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Aug 2015
Risk levels have gone up for the Indian trio -- made up of ONGC, Bharat Petro Resoures Ltd (BPRL) and Oil India Ltd (OIL) -- in the multi-billion dollar LNG trains that are being developed in Mozambique by the operator Anadarko Petroleum in the face of falling gas prices.
8Anadarko has a 26% participating interest in the Rovuma Area 1 Offshore block -- which may contain as much as 50 to 70 TCF of gas -- while the stakes of ONGC, BPRL (a subsidiary of Bharat Petroleum Corporation Ltd) and OIL are 16%, 10% and 4% respectively, among others.
8The risks of not eliciting an adequate return on investment continues to remain high even as Anadarko awarded an initial development contract for the onshore LNG terminal that will house two trains of 6 MMTPA each to a consortium consisting of CB&I, Chiyoda Corporation and Saipem (known as the CCS JV) recently. The contract however is still not firm but is subject to negotiations even as the promoter consortium grapples with problems of raising adequate funding to achive the so far elusive Final Investment Decision (FID) for the project that may total up to $20 billion or more.
8The problem is simple, the FOB price of LNG has crashed dramatically over the last one year whereas the project was built on what may now seem like an impossibly high FOB price of $12/mmbtu. The LNG from the project was sought to be sold at a mix of Japanese Custom cleared Crude (JCC) and Henry Hub/NBP Gas price, both of which have gone dramatically over the year.
8According to officials from some of the Indian companies who spoke to this website but did not want to be named, the project IRR has gone down down dramatically below the hurdle rate with the drop in the FOB price after factoring in the high acquisition cost of their stakes.
8Anadarko itself is reported to be struggling to pick up $15 billion in debt to fund the project and even though the company denies it vehemently, it is looking at diluting its stakes so as to bring down the risk invoked. Details
8Anadarko has a 26% participating interest in the Rovuma Area 1 Offshore block -- which may contain as much as 50 to 70 TCF of gas -- while the stakes of ONGC, BPRL (a subsidiary of Bharat Petroleum Corporation Ltd) and OIL are 16%, 10% and 4% respectively, among others.
8The risks of not eliciting an adequate return on investment continues to remain high even as Anadarko awarded an initial development contract for the onshore LNG terminal that will house two trains of 6 MMTPA each to a consortium consisting of CB&I, Chiyoda Corporation and Saipem (known as the CCS JV) recently. The contract however is still not firm but is subject to negotiations even as the promoter consortium grapples with problems of raising adequate funding to achive the so far elusive Final Investment Decision (FID) for the project that may total up to $20 billion or more.
8The problem is simple, the FOB price of LNG has crashed dramatically over the last one year whereas the project was built on what may now seem like an impossibly high FOB price of $12/mmbtu. The LNG from the project was sought to be sold at a mix of Japanese Custom cleared Crude (JCC) and Henry Hub/NBP Gas price, both of which have gone dramatically over the year.
8According to officials from some of the Indian companies who spoke to this website but did not want to be named, the project IRR has gone down down dramatically below the hurdle rate with the drop in the FOB price after factoring in the high acquisition cost of their stakes.
8Anadarko itself is reported to be struggling to pick up $15 billion in debt to fund the project and even though the company denies it vehemently, it is looking at diluting its stakes so as to bring down the risk invoked. Details
The Mozambique operator Anadarko had said recently that partners in the project have "secured more than 8 MMTPA of LNG in non-binding long-term off-take agreements, which are now progressing toward binding SPAs (Sales and Purchase Agreements) that is helping in the, obtaining letters of intent from lenders for project financing at a very material level".
8That may be good news but it is yet to be seen what kind of gaa price will be elicited from such deals and whether that price will provide an adequate IRR for the Indian companies.
8Given current low prices, it remains a moot point whether gas offtakers will be willing to shell out prices that will elicit a hurdle rate of return for the Indian companies.
8There is of course a difference in how the gas price will behave in 2020 and 2021 when the two LNG trains are going to go on stream from how they are now. But the present impacts the future, and given that the Americans have become the world`s swing producer for both crude oil and gas, and they may find it profitable to to produce at increasingly lower prices, getting back to the high prices that were seen a year back may not be all that easy even five years from now.
8On the positive side, both oil and gas prices are highly unpredictable given that NYMEX futures show a very wide spread going even six months ahead, it is anybody`s guess how prices will behave by the time the LNG trains come on stream.
8The problem with the E&P industry is that a lot depends on forces outside the control of companies, but the question is how much risk should a company while embarking on such investments take when factoring in such parameters?
8Did the Indian trio overshoot their risk-reward bandwidth while buying into Mozambique?
8Only time will tell how things turn out for them. Details
8That may be good news but it is yet to be seen what kind of gaa price will be elicited from such deals and whether that price will provide an adequate IRR for the Indian companies.
8Given current low prices, it remains a moot point whether gas offtakers will be willing to shell out prices that will elicit a hurdle rate of return for the Indian companies.
8There is of course a difference in how the gas price will behave in 2020 and 2021 when the two LNG trains are going to go on stream from how they are now. But the present impacts the future, and given that the Americans have become the world`s swing producer for both crude oil and gas, and they may find it profitable to to produce at increasingly lower prices, getting back to the high prices that were seen a year back may not be all that easy even five years from now.
8On the positive side, both oil and gas prices are highly unpredictable given that NYMEX futures show a very wide spread going even six months ahead, it is anybody`s guess how prices will behave by the time the LNG trains come on stream.
8The problem with the E&P industry is that a lot depends on forces outside the control of companies, but the question is how much risk should a company while embarking on such investments take when factoring in such parameters?
8Did the Indian trio overshoot their risk-reward bandwidth while buying into Mozambique?
8Only time will tell how things turn out for them. Details
At one level the Indian public sector companies cannot really be faulted for trying to pick up large stakes in what is one of the biggest gas development projects in the world in Mozambique.
8Rightfully perhaps, it was trumpeted as one of largest and at that time the most lucrative investments that the country had done even since Indian companies when foraging for oil and gas assets abroad.
8In this context it is relevant to point out that both ONGC and OIL are hardcore oil and gas companies who understand the risks involved in the E&P business though even for them it can be a case of biting off more than what they can chew.
8But fingers are now pointing towards Bharat Petro Resources Ltd (BPRL), a BPCL subsidiary, for exposing itself to such a high level of risk in the project.
8BPCL neither has the understanding nor the staying power to handle a 10% exposure in the project of such dimension. The exposure levels are too high and the risks and the danger is that such risks are directly leveraged to BPCL`s balance sheet.
8"At best BPCL is a middle level downstream company operating under a controlled environment and for the management to expose itself to the violent gyrations of the international E&P and gas markets, both of which are fraught with so much risk that only the strongest of companies in world can survive such large vulnerabilities, may not have been appropriate," an industry observer said.
8The ability to move from a completely controlled downstream environment in India to picking up a stake in wild Africa is too much of a leap of faith for BPCL.
8BPRL`s IRR was at 11.75% at a FOB price of $12 and if that goes down in the long term contracts that are signed, then the IRR may plunge below 10% and eliciting a Board approval can then become difficult.
8There is merit perhaps in the argument that a downstream company should stay confined to its own business -- particularly when the landscape has become more competitive with the advent of private players -- and not go up the value chain unless it has the financial muscle to do so. In this case BPCL is punching far above its weight.
8Does BPCL have the staying power or the financial muscle power is a question that needs a straight forward answer
8It may even be appropriate for the Modi government to open the files once again to see what prompted BPRL to take that leap straight into Mozambique. Some skeletons may come tumbling out of the closet in the process. Details
8Rightfully perhaps, it was trumpeted as one of largest and at that time the most lucrative investments that the country had done even since Indian companies when foraging for oil and gas assets abroad.
8In this context it is relevant to point out that both ONGC and OIL are hardcore oil and gas companies who understand the risks involved in the E&P business though even for them it can be a case of biting off more than what they can chew.
8But fingers are now pointing towards Bharat Petro Resources Ltd (BPRL), a BPCL subsidiary, for exposing itself to such a high level of risk in the project.
8BPCL neither has the understanding nor the staying power to handle a 10% exposure in the project of such dimension. The exposure levels are too high and the risks and the danger is that such risks are directly leveraged to BPCL`s balance sheet.
8"At best BPCL is a middle level downstream company operating under a controlled environment and for the management to expose itself to the violent gyrations of the international E&P and gas markets, both of which are fraught with so much risk that only the strongest of companies in world can survive such large vulnerabilities, may not have been appropriate," an industry observer said.
8The ability to move from a completely controlled downstream environment in India to picking up a stake in wild Africa is too much of a leap of faith for BPCL.
8BPRL`s IRR was at 11.75% at a FOB price of $12 and if that goes down in the long term contracts that are signed, then the IRR may plunge below 10% and eliciting a Board approval can then become difficult.
8There is merit perhaps in the argument that a downstream company should stay confined to its own business -- particularly when the landscape has become more competitive with the advent of private players -- and not go up the value chain unless it has the financial muscle to do so. In this case BPCL is punching far above its weight.
8Does BPCL have the staying power or the financial muscle power is a question that needs a straight forward answer
8It may even be appropriate for the Modi government to open the files once again to see what prompted BPRL to take that leap straight into Mozambique. Some skeletons may come tumbling out of the closet in the process. Details
Rovuma Area 1 Offshore block of which Anadarko is the operator is one of the two adjacent blocks that are being jointly developed to produce a massive 22 MMTPA of LNG in Mozambique.
8The other block -- dubbed block A --is operated by ENI.
8Both the blocks run into each other, so there is a Heads of Agreement between the two sides for unitization.
8In Rovuma Area 1 the plan was drill 10 wells and that was meant to be over by mid 2015
8The recoverable reserves have been pegged at anywhere between 50 to 70 TCF by Anadarko.
8Between ENI and Anadarko, they plan to put up four trains of 5 MMTPA each, but Anadarko had now decided to go for two trains of 6 MMTPA each.
8The cost of the projects is also likely to go up. By a recent estimate made by PriceWaterhouseCoopers the capex needed to build a two-train LNG project in Mozambique is a massive US$2.14 million per bcf of net gas volume. That’s a total investment of US$26.1 billion whereas Anadarko had last year pegged the cost lower at around $20 billion.
8So will low gas prices either derail or delay these projects? The answer to that question is not forthcoming just as yet. Details
8The other block -- dubbed block A --is operated by ENI.
8Both the blocks run into each other, so there is a Heads of Agreement between the two sides for unitization.
8In Rovuma Area 1 the plan was drill 10 wells and that was meant to be over by mid 2015
8The recoverable reserves have been pegged at anywhere between 50 to 70 TCF by Anadarko.
8Between ENI and Anadarko, they plan to put up four trains of 5 MMTPA each, but Anadarko had now decided to go for two trains of 6 MMTPA each.
8The cost of the projects is also likely to go up. By a recent estimate made by PriceWaterhouseCoopers the capex needed to build a two-train LNG project in Mozambique is a massive US$2.14 million per bcf of net gas volume. That’s a total investment of US$26.1 billion whereas Anadarko had last year pegged the cost lower at around $20 billion.
8So will low gas prices either derail or delay these projects? The answer to that question is not forthcoming just as yet. Details
Even though the exposure of Indian companies are high in Mozambique, the Chinese are way ahead of India in garnering oil and gas assets in the continent as is evident from recent data culled out by this website.
8India`s investment in the African oil and gas sector -- despite the Mozambique deal -- is only 4% of the total investment whereas Chinese investment totals up to a high 22% of the cake, according to an exhaustive study accessed by this website.
8The Chinese share is the largest after that of North America and Europe.
8Chinese national oil companies such as Sinopec, CNOOC and CNPC are aggressively targeting the African market.
