bad economics.
8Most of the money made by oil marketing companies is hard earned.
8Companies such as BPCL and IOC, with little experience of the E&P industry, must be cagey while assessing an M&A target.
8The underlying assumptions on which OVL had traditionally bought E&P reserves have undergone a sea change and it will be a big mistake to follow the same route.
8Unless a discovered asset has a quick reserve burn plan, an investment proposal should be rejected. A look at the asset holdings of international oil majors will show that they have accumulated reserves which are slated for quick exhaustion.
8No one wants to hold on to long assets as the discount rates have gone up.
8Just getting an investment banker to run his traditional tools on an oil and gas M&A asset is not going to be good enough any more.
8Climate change compatibility will have to be rigorously woven into the sensitivity equation in the IRR models.
8Going further downstream, into chemicals and petrochemicals, is a safer bet for Indian refiners than going up the highly uncertain E&P value chain.
8That's the business they know well. In today's troubled times, playing safe is the best way to play the game
8The integrated full service oil company is a dead animal.
Click on Reports for more Details
As was elucidated by petroleum minister Dharmendra Pradhan at the launch of the Discovered Small Fields Bid Round last week, India's emphasis continues to be focused on attracting investment and enhancing production of oil and gas in India.
8He expects future bidding rounds to bring in more companies to explore E&P reserves in India.
8These are noble intentions.
8There is also global acknowledgment that India's hydrocarbon consumption will continue to grow even after 2025 when the rest of the world will register a slow down.
8Some countries are already on the verge of reducing fossil fuels consumption. This is the case for Europe and the United States, which intend to reduce fossil fuels consumption, respectively, from 1,623 Mtoe in 2013 to 1,503 Mtoe in 2025, and from 2,185 Mtoe in 2013 to 2,179 Mtoe in 2025.
8China will reduce consumption from 2025 onwards, leaving India as the only other big country which will continue to consume more after 2025.
8The current policy response is to build a robust domestic E&P sector to keep pace with rising consumption so as to keep import dependency in check.
8But the cost-economics may turn hostile in the long run and this may not allow domestic production to go up.
8As discussed earlier, the government may have to keep an eye on global developments and fine tune policies accordingly.
Click on Reports for more Details
8He expects future bidding rounds to bring in more companies to explore E&P reserves in India.
8These are noble intentions.
8There is also global acknowledgment that India's hydrocarbon consumption will continue to grow even after 2025 when the rest of the world will register a slow down.
8Some countries are already on the verge of reducing fossil fuels consumption. This is the case for Europe and the United States, which intend to reduce fossil fuels consumption, respectively, from 1,623 Mtoe in 2013 to 1,503 Mtoe in 2025, and from 2,185 Mtoe in 2013 to 2,179 Mtoe in 2025.
8China will reduce consumption from 2025 onwards, leaving India as the only other big country which will continue to consume more after 2025.
8The current policy response is to build a robust domestic E&P sector to keep pace with rising consumption so as to keep import dependency in check.
8But the cost-economics may turn hostile in the long run and this may not allow domestic production to go up.
8As discussed earlier, the government may have to keep an eye on global developments and fine tune policies accordingly.
Click on Reports for more Details
The fact that the Middle East is destroying the underlying principles on which OPEC was structured is already evident when Saudi Arabia sabotaged a cooperation treaty to curb production when Iran refused to get roped in.
8Currently non-OPEC supplies have begun falling and this should have ordinarily meant that prices should begin to firm up from here onwards.
8But the Middle East is pumping oil and gas at such a furious pace that it is outpacing the decline in non-OPEC output.
8This is partly aided by Iranian crude exports which are approaching pre sanction levels. Iraq's Basrah crude exports is also at a record high
8Prevailing oversupply may prevent a sustained rebound of crude above $50/bbl and prices are likely to fall back to $45/bbl in 2017.
8Saudi Arabia meanwhile is going full throttle with its oil production not just to counter its traditional rival, Iran, but also its diminishing share of crude consumption in countries such as China.
8Then again, US shale oil producers are getting to be more resilient than was thought earlier. A WTI of $40/bbl price level seems to be a good enough reason to incentivize production.
8The forecast is that even at $40/bbl, 6,000 to 9,000 new wells get started, enough to stem the decline in production.
8All this means that oil prices cannot go up beyond a limit and are expected to roll back to sub-$50 level sooner than later.
Click on Reports for more Details
8Currently non-OPEC supplies have begun falling and this should have ordinarily meant that prices should begin to firm up from here onwards.
8But the Middle East is pumping oil and gas at such a furious pace that it is outpacing the decline in non-OPEC output.
8This is partly aided by Iranian crude exports which are approaching pre sanction levels. Iraq's Basrah crude exports is also at a record high
8Prevailing oversupply may prevent a sustained rebound of crude above $50/bbl and prices are likely to fall back to $45/bbl in 2017.
8Saudi Arabia meanwhile is going full throttle with its oil production not just to counter its traditional rival, Iran, but also its diminishing share of crude consumption in countries such as China.
8Then again, US shale oil producers are getting to be more resilient than was thought earlier. A WTI of $40/bbl price level seems to be a good enough reason to incentivize production.
8The forecast is that even at $40/bbl, 6,000 to 9,000 new wells get started, enough to stem the decline in production.
8All this means that oil prices cannot go up beyond a limit and are expected to roll back to sub-$50 level sooner than later.
Click on Reports for more Details
There is some consternation over the fact that countries in the Middle East or even India may turn truant when it comes to adhering to climate change targets.
8Research shows that governments own 50 percent to 70 percent of global fossil fuels.
8And every country that signed the Paris climate change agreement theoretically agrees to implement policies consistent with limiting global warming to 2°C.
8The irony is that this indirectly requires those governments to not produce their stranded assets. And that will include not just the Middle East but also India.
8The current short term race to push out as much oil and gas by Saudi Arabia and Russia seems to be aimed at selling reserves before they are stranded.
8However, one can imagine that governments will not easily relinquish their fossil-fuel reserves -- whether it is because some economies, especially those in the Middle East, are simply too dependent on their fossil fuels and have yet to transform themselves to reduce this dependence, or others such as India which want to produce more as they are afraid of their growing dependency on imported oil.
8While the Middle East may continue to keep pumping oil and gas beyond prescribed climate change limits as the cost of production will perhaps be lower, the same model will not work for India.
8Cost-economics of oil and gas production will eventually force the Indian government to give up such an attempt, unless the entire effort is subsidized, by providing a floor price for gas production for example, in the name of energy security.
8If the Middle East continues to go full steam ahead with production in the face of sliding demand, the price of hydrocabons will plunge, making incremental Indian production unviable.
Click on Reports for more Details
8Research shows that governments own 50 percent to 70 percent of global fossil fuels.
8And every country that signed the Paris climate change agreement theoretically agrees to implement policies consistent with limiting global warming to 2°C.
8The irony is that this indirectly requires those governments to not produce their stranded assets. And that will include not just the Middle East but also India.
8The current short term race to push out as much oil and gas by Saudi Arabia and Russia seems to be aimed at selling reserves before they are stranded.
8However, one can imagine that governments will not easily relinquish their fossil-fuel reserves -- whether it is because some economies, especially those in the Middle East, are simply too dependent on their fossil fuels and have yet to transform themselves to reduce this dependence, or others such as India which want to produce more as they are afraid of their growing dependency on imported oil.
8While the Middle East may continue to keep pumping oil and gas beyond prescribed climate change limits as the cost of production will perhaps be lower, the same model will not work for India.
8Cost-economics of oil and gas production will eventually force the Indian government to give up such an attempt, unless the entire effort is subsidized, by providing a floor price for gas production for example, in the name of energy security.
8If the Middle East continues to go full steam ahead with production in the face of sliding demand, the price of hydrocabons will plunge, making incremental Indian production unviable.
Click on Reports for more Details
The seeming haste by the likes of Saudi Arabia, Iran and Russia to pump as much oil as possible is anchored to the dire projection that their reserves may get stranded under the 2 degree temperature rise scenario if they don't use them up now.
8The formation of a cartel to keep prices high has suddenly become a luxury that an oil rich country cannot seem to afford at this juncture.
8Saudi Arabia's desperate attempt to retain its market share is prompted by the urge to bring in as much money as possible even as it makes an attempt to wean away its economy from being heavily dependent on oil.
8Qatar too may follow a policy of pumping as much gas as possible, instead of holding the reserves back to shore up prices, in the fear that if they are not tapped, they may get stranded when global demand goes down.
8Despite the fact that gas is cleaner than oil, the percentage of stranded assets is higher for the former as reserves are also relatively larger.
8Extending this argument further, it is only a matter of time before Qatar decides to spook the LNG market by driving prices as low as possible to keep its competitors at bay.
8This will allow the country to pump out more gas from its vast reserves.
8Iran and other Middle Eastern countries will join the rush to bring gas reserves to the market under a marginal cost model if the stranded reserve argument gains traction.
Click on Reports for more Details
8The formation of a cartel to keep prices high has suddenly become a luxury that an oil rich country cannot seem to afford at this juncture.
8Saudi Arabia's desperate attempt to retain its market share is prompted by the urge to bring in as much money as possible even as it makes an attempt to wean away its economy from being heavily dependent on oil.
8Qatar too may follow a policy of pumping as much gas as possible, instead of holding the reserves back to shore up prices, in the fear that if they are not tapped, they may get stranded when global demand goes down.
8Despite the fact that gas is cleaner than oil, the percentage of stranded assets is higher for the former as reserves are also relatively larger.
8Extending this argument further, it is only a matter of time before Qatar decides to spook the LNG market by driving prices as low as possible to keep its competitors at bay.
8This will allow the country to pump out more gas from its vast reserves.
8Iran and other Middle Eastern countries will join the rush to bring gas reserves to the market under a marginal cost model if the stranded reserve argument gains traction.
Click on Reports for more Details
If the world has already got enough oil and gas discoveries to keep it going under a climate compliant matrix, is there a need at all for India to look for new discoveries within its sedimentary basins?
8Is the new exploration policy doomed to fail because there is no real need anymore for new reserves?
8In a world where exploration is no longer a requirement, where will India, which is not a hydrocarbon rich nation, stand?
8In a risk averse world, has the revenue sharing model, where the government is unwilling to share the risk of exploration failure unlike in the Production Sharing Model, a wrong policy formulation?
8When projections show that the Middle East, home to the largest reserves of oil and gas in the world, would account for the largest share of stranded oil and gas reserves in the world (40% of its oil reserves and 60% of its gas reserves), is there a need for anyone to look for potential reserves in India?
8Will anyone carry out exploration work in India's offshore blocks when Russia would account for 32 percent of unburnable gas reserves in the world and half of its gas reserves would be stranded?
8These are serious questions and they will require calibrated answers in the months ahead.
Click on Reports for more Details
8Is the new exploration policy doomed to fail because there is no real need anymore for new reserves?
8In a world where exploration is no longer a requirement, where will India, which is not a hydrocarbon rich nation, stand?
8In a risk averse world, has the revenue sharing model, where the government is unwilling to share the risk of exploration failure unlike in the Production Sharing Model, a wrong policy formulation?
8When projections show that the Middle East, home to the largest reserves of oil and gas in the world, would account for the largest share of stranded oil and gas reserves in the world (40% of its oil reserves and 60% of its gas reserves), is there a need for anyone to look for potential reserves in India?
