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Sep 2015
The prediction is that there will be a dramatic change in the business model of energy companies, utilities, fuel suppliers and manufacturers of energy technologies.
8Decentralised energy generation for self-supply along with utility-scale solar, onshore and offshore wind farms in remote areas will have a profound impact on the way utilities operate as early as 2020.
8Since these energy sources require no fuel, it will challenge vertically integrated utilities.
8The current model is a relatively small number of large power plants owned and operated by utilities will be replaced by small but numerous distributed power plants.
8Ownership will shift away from centralised utilities towards more private investors, manufacturers of renewable energy technologies and EPC companies (engineering, procurement and construction).
8In turn, the value chain for power companies will shift towards project development, equipment manufacturing and operation and maintenance.
8Simply selling electricity to customers will play a smaller role; power companies of the future will deliver a total power plant and the required IT services to customers, not just electricity. They will therefore move towards becoming service providers for customers.
8The majority of power plants will also not require any fuel supply, so fuel production companies will lose their strategic importance.
8German utilities are a good example of future challenges. In 2014, RWE – one of Germany’s two biggest utilities along with Eon – posted a 45 percent drop in profits. Power prices are down, and the share of conventional electricity is also falling, so these firms sell less power at lower prices. At RWE, power sales fell by 7.5 percent in 2014 year over year, for instance. The result was 29 percent lower operating the profits from conventional power generation. The outlook is also dismal, with year-ahead prices dropping to the lowest level in a decade. RWE has responded partly by forming a partnership with EPC (Conergy) for significant investments in rooftop solar in Germany. Likewise, Eon is breaking up into two companies: one doing business with conventional energy, and the other with renewables and energy services.
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8Decentralised energy generation for self-supply along with utility-scale solar, onshore and offshore wind farms in remote areas will have a profound impact on the way utilities operate as early as 2020.
8Since these energy sources require no fuel, it will challenge vertically integrated utilities.
8The current model is a relatively small number of large power plants owned and operated by utilities will be replaced by small but numerous distributed power plants.
8Ownership will shift away from centralised utilities towards more private investors, manufacturers of renewable energy technologies and EPC companies (engineering, procurement and construction).
8In turn, the value chain for power companies will shift towards project development, equipment manufacturing and operation and maintenance.
8Simply selling electricity to customers will play a smaller role; power companies of the future will deliver a total power plant and the required IT services to customers, not just electricity. They will therefore move towards becoming service providers for customers.
8The majority of power plants will also not require any fuel supply, so fuel production companies will lose their strategic importance.
8German utilities are a good example of future challenges. In 2014, RWE – one of Germany’s two biggest utilities along with Eon – posted a 45 percent drop in profits. Power prices are down, and the share of conventional electricity is also falling, so these firms sell less power at lower prices. At RWE, power sales fell by 7.5 percent in 2014 year over year, for instance. The result was 29 percent lower operating the profits from conventional power generation. The outlook is also dismal, with year-ahead prices dropping to the lowest level in a decade. RWE has responded partly by forming a partnership with EPC (Conergy) for significant investments in rooftop solar in Germany. Likewise, Eon is breaking up into two companies: one doing business with conventional energy, and the other with renewables and energy services.
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Projections have shown that renewable energy cost will be near conventional power cost with a minor difference of around 0.2 cents per kwh until the year 2030.
8Due to increasing prices for conventional fuels, electricity generation costs will become economically favourable across all world regions starting in 2030
In some countries such as China and India, renewal energy will become cheaper than conventional power supply after 2020.
8A transitional phase to 100% renewable energy production, conventional natural gas, used in appropriately scaled cogeneration plants, will be valuable as a transition fuel, and can also drive cost-effective decentralisation of the energy infrastructure.
8With warmer summers, tri-generation – which incorporates heat-fired absorption chillers to deliver cooling capacity in addition to heat and power – will become a valuable means of achieving emissions reductions.
8Many revolutions will come with this, including near zero carbon buildings and distributed power generation that will connect to low-and medium-voltage power lines with an average transport distance from several hundred meters up to around 100 kilometres.