8The acquisition cost of Chinese companies vary from very little to very high. And those at the higher end of the spectrum will find the going difficult just like Indian trio in Mozambique.
8The Chinese interest also stems from the fact that it is very reliant on oil produced in Africa, especially Angola, which is now the second-largest exporter after Saudi Arabia of crude to China.
Click on the Reports for more. Details
8India`s investment in the African oil and gas sector -- despite the Mozambique deal -- is only 4% of the total investment whereas Chinese investment totals up to a high 22% of the cake, according to an exhaustive study accessed by this website.
8The Chinese share is the largest after that of North America and Europe.
8Chinese national oil companies such as Sinopec, CNOOC and CNPC are aggressively targeting the African market.
8The acquisition cost of Chinese companies vary from very little to very high. And those at the higher end of the spectrum will find the going difficult just like Indian trio in Mozambique.
8The Chinese interest also stems from the fact that it is very reliant on oil produced in Africa, especially Angola, which is now the second-largest exporter after Saudi Arabia of crude to China.
Click on the Reports for more. Details
While Mozambique may look like a risky venture for the Indian companies because of the high acquisition cost, Africa will continue to be a place to hunt for oil and gas at the right price.
8The falling crude oil price has brought down the value of assets making it worthwhile for the likes of OVL to look for bargains.
8Africa currently has 499.8 TCF ( 86.2 billion BOE) of proven gas reserves which are also 7% of world reserves but this may turn out to be just the tip of the iceberg.
8The US Energy Information Administration has estimated that Mozambique alone could have 100 TCF gas. There are many hydrocarbon basins in Africa that are yet to be explored and the reserve figures are likely go up in the future.
8Africa holds approximately 2,613 TCF of technically recoverable natural gas reserves, which is just over five times higher than the proven reserves. Mozambique and Tanzania particularly, have focused the world’s attention on East Africa as an emerging player in the global industry.
8Gas production too is going up sharply: Nigeria has plans to quintuple natural gas production by 2020, Tanzania is also expected to benefit from recent natural gas discoveries with LNG exports expected by 2025. Angola became an LNG exporter in 2013 with the commissioning of the Angola LNG plant in Soyo.
8These developments create significant economic benefits for Africa and provide opportunities for LNG importation into other gas-indigent regions within Africa.
8Africa`s LNG potential capacity of 104.4 BCM is 25.6% of the world`s capacity. LNG exports from Nigeria, Algeria, Angola Egypt and Guinea was 48.5 BCM which was 14.6% of the world exports in 2014.
8Moreover Algeria, Libya and South Africa cumulatively have potential shale oil reserves of 224.1 Billon BOE.
Click on the Reports for more. Details
8The falling crude oil price has brought down the value of assets making it worthwhile for the likes of OVL to look for bargains.
8Africa currently has 499.8 TCF ( 86.2 billion BOE) of proven gas reserves which are also 7% of world reserves but this may turn out to be just the tip of the iceberg.
8The US Energy Information Administration has estimated that Mozambique alone could have 100 TCF gas. There are many hydrocarbon basins in Africa that are yet to be explored and the reserve figures are likely go up in the future.
8Africa holds approximately 2,613 TCF of technically recoverable natural gas reserves, which is just over five times higher than the proven reserves. Mozambique and Tanzania particularly, have focused the world’s attention on East Africa as an emerging player in the global industry.
8Gas production too is going up sharply: Nigeria has plans to quintuple natural gas production by 2020, Tanzania is also expected to benefit from recent natural gas discoveries with LNG exports expected by 2025. Angola became an LNG exporter in 2013 with the commissioning of the Angola LNG plant in Soyo.
8These developments create significant economic benefits for Africa and provide opportunities for LNG importation into other gas-indigent regions within Africa.
8Africa`s LNG potential capacity of 104.4 BCM is 25.6% of the world`s capacity. LNG exports from Nigeria, Algeria, Angola Egypt and Guinea was 48.5 BCM which was 14.6% of the world exports in 2014.
8Moreover Algeria, Libya and South Africa cumulatively have potential shale oil reserves of 224.1 Billon BOE.
Click on the Reports for more. Details
There are still exciting opportunities within the African oil & gas industry waiting to be exploited by a whole range of Indian companies.
8The list is as follows:
- New exploration blocks on offer through competitive bidding rounds driven by governments’ desires to encourage exploration and production (E&P) activity;
-- Independent power producers (IPPs) in areas with a shortage of power supply;
-- Liquefied natural gas (LNG) plant engineering and construction for both export and import;
-- Port development, potential industrial development zones and management thereof;
-- Pipeline engineering and construction to help monetise discoveries;
-- Potential activity in unconventional gas plays, especially in South Africa where enabling legislation seems to be making progress;
-- Local skills and knowledge transfer;
-- Gas-fired electricity generation;
-- Other gas monetisation projects for local use (methanol, fertilisers,urea);
Click On the Reports for more. Details
8The list is as follows:
- New exploration blocks on offer through competitive bidding rounds driven by governments’ desires to encourage exploration and production (E&P) activity;
-- Independent power producers (IPPs) in areas with a shortage of power supply;
-- Liquefied natural gas (LNG) plant engineering and construction for both export and import;
-- Port development, potential industrial development zones and management thereof;
-- Pipeline engineering and construction to help monetise discoveries;
-- Potential activity in unconventional gas plays, especially in South Africa where enabling legislation seems to be making progress;
-- Local skills and knowledge transfer;
-- Gas-fired electricity generation;
-- Other gas monetisation projects for local use (methanol, fertilisers,urea);
Click On the Reports for more. Details
The year 2015 is marked by a sharp correction in global commodity prices, especially for crude oil, whose prices have corrected by almost 42% since July 2014 before touching a low of US$ 45/barrel in January 2015.
8Although lower crude oil prices are a positive for oil marketing in India as it helps in bringing down their subsidy burden, the sudden fall led to inventory losses for refineries and oil marketing companies and also lower realizations for oil marketing companies during the second-half of the fiscal.
8Most of the oil producing companies including ONGC, Cairn India and refineries like MRPL have reported sharp drops in their earnings during the year.
8From the profitability perspective, the aggregate EBITDA margins continued to witness pressure on margins on account of industry specific issues.
Click on Reports for the overview. Details
8Although lower crude oil prices are a positive for oil marketing in India as it helps in bringing down their subsidy burden, the sudden fall led to inventory losses for refineries and oil marketing companies and also lower realizations for oil marketing companies during the second-half of the fiscal.
8Most of the oil producing companies including ONGC, Cairn India and refineries like MRPL have reported sharp drops in their earnings during the year.
8From the profitability perspective, the aggregate EBITDA margins continued to witness pressure on margins on account of industry specific issues.
Click on Reports for the overview. Details
The PNGRB is of the view that the Petronet CCK Limited's (PCCKL) Cochin-Coimbatore-Karur (CCK) petroleum and petroleum products pipeline should be declared as a common carrier pipeline.
8The Board feels that the 292.5 km-long pipeline, having a capacity of 3.3 MMTPA, should be declared as a common carrier pipeline.
8Based on the throughput achieved by the CCK pipeline in last three financial years, it has emerged that the pipeline is having approximately 22% spare capacity available for declaration as common carrier capacity.
8As part of the process, the PNGRB has invited objections and suggestions from any person or entity likely to be affected if the pipeline is declared as a common carrier pipeline.
8Based upon the objections and suggestions during the public consultation process, the PNGRB will fix the terms and conditions for the pipeline to be declared as a common carrier or contract carrier. Details
8The Board feels that the 292.5 km-long pipeline, having a capacity of 3.3 MMTPA, should be declared as a common carrier pipeline.
8Based on the throughput achieved by the CCK pipeline in last three financial years, it has emerged that the pipeline is having approximately 22% spare capacity available for declaration as common carrier capacity.
8As part of the process, the PNGRB has invited objections and suggestions from any person or entity likely to be affected if the pipeline is declared as a common carrier pipeline.
8Based upon the objections and suggestions during the public consultation process, the PNGRB will fix the terms and conditions for the pipeline to be declared as a common carrier or contract carrier. Details
Petronet CCK Limited (PCCKL), the company which operates the Cochin-Coimbatore-Karur (CCK) petroleum and petroleum products pipeline, wants the pipeline to remain as a dedicated pipeline. The company has made the following arguments:
8The 292 km long CCK pipeline, which was laid even before PNGRB came into existence, was designed and conceived with 3.3MMTPA capacity considering the requirements of evacuation of products available from only BPCL's Kochi Refinery (BPCL-KR). No provision was made for other entities or refineries. Hence, in principle, CCK pipeline was construed as a "dedicated pipeline" of BPCL.
8Under the PNGRB Act 2006, only "common carrier" has been defined. There is no definition of a "dedicated pipeline”. Since the CCK pipeline does not fall within the ambit of a "common carrier”, it should not be declared as a "common carrier”.
8PCCKL transports petroleum products from BPCL's Kochi installation and delivers the same to BPCL-lrugur (Coimbatore) and Karur installations. For PCCKL, both the consignor and the consignee are the same. Hence, the question of 'sale' or 'resale' does not arise at all.
8BPCL's Kochi refinery is in the process of augmenting its refining capacity from 9.5 MMTPA to 15.5 MMTPA. The expansion is planned, keeping in view the existing capacity of the CCK pipeline, through which the additional products from the Kochi refinery would be transported to distant market centres. Hence, there is absolutely no scope for accommodating any other entity for sourcing the product other than BPCL's Kochi refinery. Details
8The 292 km long CCK pipeline, which was laid even before PNGRB came into existence, was designed and conceived with 3.3MMTPA capacity considering the requirements of evacuation of products available from only BPCL's Kochi Refinery (BPCL-KR). No provision was made for other entities or refineries. Hence, in principle, CCK pipeline was construed as a "dedicated pipeline" of BPCL.
8Under the PNGRB Act 2006, only "common carrier" has been defined. There is no definition of a "dedicated pipeline”. Since the CCK pipeline does not fall within the ambit of a "common carrier”, it should not be declared as a "common carrier”.
8PCCKL transports petroleum products from BPCL's Kochi installation and delivers the same to BPCL-lrugur (Coimbatore) and Karur installations. For PCCKL, both the consignor and the consignee are the same. Hence, the question of 'sale' or 'resale' does not arise at all.
8BPCL's Kochi refinery is in the process of augmenting its refining capacity from 9.5 MMTPA to 15.5 MMTPA. The expansion is planned, keeping in view the existing capacity of the CCK pipeline, through which the additional products from the Kochi refinery would be transported to distant market centres. Hence, there is absolutely no scope for accommodating any other entity for sourcing the product other than BPCL's Kochi refinery. Details
The government has refused to modify the gas pricing formula despite several representations that the formula should be modified to encourage investments in a hydrocarbon deficient country.
The petroleum ministry said that representations have been received from Association of Oil and Gas operators (AOGO), Confederation of Indian Industry (CII) etc. asking for a change in the gas pricing guidelines
8Some of the issues pointed out by these associations include:
--Inclusion of the Russian domestic price in the formula
--The deduction of prices to delivery point and treatment charges form the gas price
-- Applicability of premium for only new discoveries post 1st November, 2014 should be modified to include all new discoveries
--The new price formula contains parameters which are not relevant to a hydrocarbon deficit economy like India
8But the ministry has rejected the suggestions saying that the prices considered in the new gas pricing formula are the closest approximations for the market price for gas in the region and Russian domestic price has been included in the formulae as Russia is amongst the largest producers and consumer of natural gas in the world
8"Through the New Gas Pricing Guidelines 2014, government has tried to maintain a fine balance between the interest of gas producing and consuming sectors," the government said while refusing to make any change in the formula .