8Will anyone carry out exploration work in India's offshore blocks when Russia would account for 32 percent of unburnable gas reserves in the world and half of its gas reserves would be stranded?
8These are serious questions and they will require calibrated answers in the months ahead.
Click on Reports for more Details
If a large portion of KG Basin's proven reserves are unviable as established by McGlade & Etkins, where does it leave ONGC, GSPC and RIL-BP, all of whom are heavily invested or are planning to invest in the area?
8The consultants' modeling exercise possibly takes into account a dip in demand and over supply of gas in the future to keep prices low enough to make up to 50% of KG Basin's high pressure, high temperature deepwater discoveries unviable.
8Does this scenario allow for GSPC's high cost investment in KG Basin to stay viable?
8What about ONGC's Rs 34,000 crore splash in KG-DWN-98/2?
8The RIL-BP combine hasn't unveiled their plans yet in the KG Basin but they are unlikely to make a heavy duty investment like ONGC without testing the waters.
8It is pertinent to note that the gas reserves once tapped must continue to produce for years to come in order to stay viable.
8Is it possible that only RIL-BP has the best cost economics for tapping new discoveries because they are already producing in the basin and have existing unused infrastructure in place?
8All these questions cannot be answered by individual companies as they work within their silos and it is up to the government to figure out the whole picture.
8If the truth is ugly, it is better to face it now than later.
Click on Reports for more Details
8The consultants' modeling exercise possibly takes into account a dip in demand and over supply of gas in the future to keep prices low enough to make up to 50% of KG Basin's high pressure, high temperature deepwater discoveries unviable.
8Does this scenario allow for GSPC's high cost investment in KG Basin to stay viable?
8What about ONGC's Rs 34,000 crore splash in KG-DWN-98/2?
8The RIL-BP combine hasn't unveiled their plans yet in the KG Basin but they are unlikely to make a heavy duty investment like ONGC without testing the waters.
8It is pertinent to note that the gas reserves once tapped must continue to produce for years to come in order to stay viable.
8Is it possible that only RIL-BP has the best cost economics for tapping new discoveries because they are already producing in the basin and have existing unused infrastructure in place?
8All these questions cannot be answered by individual companies as they work within their silos and it is up to the government to figure out the whole picture.
8If the truth is ugly, it is better to face it now than later.
Click on Reports for more Details
There was much consternation around the world when noted consultants McGlade & Ekins came out with a global map showing how much of each country's proven reserves of oil and gas can be economically exploited under a 2-degree complaint scenario.
8The report is now widely accepted by oil and gas analysts as a pioneering study.
8The map shows that less than 50% of India's gas reserves are capable of being economically exploited. Since most of India's gas reserves are located in the KG Basin, the report implies that a bulk of KG Basin's proven reserves -- leave alone new discoveries that are likely to be made -- will be ever tapped.
8India is only among a few other countries in the world which the maps shows as not able to tap more than 50% of its gas reserves.
8This is a serious assertion and will have severe implications for the domestic E&P industry.
8It is imperative that the petroleum ministry and the likes of ONGC and RIL-BP must establish immediate contact with McGlade & Etkins and sit down with them on how they have arrived at such an alarmist conclusion.
8If the figures given out by McGlade & Etkins are realistic, then the government must redo its math and its policies accordingly.
8The E&P industry is transforming so rapidly that all previous business models and policy frameworks have become redundant.
8The petroleum ministry has to run faster than ever before to stay on top of developments.
8What it needs to do, with the help of ONGC, OIL and RIL-BP, is to assemble a global set of best-in-class consultants to understand what's going on and how the country must react to these changes.
8Policy formulations in New Delhi will never be correct if the basic assumptions are unsustainable.
Click on Reports for more Details
8The report is now widely accepted by oil and gas analysts as a pioneering study.
8The map shows that less than 50% of India's gas reserves are capable of being economically exploited. Since most of India's gas reserves are located in the KG Basin, the report implies that a bulk of KG Basin's proven reserves -- leave alone new discoveries that are likely to be made -- will be ever tapped.
8India is only among a few other countries in the world which the maps shows as not able to tap more than 50% of its gas reserves.
8This is a serious assertion and will have severe implications for the domestic E&P industry.
8It is imperative that the petroleum ministry and the likes of ONGC and RIL-BP must establish immediate contact with McGlade & Etkins and sit down with them on how they have arrived at such an alarmist conclusion.
8If the figures given out by McGlade & Etkins are realistic, then the government must redo its math and its policies accordingly.
8The E&P industry is transforming so rapidly that all previous business models and policy frameworks have become redundant.
8The petroleum ministry has to run faster than ever before to stay on top of developments.
8What it needs to do, with the help of ONGC, OIL and RIL-BP, is to assemble a global set of best-in-class consultants to understand what's going on and how the country must react to these changes.
8Policy formulations in New Delhi will never be correct if the basic assumptions are unsustainable.
Click on Reports for more Details
No one in India really questions the argument that temperature increases cannot be allowed to reach unsustainable levels.
8The hard reality is that the world -- and India too -- has to bite the bullet sooner than later and take cognition of this fact.
8Concrete but non-binding steps to curb carbon emissions will have to be submitted by each country by 2020 and biding steps will follow in 2025.
8What is not understood fully in India is that the 2-degree temperature rise limit will destroy all potential growth in the oil and gas industry.
8According to widely accepted research, much lower demand under a 2°C-compliant scenario will mean that only 13 percent of oil produced over 2020-2040 would come from yet-to-be-developed reserves and no production would come from future discoveries.
8This would kill the oil exploration industry completely in the long run even though it might continue to survive in the short and medium term.
8The E&P capex has been growing at 14% annually between 2000 and 2014.
8This cannot go on anymore.
8Capex will slow down dramatically in the future.
8In other words, there is no real upside anymore to the E&P industry as a whole though there will always be regional and country specific variations.
Click on Reports for more Details
8The hard reality is that the world -- and India too -- has to bite the bullet sooner than later and take cognition of this fact.
8Concrete but non-binding steps to curb carbon emissions will have to be submitted by each country by 2020 and biding steps will follow in 2025.
8What is not understood fully in India is that the 2-degree temperature rise limit will destroy all potential growth in the oil and gas industry.
8According to widely accepted research, much lower demand under a 2°C-compliant scenario will mean that only 13 percent of oil produced over 2020-2040 would come from yet-to-be-developed reserves and no production would come from future discoveries.
8This would kill the oil exploration industry completely in the long run even though it might continue to survive in the short and medium term.
8The E&P capex has been growing at 14% annually between 2000 and 2014.
8This cannot go on anymore.
8Capex will slow down dramatically in the future.
8In other words, there is no real upside anymore to the E&P industry as a whole though there will always be regional and country specific variations.
Click on Reports for more Details
This website believes that Indian oil and gas companies have not understood the full implications of global warming and the basic tenets of the Paris Agreement that seek to limit warming to not just 2 degree centigrade but to 1.5 degrees.
8It is now beyond reasonable scientific doubt that it can't be business as usual (BAU) in the hydrocarbon sector anymore. The BAU scenario -- in which existing levels of demand growth rates for coal, oil and gas are maintained -- will result in a catastrophic 6 degree plus increase in temperatures in 2100.
8This kind of a temperature increase will make large parts of India uninhabitable with alarming consequences for its population.
8It is also fully established that the world has eaten up 65% of the total allowable carbon emissions to keep the temperature rise to 2 degrees. Only 35% of the carbon emission budget -- amounting to 1000 giga tonnes (GT) of carbon -- is left to keep the world safe for future generations.
8The important point to note is that already there are enough proven hydrocarbon reserves in the world to produce 2800 GT of carbon. But the world cannot spend more than 1000 GT at best to stay within the 2% temperature change limit.
8Calculations show that the world can only exploit 33% of its existing proven reserves of fossil fuel if global warming is to be kept under check.
Click on Reports for more Details
8It is now beyond reasonable scientific doubt that it can't be business as usual (BAU) in the hydrocarbon sector anymore. The BAU scenario -- in which existing levels of demand growth rates for coal, oil and gas are maintained -- will result in a catastrophic 6 degree plus increase in temperatures in 2100.
8This kind of a temperature increase will make large parts of India uninhabitable with alarming consequences for its population.
8It is also fully established that the world has eaten up 65% of the total allowable carbon emissions to keep the temperature rise to 2 degrees. Only 35% of the carbon emission budget -- amounting to 1000 giga tonnes (GT) of carbon -- is left to keep the world safe for future generations.
8The important point to note is that already there are enough proven hydrocarbon reserves in the world to produce 2800 GT of carbon. But the world cannot spend more than 1000 GT at best to stay within the 2% temperature change limit.
8Calculations show that the world can only exploit 33% of its existing proven reserves of fossil fuel if global warming is to be kept under check.
Click on Reports for more Details
For reference purposes the website carries here the following tenders:
8Gas Sales from Banskandi-EPS field, A&AA Basin [ONGC] Details
8Charter Hiring of Drilling Rigs for DS Cauvery Basin and CFB Silchar [ONGC] Details
8Post Rig building works at "PIAA" Drill site in Cuddalore district [ONGC] Details
8Replacement of Sprinkler and Drenched System of LPG and Propane Storage Sphere, Uran [ONGC] Details
8Field Mounted LEL Detection System for Cauvery Basin [GAIL] Details
8ARC for testing of Protection Relays installed at Compressor Station, Township, LPG Plant & C2C3 Plant [GAIL] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8First sale for newly approved Israeli gas project Details
8Oil production in Canada's Fort McMurray coming back online Details
8Oil prices rise on start of peak US demand season Details
8Industries in Uttar Pradesh seek subsidy to switch over to CNG Details
8IOC reports highest ever profit, becomes 2nd most profitable PSU; posts Rs 10,399 cr profit in FY16 Details
8CIL Q4 net profit up marginally to Rs 4,248 crore Details
8ONGC mulling buying majority stake in GSPC's Krishna Godavri basin gas block Details
8Kuwait to spend $115 billion on oil projects: Official Details
8In US, gasoline prices at 11-year low. But its days are numbered Details
8Russian Energy Minister Novak says too early to write off OPEC Details
8Crude oil beyond $55 may hit Indian equities Details
8Oil companies' stocks likely to outperform if there’s relief on subsidies Details
8ONGC Videsh, Azerbaijan's SOCAR to jointly trade oil, source says Details
8Mumbai’s H-Energy set to place order for first offshore LNG terminal Details
8Regulator allows GAIL to hike tariff on sections of Cauvery pipeline Details
You can also click on Newsclips for more Details
8Gas Sales from Banskandi-EPS field, A&AA Basin [ONGC] Details
8Charter Hiring of Drilling Rigs for DS Cauvery Basin and CFB Silchar [ONGC] Details
8Post Rig building works at "PIAA" Drill site in Cuddalore district [ONGC] Details
8Replacement of Sprinkler and Drenched System of LPG and Propane Storage Sphere, Uran [ONGC] Details
8Field Mounted LEL Detection System for Cauvery Basin [GAIL] Details
8ARC for testing of Protection Relays installed at Compressor Station, Township, LPG Plant & C2C3 Plant [GAIL] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8First sale for newly approved Israeli gas project Details
8Oil production in Canada's Fort McMurray coming back online Details
8Oil prices rise on start of peak US demand season Details
8Industries in Uttar Pradesh seek subsidy to switch over to CNG Details
8IOC reports highest ever profit, becomes 2nd most profitable PSU; posts Rs 10,399 cr profit in FY16 Details
8CIL Q4 net profit up marginally to Rs 4,248 crore Details
8ONGC mulling buying majority stake in GSPC's Krishna Godavri basin gas block Details
8Kuwait to spend $115 billion on oil projects: Official Details
8In US, gasoline prices at 11-year low. But its days are numbered Details
8Russian Energy Minister Novak says too early to write off OPEC Details
8Crude oil beyond $55 may hit Indian equities Details
8Oil companies' stocks likely to outperform if there’s relief on subsidies Details
8ONGC Videsh, Azerbaijan's SOCAR to jointly trade oil, source says Details
8Mumbai’s H-Energy set to place order for first offshore LNG terminal Details
8Regulator allows GAIL to hike tariff on sections of Cauvery pipeline Details
You can also click on Newsclips for more Details
We have also begun testing what is arguably India's most comprehensive website for the monitoring of ongoing and upcoming energy sector projects.