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8Due to increasing prices for conventional fuels, electricity generation costs will become economically favourable across all world regions starting in 2030
In some countries such as China and India, renewal energy will become cheaper than conventional power supply after 2020.
8A transitional phase to 100% renewable energy production, conventional natural gas, used in appropriately scaled cogeneration plants, will be valuable as a transition fuel, and can also drive cost-effective decentralisation of the energy infrastructure.
8With warmer summers, tri-generation – which incorporates heat-fired absorption chillers to deliver cooling capacity in addition to heat and power – will become a valuable means of achieving emissions reductions.
8Many revolutions will come with this, including near zero carbon buildings and distributed power generation that will connect to low-and medium-voltage power lines with an average transport distance from several hundred meters up to around 100 kilometres.
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In this context, the Indian government too may have to look at their plans of exploitation of oil and gas reserves, particularly if the 2050 100% renewal target is actually going to become a reality.
8What is more, oil and gas prices may never rise to higher levels if renewable energy supply continues to expand and this may make India's offshore gas assets permanently unviable.
8The American shale oil and gas revolution is likely to keep prices down, and that seems to be also coming in the way of eliciting higher prices for untapped reserves in the Indian basins..
8What is more, the new gas pricing formula in India is not helping at all.
8The current gas price is $5.1/mmbtu but is expected to slide to a mere $3.8/mmbtu when the revision comes up in September. lower than the benchmark $4.2 earlier.
8What is more reports are now claiming that this price will also be enforced for CBM gas where companies like RIL had been demanding that they be paid $12/mmbtu.
8In any case given that spot LNG prices are at $6.4 to $7/mmbtu, it is unlikely that the market will accept a $12 price.
8The dynamics are changing very very rapidly. In fact too rapidly for large companies like RIL or even BP to keep track of the situation on the ground.
8Competition is not coming only from shale oil and gas but also from the renewable segment.
8Planners within large companies will have to think strategically and quickly or lese their billion dollar assets will be nothing but pieces of useless paper.
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8What is more, oil and gas prices may never rise to higher levels if renewable energy supply continues to expand and this may make India's offshore gas assets permanently unviable.
8The American shale oil and gas revolution is likely to keep prices down, and that seems to be also coming in the way of eliciting higher prices for untapped reserves in the Indian basins..
8What is more, the new gas pricing formula in India is not helping at all.
8The current gas price is $5.1/mmbtu but is expected to slide to a mere $3.8/mmbtu when the revision comes up in September. lower than the benchmark $4.2 earlier.
8What is more reports are now claiming that this price will also be enforced for CBM gas where companies like RIL had been demanding that they be paid $12/mmbtu.
8In any case given that spot LNG prices are at $6.4 to $7/mmbtu, it is unlikely that the market will accept a $12 price.
8The dynamics are changing very very rapidly. In fact too rapidly for large companies like RIL or even BP to keep track of the situation on the ground.
8Competition is not coming only from shale oil and gas but also from the renewable segment.
8Planners within large companies will have to think strategically and quickly or lese their billion dollar assets will be nothing but pieces of useless paper.
Click on Reports for more Details
There is now a prediction that if renewal energy grows at such a fast rate then billions of dollars of investments in new oil and gas fields may actually become redundant.
8In fact the renewable energy offtake is actually being timed to phase out the use of oil roughly at the pace of the depletion rates of existing oil fields.
8The rapid pace of increase of renewal energy and its global impact has not been factored in by the oil and gas industry.
8Companies and governments are continuing to spend hundreds of billions of dollars to develop new oil production which the world cannot use. This not just because of climate change only but also on account of the fact that renewables are growing at a rapid pace.
8The financial community is waking up to the risks associated with not only investments in new production which may become ‘stranded assets’, but the risks to the value of the existing reserves carried by fossil fuel companies (and governments, for that matter).
8The Bank of Englandand others have started to assess the risk to the global economy from potentially wiping trillions of dollars’ worth of ‘unburnable carbon’ assets off the balance sheets of fossil fuel companies.
8Viewed in this context, environmentally and economically risky projects to develop new oil and gas fields in the Arctic, or in deep waters off brazil and in the Gulf of Mexico, are high stakes gambles risking not only our future but the stability of the global economy as well.