8The plea for modification of the November 1, 2014 cut off point for deepwater gas discoveries for being eligible for a premium was also turned down. Details
The petroleum ministry said that representations have been received from Association of Oil and Gas operators (AOGO), Confederation of Indian Industry (CII) etc. asking for a change in the gas pricing guidelines
8Some of the issues pointed out by these associations include:
--Inclusion of the Russian domestic price in the formula
--The deduction of prices to delivery point and treatment charges form the gas price
-- Applicability of premium for only new discoveries post 1st November, 2014 should be modified to include all new discoveries
--The new price formula contains parameters which are not relevant to a hydrocarbon deficit economy like India
8But the ministry has rejected the suggestions saying that the prices considered in the new gas pricing formula are the closest approximations for the market price for gas in the region and Russian domestic price has been included in the formulae as Russia is amongst the largest producers and consumer of natural gas in the world
8"Through the New Gas Pricing Guidelines 2014, government has tried to maintain a fine balance between the interest of gas producing and consuming sectors," the government said while refusing to make any change in the formula .
8The plea for modification of the November 1, 2014 cut off point for deepwater gas discoveries for being eligible for a premium was also turned down. Details
8ONGC has state of the art exploration facilities which includes the following
-- 27 (24 owned + 3 charter hired) departmental seismic crew,
-- 121 (77 owned + 44 charter hired) drilling rigs,
-- 88 (58 owned + 30 charter hired) work over rigs,
-- 107 well stimulation units and 73 (27owned +46 charter hired) logging units.
8Moreover ONGC also has 240 onshore installations, 202 offshore installations, 26,598 KM length of pipeline, 65 (17 owned +48 charter hired) offshore supply vessels (OSV) and multi-purpose supply vessels (MSV).
8The website also carries here the full matrix of ONGC`s organizational chart, in terms of manpower divisions for those who are interested in understanding how the E&P giant operates.
Click on Reports for more. Details
-- 27 (24 owned + 3 charter hired) departmental seismic crew,
-- 121 (77 owned + 44 charter hired) drilling rigs,
-- 88 (58 owned + 30 charter hired) work over rigs,
-- 107 well stimulation units and 73 (27owned +46 charter hired) logging units.
8Moreover ONGC also has 240 onshore installations, 202 offshore installations, 26,598 KM length of pipeline, 65 (17 owned +48 charter hired) offshore supply vessels (OSV) and multi-purpose supply vessels (MSV).
8The website also carries here the full matrix of ONGC`s organizational chart, in terms of manpower divisions for those who are interested in understanding how the E&P giant operates.
Click on Reports for more. Details
8Import bill of oil PSUs down by more than 20% in 2014-15: The import bill of public sector oil companies went down by more than 20% in 2014-15, on account of a fall in the price of the crude oil in the international market.
--The import bill of PSU oil companies was Rs 4,47,615 crore in 2013-14 which went down to Rs 3,55,382 crore in 2014-15.
--India is the world’s third largest importer of crude oil after the United States and China.
--The International Energy Agency had predicted that India will burn around 4.1 million barrels per day (mb/d) in the second quarter of this year, edging out Japan’s 3.8 mb/d.
8Q1 results: The following companies will declare their financial results for the quarter ended June 30, 2015, as under:
--GSPL: August 7, 2015
--MRPL: August 9, 2015
--CPCL and EIL: August 10, 2015 Details
--The import bill of PSU oil companies was Rs 4,47,615 crore in 2013-14 which went down to Rs 3,55,382 crore in 2014-15.
--India is the world’s third largest importer of crude oil after the United States and China.
--The International Energy Agency had predicted that India will burn around 4.1 million barrels per day (mb/d) in the second quarter of this year, edging out Japan’s 3.8 mb/d.
8Q1 results: The following companies will declare their financial results for the quarter ended June 30, 2015, as under:
--GSPL: August 7, 2015
--MRPL: August 9, 2015
--CPCL and EIL: August 10, 2015 Details
8Details of composite caps for simplification of FDI policy: For reference purposes, the website carries here details of composite caps for simplification of foreign direct investment (FDI) policy to attract foreign investments. In the oil and gas sector, most segments already attract provisions of 100% foreign investment.
Click here for Details
8Cairn invites two EOIs for Rajasthan and Cambay blocks: Cairn has invited the following two Expression of Interests (EOIs) for its Rajasthan and Cambay blocks:
--Supply of low sulphur high flash HSD for the Cambay and Ravva blocks
--Supply of HSD for the Rajasthan field
--Supply and apply of hydrogen sulphide scavenger liquid chemical for oil field application contract for the Rajasthan block
Click on our Tenders section for more Details
Click here for Details
8Cairn invites two EOIs for Rajasthan and Cambay blocks: Cairn has invited the following two Expression of Interests (EOIs) for its Rajasthan and Cambay blocks:
--Supply of low sulphur high flash HSD for the Cambay and Ravva blocks
--Supply of HSD for the Rajasthan field
--Supply and apply of hydrogen sulphide scavenger liquid chemical for oil field application contract for the Rajasthan block
Click on our Tenders section for more Details
After a long delay, Cairn India Ltd, the operator of the block PR-OSN-2004/1, is planning to start drilling in the offshore deepwater block in Q2 2016.
8Cairn India and its JV partners ONGC (35%) and Tata Petrodyne Limited (30%) were awarded the offshore block during NELP-VI licensing round in 2007.
8The JV has already spent $35 million in the block in minimum work programmes but had to suspend work after the Department of Space said that a large chunk of the block fell on the missile path pf the DOS.
8The DoS had put exploration and drilling restrictions on 4,200 sq km out of the total license area of 9,417 sq km as they considered it not appropriate to permit any activity related to survey and exploration near the Satish Dhawan Space Centre (SDSC), Sriharikota Range (SHAR).
8The main reason for delay is that a key hydrocarbon prospect -- dubbed PR-8 -- which fell inside the restricted zone close to the northern boundary which was not allowed to explore.
8Now, after considerable efforts by ministry and the DGH, the work has restarted and the three wells under MWP will be drilled till the second quarter of 2016.
8A maximum of 10 wells are planned to be drilled in the block. Details
8Cairn India and its JV partners ONGC (35%) and Tata Petrodyne Limited (30%) were awarded the offshore block during NELP-VI licensing round in 2007.
8The JV has already spent $35 million in the block in minimum work programmes but had to suspend work after the Department of Space said that a large chunk of the block fell on the missile path pf the DOS.
8The DoS had put exploration and drilling restrictions on 4,200 sq km out of the total license area of 9,417 sq km as they considered it not appropriate to permit any activity related to survey and exploration near the Satish Dhawan Space Centre (SDSC), Sriharikota Range (SHAR).
8The main reason for delay is that a key hydrocarbon prospect -- dubbed PR-8 -- which fell inside the restricted zone close to the northern boundary which was not allowed to explore.
8Now, after considerable efforts by ministry and the DGH, the work has restarted and the three wells under MWP will be drilled till the second quarter of 2016.
8A maximum of 10 wells are planned to be drilled in the block. Details
Petroleum minister Dharmendra Pradhan has left for Ashgabat today (august 5, 2015) to attend the 22nd Steering Committee meeting of the $10 billion Turkemanistan, Afghanistan, Pakistan and India (TAPI) natural gas pipeline project.
8Pradhan is accompanied by a high-level delegation including senior officials from the petroleum ministry. GAIL Chairman, BC Tripathi, and OVL Managing Director, Narendra K Verma, are also part of the delegation.
8The meeting is happening in the wake of the recent visit of the Indian Prime Minister, Narendra Modi, to Turkmenistan during July 10-11, 2015, followed by the visit of the Deputy Prime Minister of Turkmenistan, Baymurat Hojamuhammedov, on July 21, 2015, wherein the progress of the TAPI natural gas pipeline project was one of the important agenda points.
8Hojamuhammedov also met Pakistani Prime Minister Nawaz Sharif on Monday (August 3). As per Pakistani media reports, the construction of the TAPI gas pipeline project is set to begin in December this year.
8The politically complex and logistically challenging project requires cooperation from all the partners as the pipeline would pass through areas of Afghanistan and Pakistan plagued by Taliban and separatist insurgents.
8Initially, France`s Total was interested in becoming the consortium leader for the project, but now Russia is also said to have expressed interest.
8The 1800 km long gas pipeline is expected to deliver natural gas to the tune of 38 MMSCMD at India’s western border. Details
8Pradhan is accompanied by a high-level delegation including senior officials from the petroleum ministry. GAIL Chairman, BC Tripathi, and OVL Managing Director, Narendra K Verma, are also part of the delegation.
8The meeting is happening in the wake of the recent visit of the Indian Prime Minister, Narendra Modi, to Turkmenistan during July 10-11, 2015, followed by the visit of the Deputy Prime Minister of Turkmenistan, Baymurat Hojamuhammedov, on July 21, 2015, wherein the progress of the TAPI natural gas pipeline project was one of the important agenda points.
8Hojamuhammedov also met Pakistani Prime Minister Nawaz Sharif on Monday (August 3). As per Pakistani media reports, the construction of the TAPI gas pipeline project is set to begin in December this year.
8The politically complex and logistically challenging project requires cooperation from all the partners as the pipeline would pass through areas of Afghanistan and Pakistan plagued by Taliban and separatist insurgents.
8Initially, France`s Total was interested in becoming the consortium leader for the project, but now Russia is also said to have expressed interest.
8The 1800 km long gas pipeline is expected to deliver natural gas to the tune of 38 MMSCMD at India’s western border. Details
Petroleum minister Dharmendra Pradhan made several replies relating to the oil and gas sector in the Rajya Sabha recently. The replies related to the following:
8Indigenisation of oil and gas exploration
8Discussions between Asian suppliers and consumers of oil and natural gas
8Target of PNG connections in the next two years
8Details of casual labourers working in various oil PSUs
8Faster approvals for exploration companies
8Target for reduction of import dependency of crude oil by 10% Details
8Indigenisation of oil and gas exploration
8Discussions between Asian suppliers and consumers of oil and natural gas
8Target of PNG connections in the next two years
8Details of casual labourers working in various oil PSUs
8Faster approvals for exploration companies
8Target for reduction of import dependency of crude oil by 10% Details
Gulf Oil Lubricants India Limited, a Hinduja group company, is planning to invest Rs 120 crore to set up a new 75,000-KL capacity plant in Chennai.
8The setting up of the new plant in Chennai is part of the company`s strategy to decongest its Silvassa plant because of locational disadvantages. The company plans to offset some of the Silvassa capacity to the Chennai plant.
8The reason for moving south is that around 30% of the company`s sale is in the south. Because of the Chennai plant, the capacity utilization at Silvassa would come down slightly.
8The capacity utilization of the Silvassa plant, which is currently around 90%, will be brought down to around 80-85%.
8Initially, the company will try to operate the upcoming Chennai plant at around 60-70% capacity. Details
8The setting up of the new plant in Chennai is part of the company`s strategy to decongest its Silvassa plant because of locational disadvantages. The company plans to offset some of the Silvassa capacity to the Chennai plant.
8The reason for moving south is that around 30% of the company`s sale is in the south. Because of the Chennai plant, the capacity utilization at Silvassa would come down slightly.
8The capacity utilization of the Silvassa plant, which is currently around 90%, will be brought down to around 80-85%.
8Initially, the company will try to operate the upcoming Chennai plant at around 60-70% capacity. Details
The global crude oil price of Indian basket has fallen below the $50/barrel mark.
8The price on August 4, 2015, worked out to $49.97 per bbl.
8This was lower than the price of $50.63 per bbl seen on previous publishing day, that is, August 3, 2015.
8In rupee terms, the price of Indian Basket decreased to Rs 3,194.58 per bbl on August 4, 2015, as compared to Rs 3,238.29 per bbl on August 3, 2015.
8Rupee closed stronger at Rs 63.93 per US$ on August 4, 2015, as against Rs 63.96 per US$ on August 3, 2015.