8We have a 40-parameter search engine for each project.
8And what is more, the information will be dynamic, moving ahead as project milestones march forward.A dashboard and email alerts will keep readers abreast of every development.
8To begin with, we will shortly unveil the website to cover all major fertilizer projects.
8This is an industry we specialize in through our portal www.indianfertilizer.com. Every major fertilizer company in India and around the world subscribes to our site and we want to extend our understanding of the industry to provide business development opportunities for equipment and service providers.
8Please get in touch with our marketing team for more information. Also look at our Reports for a brochure on our project software. Details
8We have a 40-parameter search engine for each project.
8And what is more, the information will be dynamic, moving ahead as project milestones march forward.A dashboard and email alerts will keep readers abreast of every development.
8To begin with, we will shortly unveil the website to cover all major fertilizer projects.
8This is an industry we specialize in through our portal www.indianfertilizer.com. Every major fertilizer company in India and around the world subscribes to our site and we want to extend our understanding of the industry to provide business development opportunities for equipment and service providers.
8Please get in touch with our marketing team for more information. Also look at our Reports for a brochure on our project software. Details
IndianPetroPlus.Com has come a long way since its launch last year.
8Our emailers are highly prized and a recent outreach exercise showed that readers look forward to them every morning.
8Our mailers go to 30,000 people across the industry, not just within India but across the world.
8Readers in our mailing list in turn become our sources of information. There is a relationship of trust between the readers and us. They seem willing to part with information as they know we will keep our sources confidential while treating the information objectively.
8Our reach extends from a junior engineer in ONGC in the remote North East of India to a managing director of a global E&P multinational in England.
8We are never short of information as a consequence.
8Our coverage of business development opportunities is focused on the exact requirements of the service and equipment supplier.
8The launch of our project monitoring website will complete the offering (see the next item).
8We won't be off the mark when we say that we set the tone of discussion every morning in the oil and gas sector with our reportages, insights and analyses.
8We have began to notice that our newsbreaks and indepth analyses are picked up by the general media within a time lag.
8The government too reads our site with attention and we have seen the ministry reacting, albeit indirectly, to some of our reportage.
8As we have said earlier, we uphold the highest tenets of journalism while reporting on the oil and gas industry in India and we will continue to build a stronger information network on the support and goodwill of our readers.
Click on Reports for more. Details
8Our emailers are highly prized and a recent outreach exercise showed that readers look forward to them every morning.
8Our mailers go to 30,000 people across the industry, not just within India but across the world.
8Readers in our mailing list in turn become our sources of information. There is a relationship of trust between the readers and us. They seem willing to part with information as they know we will keep our sources confidential while treating the information objectively.
8Our reach extends from a junior engineer in ONGC in the remote North East of India to a managing director of a global E&P multinational in England.
8We are never short of information as a consequence.
8Our coverage of business development opportunities is focused on the exact requirements of the service and equipment supplier.
8The launch of our project monitoring website will complete the offering (see the next item).
8We won't be off the mark when we say that we set the tone of discussion every morning in the oil and gas sector with our reportages, insights and analyses.
8We have began to notice that our newsbreaks and indepth analyses are picked up by the general media within a time lag.
8The government too reads our site with attention and we have seen the ministry reacting, albeit indirectly, to some of our reportage.
8As we have said earlier, we uphold the highest tenets of journalism while reporting on the oil and gas industry in India and we will continue to build a stronger information network on the support and goodwill of our readers.
Click on Reports for more. Details
Oil and gas service providers continue to suffer from a depressed market as is evident from Punj Lloyd group's loss of Rs 2,245 crore in 2015-16.
8The company lost Rs 1,141 crore in 2014-15.
8Chairman Atul Punj however sees better performance on improved macros in the coming year.
8"The improving domestic environment reflected in policy changes and higher order inflow has encouraged us to view the Indian market as a priority focus area. I believe there are numerous opportunities unfolding," he said.
8The company's order book position totaled up to Rs 23,836 crore but timely implementation seems to be a problem as project promoters are going slow. For example, an order backlog of Rs. 6,845 crores in Libya is not seeing traction.
8Hope lies in segments which are likely to see rapid growth in the future.
8The company is pushing aggressively into the defence production business, building up capabilities around Air Defence, Artillery, Small Arms, Homeland Security and Component Manufacturing
8Punj said that he now had the technical expertise and manufacturing facility to become eligible to participate in the Make in India program in the Air Defence Upgrade Program.
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8The company lost Rs 1,141 crore in 2014-15.
8Chairman Atul Punj however sees better performance on improved macros in the coming year.
8"The improving domestic environment reflected in policy changes and higher order inflow has encouraged us to view the Indian market as a priority focus area. I believe there are numerous opportunities unfolding," he said.
8The company's order book position totaled up to Rs 23,836 crore but timely implementation seems to be a problem as project promoters are going slow. For example, an order backlog of Rs. 6,845 crores in Libya is not seeing traction.
8Hope lies in segments which are likely to see rapid growth in the future.
8The company is pushing aggressively into the defence production business, building up capabilities around Air Defence, Artillery, Small Arms, Homeland Security and Component Manufacturing
8Punj said that he now had the technical expertise and manufacturing facility to become eligible to participate in the Make in India program in the Air Defence Upgrade Program.
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Goaded by surging profits, public sector oil marketing companies have turned into aggressive marketers of LNG in India.
8Their penetration in the gas market would have been higher but for GAIL's monopoly over the gas pipeline network
8IOC for example sold over 19,000 tonnes of gas through its "LNG at the Doorstep" facility for customers located away from gas pipelines.
8This mode of offtake is likely to gain more ground in the years ahead.
8The company marketed 1.92 MMT of gas in 2015-16, registering an impressive growth of 6.9%. For the first time, IOC imported 9 LNG cargoes on its own. And more are likely to follow.
8IOC's next step is to work on the 1175 km Ennore-Tuticorin gas pipeline and build the attendant 5 MMTPA terminal at Ennore.
8HPCL too has set up a gas marketing division and it has drawn up plans to aggressively push into the domestic market.
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8Their penetration in the gas market would have been higher but for GAIL's monopoly over the gas pipeline network
8IOC for example sold over 19,000 tonnes of gas through its "LNG at the Doorstep" facility for customers located away from gas pipelines.
8This mode of offtake is likely to gain more ground in the years ahead.
8The company marketed 1.92 MMT of gas in 2015-16, registering an impressive growth of 6.9%. For the first time, IOC imported 9 LNG cargoes on its own. And more are likely to follow.
8IOC's next step is to work on the 1175 km Ennore-Tuticorin gas pipeline and build the attendant 5 MMTPA terminal at Ennore.
8HPCL too has set up a gas marketing division and it has drawn up plans to aggressively push into the domestic market.
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The impact of higher crude prices on India's oil-indexed long term LNG price is likely to be felt more strongly once the averaging formula begins to bite in.
8This is going to widen the gap between spot LNG and RasGas prices. Already the differential is more than 10%.
8Major offtakers of LNG are clamoring that the differential is unacceptably high.
8The spike in demand for LNG is helping keep consumption of higher cost long term LNG up in India but if the price differential stays or goes up, then the LNG mix in Petronet LNG Ltd's Dahej regasification terminal may begin to change in favour of spot or short term LNG.
8The point to note is that as more crude oil prices diverge from spot LNG prices, consumers will begin to demand that the difference between the two prices be brought down.
8A contract agreement may not stand in the way if buyers switch to spot LNG.
8Eventually the two prices will have to converge in a buyers' market for LNG.
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8This is going to widen the gap between spot LNG and RasGas prices. Already the differential is more than 10%.
8Major offtakers of LNG are clamoring that the differential is unacceptably high.
8The spike in demand for LNG is helping keep consumption of higher cost long term LNG up in India but if the price differential stays or goes up, then the LNG mix in Petronet LNG Ltd's Dahej regasification terminal may begin to change in favour of spot or short term LNG.
8The point to note is that as more crude oil prices diverge from spot LNG prices, consumers will begin to demand that the difference between the two prices be brought down.
8A contract agreement may not stand in the way if buyers switch to spot LNG.
8Eventually the two prices will have to converge in a buyers' market for LNG.
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The projected fall in demand for LNG in major markets in the world is already becoming evident.
8Japan, the No.1 LNG buyer, is a market most likely in structural decline for LNG, with imports falling 3.3 percent in April from a year earlier, to 6.38 million tonnes. This takes the drop for the first four months of the year to 5.5 percent. Data for May also shows lower demand.
8But it is South Korea that is showing the sharpest drop in demand. Imports fell 22.8 percent in April from the same month in 2015 to 2.18 million tonnes, bringing the year-to-date fall to 8.4 percent.
8On the positive side, Chinese demand for LNG grew 22.4 percent in April from a year earlier to 1.886 million tonnes, bringing the gain for the first four months of the year to 18.6 percent.
8But when gas supplies via pipelines from Central Asia and Russia are ramped up, LNG demand may taper out in China.
8India's imports are also likely to be largely steady in May, matching April's 1.6 million tonnes, leaving the country with a fairly strong year-on-year growth of about 17 percent.
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8Japan, the No.1 LNG buyer, is a market most likely in structural decline for LNG, with imports falling 3.3 percent in April from a year earlier, to 6.38 million tonnes. This takes the drop for the first four months of the year to 5.5 percent. Data for May also shows lower demand.
8But it is South Korea that is showing the sharpest drop in demand. Imports fell 22.8 percent in April from the same month in 2015 to 2.18 million tonnes, bringing the year-to-date fall to 8.4 percent.
8On the positive side, Chinese demand for LNG grew 22.4 percent in April from a year earlier to 1.886 million tonnes, bringing the gain for the first four months of the year to 18.6 percent.
8But when gas supplies via pipelines from Central Asia and Russia are ramped up, LNG demand may taper out in China.
8India's imports are also likely to be largely steady in May, matching April's 1.6 million tonnes, leaving the country with a fairly strong year-on-year growth of about 17 percent.
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The differential between spot and long term oil indexed LNG has begun widening following a hardening of crude prices recently.