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8In fact the renewable energy offtake is actually being timed to phase out the use of oil roughly at the pace of the depletion rates of existing oil fields.
8The rapid pace of increase of renewal energy and its global impact has not been factored in by the oil and gas industry.
8Companies and governments are continuing to spend hundreds of billions of dollars to develop new oil production which the world cannot use. This not just because of climate change only but also on account of the fact that renewables are growing at a rapid pace.
8The financial community is waking up to the risks associated with not only investments in new production which may become ‘stranded assets’, but the risks to the value of the existing reserves carried by fossil fuel companies (and governments, for that matter).
8The Bank of Englandand others have started to assess the risk to the global economy from potentially wiping trillions of dollars’ worth of ‘unburnable carbon’ assets off the balance sheets of fossil fuel companies.
8Viewed in this context, environmentally and economically risky projects to develop new oil and gas fields in the Arctic, or in deep waters off brazil and in the Gulf of Mexico, are high stakes gambles risking not only our future but the stability of the global economy as well.
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With all the good news from the renewable power sector, the overall transition away from fossil and nuclear fuels to renewables is far too slow to combat dangerous climate change.
8During the past decade almost as much capacity of new coal power plants has been installed as renewables: 750,000 MW.
8Over 80% of the new capacity has been added in China, where not only wind and solar power lead their respective global markets, but also new coal. but there are the first positive signs that the increase in coal use is coming to an end in China.
8The amount of coal being burned by China has fallen for the first time this century in 2014, according to an analysis of official statistics. China’s booming coal in the last decade has been the major contributor to the fast-rising carbon emissions that drive climate change, making the first drop a significant moment.
8Phasing out nuclear and fossil fuels entirely is still a revolutionary idea and many energy experts are skeptical.
8However, more and more scientists, engineers and activists actively promote a 100% renewable energy vision.
8According to latest assessment reports, we have already used almost 2/3 of our carbon budget, if we are to have a reasonable chance of limiting global mean temperature rise to 2 degrees C.
8At the current and projected rate of consumption, this entire budget will be used by 2040.
8In fact now the pressure seems to be to move move rapidly towards a new form of energy supply – one that delivers 100% renewable energy by 2050.
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8During the past decade almost as much capacity of new coal power plants has been installed as renewables: 750,000 MW.
8Over 80% of the new capacity has been added in China, where not only wind and solar power lead their respective global markets, but also new coal. but there are the first positive signs that the increase in coal use is coming to an end in China.
8The amount of coal being burned by China has fallen for the first time this century in 2014, according to an analysis of official statistics. China’s booming coal in the last decade has been the major contributor to the fast-rising carbon emissions that drive climate change, making the first drop a significant moment.
8Phasing out nuclear and fossil fuels entirely is still a revolutionary idea and many energy experts are skeptical.
8However, more and more scientists, engineers and activists actively promote a 100% renewable energy vision.
8According to latest assessment reports, we have already used almost 2/3 of our carbon budget, if we are to have a reasonable chance of limiting global mean temperature rise to 2 degrees C.
8At the current and projected rate of consumption, this entire budget will be used by 2040.
8In fact now the pressure seems to be to move move rapidly towards a new form of energy supply – one that delivers 100% renewable energy by 2050.
Click on Reports for more Details
The dramatic changes on the renewal energy front has made existing models of utilities difficult to sustain and this may eventually hold true in India too.
8Already utilities in Europe and North America are facing the heat.
8In Germany, where the capacity of solar and wind power is equal to peak demand, utilities like RWE and EON are struggling. More and more customers generate their own power.
8The future business model for utilities will have to change from selling kilowatthours to selling energy services if they are to survive.
8The revolution is spreading with the price of solar photovoltaics dropping drastically.
8Between 2005 and the end of 2014 over 496,000 MW of new solar and wind power plants have been installed – equal to the total capacity of all coal and gas power plants in Europe!
8In addition 286,000 MW of hydro, biomass, concentrated solar and geothermal power plants have been installed, totaling 783,000 MW of new renewable power generation connected to the grid in the past decade – enough to supply the current electricity demand of India and Africa combined.