8Crude has come under pressure from signs of too much supply and too little demand. In July, OPEC`s output reached the highest monthly level in recent history, a Reuters survey had found.
8OPEC, which includes Saudi Arabia and other major crude producers, has been producing about 1.7 million bpd in surplus since deciding in November to favor market share over price defense.
8While the ensuing glut knocked Brent down 18% in July, US crude tumbled even more, 21%, for its biggest monthly decline since the 2008 financial crisis. Details
8The price on August 4, 2015, worked out to $49.97 per bbl.
8This was lower than the price of $50.63 per bbl seen on previous publishing day, that is, August 3, 2015.
8In rupee terms, the price of Indian Basket decreased to Rs 3,194.58 per bbl on August 4, 2015, as compared to Rs 3,238.29 per bbl on August 3, 2015.
8Rupee closed stronger at Rs 63.93 per US$ on August 4, 2015, as against Rs 63.96 per US$ on August 3, 2015.
8Crude has come under pressure from signs of too much supply and too little demand. In July, OPEC`s output reached the highest monthly level in recent history, a Reuters survey had found.
8OPEC, which includes Saudi Arabia and other major crude producers, has been producing about 1.7 million bpd in surplus since deciding in November to favor market share over price defense.
8While the ensuing glut knocked Brent down 18% in July, US crude tumbled even more, 21%, for its biggest monthly decline since the 2008 financial crisis. Details
8Case over DDA`s demand of Rs 155.64 crore on IGL still pending: The Delhi Development Authority (DDA) has raised a total demand of Rs 155.64 crores on Indraprastha Gas Ltd (IGL) on account of increase in license fees in respect of sites taken by the company on lease from DDA for setting up CNG stations in Delhi.
--The increase in license fees is related to the period starting from April 1, 2007, to March 31, 2014.
--The company has already filed a writ petition before the Delhi High Court against the demand raised by DDA as the revised license fees has been increased manifold and made applicable retrospectively from Financial Year 2007-08.
--The matter is pending in the High Court of Delhi.
8IGL Q1 net down by 11% to Rs 102 crore: Indraprastha Gas Ltd (IGL), the sole supplier of CNG and piped cooking gas in Delhi, has reported 11% drop in the June quarter net profit on lower realisation from industrial and commercial users.
--Its net profit in the April-June period fell to Rs 101.84 crore, as against Rs 114.03 crore a year ago.
--The net profit in the first quarter of the current fiscal went down despite the turnover of the company posting 4% rise to Rs 992 crore from Rs 957 crore in the year-ago period.
--The overall sales volume had registered a growth of 2% over the corresponding quarter in the last fiscal with average daily sale increasing from 3.75 million standard cubic meters per day to 3.83 mmscmd.
--IGL owns around 10,000 km of pipeline network in Delhi, Noida, Ghaizabad and Greater Noida. It sells fuels to over 8 lakh vehicles in the NCR through a network of over 300 CNG stations. It also supplies piped gas to over 5.85 lakh households in Delhi and NCR towns. Details
--The increase in license fees is related to the period starting from April 1, 2007, to March 31, 2014.
--The company has already filed a writ petition before the Delhi High Court against the demand raised by DDA as the revised license fees has been increased manifold and made applicable retrospectively from Financial Year 2007-08.
--The matter is pending in the High Court of Delhi.
8IGL Q1 net down by 11% to Rs 102 crore: Indraprastha Gas Ltd (IGL), the sole supplier of CNG and piped cooking gas in Delhi, has reported 11% drop in the June quarter net profit on lower realisation from industrial and commercial users.
--Its net profit in the April-June period fell to Rs 101.84 crore, as against Rs 114.03 crore a year ago.
--The net profit in the first quarter of the current fiscal went down despite the turnover of the company posting 4% rise to Rs 992 crore from Rs 957 crore in the year-ago period.
--The overall sales volume had registered a growth of 2% over the corresponding quarter in the last fiscal with average daily sale increasing from 3.75 million standard cubic meters per day to 3.83 mmscmd.
--IGL owns around 10,000 km of pipeline network in Delhi, Noida, Ghaizabad and Greater Noida. It sells fuels to over 8 lakh vehicles in the NCR through a network of over 300 CNG stations. It also supplies piped gas to over 5.85 lakh households in Delhi and NCR towns. Details
The preliminary results of the National Gas Hydrate Programme (NGHP) Expedition-02 in the KG basin are quite encouraging.
8Under the NGHP Expedition-02, drilling and coring operations were carried out by a state-of-the-art Japanese vessel -- dubbed Chikyu -- hired for exploring gas hydrates in the KG basin.
8The vessel, hired from the Japan Drilling Company Ltd (JDC), successfully drilled 40 wells in the KG area.
8Though the first edition of the programme -- dubbed NGHP Expedition-01 -- had established the presence of gas hydrate on the east coast deep water basins of Krishna Godavari, Mahanadi and Andaman in the Bay of Bengal, no assessment has been made on the potential of gas hydrates in the region.
8However, Hydrate Energy International has estimated the resource potential of gas hydrates in India at 933 TCF.
8Indian experts from DGH, ONGC, OIL, GAIL and several scientific institutions like CSIR, the National Institute of Ocean Technology (NIOT) and the the National Geophysical Research Institute (NGRI) are working in collaboration with scientists from Japan and the US to develop gas hydrates on a commercial scale in India. Details
8Under the NGHP Expedition-02, drilling and coring operations were carried out by a state-of-the-art Japanese vessel -- dubbed Chikyu -- hired for exploring gas hydrates in the KG basin.
8The vessel, hired from the Japan Drilling Company Ltd (JDC), successfully drilled 40 wells in the KG area.
8Though the first edition of the programme -- dubbed NGHP Expedition-01 -- had established the presence of gas hydrate on the east coast deep water basins of Krishna Godavari, Mahanadi and Andaman in the Bay of Bengal, no assessment has been made on the potential of gas hydrates in the region.
8However, Hydrate Energy International has estimated the resource potential of gas hydrates in India at 933 TCF.
8Indian experts from DGH, ONGC, OIL, GAIL and several scientific institutions like CSIR, the National Institute of Ocean Technology (NIOT) and the the National Geophysical Research Institute (NGRI) are working in collaboration with scientists from Japan and the US to develop gas hydrates on a commercial scale in India. Details
The government after much persuasion has agreed to shift the Northern boundary of the prohibited area near Sriharikota range by 7 kms. southwards so that drilling activities on the PR-8 hydrocarbon location could be undertaken.
8The written assurance for permanent shift of the boundary was received by Cairn with an extension in the PEL.
8A special dispensation of 30 months for drilling preparations and operations was also granted to Cairn.
8Time lost due to invocation following the imposition of Force Majeure and in getting approvals for the special dispensation resulted in drilling not being carried out till date.
8In order to carry out exploratory drilling in accordance with the revised project timelines of Q2 2016, extension of validity for the Environment Clearance will be required.
Comment: There is good business awaiting equipment and service providers now that the decks are being cleared for a three-well offshore drilling programme by next year. This is likely to be a sustained campaign given that a maximum of 10 wells are likely to be drilled. Details
8The written assurance for permanent shift of the boundary was received by Cairn with an extension in the PEL.
8A special dispensation of 30 months for drilling preparations and operations was also granted to Cairn.
8Time lost due to invocation following the imposition of Force Majeure and in getting approvals for the special dispensation resulted in drilling not being carried out till date.
8In order to carry out exploratory drilling in accordance with the revised project timelines of Q2 2016, extension of validity for the Environment Clearance will be required.
Comment: There is good business awaiting equipment and service providers now that the decks are being cleared for a three-well offshore drilling programme by next year. This is likely to be a sustained campaign given that a maximum of 10 wells are likely to be drilled. Details
8Details of the expected production from the proposed development wells are as follows.
-- Expected potential for each well at the Bhuvanagiri area is 35,000 meters cube per day of gas, having nearest oil and gas handling facility at EPS-Bhuvanagiri.
8For the others, the following are the details:
-- Madanam - 20 - GGS-Madanam.
-- Pallivaramangalam - 20 EPS Adiayakamangalam.
-- Vijayapuram - 20 - EPS Kamalapurm.
-- Periyakudi - 50000 - GCS Kovilkalapal.
-- Tulsiapattinam - 15 - EPS Thulasiapattinam.
-- Pundi - 20 - EPS Pundi.
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-- Expected potential for each well at the Bhuvanagiri area is 35,000 meters cube per day of gas, having nearest oil and gas handling facility at EPS-Bhuvanagiri.
8For the others, the following are the details:
-- Madanam - 20 - GGS-Madanam.
-- Pallivaramangalam - 20 EPS Adiayakamangalam.
-- Vijayapuram - 20 - EPS Kamalapurm.
-- Periyakudi - 50000 - GCS Kovilkalapal.
-- Tulsiapattinam - 15 - EPS Thulasiapattinam.
-- Pundi - 20 - EPS Pundi.
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Drilling is a complex process that involves a large number of mud chemicals and drilling materials. For the drilling programme that will be undertaken, the following are the requirements:
8A Water-Based Mud (WBM) system will be used for drilling of the proposed wells. It may be noted that a typical WBM may contain nearly 80% water and 20% Clay(Bentonite) as well as Chemicals by weight.
8The constituents of WBM involves lime stone (50.75 t/day), bentonite (74.50 t/day), caustic soda (1.18 t/day), soda ash (0.95 t/day), carboxymethyl cellulose ( 0.3 t/day), xanthum gum polymer (1.95 t/day), partially hydrolysed polyacryl amide ( 2.15 t/day), poly anionic cellulose (0.50 t/day), poly anionic cellulose (1.23 t/day), pre-gelatinised starch (4.45 t/day), modified alkanoamide (3.00 t/day), sodium chloride (20.00 t/day) and potassium chloride (40.00 t/day).
8Over and above it, special additives are also used such as sodium bicarbonate, sodium chloride, groundnut shells, mica flakes cellulose polymers, aluminium stearate, vegetable oillubricant and pill of oil-based mud spotting fluid.
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8A Water-Based Mud (WBM) system will be used for drilling of the proposed wells. It may be noted that a typical WBM may contain nearly 80% water and 20% Clay(Bentonite) as well as Chemicals by weight.
8The constituents of WBM involves lime stone (50.75 t/day), bentonite (74.50 t/day), caustic soda (1.18 t/day), soda ash (0.95 t/day), carboxymethyl cellulose ( 0.3 t/day), xanthum gum polymer (1.95 t/day), partially hydrolysed polyacryl amide ( 2.15 t/day), poly anionic cellulose (0.50 t/day), poly anionic cellulose (1.23 t/day), pre-gelatinised starch (4.45 t/day), modified alkanoamide (3.00 t/day), sodium chloride (20.00 t/day) and potassium chloride (40.00 t/day).
8Over and above it, special additives are also used such as sodium bicarbonate, sodium chloride, groundnut shells, mica flakes cellulose polymers, aluminium stearate, vegetable oillubricant and pill of oil-based mud spotting fluid.
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ONGC intends to drill 66 developmental wells in a total of seven ML/NELP blocks of the Cauvery basin (onshore) which are spread over Cuddalore, Tiruvarur, Nagapattinam and Thanjavur districts of Tamil Nadu.
8The potential wells which are capable of producing oil and gas will be connected to the existing production facility available or else transported to the installations of nearby blocks.
8Total estimated drilling period for each well is between 90 to 100 days, and the drilling depth will be in the range of 3000 to 5000 meters.
8Wells will be drilled using conventional on-land drilling rigs equipped with electrical rotary drive systems.
8Three DG sets (each of 1250kVA capacity) will suffice the requirements of the each rig and also for emergency requirements. Only low sulphur (108 mg/kg) HSD will be used as fuel.
8During the drilling phase, the fuel consumption is estimated to be about 6 kl/d of HSD per well
8Four to five acres of land will be acquired for the each well. Cluster wells will also be planned wherever directional drilling is feasible so as to reduce the usage of fresh land.