8Spot LNG was assessed at $4.65/mmbtu in mid-May, down 35% from around $7/mmbtu a year ago. Prices were higher than the lows of $4/mmbtu in mid-April but in contrast Brent crude pushed above $50/bbl last week, up by around 33% from last year.
8The de-coupling of crude and spot LNG prices so far this year has heightened uncertainty for participants in the LNG market.
8The oversupply of LNG may actually worsen in coming years as more U.S. projects ramp up and the last of the eight major Australian ventures come to full production.
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8Spot LNG was assessed at $4.65/mmbtu in mid-May, down 35% from around $7/mmbtu a year ago. Prices were higher than the lows of $4/mmbtu in mid-April but in contrast Brent crude pushed above $50/bbl last week, up by around 33% from last year.
8The de-coupling of crude and spot LNG prices so far this year has heightened uncertainty for participants in the LNG market.
8The oversupply of LNG may actually worsen in coming years as more U.S. projects ramp up and the last of the eight major Australian ventures come to full production.
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Total LPG consumption has been growing for thirty two months in a row, according to the PPAC.
8It recorded a a growth of 8.2% during April 2016 which was lower than the 12.8% rise registered in March.
8Packed Domestic LPG consumption registered a growth of 6.6% during April, 2016 as against 7.8% for the same month last year.
8LPG-Packed Non-Domestic consumption grew at 29.6% in April, 2016, slowing down from April, 2015, when demand grew at a fantastic 41.4%.
8This double digit growth was mainly due to easy availability of low priced non-domestic LPG The curb in diversion of subsidized domestic cylinders also helped spur growth.
8Bulk LPG registered a positive growth of 30.6% during April, 2016 whereas last year the growth was at 33.3%
8One segment that is not doing well is Auto LPG, registering a de-growth of 4.6% in April, 2016. Last year, in April, consumption was higher at a positive 3.2%.
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8It recorded a a growth of 8.2% during April 2016 which was lower than the 12.8% rise registered in March.
8Packed Domestic LPG consumption registered a growth of 6.6% during April, 2016 as against 7.8% for the same month last year.
8LPG-Packed Non-Domestic consumption grew at 29.6% in April, 2016, slowing down from April, 2015, when demand grew at a fantastic 41.4%.
8This double digit growth was mainly due to easy availability of low priced non-domestic LPG The curb in diversion of subsidized domestic cylinders also helped spur growth.
8Bulk LPG registered a positive growth of 30.6% during April, 2016 whereas last year the growth was at 33.3%
8One segment that is not doing well is Auto LPG, registering a de-growth of 4.6% in April, 2016. Last year, in April, consumption was higher at a positive 3.2%.
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Understandably the PPAC could not clearly explain the sharp increase in demand for naphtha and FO as well as for gas even as the industrial sector slowed down.
8Naphtha offtake was up due to higher demand for naphtha cracking by the petrochemical sctor.
8FO demand received a boost from the power, fertilizer, steel and general trade segments.
8The point to note is that the general industrial sector -- made up of steel, sponge iron and refining segments -- showed an appetite for gas as well.
8But when both liquid fuel and gas demand went up, the trend should have translated into higher industrial activity which was absent during April.
8Overall gas uptake was up by 8.5% because of a 21.5% jump in consumption by power plants in April. The increase would have been higher but for a slump of 9.2% in offtake by fertilizer plants due to shutdowns.
8There was also low consumption of gas in Iffco's Anola and Nagarjuna's Kakinanda plant.
8The highlight of the month was a growth of 30% recorded by the CGD industry. The CNG and PNG segments registered robust growth.
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8Naphtha offtake was up due to higher demand for naphtha cracking by the petrochemical sctor.
8FO demand received a boost from the power, fertilizer, steel and general trade segments.
8The point to note is that the general industrial sector -- made up of steel, sponge iron and refining segments -- showed an appetite for gas as well.
8But when both liquid fuel and gas demand went up, the trend should have translated into higher industrial activity which was absent during April.
8Overall gas uptake was up by 8.5% because of a 21.5% jump in consumption by power plants in April. The increase would have been higher but for a slump of 9.2% in offtake by fertilizer plants due to shutdowns.
8There was also low consumption of gas in Iffco's Anola and Nagarjuna's Kakinanda plant.
8The highlight of the month was a growth of 30% recorded by the CGD industry. The CNG and PNG segments registered robust growth.
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Demand for diesel rose by 4% in April, down from 15.2% in March
8The slow growth is a little confusing given that demand should have picked up because of water shortage in rural India, which should activate diesel pumps, and due to electioneering in the states.
8Commercial vehicle sales also grew by 17.4% in April.
8So where has the demand disappeared?
8A spike in inflation and a contraction of industrial manufacturing may have trimmed demand.
8There was also the overhang of a ban in diesel cars in Delhi which may have dragged down consumption.
8The PPAC needs to dive deeper to come out with the reasons for such fluctuations.
8As a government agency, it perhaps fears censure if the negatives are highlighted.
8So even when there is a slowdown, the PPAC analysis sings a tune which is at variance with the reality on the ground.
8The spin cannot always be rosy if the numbers don't add up.
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8The slow growth is a little confusing given that demand should have picked up because of water shortage in rural India, which should activate diesel pumps, and due to electioneering in the states.
8Commercial vehicle sales also grew by 17.4% in April.
8So where has the demand disappeared?
8A spike in inflation and a contraction of industrial manufacturing may have trimmed demand.
8There was also the overhang of a ban in diesel cars in Delhi which may have dragged down consumption.
8The PPAC needs to dive deeper to come out with the reasons for such fluctuations.
8As a government agency, it perhaps fears censure if the negatives are highlighted.
8So even when there is a slowdown, the PPAC analysis sings a tune which is at variance with the reality on the ground.
8The spin cannot always be rosy if the numbers don't add up.
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All kinds of forces seem to have come into play in determining the consumption of petroleum products in India in April.
8The data given out by the government shows contradictory trends and the explanations put out by the PPAC do not fit the trend.
8A time has come for the government to improve the analysis behind the figures.
8The cost is going to be high if policy decisions are pegged on wrong prognosis.
8Consumption of POL was tempered down to 10.4% in April, 2016 from 14.71% registered for the same month last year.
8There is a slowing down in consumption as industrial growth stalled in April.
8MS consumption growth was down to 11.9% in May from a sizzling 21.5% in April.
8In comparison, diesel consumption growth declined to 4.4% from a high of 15.1%.
8Liquid fuel consumption continued to march ahead at a rapid pace but gas offtake did not suffer despite a rather steep fall in demand from fertilizer companies. Consumption was up and at an impressive 8.5% in April.
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8The data given out by the government shows contradictory trends and the explanations put out by the PPAC do not fit the trend.
8A time has come for the government to improve the analysis behind the figures.
8The cost is going to be high if policy decisions are pegged on wrong prognosis.
8Consumption of POL was tempered down to 10.4% in April, 2016 from 14.71% registered for the same month last year.
8There is a slowing down in consumption as industrial growth stalled in April.
8MS consumption growth was down to 11.9% in May from a sizzling 21.5% in April.
8In comparison, diesel consumption growth declined to 4.4% from a high of 15.1%.
8Liquid fuel consumption continued to march ahead at a rapid pace but gas offtake did not suffer despite a rather steep fall in demand from fertilizer companies. Consumption was up and at an impressive 8.5% in April.
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Price comparison of competitive offerings is a common practice among many industry segments.
8In the energy sector too, as the market diversifies, price differentiators are likely to emerge in the hydrocarbon industry.
8In the UK for example, there are now over 39 energy suppliers and price comparison websites are an everyday tool of choice for millions of energy customers.
8India is many years away from such websites but the possibility exists of comparing gas prices offered by different players in the industrial market as the composition of spot and short term LNG bought at variable prices goes up in the overall gas import matrix.
8The big constraint however is GAIL's monopoly over the distribution structure. As a consequence differential prices may not be available for industrial customers at every place served by a pipeline.
8But nevertheless this website is working hard to put together a price comparison platform, however imperfect, for industrial customers of gas.
8LNG at Doorstep delivery prices and places where such supplies will be available will also be gathered.
8It is not always possible to compare prices of liquid fuels such as FO and LSHS with gas but an attempt will be made by this website. We will also keep track of monthly average gas prices set by the Department of Fertilizers for the industry. Power sector gas prices will also be tracked.
8The website already has a price comparison website for petrochemical products and feedstock prices for LNG and napthha (go to www.indianpetrochem.com ) but this gas price comparison platform is sought to be aligned with the www.indianpetroplus.com site and over time it will be provided as a separate product. Details
8In the energy sector too, as the market diversifies, price differentiators are likely to emerge in the hydrocarbon industry.
8In the UK for example, there are now over 39 energy suppliers and price comparison websites are an everyday tool of choice for millions of energy customers.
8India is many years away from such websites but the possibility exists of comparing gas prices offered by different players in the industrial market as the composition of spot and short term LNG bought at variable prices goes up in the overall gas import matrix.
8The big constraint however is GAIL's monopoly over the distribution structure. As a consequence differential prices may not be available for industrial customers at every place served by a pipeline.
8But nevertheless this website is working hard to put together a price comparison platform, however imperfect, for industrial customers of gas.
8LNG at Doorstep delivery prices and places where such supplies will be available will also be gathered.
8It is not always possible to compare prices of liquid fuels such as FO and LSHS with gas but an attempt will be made by this website. We will also keep track of monthly average gas prices set by the Department of Fertilizers for the industry. Power sector gas prices will also be tracked.