8Renewable power generation has become mainstream in recent years.
8Onshore wind is already the most economic power source for new capacity in a large and growing number of markets, while solar PV is likely to follow within the next 3 to 5 years.
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8Already utilities in Europe and North America are facing the heat.
8In Germany, where the capacity of solar and wind power is equal to peak demand, utilities like RWE and EON are struggling. More and more customers generate their own power.
8The future business model for utilities will have to change from selling kilowatthours to selling energy services if they are to survive.
8The revolution is spreading with the price of solar photovoltaics dropping drastically.
8Between 2005 and the end of 2014 over 496,000 MW of new solar and wind power plants have been installed – equal to the total capacity of all coal and gas power plants in Europe!
8In addition 286,000 MW of hydro, biomass, concentrated solar and geothermal power plants have been installed, totaling 783,000 MW of new renewable power generation connected to the grid in the past decade – enough to supply the current electricity demand of India and Africa combined.
8Renewable power generation has become mainstream in recent years.
8Onshore wind is already the most economic power source for new capacity in a large and growing number of markets, while solar PV is likely to follow within the next 3 to 5 years.
Click on Reports for more Details
In what is seen as a dramatic development and possibly a turnaround point, for the first time in 40 years, global CO2 emissions associated with energy consumption remained stable over the course of the year while the global economy grew.
8The landmark “decoupling” of economic and CO2 growth is due in large measure to China’s increased use of renewable resources, and efforts by countries in the OECD to promote renewable energy and energy efficiency.
8This is particularly encouraging in view of 2015 Paris Climate Conference later this year in Paris, where countries will announce or confirm actions to mitigate climate change, setting the stage for future investment in renewables and energy efficiency.
8This decoupling clearly signals that renewables have become a mainstream energy resource.
8The penetration and use of both variable and non-variable renewables are increasing, thereby contributing to diversification of the energy mix.
8As of early 2015, 164 countries have renewable energy targets in place.
8However, even with these successes, growth in renewables capacity as well as improvements in energy efficiency are below the rates necessary to achieve the Sustainable Energy for All (SE4All) goals of: doubling the level of renewable energy; doubling the global rate of improvement in energy efficiency; and providing universal energy access by 2030.
With the implementation of ambitious targets and innovative policies, renewables can continue to surpass expectations and create a clean, equitable energy future.
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8The landmark “decoupling” of economic and CO2 growth is due in large measure to China’s increased use of renewable resources, and efforts by countries in the OECD to promote renewable energy and energy efficiency.
8This is particularly encouraging in view of 2015 Paris Climate Conference later this year in Paris, where countries will announce or confirm actions to mitigate climate change, setting the stage for future investment in renewables and energy efficiency.
8This decoupling clearly signals that renewables have become a mainstream energy resource.
8The penetration and use of both variable and non-variable renewables are increasing, thereby contributing to diversification of the energy mix.
8As of early 2015, 164 countries have renewable energy targets in place.
8However, even with these successes, growth in renewables capacity as well as improvements in energy efficiency are below the rates necessary to achieve the Sustainable Energy for All (SE4All) goals of: doubling the level of renewable energy; doubling the global rate of improvement in energy efficiency; and providing universal energy access by 2030.
With the implementation of ambitious targets and innovative policies, renewables can continue to surpass expectations and create a clean, equitable energy future.
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Cairn India is looking for a support vessel for its acid campaign in the Ravva block.
8CIL is the operator of the offshore oil and gas field ocated off the east coast of India in the state of Andhra Pradesh.
8The vessel will be required to support bessel based Acid Stimulation Campaign at for an approximate period of 3 months during January-April 2016.
8Capability to provide PSV vessel built after May 1996 is of importance
8The PSV should have the capability of DP 2 , Min 3600 BHP engine, FiFi-1, deck space 350 m2 with SPS compliance and charterer’s accommodation for a minimum of 24 personnel.
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8CIL is the operator of the offshore oil and gas field ocated off the east coast of India in the state of Andhra Pradesh.
8The vessel will be required to support bessel based Acid Stimulation Campaign at for an approximate period of 3 months during January-April 2016.