8District wise distribution of wells are as follows:
-- 10 Drillings Wells are located in the Nagapattinam district,
-- 20 wells are located in the Cuddalore district,
-- 28 wells in the Thiruvarur district,
-- Eight wells in the Thanjavur district.
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8The potential wells which are capable of producing oil and gas will be connected to the existing production facility available or else transported to the installations of nearby blocks.
8Total estimated drilling period for each well is between 90 to 100 days, and the drilling depth will be in the range of 3000 to 5000 meters.
8Wells will be drilled using conventional on-land drilling rigs equipped with electrical rotary drive systems.
8Three DG sets (each of 1250kVA capacity) will suffice the requirements of the each rig and also for emergency requirements. Only low sulphur (108 mg/kg) HSD will be used as fuel.
8During the drilling phase, the fuel consumption is estimated to be about 6 kl/d of HSD per well
8Four to five acres of land will be acquired for the each well. Cluster wells will also be planned wherever directional drilling is feasible so as to reduce the usage of fresh land.
8District wise distribution of wells are as follows:
-- 10 Drillings Wells are located in the Nagapattinam district,
-- 20 wells are located in the Cuddalore district,
-- 28 wells in the Thiruvarur district,
-- Eight wells in the Thanjavur district.
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The Cauvery basin is a pericratonic rift basin and covers an area of 1.5 lakh sq.km comprising the on-land (25,000 sq.km) and shallow offshore areas (30,000 sq km).
8In addition to that, there is about 95,000 sq. km of offshore areas in the Cauvery basin. Most of the offshore and the on-land basin area is covered by gravity, magnetic and CDP seismic surveys.
8ONGC is currently involved with the exploration of oil and gas reserves in the Cauvery basin.
8ONGC`s presence in this region has given a boost to the industrial development in the districts of Nagapattinam, Karaikal, Tiruvarur, Ramnadu and Cuddalore.
8The mushrooming of the steel units as well as the power generation stations bear the testimony to this. Moreover private and also public sector power generation stations operate on the gas supplied from the ONGC’s oil and gas fields.
8The continuous exploratory and development activities resulted in the drilling of 630 wells till date out of which 147 are oil and 99 are gas wells. This has led to the discovery of 26 oil and gas fields.
8These are namely Karaikal (1977), Kovilkalappal (1988), Adiyakkamangalam (1989), Kamalapuram and Tiruvarur (1990), Mattur, Athikadai, Vadatheru and Vijayapuram (1992), Pallivaramangalam and Kuttanallur (1993), Perungulam (1994), Poondi (1995), Kizhvalur and Kuthalam (1996), Tulsiapatnam, Periyapatnam, Neyveli and Ramanvalasai (1997) and Kali (1998), Kuthalam satellite fields (1999), Kanjirangudi (2000), Palk Bay Shallow-Offshore (2001) and Adichapuram (2007).
8Development activities were under process for enhancing the production of oil and gas.
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8In addition to that, there is about 95,000 sq. km of offshore areas in the Cauvery basin. Most of the offshore and the on-land basin area is covered by gravity, magnetic and CDP seismic surveys.
8ONGC is currently involved with the exploration of oil and gas reserves in the Cauvery basin.
8ONGC`s presence in this region has given a boost to the industrial development in the districts of Nagapattinam, Karaikal, Tiruvarur, Ramnadu and Cuddalore.
8The mushrooming of the steel units as well as the power generation stations bear the testimony to this. Moreover private and also public sector power generation stations operate on the gas supplied from the ONGC’s oil and gas fields.
8The continuous exploratory and development activities resulted in the drilling of 630 wells till date out of which 147 are oil and 99 are gas wells. This has led to the discovery of 26 oil and gas fields.
8These are namely Karaikal (1977), Kovilkalappal (1988), Adiyakkamangalam (1989), Kamalapuram and Tiruvarur (1990), Mattur, Athikadai, Vadatheru and Vijayapuram (1992), Pallivaramangalam and Kuttanallur (1993), Perungulam (1994), Poondi (1995), Kizhvalur and Kuthalam (1996), Tulsiapatnam, Periyapatnam, Neyveli and Ramanvalasai (1997) and Kali (1998), Kuthalam satellite fields (1999), Kanjirangudi (2000), Palk Bay Shallow-Offshore (2001) and Adichapuram (2007).
8Development activities were under process for enhancing the production of oil and gas.
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The government has delineated six CBM blocks in Gujarat which will be put on offer in the next CBM bidding (CBM-V) round.
8The six blocks are: GJ(1)-CBM-2013/V, GJ(2)-CBM-2013/V, GJ(3)-CBM-2013/V, GJ(4)-CBM-2013/V, GJ(5)-CBM-2013/V and GJ(6)-CBM-2013/V.
8As of now, around 26,000 sq. km of coal basinal areas have been identified jointly by the petroleum and coal ministries for CBM exploration. Of this, 33 CBM blocks, spread over 16,613 sq. km, have already been awarded.
8The total estimated CBM resources in identified area made available (26,000 sq km) is about 2,600 BCM (91.8 TCF).
8The total prognosticated CBM resource for 33 awarded CBM blocks, is about 62.4 TCF. Of this only 9.9 TCF has been established as gas-in-place (GIP).
8Though a total of eight blocks have reached the development stage, only one block is producing CBM commercially. Another four blocks are producing incidental CBM. Details
8The six blocks are: GJ(1)-CBM-2013/V, GJ(2)-CBM-2013/V, GJ(3)-CBM-2013/V, GJ(4)-CBM-2013/V, GJ(5)-CBM-2013/V and GJ(6)-CBM-2013/V.
8As of now, around 26,000 sq. km of coal basinal areas have been identified jointly by the petroleum and coal ministries for CBM exploration. Of this, 33 CBM blocks, spread over 16,613 sq. km, have already been awarded.
8The total estimated CBM resources in identified area made available (26,000 sq km) is about 2,600 BCM (91.8 TCF).
8The total prognosticated CBM resource for 33 awarded CBM blocks, is about 62.4 TCF. Of this only 9.9 TCF has been established as gas-in-place (GIP).
8Though a total of eight blocks have reached the development stage, only one block is producing CBM commercially. Another four blocks are producing incidental CBM. Details
The total estimated CBM resources in identified area made available (26,000 sq km) is about 2,600 BCM (91.8 TCF). The state-wise distribution of CBM resources in these identified areas is as under:
8Jharkhand: 722.08 BCM (25.5 TCF)
8Rajasthan: 359.62 BCM (12.7 TCF)
8Gujarat: 351.13 BCM (12.4 TCF)
8Odisha: 243.52 BCM (8.6 TCF)
8Chattisgarh: 240.69 BCM (8.5 TCF)
8Madhya Pradesh: 218.04 BCM (7.7 TCF)
8West Bengal: 218.04 BCM (7.7 TCF)
8Tamil Nadu: 104.77 BCM (3.7 TCF)
8Telangana & Andhra Pradesh: 99.11 BCM (3.5 TCF)
8Maharashtra: 33.98 BCM (1.2 TCF)
8North-East: 8.50 BCM (0.3 TCF)
8Total CBM resources: 2599.48 BCM (91.8 TCF) Details
8Jharkhand: 722.08 BCM (25.5 TCF)
8Rajasthan: 359.62 BCM (12.7 TCF)
8Gujarat: 351.13 BCM (12.4 TCF)
8Odisha: 243.52 BCM (8.6 TCF)
8Chattisgarh: 240.69 BCM (8.5 TCF)
8Madhya Pradesh: 218.04 BCM (7.7 TCF)
8West Bengal: 218.04 BCM (7.7 TCF)
8Tamil Nadu: 104.77 BCM (3.7 TCF)
8Telangana & Andhra Pradesh: 99.11 BCM (3.5 TCF)
8Maharashtra: 33.98 BCM (1.2 TCF)
8North-East: 8.50 BCM (0.3 TCF)
8Total CBM resources: 2599.48 BCM (91.8 TCF) Details
Assailed for not taking enough safety measures to prevent the pipeline blast in the KG Basin that lead to many deaths, GAIL now intends to conduct a Quantitative Risk Assessment and a Hazop Study of gas pipelines and its associated installations to analyse the consequences and risk posed to the surrounding facilities due to identified hazards that can emanate from the gas dispatch terminal.
8Details of pipelines are as follows:
-- 36" Hazira-Jhabua-Vijaipur pipeline
-- 30" Vijapur - Auraiya Pipeline
-- 24" Auriya - Aonla - Barala Pipeline
-- 18" Auriya - Jagdispur Pipeline
-- 18" Vijapur - Boreri Pipeline
-- 18" Boreri -Gadepan Pipeline
-- 18" Vagodhia - IPCL Pipeline
-- 24" Babrala - Dadri Pipeline
-- Vjapur To Dadri 36" GREP Pipeline
-- 10”/8” Bajhera-Agra-Firozabad
-- 18" Dadri - Desu Pipeline
-- 42" DVPL Pipeline
-- 18" TPPL
-- 16" JIPPL :89.228 kms
-- 12" Sanewar Dewas 19.59Kms Pipeline
-- 12" KMPL
-- 18" VKPL Pipeline
-- 48” VDPL Pipeline
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8Details of pipelines are as follows:
-- 36" Hazira-Jhabua-Vijaipur pipeline
-- 30" Vijapur - Auraiya Pipeline
-- 24" Auriya - Aonla - Barala Pipeline
-- 18" Auriya - Jagdispur Pipeline
-- 18" Vijapur - Boreri Pipeline
-- 18" Boreri -Gadepan Pipeline
-- 18" Vagodhia - IPCL Pipeline
-- 24" Babrala - Dadri Pipeline
-- Vjapur To Dadri 36" GREP Pipeline
-- 10”/8” Bajhera-Agra-Firozabad
-- 18" Dadri - Desu Pipeline
-- 42" DVPL Pipeline
-- 18" TPPL
-- 16" JIPPL :89.228 kms
-- 12" Sanewar Dewas 19.59Kms Pipeline
-- 12" KMPL
-- 18" VKPL Pipeline
-- 48” VDPL Pipeline
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IOCL is planning to conduct Hazard and Operability (HAZOP) study in the Haldia refinery to identify hazard and operability problems in the process systems.
8The Hazop study will cover the modifications carried out during the course of operation since installation of the units.
8There are altogether 32 process units in the refinery, which are clustered in four major blocks namely the Fuel Oil Block (FOB), Lube Oil Block (LOB), DHDS/FCC block and OHCU block.
8It is planned to carryout the HAZOP study of OHCU Block units and the Old HGU.
Details of the units are:
-- New Hydrogen Generation Unit (HGU-II, U-92)
-- Once Through Hydrocracker Unit (OHCU, U-91)
-- Nitrogen Generation Unit (NGU, U-96)
-- Old Hydrogen Generation Unit (HGU-I, U-24)
8The OHCU is installed for more distillate yield, HGU-II/HGU-I caters to the hydrogen demand for the OHCU, DHDS, KHDS and the CRU as well as the MSQU for meeting Euro-III and Euro-IV fuel quality standards whereas the NGU caters to nitrogen demand from all refinery units.
8Performance and safety of these units are of utmost importance to the refinery, hence a decision has been taken by IOCL Haldia Refinery management for conducting a HAZOP study these four (04) units.
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8The Hazop study will cover the modifications carried out during the course of operation since installation of the units.
8There are altogether 32 process units in the refinery, which are clustered in four major blocks namely the Fuel Oil Block (FOB), Lube Oil Block (LOB), DHDS/FCC block and OHCU block.
8It is planned to carryout the HAZOP study of OHCU Block units and the Old HGU.