8The website already has a price comparison website for petrochemical products and feedstock prices for LNG and napthha (go to www.indianpetrochem.com ) but this gas price comparison platform is sought to be aligned with the www.indianpetroplus.com site and over time it will be provided as a separate product. Details
For reference purposes the website carries here the following tenders:
8Gas sale from Vadatheru Field, Cauvery Asset [ONGC] Details
8Gas sale from Andimadam Field, Cauvery Asset [ONGC] Details
8Hiring of Operation and Maintenance services for Work Over Rigs [ONGC] Details
8Charter Hiring of Workover Rigs for Frontier Basin, Mehsana Asset, Jorhat and Rajahmundry Asset [ONGC] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8As crude hits $50 a barrel, options market suggests jitters Details
8Saudi Aramco boosting market share as it prepares for listing - CEO Details
8No study to assess the impact of falling oil prices on Keralites Details
8Forbes Global ranks ONGC 3rd largest in India Details
8Oil prices fall back after breaching $50 Details
8Workshop organized by Karnataka renewable energy development promotes green buildings Details
8BPCL, L&T among five stocks that got buy ratings post March quarter results Details
8Oil price will cross $70 within next 12 months: Arvind Sanger, Geosphere Capital Management Details
8BPCL Q4 Net drops 10.6% to Rs 2,549-cr on low oil prices Details
8Norway oil investments set to drop again in 2017: survey Details
8Saudi Arabia offers more oil to Asian clients ahead of OPEC meet Details
8PM Modi should reply to allegations on him in GSPC project: RPN Singh Details
8Govt eyes Rs 8,000 cr from stake sale in 4 PSUs Details
8Reliance said to revive offshore natural gas project by end-2017 Details
8Bright prospect for piped gas Details
8India hit by reduced Gulf remittances Details
You can also click on Newsclips for more Details
8Gas sale from Vadatheru Field, Cauvery Asset [ONGC] Details
8Gas sale from Andimadam Field, Cauvery Asset [ONGC] Details
8Hiring of Operation and Maintenance services for Work Over Rigs [ONGC] Details
8Charter Hiring of Workover Rigs for Frontier Basin, Mehsana Asset, Jorhat and Rajahmundry Asset [ONGC] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8As crude hits $50 a barrel, options market suggests jitters Details
8Saudi Aramco boosting market share as it prepares for listing - CEO Details
8No study to assess the impact of falling oil prices on Keralites Details
8Forbes Global ranks ONGC 3rd largest in India Details
8Oil prices fall back after breaching $50 Details
8Workshop organized by Karnataka renewable energy development promotes green buildings Details
8BPCL, L&T among five stocks that got buy ratings post March quarter results Details
8Oil price will cross $70 within next 12 months: Arvind Sanger, Geosphere Capital Management Details
8BPCL Q4 Net drops 10.6% to Rs 2,549-cr on low oil prices Details
8Norway oil investments set to drop again in 2017: survey Details
8Saudi Arabia offers more oil to Asian clients ahead of OPEC meet Details
8PM Modi should reply to allegations on him in GSPC project: RPN Singh Details
8Govt eyes Rs 8,000 cr from stake sale in 4 PSUs Details
8Reliance said to revive offshore natural gas project by end-2017 Details
8Bright prospect for piped gas Details
8India hit by reduced Gulf remittances Details
You can also click on Newsclips for more Details
For reference purposes the website carries here the following tenders:
8Transportation of BPCL packed LPG cylinders to LPG filling plant, Indore [BPCL] Details
8Procurement of Bi-Directional, Double Acting, Hydraulic Drilling Jar for vertical and highly deviated Wells, Assam [OIL] Details
8Rate Contract for Route and Cadastral Survey for Pipeline and Drill Sites, Ankleshwar Asset [ONGC] Details
8Providing Concrete Coating on equipments in Gas Processing Area at Uran Plant [ONGC] Details
8EOI for Procurement of Vibrators for VSP operations [ONGC] Details
8Installation of additional facilities in Marine Liquid Terminal [Kamarajar Port Limited] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8Obama govt bats for India on Chabahar deal Details
8GAIL reconfigures Rs 12,000 crore Jagdishpur-Haldia gas pipeline Details
8Centre to distribute 5 crore LPG connections in country: Narendra Singh Tomar Details
8GAIL profit up by 51 percent in Q4 Details
8Qatar's Texas LNG venture expects to begin exports by 2021 Details
8Brent crude surpasses $50 a barrel for first time this year Details
8India home to 56 of the world's largest public firms, RIL tops list again: Forbes Details
8Venezuela nominates Ali Rodriguez as next OPEC Secretary General Details
8ONGC reports 12 percent rise in fourth quarter profit, beating estimates Details
8Oil India Q4 profit seen down 23% on sharp fall in realisations Details
8New trade pact with Iran may be linked to volumes Details
8Lower oil prices to keep inflation under control Details
You can also click on Newsclips for more Details
8Transportation of BPCL packed LPG cylinders to LPG filling plant, Indore [BPCL] Details
8Procurement of Bi-Directional, Double Acting, Hydraulic Drilling Jar for vertical and highly deviated Wells, Assam [OIL] Details
8Rate Contract for Route and Cadastral Survey for Pipeline and Drill Sites, Ankleshwar Asset [ONGC] Details
8Providing Concrete Coating on equipments in Gas Processing Area at Uran Plant [ONGC] Details
8EOI for Procurement of Vibrators for VSP operations [ONGC] Details
8Installation of additional facilities in Marine Liquid Terminal [Kamarajar Port Limited] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8Obama govt bats for India on Chabahar deal Details
8GAIL reconfigures Rs 12,000 crore Jagdishpur-Haldia gas pipeline Details
8Centre to distribute 5 crore LPG connections in country: Narendra Singh Tomar Details
8GAIL profit up by 51 percent in Q4 Details
8Qatar's Texas LNG venture expects to begin exports by 2021 Details
8Brent crude surpasses $50 a barrel for first time this year Details
8India home to 56 of the world's largest public firms, RIL tops list again: Forbes Details
8Venezuela nominates Ali Rodriguez as next OPEC Secretary General Details
8ONGC reports 12 percent rise in fourth quarter profit, beating estimates Details
8Oil India Q4 profit seen down 23% on sharp fall in realisations Details
8New trade pact with Iran may be linked to volumes Details
8Lower oil prices to keep inflation under control Details
You can also click on Newsclips for more Details
It is time for petroleum minister Dharmendra Pradhan to build and start up a technology transformation team within the ministry.
8The team must look at the technology trends and business models and suggest their adoption in ONGC and OIL.
8The top brass from the best in class technology and service providers should be called for consultations.
8Specific Indian conditions must be explained and they should be told to provide best solutions.
8A service provider team can then work with a joint team, involving the petroleum ministry and the finance ministry along with Central Vigilance Commission officials to work out the business models.
8International examples of how such business models have worked should stand as the benchmark.
8The risk-reward system for service providers will need closer scrutiny from CVC officials and standard procedures have to be evolved, particularly when the reward turns out to be high for achieving given milestones.
8Questions will raised if a service provider walks away with a Rs 1000 crore bonus for a job well done. So systems will have to be in place to allow for such flexibility.
8Transparent mechanisms will have to be evolved so that neither the CVC nor the CAG ends up pointing fingers.
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8The team must look at the technology trends and business models and suggest their adoption in ONGC and OIL.
8The top brass from the best in class technology and service providers should be called for consultations.
8Specific Indian conditions must be explained and they should be told to provide best solutions.
8A service provider team can then work with a joint team, involving the petroleum ministry and the finance ministry along with Central Vigilance Commission officials to work out the business models.
8International examples of how such business models have worked should stand as the benchmark.
8The risk-reward system for service providers will need closer scrutiny from CVC officials and standard procedures have to be evolved, particularly when the reward turns out to be high for achieving given milestones.
8Questions will raised if a service provider walks away with a Rs 1000 crore bonus for a job well done. So systems will have to be in place to allow for such flexibility.
8Transparent mechanisms will have to be evolved so that neither the CVC nor the CAG ends up pointing fingers.
Click on Reports for more Details
Integrated Services Management is how oil companies are now looking at E&P contracting and ONGC should learn from the process.
8In this model specially trained project managers coordinate activity across product and service lines.
8Service companies can be hired to take integrated full field-management responsibility based on long-term, incentive-based commercial agreements.
8Shell has been in the forefront of using such platforms.
8A project by the multinational involved hiring a single service provider to drill five wells in three countries -- Benin, Turkey, and Gabon.
8The service provider supported the majority of the services on the rig including project management, drilling and measurement, cementing, mud logging, drilling fluids, wireline logging, fishing and abandonment services, and oversaw the provision of coring and tubular services. A total of 16,120 m were drilled, complicated logistics were successfully managed, and the project was considered an operational success.
8The model, included the collocation, integration, and alignment of the objective of the operator with the service provider teams.
8This led to world-class performance with continuous improvement throughout the project.
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8In this model specially trained project managers coordinate activity across product and service lines.
8Service companies can be hired to take integrated full field-management responsibility based on long-term, incentive-based commercial agreements.
8Shell has been in the forefront of using such platforms.
8A project by the multinational involved hiring a single service provider to drill five wells in three countries -- Benin, Turkey, and Gabon.
8The service provider supported the majority of the services on the rig including project management, drilling and measurement, cementing, mud logging, drilling fluids, wireline logging, fishing and abandonment services, and oversaw the provision of coring and tubular services. A total of 16,120 m were drilled, complicated logistics were successfully managed, and the project was considered an operational success.
8The model, included the collocation, integration, and alignment of the objective of the operator with the service provider teams.
8This led to world-class performance with continuous improvement throughout the project.
Click on Reports for more Details
Among the trend setters in technology today are:
Just in time inventory management systems which is the need of the hour in companies such as ONGC.
8A huge amount of effort and time is spent by the company in stocking up supplies through an ineffective government procurement process.
8The time for change has come in ONGC.
8The other big trend is remote operations in drilling and measurement
8Russia has been using remote operations since 2009 and today 83% of their work is handled by the Remote Operations Center in Tyumen, Western Siberia.
8ONGC can draw lessons from China in this aspect.
8In just over a year, field crew sizes have been reduced by 28% and significant reliability and drilling performance improvements have been achieved through round-the-clock support and access to key technical expertise that help optimize drilling performance at the wellsite.
Click on Reports for more Details
Just in time inventory management systems which is the need of the hour in companies such as ONGC.
8A huge amount of effort and time is spent by the company in stocking up supplies through an ineffective government procurement process.
8The time for change has come in ONGC.
8The other big trend is remote operations in drilling and measurement
8Russia has been using remote operations since 2009 and today 83% of their work is handled by the Remote Operations Center in Tyumen, Western Siberia.
8ONGC can draw lessons from China in this aspect.
8In just over a year, field crew sizes have been reduced by 28% and significant reliability and drilling performance improvements have been achieved through round-the-clock support and access to key technical expertise that help optimize drilling performance at the wellsite.
Click on Reports for more Details
A time has come to use an approach based on early engagement, collaboration, and commercial alignment between operator and service companies.
8Already big companies across the world are looking at engaging integrated service providing companies with a multiskilled field crew competent to perform operations across an entire customer workflow.
8The service providers in turn will use fully integrated and digitally enabled systems designed and configured for each specific well.
8Equipment will be delivered from specialized centers for reliability and efficiency.
8These specialized centres in turn will stock materials not in the traditional sense but they will use systems and techniques first developed in other high-technology industries such as aerospace and automobiles.
8The planning and distribution of equipment and personnel will be managed centrally to assure timely delivery and enable rapid response to planning changes while maximizing asset utilization.
8Integrated operational hubs will form the foundation of the service delivery process while remote operations engineers will monitor progress and engage with customers to make real-time decisions.
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8Already big companies across the world are looking at engaging integrated service providing companies with a multiskilled field crew competent to perform operations across an entire customer workflow.
8The service providers in turn will use fully integrated and digitally enabled systems designed and configured for each specific well.
8Equipment will be delivered from specialized centers for reliability and efficiency.
8These specialized centres in turn will stock materials not in the traditional sense but they will use systems and techniques first developed in other high-technology industries such as aerospace and automobiles.
8The planning and distribution of equipment and personnel will be managed centrally to assure timely delivery and enable rapid response to planning changes while maximizing asset utilization.
8Integrated operational hubs will form the foundation of the service delivery process while remote operations engineers will monitor progress and engage with customers to make real-time decisions.
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It is time for the government and companies such as ONGC to look at a new business model for procurement of products and services.
8The Indian public sector business model is largely procurement driven, where every aspect of a new hydrocarbon development is broken into discrete parts.
8The operator then seeks the lowest bid for each part believing that this will mean the lowest overall cost and highest project value.
8This approach has a number of drawbacks.
8First, there is no incentive for service providers to differentiate their performance based on quality and efficiency.
8Second, any approach to technology system innovation and performance optimization is highly fragmented.
8Third, avoiding the opportunity for operators and suppliers to collaborate during the concept and design phases greatly affects project costs.
8The result is sub-optimal technical solutions and project performance in terms of design, execution, and financial returns.