8Capability to provide PSV vessel built after May 1996 is of importance
8The PSV should have the capability of DP 2 , Min 3600 BHP engine, FiFi-1, deck space 350 m2 with SPS compliance and charterer’s accommodation for a minimum of 24 personnel.
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Cairn India Ltd has put in a request for quotations for a patrol boat or requisite vessel services at its Ravva block.
8Cairn says that the essel shall be in compliance to Class requirements and be capable of certification for all its statutory requirements including the SOLAS, MARPOL & other IMO conventions as applicable.
8The Ravva field is located within the immediate environs of the coastline, which abounds with fishing activity.
8The fishing is done by a small fleet of motorized and non-motorized craft.
8Untended drift nets are a constant threat to propulsion systems and offshore structures.
8The vessel will be required for patrolling the Ravva field so as to be able to keep a constant watch over the offshore structures and ensure that no intrusion takes place and a safe distance is maintained from these structures.
8The general specifications of the vessel will be in compliance to DG Shipping's cricular. The maximum speed of the boat has been revised to a minimum of 20 knots by the administration. Click on Report for more details. Details
8Cairn says that the essel shall be in compliance to Class requirements and be capable of certification for all its statutory requirements including the SOLAS, MARPOL & other IMO conventions as applicable.
8The Ravva field is located within the immediate environs of the coastline, which abounds with fishing activity.
8The fishing is done by a small fleet of motorized and non-motorized craft.
8Untended drift nets are a constant threat to propulsion systems and offshore structures.
8The vessel will be required for patrolling the Ravva field so as to be able to keep a constant watch over the offshore structures and ensure that no intrusion takes place and a safe distance is maintained from these structures.
8The general specifications of the vessel will be in compliance to DG Shipping's cricular. The maximum speed of the boat has been revised to a minimum of 20 knots by the administration. Click on Report for more details. Details
The Americans know how to innovate but even that will have its limits.
8According data available with this website, well cost has come down between 16 to 18% over the past one year in two of the largest shell oil plays -- the Mercellus and Utica -- in the US.
8The cost of well for every 1000 feet of lateral drilling was $1.357 million in 2014 and this has come down to $1.144 million in 2015. Similarly, for Utica, the cost is down to $1.289 million from $ 1.571 million.
8But while some shale plays still show a very high return on investment even at current low prices, there is data to show that a large number of shale plays are at below breakeven point at current gas and crude prices.
8Even the most profitable shale plays in the US are now cutting down on investments and reducing the number of wells to be drilled.
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8According data available with this website, well cost has come down between 16 to 18% over the past one year in two of the largest shell oil plays -- the Mercellus and Utica -- in the US.
8The cost of well for every 1000 feet of lateral drilling was $1.357 million in 2014 and this has come down to $1.144 million in 2015. Similarly, for Utica, the cost is down to $1.289 million from $ 1.571 million.
8But while some shale plays still show a very high return on investment even at current low prices, there is data to show that a large number of shale plays are at below breakeven point at current gas and crude prices.
8Even the most profitable shale plays in the US are now cutting down on investments and reducing the number of wells to be drilled.
Click on our Reports section for more Details
During the month of August 2015, refinery capacity utilization exceeded the target by 107.66 % which was higher than what was achieved in the corresponding month of 2014 at 101.44%.
8The actual crude throughput for the month stood at 19611 TMT as against the total prorated installed capacity of 18216 TMT.
8Cumulatively too, capacity utilization at Indian refineries during April-August 2015, exceeded planned utilization with actual crude throughput standing at 94557 TMT as against the prorated installed capacity of 89905 TMT.
8The public sector maintained a prorated installed capacity of 10296 TMT during August, while the actual crude throughput came to 10170 TMT. Cumulatively, capacity utilization for April-August stood with actual crude throughput at 50938 TMT and prorated installed capacity at 50192 TMT.
8The private sector crude throughput was at 7757 TMT while its prorated installed capacity stood at 6776 TMT. Cumulatively, capacity utilization for April-August stood at 114.49%.