Details of the units are:
-- New Hydrogen Generation Unit (HGU-II, U-92)
-- Once Through Hydrocracker Unit (OHCU, U-91)
-- Nitrogen Generation Unit (NGU, U-96)
-- Old Hydrogen Generation Unit (HGU-I, U-24)
8The OHCU is installed for more distillate yield, HGU-II/HGU-I caters to the hydrogen demand for the OHCU, DHDS, KHDS and the CRU as well as the MSQU for meeting Euro-III and Euro-IV fuel quality standards whereas the NGU caters to nitrogen demand from all refinery units.
8Performance and safety of these units are of utmost importance to the refinery, hence a decision has been taken by IOCL Haldia Refinery management for conducting a HAZOP study these four (04) units.
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The additional Berths C and D which will be oriented in the North – South direction in line with the existing berths, are planned for the prevailing bathymetry of the Pathfinder Inlet and no dredging will be required.
8Berths C and D will be of the open type pile construction category and designed to receive ships of sizes between 25000 and 105000 dwt.
8The berths will be complete with a main platform, mooring dolphins, breasting dolphins, fendering system, Quick Release Marine Hooks (QRMHs) and Bollards.
8The top side equipments and auxiliary facilities will comprise of a piled approach for pipelines and walk ways from existing berths to the proposed Berths C and D as well as pipelines, marine loading/unloading arms equipped with hydraulic coupler, powered emergency release coupling (PERC) and emergency shut down (ESD) equipment.
8The products proposed to be handled at the berths are motor spirit, HSD, Naphtha, ATF/SKO and VGO/FO.
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8Berths C and D will be of the open type pile construction category and designed to receive ships of sizes between 25000 and 105000 dwt.
8The berths will be complete with a main platform, mooring dolphins, breasting dolphins, fendering system, Quick Release Marine Hooks (QRMHs) and Bollards.
8The top side equipments and auxiliary facilities will comprise of a piled approach for pipelines and walk ways from existing berths to the proposed Berths C and D as well as pipelines, marine loading/unloading arms equipped with hydraulic coupler, powered emergency release coupling (PERC) and emergency shut down (ESD) equipment.
8The products proposed to be handled at the berths are motor spirit, HSD, Naphtha, ATF/SKO and VGO/FO.
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Vadinar Oil Terminal Limited (VOTL) is proposing to expand its product evacuation capacity by adding two more berths termed as Berth C and Berth D at Vadinar in Jamnagar,Gujarat.
8This is basically being done to cope with the ongoing expansion project at the Essar Oil Ltd`ss refinery which will go up from the existing capacity of 10.5MTPA to 60 MTPA.
8Though in the first phase of expansion it is proposed to increase the refining capacity from 10.5 MTPA to 32 MTPA.
8After the refinery scales the 32 MTPA mark, there will be a need to augment marine facilities so as to provide enough flexibility to refinery operations for import of crude oil and evacuation of petroleum products as well.
8Currently, the refinery production capacity is 10.5 Mtpa and the jetty occupation is already at 60-65%. Evidently, when the refinery expansion will be three times the existing capacity, at least two additional berths are required.
8Essar has planned a separate marine facilitiy in the adjacent Salaya Creek that will include liquid handling berths which will cater for the refinery expansion during next phase, from 32 MTPA to 60 MTPA.
8All the product lines which now terminates in the existing berths will be extended to the new berths.
8In addition to that the 48” crude line from the SPM-2 will rise on Berth D through a riser and will travel across the Jetty to the COT area through the Jetty Terminal. Loading and unloading points of crude will be provided in Berth B.
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Details
8This is basically being done to cope with the ongoing expansion project at the Essar Oil Ltd`ss refinery which will go up from the existing capacity of 10.5MTPA to 60 MTPA.
8Though in the first phase of expansion it is proposed to increase the refining capacity from 10.5 MTPA to 32 MTPA.
8After the refinery scales the 32 MTPA mark, there will be a need to augment marine facilities so as to provide enough flexibility to refinery operations for import of crude oil and evacuation of petroleum products as well.
8Currently, the refinery production capacity is 10.5 Mtpa and the jetty occupation is already at 60-65%. Evidently, when the refinery expansion will be three times the existing capacity, at least two additional berths are required.
8Essar has planned a separate marine facilitiy in the adjacent Salaya Creek that will include liquid handling berths which will cater for the refinery expansion during next phase, from 32 MTPA to 60 MTPA.
8All the product lines which now terminates in the existing berths will be extended to the new berths.
8In addition to that the 48” crude line from the SPM-2 will rise on Berth D through a riser and will travel across the Jetty to the COT area through the Jetty Terminal. Loading and unloading points of crude will be provided in Berth B.
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Details
Punj Lloyd;s order book has topped Rs 22,171 crore subsequent to the bagging of a tankage order from Mitsubhishi Heavy Industries Ltd, for Rs 477 crore.
8The current order won includes confirmatory geotechnical investigation, early earth works, construction of two 180,000 m3 capacity full containment LNG Tanks on elevated piled foundation for the LNG import, storage and regasification terminal of Indian Oil Corporation at Ennore port in Tamil Nadu, India.
8Once completed, the LNG imported to the Ennore terminal will be used by utility company power generation plants as an alternative fuel and as feedstock by fertiliser plants.
8The project is to be completed within a challenging timeline of 33 months, however the expertise of Punj Lloyd in tanks and terminals, especially cryogenic tanks is well established, making Punj Lloyd excellently placed to deliver this project.
8Here is a list of LNG tank projects by Punj LIyod in india:
-- LNG Storage Tank Expansion at Dahej under Petronet LNG.
-- LNG Storage Tanks for Receiving Terminal at Hazira under Shell.
-- LNG Storage and Re-gasification Terminal at Dabhol under Skanska Cementation International Ltd.
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8The current order won includes confirmatory geotechnical investigation, early earth works, construction of two 180,000 m3 capacity full containment LNG Tanks on elevated piled foundation for the LNG import, storage and regasification terminal of Indian Oil Corporation at Ennore port in Tamil Nadu, India.
8Once completed, the LNG imported to the Ennore terminal will be used by utility company power generation plants as an alternative fuel and as feedstock by fertiliser plants.
8The project is to be completed within a challenging timeline of 33 months, however the expertise of Punj Lloyd in tanks and terminals, especially cryogenic tanks is well established, making Punj Lloyd excellently placed to deliver this project.
8Here is a list of LNG tank projects by Punj LIyod in india:
-- LNG Storage Tank Expansion at Dahej under Petronet LNG.
-- LNG Storage Tanks for Receiving Terminal at Hazira under Shell.
-- LNG Storage and Re-gasification Terminal at Dabhol under Skanska Cementation International Ltd.
Click on Reports for more. Details
ONGC is planning to drill a total of four wells -- dubbed R-HAT-A, B, C and D -- in its Madhya Pradesh exploration block VN-ONN-2009/3.
8The block, which falls in Damoh and Chhatarpur districts, covers an area of 1250 sq. km and is mainly covered with agricultural and forest land.
8The Petroleum Exploration License (PEL) for the block was granted to ONGC in 2011 for a total period of seven years: Phase-I of four years and Phase-II of three years.
8Based on the interpretation of seismic data and integration with available G&G data of the block and the contiguous area, a number of prospective locations have been identified in the block.
8One exploratory location, R-HAT-A, has been okayed, while the three others have been identified but will be firmed up depending on the results of the well R-HAT-A.
8Drilling of the location R-HAT-A during Phase-I (planned for drilling in 2015-16) will enable the E&P major to establish the prospectivity of the block. This well will be set off against the minimum work program (MWP) of three wells in Phase-II of exploration.
8ONGC has a 100% stake in this NELP-VIII block. Details
8The block, which falls in Damoh and Chhatarpur districts, covers an area of 1250 sq. km and is mainly covered with agricultural and forest land.
8The Petroleum Exploration License (PEL) for the block was granted to ONGC in 2011 for a total period of seven years: Phase-I of four years and Phase-II of three years.
8Based on the interpretation of seismic data and integration with available G&G data of the block and the contiguous area, a number of prospective locations have been identified in the block.
8One exploratory location, R-HAT-A, has been okayed, while the three others have been identified but will be firmed up depending on the results of the well R-HAT-A.
8Drilling of the location R-HAT-A during Phase-I (planned for drilling in 2015-16) will enable the E&P major to establish the prospectivity of the block. This well will be set off against the minimum work program (MWP) of three wells in Phase-II of exploration.
8ONGC has a 100% stake in this NELP-VIII block. Details
The details of drilling locations, which all fall in the Domah district of Madhya Pradesh, are as under:
8The proposed well R-HAT-A is located at the Luhari village adjacent to the state highway SH-49.
8The subsurface location of the R-HAT-B well is located about 1.5 km east of the Hatta town.
8The R-HAT-C and R-HAT-D well sites are located around 0.7 km east of the Mankora village and about 0.7 km south east of the Majhguwan Patol village, respectively.
8The location of the three wells -- R-HAT-B, C and D -- are tentative and will be finalized depending on the availability of seismic data.
8The cost for drilling four wells (including well site construction and site decommissioning) is estimated at around Rs 160 crore. Details
8The proposed well R-HAT-A is located at the Luhari village adjacent to the state highway SH-49.
8The subsurface location of the R-HAT-B well is located about 1.5 km east of the Hatta town.
8The R-HAT-C and R-HAT-D well sites are located around 0.7 km east of the Mankora village and about 0.7 km south east of the Majhguwan Patol village, respectively.
8The location of the three wells -- R-HAT-B, C and D -- are tentative and will be finalized depending on the availability of seismic data.
8The cost for drilling four wells (including well site construction and site decommissioning) is estimated at around Rs 160 crore. Details
The lifecycle of project activities for the proposed project has been divided into distinct steps and will take approximately three months to complete drilling and testing activity at each well site. The drilling project has been split up into three phases:
8Pre-drilling activity
--Site selection and land acquisition
--Site access road and drill site construction
--Pre-drilling activities, mobilization and rigging up
--Initial well construction
8Drilling activity
--Drilling of wells
--Testing of wells
8Well decommissioning
--Well abandonment
--Site closure and decommissioning
--Site restoration Details
8Pre-drilling activity
--Site selection and land acquisition
--Site access road and drill site construction
--Pre-drilling activities, mobilization and rigging up
--Initial well construction
8Drilling activity
--Drilling of wells
--Testing of wells
8Well decommissioning
--Well abandonment
--Site closure and decommissioning
--Site restoration Details
Petroleum minister Dharmendra Pradhan made several replies relating to the oil and gas sector in the Rajya Sabha recently. The replies related to the following:
8Non-completion of the laying of the gas pipeline to Goa
8Introduction of open acreage system
8Piped gas network in Tamil Nadu
8Projects of GAIL running behind Schedule
8Steps for implementation of bio-fuel programme
8Utilization of residue gas in LPG cylinders
8Criteria for providing LPG connections to BPL families
8Complaints against LPG dealers Details
8Non-completion of the laying of the gas pipeline to Goa
8Introduction of open acreage system
8Piped gas network in Tamil Nadu
8Projects of GAIL running behind Schedule
8Steps for implementation of bio-fuel programme
8Utilization of residue gas in LPG cylinders
8Criteria for providing LPG connections to BPL families
8Complaints against LPG dealers Details
Petroleum minister Dharmendra Pradhan also replied to several queries in the Lok Sabha, which related to the following issues:
8Schemes for welfare of SCs, STs, OBCs and OMCs
8Production cost of petroleum products
8Give up campaign of LPG subsidy
8Using solar energy at Retail Outlets (ROs)
8Seismic surveys carried out by ONGC
8Anomalies in allocation of petrol pumps
8Audit of Petronet LNG Details
8Schemes for welfare of SCs, STs, OBCs and OMCs
8Production cost of petroleum products
8Give up campaign of LPG subsidy
8Using solar energy at Retail Outlets (ROs)
8Seismic surveys carried out by ONGC
8Anomalies in allocation of petrol pumps
8Audit of Petronet LNG Details
8Allocation of PDS kerosene in last three years: A total of 89,75,538 KL of PDS kerosene was allocated to various states and Union Territories (UTs) during 2014-15.