8This is exactly how ONGC is planning to do the KG-DWN-98/2 development, by splicing it up into multiple contracts.
8This leads to inefficiencies and higher cost. Since the project cost has been skinned down to its bones by using the traditional route of squeezing suppliers to quote their lowest rates through the L-1 system, no one will be interested in quality or efficiency.
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8The Indian public sector business model is largely procurement driven, where every aspect of a new hydrocarbon development is broken into discrete parts.
8The operator then seeks the lowest bid for each part believing that this will mean the lowest overall cost and highest project value.
8This approach has a number of drawbacks.
8First, there is no incentive for service providers to differentiate their performance based on quality and efficiency.
8Second, any approach to technology system innovation and performance optimization is highly fragmented.
8Third, avoiding the opportunity for operators and suppliers to collaborate during the concept and design phases greatly affects project costs.
8The result is sub-optimal technical solutions and project performance in terms of design, execution, and financial returns.
8This is exactly how ONGC is planning to do the KG-DWN-98/2 development, by splicing it up into multiple contracts.
8This leads to inefficiencies and higher cost. Since the project cost has been skinned down to its bones by using the traditional route of squeezing suppliers to quote their lowest rates through the L-1 system, no one will be interested in quality or efficiency.
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There are specific government led initiatives that can be taken, which should include the following steps:
8Fostering a free trading environment with adequate market surveillance
8Supporting demand expansion policies
8Promoting projects which help develop the flexible LNG markets (like those that can combine shipments to India with reselling to third countries) through priority and special financing by the government agencies and institutions.
8Smoothening procedures for LNG carriers berthing at Indian ports
8Pushing for policy dialogue with key Asian countries having substantial market opportunities for gas business.
8Encouraging large LNG consuming countries to jointly relax or abolish the destination clause (i.e. Japan, Europe, Korea, China, and India account for 80% of the world’s total LNG imports).
8Work with Platts or similar pricing agencies on long term goals for transforming the West Coast of India into an LNG trading hub with a definite and long term action plan.
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8Fostering a free trading environment with adequate market surveillance
8Supporting demand expansion policies
8Promoting projects which help develop the flexible LNG markets (like those that can combine shipments to India with reselling to third countries) through priority and special financing by the government agencies and institutions.
8Smoothening procedures for LNG carriers berthing at Indian ports
8Pushing for policy dialogue with key Asian countries having substantial market opportunities for gas business.
8Encouraging large LNG consuming countries to jointly relax or abolish the destination clause (i.e. Japan, Europe, Korea, China, and India account for 80% of the world’s total LNG imports).
8Work with Platts or similar pricing agencies on long term goals for transforming the West Coast of India into an LNG trading hub with a definite and long term action plan.
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May 27 : The end of oil-indexed LNG pricing-VI: Policy makers need to draw up a specific action plan
It is imperative for policy makers to draw up action plans around specific goals in the oil & gas sector.
8Becoming a trading hub for LNG can be a target around which a series of policy measures should be initiated from now onwards.
8Three specific goals are required to be set:
8Enhancing tradability of LNG by removing destination clauses in LNG supplied
8Building of open and sufficient infrastructure with third party access. There is a need to split up GAIL so that a professional infrastructure operating company can be built
8Price discovery should be ensured through a free play of supply and demand.
8To provide all support for use of spare LNG capacity, such as is available in Kochi, for onward third party trading.
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8Becoming a trading hub for LNG can be a target around which a series of policy measures should be initiated from now onwards.
8Three specific goals are required to be set:
8Enhancing tradability of LNG by removing destination clauses in LNG supplied
8Building of open and sufficient infrastructure with third party access. There is a need to split up GAIL so that a professional infrastructure operating company can be built
8Price discovery should be ensured through a free play of supply and demand.
8To provide all support for use of spare LNG capacity, such as is available in Kochi, for onward third party trading.
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There is already competition building up among Japan, China, Singapore and even Korea to develop their own hubs for trading of LNG. Each country hopes that its hub will set the price benchmark for the entire region.
8Should India throw in its hat too to become a pricing hub for the region?
8This website believes it should.
8The reason why India stands a chance is because in the future it is the only country in Asia where LNG volumes are likely to go up very significantly.
8In comparison, LNG volumes will decline in Japan and Korea, whereas demand is likely to remain tepid in China because of a slowdown in its economic growth and large pipeline gas supplies.
8It is not improbable for India to emerge as the biggest destination of LNG in Asia in the years ahead.
8Then again, geographically, it is ideally located from the main supply centers in Asia and Australia.
8A highly price sensitive Indian market fosters competitive acquisition of LNG.
8Reforms in the gas sector will all help bring about more transparency in the market.
8Indian companies, such as GAIL, are already sharpening their skills in the global trade for LNG. Forced by its inability to sell its 5.8 million tonnes of American LNG contracts to a captive market in India, this gas giant will grow up to become an international trading conglomerate.
8In this context, the Indian government must aim big and attempt to look at converting India into an Asian pricing hub by the mid 2020s.
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8Should India throw in its hat too to become a pricing hub for the region?
8This website believes it should.
8The reason why India stands a chance is because in the future it is the only country in Asia where LNG volumes are likely to go up very significantly.
8In comparison, LNG volumes will decline in Japan and Korea, whereas demand is likely to remain tepid in China because of a slowdown in its economic growth and large pipeline gas supplies.
8It is not improbable for India to emerge as the biggest destination of LNG in Asia in the years ahead.
8Then again, geographically, it is ideally located from the main supply centers in Asia and Australia.
8A highly price sensitive Indian market fosters competitive acquisition of LNG.
8Reforms in the gas sector will all help bring about more transparency in the market.
8Indian companies, such as GAIL, are already sharpening their skills in the global trade for LNG. Forced by its inability to sell its 5.8 million tonnes of American LNG contracts to a captive market in India, this gas giant will grow up to become an international trading conglomerate.
8In this context, the Indian government must aim big and attempt to look at converting India into an Asian pricing hub by the mid 2020s.
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The wide differential in price between LNG supplied in Asia and Europe or the US is now coming to end, thereby aiding the move away from oil-index pricing.
8The global natural gas markets in North America, Europe, and Asia have been isolated from each other so far.
8In North America and Europe, natural gas is supplied to each market via pipelines from gas fields in the region and/or neighboring countries.
8On the other hand, gas from the Middle East and Southeast Asia is transported in the form of LNG to markets in Asia.
8This brought about a difference in gas prices among Europe, North America, and Asia (especially in the wake of the Shale Revolution).
8In the future, large quantities of North American LNG will be supplied to the increasingly expanding Asian market.
8Furthermore, because Europe is going to increase the import of LNG, the Asian, European, and North American LNG markets will become multi-directional, and this will encourage arbitrage trading and price convergence.
8Japan is trying to take into account the size of its LNG demand and the proximity to LNG trade routes to pitch towards becoming an LNG trading hub (a hub is a base where many LNG trades take place, as a result market prices are formed and publicly reported).
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8The global natural gas markets in North America, Europe, and Asia have been isolated from each other so far.
8In North America and Europe, natural gas is supplied to each market via pipelines from gas fields in the region and/or neighboring countries.
8On the other hand, gas from the Middle East and Southeast Asia is transported in the form of LNG to markets in Asia.
8This brought about a difference in gas prices among Europe, North America, and Asia (especially in the wake of the Shale Revolution).
8In the future, large quantities of North American LNG will be supplied to the increasingly expanding Asian market.
8Furthermore, because Europe is going to increase the import of LNG, the Asian, European, and North American LNG markets will become multi-directional, and this will encourage arbitrage trading and price convergence.
8Japan is trying to take into account the size of its LNG demand and the proximity to LNG trade routes to pitch towards becoming an LNG trading hub (a hub is a base where many LNG trades take place, as a result market prices are formed and publicly reported).
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The Japanese government has recently become a big advocate of hub based instead of oil indexed pricing of gas.
8Japan accounts for one third of the global trade -- at 80 MMTPA -- for LNG.
8With the liberalization of energy markets progressing, Japanese electric power and gas companies will not only find it increasingly difficult to forecast demand, but also face intensifying competition for better fuel procurement terms as the supply of nuclear power and renewal energy go up.
8As with their European counterparts, Japanese energy companies will be forced to become more market oriented., thereby redefining the pricing paradigm in the LNG market.
8Japanese companies have already begun the process of cutting down on long term cargoes while increasing the share of short term and spot contracts in their LNG portfolios.
8More importantly, they are asking for relaxation of the destination clause in LNG contracts.
8Going ahead, raditional Japanese importers are likely to utilize reselling and arbrbitration possibilities for LNG.
8All of this will lead to greater transparency in the pricing of LNG.
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8Japan accounts for one third of the global trade -- at 80 MMTPA -- for LNG.
8With the liberalization of energy markets progressing, Japanese electric power and gas companies will not only find it increasingly difficult to forecast demand, but also face intensifying competition for better fuel procurement terms as the supply of nuclear power and renewal energy go up.
8As with their European counterparts, Japanese energy companies will be forced to become more market oriented., thereby redefining the pricing paradigm in the LNG market.
8Japanese companies have already begun the process of cutting down on long term cargoes while increasing the share of short term and spot contracts in their LNG portfolios.
8More importantly, they are asking for relaxation of the destination clause in LNG contracts.
8Going ahead, raditional Japanese importers are likely to utilize reselling and arbrbitration possibilities for LNG.
8All of this will lead to greater transparency in the pricing of LNG.
Click on Reports for more Details
The rapid diversification of gas supply and demand is also aiding the move away from oil-indexed pricing.
8LNG demand will be driven especially by Asian countries. Exporters have become net importers. Malaysia shifted from a major LNG exporter to a net importer. Likewise, Indonesia is becoming a net LNG importer.
8Additionally, even countries in the Middle East, Latin America, and Eastern Europe are becoming LNG importers.
8The website carries here details of a fresh crop of countries which will begin importing LNG by 2020. Details are also given of those countries which have begun importing LNG in the last three years.
8On the supply side, national oil and gas companies in Southeast Asia and Qatar have had a monopoly on gas supply.
8But this has begun changing.
8In the future, Southeast Asian countries will become net LNG importers, while the supply of LNG from market-oriented and diverse private companies in the U.S., Canada, and Australia will go up sharply.
8This provides the best opportunity to move away from oil linked pricing in this region.
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8LNG demand will be driven especially by Asian countries. Exporters have become net importers. Malaysia shifted from a major LNG exporter to a net importer. Likewise, Indonesia is becoming a net LNG importer.
8Additionally, even countries in the Middle East, Latin America, and Eastern Europe are becoming LNG importers.
8The website carries here details of a fresh crop of countries which will begin importing LNG by 2020. Details are also given of those countries which have begun importing LNG in the last three years.
8On the supply side, national oil and gas companies in Southeast Asia and Qatar have had a monopoly on gas supply.
8But this has begun changing.
8In the future, Southeast Asian countries will become net LNG importers, while the supply of LNG from market-oriented and diverse private companies in the U.S., Canada, and Australia will go up sharply.
8This provides the best opportunity to move away from oil linked pricing in this region.
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It looks like the world is slowly but inexorably moving away from oil-indexed pricing of gas.
8The US shale gas revolution led to a sharp drop production cost and there are now projections of a widening gap between oil and gas prices.