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8The actual crude throughput for the month stood at 19611 TMT as against the total prorated installed capacity of 18216 TMT.
8Cumulatively too, capacity utilization at Indian refineries during April-August 2015, exceeded planned utilization with actual crude throughput standing at 94557 TMT as against the prorated installed capacity of 89905 TMT.
8The public sector maintained a prorated installed capacity of 10296 TMT during August, while the actual crude throughput came to 10170 TMT. Cumulatively, capacity utilization for April-August stood with actual crude throughput at 50938 TMT and prorated installed capacity at 50192 TMT.
8The private sector crude throughput was at 7757 TMT while its prorated installed capacity stood at 6776 TMT. Cumulatively, capacity utilization for April-August stood at 114.49%.
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Indian refineries registered a crude throughput of 19611.742 TMT during the month, which is 6.04% higher than the target of 18495 TMT. Cumulatively, in April-August, these refineries processed 94557 TMT of crude, which is higher than the target of 91932.89 TMT.
8Despite the overall rise in crude throughput, IOC's Mathura , IOC's Gujrat, IOC's Baruni, and RIL SEZ performed at less than expected levels.
8In IOC's Guwahati refinery, the crude throughput was on account of restrictions in the crude transport line. In Panipat refinery, throughput was restricted due to a planded OHCU shutdown.
8The website also carries a review of refinery production (in terms of crude throughput) for the month of August 2015 as well as for the April-August 2015 period. Data on the corresponding periods in the previous fiscal (2014-15) is also carried here to aid comparison.
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8Despite the overall rise in crude throughput, IOC's Mathura , IOC's Gujrat, IOC's Baruni, and RIL SEZ performed at less than expected levels.
8In IOC's Guwahati refinery, the crude throughput was on account of restrictions in the crude transport line. In Panipat refinery, throughput was restricted due to a planded OHCU shutdown.
8The website also carries a review of refinery production (in terms of crude throughput) for the month of August 2015 as well as for the April-August 2015 period. Data on the corresponding periods in the previous fiscal (2014-15) is also carried here to aid comparison.
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Crude oil production during August 2015 was 3193.067 TMT, representing a huge 1.44 % increase from the planned monthly target of 3148 TMT. The production during the month was 5.57% higher than the figure of 3024 TMT in August last year.
8The cumulative production during April-August 2015 was 15638.31 TMT, which was higher than the target by 1.72%. The targeted production for the cumulative period was 15368 TMT. Comparative production during the period reveals a 0.52 % increases over the 15557 TMT produced in the corresponding period of the last fiscal (2014-15).
8ONGC`s total crude oil production was lower by 0.26% than its monthly target aggregating to TMT, 1929.293 as against the planned 1934 TMT due to the closure of a few high GOR wells and less than planned production from Mumbai High. . The cumulative production for the April-August period was also less than its target with the company producing 9384.609 TMT of crude as against the targeted 9430 TMT.
8Oil India Limited (OIL) produced 276 TMT of crude during the month, which is behind its planned production (302 TMT) by 8.7%. During April-August, the company produced 1388 TMT, which was behind its target of 1470 TMT. Production was affected by the net realization from old wells is 97 % of planned target. The gap is mainly due to bandhs, blockades and flood because of continuous rainfall.
8Private/JV companies' production was higher by 8.42% in August 2015, at 987.12TMT as against the targeted 911 TMT. Production over the April-August period stood at 4866 TMT as against the target of 4468 TMT. Output had been higher still but for the underperformance of the MA wells in the D-6 block and a few on land wells due to sand ingress in existing producers of Kharsang field in Arunachal Pradesh
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8The cumulative production during April-August 2015 was 15638.31 TMT, which was higher than the target by 1.72%. The targeted production for the cumulative period was 15368 TMT. Comparative production during the period reveals a 0.52 % increases over the 15557 TMT produced in the corresponding period of the last fiscal (2014-15).
8ONGC`s total crude oil production was lower by 0.26% than its monthly target aggregating to TMT, 1929.293 as against the planned 1934 TMT due to the closure of a few high GOR wells and less than planned production from Mumbai High. . The cumulative production for the April-August period was also less than its target with the company producing 9384.609 TMT of crude as against the targeted 9430 TMT.