This was lower by 1.22% as against the allocation of 90,86,858 KL in 2013-14.
In 2012-13, the total allocation was 94,80,006 KL.
The website carries here, for reference purposes, details of State/UT-wise allocation of PDS kerosene during the last three years (2012-13 to 2014-15) and the current year (up to June 2015-16)
8More than 15 lakh people surrender subsidized LPG: As of now, more than 15.68 people have voluntarily surrendered their subsidized LPG connections.
The number was 12.14 lakh as of July 20, 2015, resulting in savings to the tune of Rs 565.37 crore.
8State-wise 14.2 kg LPG cylinders in circulation: A total of 30.39 crore LPG cylinders (14.2 kg) were in circulation in India as on July 1, 2015.
--The highest number (14.74 crore) belong to IOC, followed by BPCL and HPCL at 7.89 crore and 7.74 crore, respectively.
--The website carries here, for reference purposes, state-wise and company-wise break-up of number of 14.2 kg cylinders in circulation on July 1, 2015. Details
This was lower by 1.22% as against the allocation of 90,86,858 KL in 2013-14.
In 2012-13, the total allocation was 94,80,006 KL.
The website carries here, for reference purposes, details of State/UT-wise allocation of PDS kerosene during the last three years (2012-13 to 2014-15) and the current year (up to June 2015-16)
8More than 15 lakh people surrender subsidized LPG: As of now, more than 15.68 people have voluntarily surrendered their subsidized LPG connections.
The number was 12.14 lakh as of July 20, 2015, resulting in savings to the tune of Rs 565.37 crore.
8State-wise 14.2 kg LPG cylinders in circulation: A total of 30.39 crore LPG cylinders (14.2 kg) were in circulation in India as on July 1, 2015.
--The highest number (14.74 crore) belong to IOC, followed by BPCL and HPCL at 7.89 crore and 7.74 crore, respectively.
--The website carries here, for reference purposes, state-wise and company-wise break-up of number of 14.2 kg cylinders in circulation on July 1, 2015. Details
8Ved Prakash Mahawar takes over as ONGC Director (Onshore): Ved Prakash Mahawar has taken over as the Director (Onshore) of ONGC.
--Mahawar brings with him 33 years of vast experience of managing drilling and operational functions, holding various key positions across vast spectrum of oil field activities.
--Prior to his joining the present assignment he has been OSD (Onshore) at Delhi for some time before which he was heading the Tripura Asset of ONGC as Executive Director-Asset Manager. ---Under his leadership, Tripura Asset saw increase in gas production by more than two folds. During his tenure ONGC commenced supplying gas for both units of ONGC Tripura Power Company-OTPC. He has also been instrumental in monetization of two discovered fields, putting them on production.
--A mechanical graduate from the Pandit Ravi Shankar Shukla University, Raipur, Mahawar started career with ONGC as Drilling Engineer in 1982. He is known as the first sub-sea engineer of ONGC.
8ONGC to drill another well in Ramnad area: ONGC will soon start drilling another well in its Ramnad block.
--The exploratory drilling location -- dubbed KJWAA -- has been finalized by the E&P major.
--The company will soon finalize a contractor to carry out civil works in the drilling area so that a rig can be deployed.
--A total of 2.765 mmscmd of gas has already been allocated from the Ramnad block to five customers, namely Coromandal Electric Company, Sai Regency Power, Arkay Energy, Pioneer Power and Tangendco.
--An additional demand of 2.058 mmscmd of gas from the field has also been submitted by the existing five customers. Details
--Mahawar brings with him 33 years of vast experience of managing drilling and operational functions, holding various key positions across vast spectrum of oil field activities.
--Prior to his joining the present assignment he has been OSD (Onshore) at Delhi for some time before which he was heading the Tripura Asset of ONGC as Executive Director-Asset Manager. ---Under his leadership, Tripura Asset saw increase in gas production by more than two folds. During his tenure ONGC commenced supplying gas for both units of ONGC Tripura Power Company-OTPC. He has also been instrumental in monetization of two discovered fields, putting them on production.
--A mechanical graduate from the Pandit Ravi Shankar Shukla University, Raipur, Mahawar started career with ONGC as Drilling Engineer in 1982. He is known as the first sub-sea engineer of ONGC.
8ONGC to drill another well in Ramnad area: ONGC will soon start drilling another well in its Ramnad block.
--The exploratory drilling location -- dubbed KJWAA -- has been finalized by the E&P major.
--The company will soon finalize a contractor to carry out civil works in the drilling area so that a rig can be deployed.
--A total of 2.765 mmscmd of gas has already been allocated from the Ramnad block to five customers, namely Coromandal Electric Company, Sai Regency Power, Arkay Energy, Pioneer Power and Tangendco.
--An additional demand of 2.058 mmscmd of gas from the field has also been submitted by the existing five customers. Details
IOC is planning to convert its four underground dock-line pipelines to above-ground lines at its Kandla terminal, Gujarat.
8The four lines are dubbed as 24” MS dock line, 24” HSD dock line, 24” naptha N1 and N2 dock line.
8The work will involve building structural truss and allied dock line jobs based on the site conditions.
8The estimated time for completion of project is eight months
8Along with this, IOC will also dismantle the existing underground pipelines and re-route them as above ground lines. Details
8The four lines are dubbed as 24” MS dock line, 24” HSD dock line, 24” naptha N1 and N2 dock line.
8The work will involve building structural truss and allied dock line jobs based on the site conditions.
8The estimated time for completion of project is eight months
8Along with this, IOC will also dismantle the existing underground pipelines and re-route them as above ground lines. Details
ONGC is planning to set up a 51MW Captive Combined Cycle Power Plant in the Hazira gas processingn plant in Gujarat at a cost of Rs 360 crore to take care of the expansion in the processing plant.
8The additional captive plant will act as a standby power plant in case of an emergency or a mechanical breakdown and as a standby when maintenance works are on.
8The plan to set up an additional captive plant near the existing power plant is in line with the ongoing expansion project at the Hazira plant.
8The Hazira plant has a design capacity of 40.6 MMSCMD for processing of sour gas and associated condensate received from the company's Western Offshore fields.
8The expansion of the gas processing plant will increase the existing capacity of 40.6 MMSCM to 46.9 MMSCMD and also increase the sulphur recovery unit capacity by 2100 TPA.
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8The additional captive plant will act as a standby power plant in case of an emergency or a mechanical breakdown and as a standby when maintenance works are on.
8The plan to set up an additional captive plant near the existing power plant is in line with the ongoing expansion project at the Hazira plant.
8The Hazira plant has a design capacity of 40.6 MMSCMD for processing of sour gas and associated condensate received from the company's Western Offshore fields.
8The expansion of the gas processing plant will increase the existing capacity of 40.6 MMSCM to 46.9 MMSCMD and also increase the sulphur recovery unit capacity by 2100 TPA.
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Framework agreements between operators and service providers seem to be the new model in the E&P sector.
8ONGC has been talking about such agreements with service providers.
8A fundamental change in the contracting model would mean that it would be possible to reduce wasted time by combining front-end engineering design, delivery, life of field, and scope into one all-encompassing partner agreement.
8Framework agreements are useful methods of securing long-term assurances around price, quality, and quantity. They can cover specific services and offer stability over fixed periods, which can be renewed depending on the success of the arrangement. I
8Such agreements have helped deliver high uptime and availability for certain projects. They have encouraged standardization of equipment, thereby reducing lead times, increasing flexibility and interchangeability, and improving installation times.
8Furthermore, framework agreements can help strengthen the relationship between operators and their partners as both parties work closely together to reduce life-of-field coss, improve efficiency gains, and simplify processes.
8Clearly, business as usual is not an option right now. This is a time for radical changes that address the industry’s challenges and help operators secure the returns they need.
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8ONGC has been talking about such agreements with service providers.
8A fundamental change in the contracting model would mean that it would be possible to reduce wasted time by combining front-end engineering design, delivery, life of field, and scope into one all-encompassing partner agreement.
8Framework agreements are useful methods of securing long-term assurances around price, quality, and quantity. They can cover specific services and offer stability over fixed periods, which can be renewed depending on the success of the arrangement. I
8Such agreements have helped deliver high uptime and availability for certain projects. They have encouraged standardization of equipment, thereby reducing lead times, increasing flexibility and interchangeability, and improving installation times.
8Furthermore, framework agreements can help strengthen the relationship between operators and their partners as both parties work closely together to reduce life-of-field coss, improve efficiency gains, and simplify processes.
8Clearly, business as usual is not an option right now. This is a time for radical changes that address the industry’s challenges and help operators secure the returns they need.
Click on Details for more. Details
The dramatic drop in oil prices and the rapid march of technology is forcing both service providers to look for new ways to do business and stay afloat.
8The pinch is being felt more in the E&P sector particularly in the deepwater and mature developments where the cost of delivering oil and gas is high.
8What has changed is the emergence of a greater sense of urgency.
8New thinking has now begin to grow on how to survive the current crisis.
8A paper here discusses new ways to reduce the expense of subsea developments and gain efficiencies across the life of a field in India.
8For example, it makes a great deal of economic and operational sense for service companies to be involved at the earliest possible stage in the development of a field. This is when the ability to influence cost is at its greatest.
8Having a presence in the initial phase allows a company to assess the field up front and propose a lower-cost development scheme. By rationalizing and simplifying the overall field layout, costs can be reduced by up to 25% to 30%.
Click on Details for more. Details
8The pinch is being felt more in the E&P sector particularly in the deepwater and mature developments where the cost of delivering oil and gas is high.
8What has changed is the emergence of a greater sense of urgency.
8New thinking has now begin to grow on how to survive the current crisis.
8A paper here discusses new ways to reduce the expense of subsea developments and gain efficiencies across the life of a field in India.
8For example, it makes a great deal of economic and operational sense for service companies to be involved at the earliest possible stage in the development of a field. This is when the ability to influence cost is at its greatest.
8Having a presence in the initial phase allows a company to assess the field up front and propose a lower-cost development scheme. By rationalizing and simplifying the overall field layout, costs can be reduced by up to 25% to 30%.
Click on Details for more. Details
IOC is planning to convert its 13.7 MMTPA refinery in Gujarat into producing 100% BS-IV quality compliant petrol (MS) and diesel (HSD)
8This will require the revamping of its existing Diesel Hydro-treater Unit (DHDT), Diesel Hydro-desulphurization Unit (DHDS), Vacuum Gas oil Hydro-Treater Unit (VGO-HDT) and Hydrogen Generation Unit-III (HGU-III) units at Koyali, Gujarat.
8Gujarat refinery is the second largest oil refinery owned by IOC after the Panipat refinery.
8The present crude basket of the refineyr comprises of 58% high sulphur crude (7.9 MMTPA) and 42% low sulphur indigenous crude (5.8 MMTPA). In addition to EUROIII/EURO-IV fuel products, the refinery also has the capability to produce a wide range of specialty products such as benzene, toluene, MTBE, MTO, Food Grade Hexane and LAB.
8No additional land will be required for BS-IV project as there are no new units involved and only the revamp of some units is proposed in this project
8At present, company is at the stage of preparing EIA and Risk Assessment reports required for environment clearance. Details
8This will require the revamping of its existing Diesel Hydro-treater Unit (DHDT), Diesel Hydro-desulphurization Unit (DHDS), Vacuum Gas oil Hydro-Treater Unit (VGO-HDT) and Hydrogen Generation Unit-III (HGU-III) units at Koyali, Gujarat.
8Gujarat refinery is the second largest oil refinery owned by IOC after the Panipat refinery.