8Data available with this website shows that prices of crude and oil overlapped (in $/mmbtu) before the shale revolution but diverged terribly between 2008 and 2014 during the time of the revolution.
8Future outlook for crude and oil price projected up to 2040 shows the price of crude and gas diverging by a very wide margin.
8These projections have now galvanized countries such as Japan, who were grossly dependent on oil indexed pricing, to move towards a hub based pricing mechanism.
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8The US shale gas revolution led to a sharp drop production cost and there are now projections of a widening gap between oil and gas prices.
8Data available with this website shows that prices of crude and oil overlapped (in $/mmbtu) before the shale revolution but diverged terribly between 2008 and 2014 during the time of the revolution.
8Future outlook for crude and oil price projected up to 2040 shows the price of crude and gas diverging by a very wide margin.
8These projections have now galvanized countries such as Japan, who were grossly dependent on oil indexed pricing, to move towards a hub based pricing mechanism.
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The merger of Technip with FMC Technologies has created a formidable giant for competitors for offshore business in India.
8The two together now provide services that encompass the entire spectrum, from subsea projects and services to onshore capabilities.
8Technip is a leader in flexible risers and flowlines, umblicals, subsea equipment installation and platform and topside design whereas FMC is good in sub sea production systems, control and automation systems, sub sea well interventions and sub sea separation nd boosting systems.
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8The two together now provide services that encompass the entire spectrum, from subsea projects and services to onshore capabilities.
8Technip is a leader in flexible risers and flowlines, umblicals, subsea equipment installation and platform and topside design whereas FMC is good in sub sea production systems, control and automation systems, sub sea well interventions and sub sea separation nd boosting systems.
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The slowdown in the oil and gas sector has hurt the profitability of Engineers India Ltd.
8The company posted a lower sales turnover and profit in 2015-16.
8On the other hand, another engineering company L&T posted higher profits because of its more diversified base.
8The hydrocarbons sector accounted for just 7% of its total sales with the infrastructure making up 75% of its order book position.
8Unlike EIL, net revenues and margins were higher in the hydrocarbon segement in 2015-16 in comparison to the previous year.
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8The company posted a lower sales turnover and profit in 2015-16.
8On the other hand, another engineering company L&T posted higher profits because of its more diversified base.
8The hydrocarbons sector accounted for just 7% of its total sales with the infrastructure making up 75% of its order book position.
8Unlike EIL, net revenues and margins were higher in the hydrocarbon segement in 2015-16 in comparison to the previous year.
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The Chinese work far more effectively than India when it comes to coordinating between diplomatic, financial, and corporate stakeholders for securing energy supplies and gaining access to upstream investments.
8One way of doing this was through energy-backed loans (EBLs) that were initiated in the aftermath of the 2008/9 financial crisis.
8The China Development Bank (CDB) extended lines of credit totaling up to hundreds of billions of dollars to energy companies across the world.
8EBLs were used when resource-rich countries needed financial flows but were reluctant to sell assets.
8While each deal had unique terms of repayment, all the CDB deals were structured similarly:
8Each EBL was secured by revenue earned from deliveries of oil or natural gas to a Chinese oil company.
8The Chinese oil company deposited its payment for the oil and natural gas deliveries into an account held by the borrower at CDB, from which CDB could withdraw the interest, principal, and other fees it
was owed.
8The deals also led to different degrees of NOC involvement in the host countries: Some deals involved infrastructure projects, others led to upstream contracts for Chinese firms, and some to the purchase of Chinese equipment.
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8One way of doing this was through energy-backed loans (EBLs) that were initiated in the aftermath of the 2008/9 financial crisis.
8The China Development Bank (CDB) extended lines of credit totaling up to hundreds of billions of dollars to energy companies across the world.
8EBLs were used when resource-rich countries needed financial flows but were reluctant to sell assets.
8While each deal had unique terms of repayment, all the CDB deals were structured similarly:
8Each EBL was secured by revenue earned from deliveries of oil or natural gas to a Chinese oil company.
8The Chinese oil company deposited its payment for the oil and natural gas deliveries into an account held by the borrower at CDB, from which CDB could withdraw the interest, principal, and other fees it
was owed.
8The deals also led to different degrees of NOC involvement in the host countries: Some deals involved infrastructure projects, others led to upstream contracts for Chinese firms, and some to the purchase of Chinese equipment.
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The paper predicts a massive round of round of global M&As by these super giants in the face of falling domestic output.
8But their international peers, such as OVL, will see changes in their partners and competitors emerging out of China.
8OVL will come across more Chinese companies -- both state owned and private -- that will be more risk-conscious but also more aggressive as they benefit from substantial state support.
8China’s NOCs are setting their sights on assets that they hope will be cheaply valued in Iran, Brazil, and Africa. CNPC chairman Wang Yilin announced in March 2016 that his company is considering expanding its presence in Russia and Iran, while CNOOC is reportedly looking to purchase Petrobras’ petrochemical company Braskem.
8This is a must-read document for policy planners in India and ONGC.
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8But their international peers, such as OVL, will see changes in their partners and competitors emerging out of China.
8OVL will come across more Chinese companies -- both state owned and private -- that will be more risk-conscious but also more aggressive as they benefit from substantial state support.
8China’s NOCs are setting their sights on assets that they hope will be cheaply valued in Iran, Brazil, and Africa. CNPC chairman Wang Yilin announced in March 2016 that his company is considering expanding its presence in Russia and Iran, while CNOOC is reportedly looking to purchase Petrobras’ petrochemical company Braskem.
8This is a must-read document for policy planners in India and ONGC.
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For reference purposes, the website carries here a fascinating paper on the evolution of the oil super giants in China.
8These giants owned large chunks of the Chinese economy, from oil fields to towns and cities to hotels and agricultural operations.
8They enjoyed immense clout in the Chinese power structure but the relationship between the energy giants and the government has been a story of successive waves of centralisation and decentralisation.
8Fundamentally, the Chinese oil and gas industry remains a strategic asset for the government but yet enjoyed far more autonomy than their Indian counterparts.
8They were given room to grow, so much so that they are today the largest oil companies in the world.
8ONGC is a pigmy compared to them.
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8These giants owned large chunks of the Chinese economy, from oil fields to towns and cities to hotels and agricultural operations.
8They enjoyed immense clout in the Chinese power structure but the relationship between the energy giants and the government has been a story of successive waves of centralisation and decentralisation.
8Fundamentally, the Chinese oil and gas industry remains a strategic asset for the government but yet enjoyed far more autonomy than their Indian counterparts.
8They were given room to grow, so much so that they are today the largest oil companies in the world.
8ONGC is a pigmy compared to them.
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If there is a face to Indian's gas hydrate drive it is not the petroleum minister or the ONGC chairman but K.M. Shukla, the Lead Geophysicist for India’s second National Gas Hydrate Program (NGHP) Expedition.
8Shukla has come in for praise from his international colleagues.
8He and his team discovered and described the first complete gas hydrate petroleum system in India’s KG Basin.
8After serving as a lecturer in physics, Shukla joined India’s ONGC as a geophysicist, where he built a successful career, and assumed the task of evaluating conventional hydrocarbon prospects in Indian basins.
8His ability in this area prompted the head of ONGC’s Keshava Deva Malaviya Institute of Petroleum Exploration (KDMIPE) in Dehradun to assign him the task of identifying prospective gas hydrate sites for the second NGHP expedition.
8Recognizing producible gas hydrate prospects in India’s deepwater regions was a challenge, as any seismic data interpretation had to be carried out with minimal subsurface well data available for calibration of the objective sands within shallow sedimentary sections.
8He had to work with data that had been acquired and processed for deeper sediments in the search for conventional oil and natural gas. Moreover, the area of study was spread across the entire eastern offshore of India.
8As there was very little published material available for exploration of natural gas hydrate in deep-water marine environments, Shukla was on his own.
8His first task was to develop a standardized approach for evaluating India’s eastern coast. His geophysical modelling led to the identification of multiple sites which were subsequently accepted by the scientific team of the second expedition.
8When the sites were finally drilled last year, two areas were found to contain world class gas hydrate accumulations and represented ideal sites for future production testing. One of these has the thickest known gas hydrate-bearing channel-levee sand reservoir system in the world.
8Presently, Shukla is working to identify highly saturated producible gas hydrate in coarser clastic provinces in Indian deep-water. He is also carrying out reservoir characterization and resource estimation work for the gas hydrate prospects established during the expedition, to support future production tests.
8In addition, he continues to enhance and refine the models which led to the matching of pre-expedition predictions to post-expedition results at almost all of the sites drilled in 2015.
8According to Shukla, “The main question associated with methane hydrates for the future will be how to monetize the gas hydrate we find in a sustainable manner, to improve the contribution of clean energy to
industrial and domestic development.”
Click on Reports for more Details
8Shukla has come in for praise from his international colleagues.
8He and his team discovered and described the first complete gas hydrate petroleum system in India’s KG Basin.
8After serving as a lecturer in physics, Shukla joined India’s ONGC as a geophysicist, where he built a successful career, and assumed the task of evaluating conventional hydrocarbon prospects in Indian basins.
8His ability in this area prompted the head of ONGC’s Keshava Deva Malaviya Institute of Petroleum Exploration (KDMIPE) in Dehradun to assign him the task of identifying prospective gas hydrate sites for the second NGHP expedition.
8Recognizing producible gas hydrate prospects in India’s deepwater regions was a challenge, as any seismic data interpretation had to be carried out with minimal subsurface well data available for calibration of the objective sands within shallow sedimentary sections.
8He had to work with data that had been acquired and processed for deeper sediments in the search for conventional oil and natural gas. Moreover, the area of study was spread across the entire eastern offshore of India.
8As there was very little published material available for exploration of natural gas hydrate in deep-water marine environments, Shukla was on his own.
8His first task was to develop a standardized approach for evaluating India’s eastern coast. His geophysical modelling led to the identification of multiple sites which were subsequently accepted by the scientific team of the second expedition.
8When the sites were finally drilled last year, two areas were found to contain world class gas hydrate accumulations and represented ideal sites for future production testing. One of these has the thickest known gas hydrate-bearing channel-levee sand reservoir system in the world.
8Presently, Shukla is working to identify highly saturated producible gas hydrate in coarser clastic provinces in Indian deep-water. He is also carrying out reservoir characterization and resource estimation work for the gas hydrate prospects established during the expedition, to support future production tests.
8In addition, he continues to enhance and refine the models which led to the matching of pre-expedition predictions to post-expedition results at almost all of the sites drilled in 2015.
8According to Shukla, “The main question associated with methane hydrates for the future will be how to monetize the gas hydrate we find in a sustainable manner, to improve the contribution of clean energy to
industrial and domestic development.”
Click on Reports for more Details
It may be a good idea for big private companies to keep an eye on gas hydrate developments in the KG Basin.
8Companies such as RIL and BP as well others should deploy teams to study the gas hydrate results thrown up by the 2015 expedition.
8The cost of production will be high but the volumes of gas may be big enough to bring down per unit cost.
8Any production will be at least 15 to 20 years away but conglomerations such as BP and RIL cannot ignore the possibility of tapping such reserves that lie around the areas in which they are already present.
8The allure is in the size of these reservoirs, each accounting for hundreds of TCF of hydrate reserves.
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8Companies such as RIL and BP as well others should deploy teams to study the gas hydrate results thrown up by the 2015 expedition.
8The cost of production will be high but the volumes of gas may be big enough to bring down per unit cost.
8Any production will be at least 15 to 20 years away but conglomerations such as BP and RIL cannot ignore the possibility of tapping such reserves that lie around the areas in which they are already present.
8The allure is in the size of these reservoirs, each accounting for hundreds of TCF of hydrate reserves.
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There are now realistic estimates that gas hydrate production will be a reality before 2050.
8In fact the projection is that gas hydrate will go into commercial use sooner than later and it will be as much of a disruption as shale oil and gas has been.
8International oil major, BP, says that gas hydrates represent an enormous recoverable resource at least of the order of shale gas.
8Gas hydrate resources are global and Asian economies such as India that are heavily dependent on imported energy are making gas hydrate recovery a strategic imperative.
8By 2050 gas hydrate recovery may account for 5% or more of all global gas production, if public and private sector initiatives develop safe and cost-effective extraction technologies based on depressurization, thermal stimulation and chemical or gas injection.
8India will be in a good position to tap gas hydrates because they are found in abundance and the country has been at the forefront of gas hydrate research.
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8In fact the projection is that gas hydrate will go into commercial use sooner than later and it will be as much of a disruption as shale oil and gas has been.
8International oil major, BP, says that gas hydrates represent an enormous recoverable resource at least of the order of shale gas.
8Gas hydrate resources are global and Asian economies such as India that are heavily dependent on imported energy are making gas hydrate recovery a strategic imperative.
8By 2050 gas hydrate recovery may account for 5% or more of all global gas production, if public and private sector initiatives develop safe and cost-effective extraction technologies based on depressurization, thermal stimulation and chemical or gas injection.
8India will be in a good position to tap gas hydrates because they are found in abundance and the country has been at the forefront of gas hydrate research.
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The expedition was one of the finest examples of collaborative international research.
8Around 80 sites were selected, of which 25 were candidates for test sites in the KG and Mahanadi bains..
8The entire effort was orchestrated by ONGC with the help of the petroleum ministry.
8The drilling platform was the research vessel D/S Chikyu, operated by the Japanese Drilling Company (JDC) and the shipboard science program was managed by the Japan Agency for Marine-Earth Science and Technology (JAMSTEC).
8LWD, wireline logging, and formation testing services were provided by Schlumberger.
8Pressure coring tools were provided by JAMSTEC, and shipboard pressure core operations and analysis were provided by Geotek Coring.
8Additional operational and scientific support was provided by the U.S. Geological Survey (USGS), the U.S. Department of Energy (US-DOE), the National Institute of Advanced Industrial Science and Technology (AIST), and the Japan Oil, Gas and Metals National Corporation (JOGMEC).
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8Around 80 sites were selected, of which 25 were candidates for test sites in the KG and Mahanadi bains..
8The entire effort was orchestrated by ONGC with the help of the petroleum ministry.
8The drilling platform was the research vessel D/S Chikyu, operated by the Japanese Drilling Company (JDC) and the shipboard science program was managed by the Japan Agency for Marine-Earth Science and Technology (JAMSTEC).
8LWD, wireline logging, and formation testing services were provided by Schlumberger.
8Pressure coring tools were provided by JAMSTEC, and shipboard pressure core operations and analysis were provided by Geotek Coring.
8Additional operational and scientific support was provided by the U.S. Geological Survey (USGS), the U.S. Department of Energy (US-DOE), the National Institute of Advanced Industrial Science and Technology (AIST), and the Japan Oil, Gas and Metals National Corporation (JOGMEC).
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May 26 : India's energy security lies in gas hydrates found in KG Basin-II: Deposits are established
Gas hydrate research is one of those few areas, where India is really at the cutting edge of technology.
8The possibility of extremely large quantities of methane deposits has been established.
8The next step seems to be go further and begin production testing of the deposits that have been found.
8The National Institute of Ocean Technology (NIOT) is reported to be engaged in developing technologies for establishing the feasibility of a remotely operated underwater vehicle and an autonomous coring system for the exploration of gas hydrates
8The good news is that wireline formation pressure testing, coupled with nuclear magnetic resonance (NMR) log data, and shipboard pressure core analysis have shown that the effective permeabilities of hydrate-bearing sand reservoirs were possibly significantly higher than those interpreted from previous field and laboratory studies when the first expedition was undertaken.
8The expedition has confirmed the presence of large, highly saturated gas hydrate accumulations in coarse-grained sand-rich depositional systems not just in one place but throughout the Krishna-Godavari Basin
8The tapping of these gas hydrates can open up a seemingly endless source of methane that can power all of India's energy needs well into the future.
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8The possibility of extremely large quantities of methane deposits has been established.
8The next step seems to be go further and begin production testing of the deposits that have been found.
8The National Institute of Ocean Technology (NIOT) is reported to be engaged in developing technologies for establishing the feasibility of a remotely operated underwater vehicle and an autonomous coring system for the exploration of gas hydrates
8The good news is that wireline formation pressure testing, coupled with nuclear magnetic resonance (NMR) log data, and shipboard pressure core analysis have shown that the effective permeabilities of hydrate-bearing sand reservoirs were possibly significantly higher than those interpreted from previous field and laboratory studies when the first expedition was undertaken.
8The expedition has confirmed the presence of large, highly saturated gas hydrate accumulations in coarse-grained sand-rich depositional systems not just in one place but throughout the Krishna-Godavari Basin
8The tapping of these gas hydrates can open up a seemingly endless source of methane that can power all of India's energy needs well into the future.
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It is now known that India had conducted two successful gas hydrate expeditions -- one in 2006 and another in 2015 -- in the deep waters of India's East Coast.
8The true magnitude of what was found by the second expedition has not be fully understood yet except for wildly varying estimates of reserves (of between 300 to 1000 tcf).
8The point to note is that it was high technology job involving Indian, Japanese and US agencies.
8And the achievements were remarkable: The deepwter surveys -- through closely spaced LWD and core holes -- were intense enough to throw up some of the most comprehensive three-dimensional petrophysical-based views of any known gas hydrate reservoir system in the world.
8What is more, the expedition has established that the KG Basin has world-class gas hydrate accumulations and they represent ideal sites future gas hydrate production testing.
8One of the holes drilled by the expedition penetrated a 50-m-thick interval of what appears to be a sand-rich channel-levee deposit with high gas hydrate saturations.
8This was one of the largest such deposits found so far in the world.
Click on Reports for more Details
8The true magnitude of what was found by the second expedition has not be fully understood yet except for wildly varying estimates of reserves (of between 300 to 1000 tcf).
8The point to note is that it was high technology job involving Indian, Japanese and US agencies.
8And the achievements were remarkable: The deepwter surveys -- through closely spaced LWD and core holes -- were intense enough to throw up some of the most comprehensive three-dimensional petrophysical-based views of any known gas hydrate reservoir system in the world.
8What is more, the expedition has established that the KG Basin has world-class gas hydrate accumulations and they represent ideal sites future gas hydrate production testing.
8One of the holes drilled by the expedition penetrated a 50-m-thick interval of what appears to be a sand-rich channel-levee deposit with high gas hydrate saturations.
8This was one of the largest such deposits found so far in the world.
Click on Reports for more Details
Is there really a need for foreign road shows for marginal fields that are being auctioned off in India?
8A section of the Indian industry feels that such shows may not be a good idea.
8The point to note is that these fields are too small in size to attract any significant foreign investment.
8To hold road shows for small sized fields may seem to be somewhat disproportionate to the size and clout that India enjoys globally.
8In today's distressed environment, super sized assets are available for cheap in the global markets and yet investors are unwilling to pick them up.
8The point to note is that these fields have been discovered and discarded by ONGC and OIL as they found the cost of producing from them unremunerative
8Such fields are best suited for small domestic E&P players who can keep infrastructure cost low enough to make producing from them a viable proposition.
Click on Details Details
8A section of the Indian industry feels that such shows may not be a good idea.
8The point to note is that these fields are too small in size to attract any significant foreign investment.
8To hold road shows for small sized fields may seem to be somewhat disproportionate to the size and clout that India enjoys globally.
8In today's distressed environment, super sized assets are available for cheap in the global markets and yet investors are unwilling to pick them up.
8The point to note is that these fields have been discovered and discarded by ONGC and OIL as they found the cost of producing from them unremunerative
8Such fields are best suited for small domestic E&P players who can keep infrastructure cost low enough to make producing from them a viable proposition.
Click on Details Details
For reference purposes the website carries here the following tenders:
8Supply of Di-Hydrotalcite for Polypropylene Unit [MRPL] Details
8Laying and construction of pipelines along-with associated works [GAIL] Details
8Ex-Situ Regeneration of Hydrocracker Unit, Mangalore [MRPL] Details
8Thickness Survey jobs during shutdown of various Utility units, Offsite Piping and Tanks, Haldia Refinery [IOC] Details
8Supply of Pressure Gauges [EIL] Details
8Hiring the services to carry out Pipeline Row exposure repair works [OIL] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8Discovered Small Fields Bid Round-2016 launched Details
8Delhi must convert to gas for clean air: Dharmendra Pradhan Details
8Shell CEO warns renewables shift could spell end if too swift Details
8AP Interview: Qatar energy minister wants 'fair' oil price Details
8Exxon says crude output at Indonesia's Cepu block could reach 200,000 bpd Details
8Government's plan for auction a welcome step from industry point of view: RS Sharma, ONGC Details
8India’s LNG imports rise 45% in April Details
8Trump advisers push him to target OPEC, regulations in big energy speech Details
8Shell to cut 2,200 more jobs in face of weak oil prices Details
8Govt to auction oil, gas fields with Rs 70,000 cr worth reserves from July Details
8RIL, BP on way to end dispute with government Details
8Gail posts 51 percentage increase in net profit Details
You can also click on Newsclips for more Details
8Supply of Di-Hydrotalcite for Polypropylene Unit [MRPL] Details
8Laying and construction of pipelines along-with associated works [GAIL] Details
8Ex-Situ Regeneration of Hydrocracker Unit, Mangalore [MRPL] Details
8Thickness Survey jobs during shutdown of various Utility units, Offsite Piping and Tanks, Haldia Refinery [IOC] Details
8Supply of Pressure Gauges [EIL] Details
8Hiring the services to carry out Pipeline Row exposure repair works [OIL] Details
You can also click on Tenders for more
For reference purposes the website carries here the following Newsclips:
8Discovered Small Fields Bid Round-2016 launched Details
8Delhi must convert to gas for clean air: Dharmendra Pradhan Details
8Shell CEO warns renewables shift could spell end if too swift Details
8AP Interview: Qatar energy minister wants 'fair' oil price Details
8Exxon says crude output at Indonesia's Cepu block could reach 200,000 bpd Details
8Government's plan for auction a welcome step from industry point of view: RS Sharma, ONGC Details
8India’s LNG imports rise 45% in April Details
8Trump advisers push him to target OPEC, regulations in big energy speech Details
8Shell to cut 2,200 more jobs in face of weak oil prices Details
8Govt to auction oil, gas fields with Rs 70,000 cr worth reserves from July Details
8RIL, BP on way to end dispute with government Details
8Gail posts 51 percentage increase in net profit Details
You can also click on Newsclips for more Details