8The present crude basket of the refineyr comprises of 58% high sulphur crude (7.9 MMTPA) and 42% low sulphur indigenous crude (5.8 MMTPA). In addition to EUROIII/EURO-IV fuel products, the refinery also has the capability to produce a wide range of specialty products such as benzene, toluene, MTBE, MTO, Food Grade Hexane and LAB.
8No additional land will be required for BS-IV project as there are no new units involved and only the revamp of some units is proposed in this project
8At present, company is at the stage of preparing EIA and Risk Assessment reports required for environment clearance. Details
8Loss in contact with L&T for South Heera Process Complex (SHPC): The CAG highlighted avoidable expenditure due to change in scope of work after the award of contract to Larsen & Tubro and interface problems in the revamping of the South Heera Process Complex that led to delay in completion of the project and avoidable expenditure of Rs 32.29 crore. Also, interface issues not visualized by the company for execution of reconstructionof another oil complex (viz. NQPC) led to delays and avoidable expenditure of Rs 55.30 crore.
8Extra expenditure on retendering: The company awarded a tender for two projects – Redevelopment of Heera and South Heera Phase II and Advancement of development of phase III of C-series cluster fields -- to the lowest bidder. But on representation by a technically disqualified bidder, negotiations were held with the L-1 bidder for renegotiation of the contract. On refusal by the bidder to agree to the terms of the negotiation, the work was re-tendered resulting in additional expenditure of Rs 19.45 crore.
8Extra expenditure due to non-availing of concessional customs duty: The company, though eligible, failed to include a clause in the tender for procurement of capital goods in September 2004, for availing concessional customs duty under the EPCG Scheme which resulted in an extra expenditure of Rs 7.41 crore.
8Avoidable payment of rental due to abnormal delay in restoration and surrender of abandoned drill sites and approach roads: ONGC delayed restoration and surrender of land to land owners on time in respect of 125 drill sites and attendant approach roads that had been abandoned between February 2008 and December 2013 which resulted in avoidable payment of Rs 6 crore towards rental to the land owners.
Click on our Reports section to download the report. Details
8Extra expenditure on retendering: The company awarded a tender for two projects – Redevelopment of Heera and South Heera Phase II and Advancement of development of phase III of C-series cluster fields -- to the lowest bidder. But on representation by a technically disqualified bidder, negotiations were held with the L-1 bidder for renegotiation of the contract. On refusal by the bidder to agree to the terms of the negotiation, the work was re-tendered resulting in additional expenditure of Rs 19.45 crore.
8Extra expenditure due to non-availing of concessional customs duty: The company, though eligible, failed to include a clause in the tender for procurement of capital goods in September 2004, for availing concessional customs duty under the EPCG Scheme which resulted in an extra expenditure of Rs 7.41 crore.
8Avoidable payment of rental due to abnormal delay in restoration and surrender of abandoned drill sites and approach roads: ONGC delayed restoration and surrender of land to land owners on time in respect of 125 drill sites and attendant approach roads that had been abandoned between February 2008 and December 2013 which resulted in avoidable payment of Rs 6 crore towards rental to the land owners.
Click on our Reports section to download the report. Details
In a scanting indictment of contracting procedures followed by ONGC Petro Additions Ltd, the CAG said that the defective contracts that provided interest free advances to contractors and linking their recovery to progress of work in violation of CVC guidelines leading to loss of interest.
8The company entered into defective contracts with three contractors -- one involving a consortium of Linde and Samsung, another with a consortium of TecnimontSpA and Tecnimont ICB Private Limited, and yet another with BHEL -- and extended interest free advances during March 2009 to November 2011 and linked the recovery of these advances to the progress of the related project in violation of CVC guidelines instead of effecting the recovery in a time-based manner.
8This lead to a loss of interest to the tune of Rs 49.63 crore from February 2012 to October 2014. Besides this, the company was yet to recover such advances of amounting to Rs 144.20 crore from the contractors as on October 2014 sustaining further loss of interest.
8OIL India Ltd caused loss of Rs 105 crore: Meanwhile, loss of revenue on account of discounts allowed on sale of crude oil containing basic sediments and water content above the norm by Oil India Ltd lead to a loss of revenue of Rs 105.55 crore during 2008-09 to 2013-14.
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8The company entered into defective contracts with three contractors -- one involving a consortium of Linde and Samsung, another with a consortium of TecnimontSpA and Tecnimont ICB Private Limited, and yet another with BHEL -- and extended interest free advances during March 2009 to November 2011 and linked the recovery of these advances to the progress of the related project in violation of CVC guidelines instead of effecting the recovery in a time-based manner.
8This lead to a loss of interest to the tune of Rs 49.63 crore from February 2012 to October 2014. Besides this, the company was yet to recover such advances of amounting to Rs 144.20 crore from the contractors as on October 2014 sustaining further loss of interest.
8OIL India Ltd caused loss of Rs 105 crore: Meanwhile, loss of revenue on account of discounts allowed on sale of crude oil containing basic sediments and water content above the norm by Oil India Ltd lead to a loss of revenue of Rs 105.55 crore during 2008-09 to 2013-14.
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It is the job of the CAG to find lapses in contract procedures in public sector companies. In its latest report, the CAG has highlighted procedural abnormalities in a clutch of oil sector companies.
The following deviations were found by the government auditor in IOC`s contracts:
8Guwahati refinery: The company went ahead with the execution of Guwahati ATF pipeline project and procured the materials thereof without finalization of the commercial terms with OIL who was the owner of more than 50 per cent of the required land for laying the pipeline. Proper survey of the exact terrain of the land was also not conducted before planning of the project. All these led to abnormal increase in project cost and consequent abandonment of the project resulting in an idle investment of Rs 17.80 crore and loss of Rs 2.57 crore.
8Paradip refinery:
The failure to reschedule mechanical completion of tankage facilities for a refinery project in line with provisions in the BOOT contract with Indian Oiltanking Ltd resulted in an avoidable expenditure of Rs12.10 crore without deriving any benefit.
Deficient tender document coupled with the company’s failure to negotiate with the L1 bidder -- Basell Poliolefine Italia of Italy -- in view of the reduced rate of withholding tax led to avoidable expenditure. Tender documents of the Company were deficient because the bidders were asked to quote a price inclusive of tax and duties. Further, the IOC failed to negotiate with Basell to reduce the price in view of the downward revision of withholding tax rate which led to avoidable expenditure of Rs 9.56 crore.
8Barauni refinery:
IOC could not achieve the intended benefits from Flue Gas Cooler (FGC) in the refinery due to frequent failures, leading to excess consumption of fuel. Further the replacement of tubes alone of the FGC contrary to advice of BHEL at a cost of Rs 7.62 crore did not yield the desired results and has become wasteful as the company has decided to install a new FGC unit instead.
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The following deviations were found by the government auditor in IOC`s contracts:
8Guwahati refinery: The company went ahead with the execution of Guwahati ATF pipeline project and procured the materials thereof without finalization of the commercial terms with OIL who was the owner of more than 50 per cent of the required land for laying the pipeline. Proper survey of the exact terrain of the land was also not conducted before planning of the project. All these led to abnormal increase in project cost and consequent abandonment of the project resulting in an idle investment of Rs 17.80 crore and loss of Rs 2.57 crore.
8Paradip refinery:
The failure to reschedule mechanical completion of tankage facilities for a refinery project in line with provisions in the BOOT contract with Indian Oiltanking Ltd resulted in an avoidable expenditure of Rs12.10 crore without deriving any benefit.
Deficient tender document coupled with the company’s failure to negotiate with the L1 bidder -- Basell Poliolefine Italia of Italy -- in view of the reduced rate of withholding tax led to avoidable expenditure. Tender documents of the Company were deficient because the bidders were asked to quote a price inclusive of tax and duties. Further, the IOC failed to negotiate with Basell to reduce the price in view of the downward revision of withholding tax rate which led to avoidable expenditure of Rs 9.56 crore.
8Barauni refinery:
IOC could not achieve the intended benefits from Flue Gas Cooler (FGC) in the refinery due to frequent failures, leading to excess consumption of fuel. Further the replacement of tubes alone of the FGC contrary to advice of BHEL at a cost of Rs 7.62 crore did not yield the desired results and has become wasteful as the company has decided to install a new FGC unit instead.
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Cairn, the operator of the Rajasthan block (also known as RJ-ON-90/1), has submitted a proposal to the Petroleum & Natural Gas Regulatory Board (PNGRB) for establishing pipeline tie-in connectivity from its Raageshwari Deep Gas (RDG) Terminal at Gudamalani, Barmer (Rajasthan), to the Gujarat State Petronet’s (GSPL) Palanpur Terminal in Gujarat.
8As company needs to install a pipeline system to take the gas to the nearest grid, it has submitted the proposal to facilitate evacuation of natural gas from the RDG field, to be sold through the GSPL`s grid, around 200 km away at Palanpur in Gujarat.
8The gas produced from the RDG field would be gathered and treated at the proposed RDG terminal, from where it will be evacuated through a 24-inch pipeline to GSPL`s Gujarat gas grid.
8The cost of the 24-inch pipeline is expected to come roughly to around Rs 1,000 crore.
8Along with the pipeline, the company also plans to create a gas processing and export hub at the Raageshwari Gas Terminal (RGT) in line with the Mangala Process Terminal (MPT) for oil handling and processing.
8A final decision on the laying of the pipeline will be taken by the PNGRB. Details
8As company needs to install a pipeline system to take the gas to the nearest grid, it has submitted the proposal to facilitate evacuation of natural gas from the RDG field, to be sold through the GSPL`s grid, around 200 km away at Palanpur in Gujarat.
8The gas produced from the RDG field would be gathered and treated at the proposed RDG terminal, from where it will be evacuated through a 24-inch pipeline to GSPL`s Gujarat gas grid.
8The cost of the 24-inch pipeline is expected to come roughly to around Rs 1,000 crore.
8Along with the pipeline, the company also plans to create a gas processing and export hub at the Raageshwari Gas Terminal (RGT) in line with the Mangala Process Terminal (MPT) for oil handling and processing.
8A final decision on the laying of the pipeline will be taken by the PNGRB. Details
IOC is planning to shut down its Sulpher Recovery Unit (SRU-IV) in itsDiesel Hydro De-Sulphurisation (DHDS) for maintenance and inspection (M&I) during September-October 2015.
8DHDS unit is used for production of low Sulphur content (0.25% wt) High Speed Diesel (HSD) and the SRU-IV is designed to recover sulphur from the sour vapors originating from the Amine Regeneration (Unit 26) and Sour Water Stripper (Unit 29).
8The shutdown is expected to last for a period of around thirty days.
8During the shutdown, maintenance of reactors, vessels/column, heat exchangers, buffing of weld joints, hydro-testing and radiographic inspection of pipes and pipe fittings will be carried out.
8The scope of work during the shutdown also includes dismantling of carbon and alloy steel piping by hot working, cold cutting of carbon and alloy steel pipelines, wrapping and coating of vessels and underground pipelines, heat treatment of shop fabricated for already installed piping and static equipment for joints. Details
8DHDS unit is used for production of low Sulphur content (0.25% wt) High Speed Diesel (HSD) and the SRU-IV is designed to recover sulphur from the sour vapors originating from the Amine Regeneration (Unit 26) and Sour Water Stripper (Unit 29).
8The shutdown is expected to last for a period of around thirty days.
8During the shutdown, maintenance of reactors, vessels/column, heat exchangers, buffing of weld joints, hydro-testing and radiographic inspection of pipes and pipe fittings will be carried out.
8The scope of work during the shutdown also includes dismantling of carbon and alloy steel piping by hot working, cold cutting of carbon and alloy steel pipelines, wrapping and coating of vessels and underground pipelines, heat treatment of shop fabricated for already installed piping and static equipment for joints. Details