8Oil India Limited (OIL) produced 276 TMT of crude during the month, which is behind its planned production (302 TMT) by 8.7%. During April-August, the company produced 1388 TMT, which was behind its target of 1470 TMT. Production was affected by the net realization from old wells is 97 % of planned target. The gap is mainly due to bandhs, blockades and flood because of continuous rainfall.
8Private/JV companies' production was higher by 8.42% in August 2015, at 987.12TMT as against the targeted 911 TMT. Production over the April-August period stood at 4866 TMT as against the target of 4468 TMT. Output had been higher still but for the underperformance of the MA wells in the D-6 block and a few on land wells due to sand ingress in existing producers of Kharsang field in Arunachal Pradesh
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Natural gas production across the industry during August 2015 stood at 2836.48 MMSCM , representing a 7.15% shortfall over the planned monthly target of 3055 MMSCM.
8The production during the month was 3.66 % higher than the figure of 2376 MMSCM in August last year. The cumulative production during April-August 2015 was 13698.912 MMSCM, which fell short of the the target by 5.37%.
8During the month, ONGC`s gas production stood at 1856 MMSCM, which was below the monthly target of 2064 MMSCM. The company registered a shortfall in its Rajasthan (83.47%), Assam (11.62%), Tripura (15.31%) , Andhra (39%) and Tamil Nadu (16%) fields while its Gujarat offshore fields outperformed their respective targets by 10.74% . The production was down due to delay in commencement of production from one deep water well planned in Eastern offshore and restricted withdrawal by GAIL in view of pipeline safety issues. 8Closure of wells due to unplanned shut down of GAIL Gas line from Ahmedabad/Kalol to Ramol. Decline in associated gas production in South Kadi, Limbodara&Gamij fields.
8OIL's gas production was behind its target by 9.67% at 242.65 MMSCM during the month as against the planned 269 MMSCM. A lower than planned production is due to Production affected due to less gas withdrawal by the potential customers like BVFCL, NTPS, LTPS, BCPL and RRVUNL.
8Private/JV firms also registered increase in production by 2.22%, with total production from these companies coming to 737.88 MMSCM as against 722 MMSCM target set for August 2015. Production was affected due to Underperformance of MA wells. Prolonged dewatering in new wells in Raniganj South and Forest Clearance received late in Raniganj East.
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8The production during the month was 3.66 % higher than the figure of 2376 MMSCM in August last year. The cumulative production during April-August 2015 was 13698.912 MMSCM, which fell short of the the target by 5.37%.
8During the month, ONGC`s gas production stood at 1856 MMSCM, which was below the monthly target of 2064 MMSCM. The company registered a shortfall in its Rajasthan (83.47%), Assam (11.62%), Tripura (15.31%) , Andhra (39%) and Tamil Nadu (16%) fields while its Gujarat offshore fields outperformed their respective targets by 10.74% . The production was down due to delay in commencement of production from one deep water well planned in Eastern offshore and restricted withdrawal by GAIL in view of pipeline safety issues. 8Closure of wells due to unplanned shut down of GAIL Gas line from Ahmedabad/Kalol to Ramol. Decline in associated gas production in South Kadi, Limbodara&Gamij fields.
8OIL's gas production was behind its target by 9.67% at 242.65 MMSCM during the month as against the planned 269 MMSCM. A lower than planned production is due to Production affected due to less gas withdrawal by the potential customers like BVFCL, NTPS, LTPS, BCPL and RRVUNL.
8Private/JV firms also registered increase in production by 2.22%, with total production from these companies coming to 737.88 MMSCM as against 722 MMSCM target set for August 2015. Production was affected due to Underperformance of MA wells. Prolonged dewatering in new wells in Raniganj South and Forest Clearance received late in Raniganj East.
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The deregulation of diesel and petrol prices have allowed as many the private sector to reopen and also set up as many as 3000 retail outlets across the country.
8The competition is likely to become more intensive as the public sector plans to retain its monopoly.
8The PSUs among themselves have 58,800 outlets.
8But an estimated 32,000 more retail outlets are needed over the next 10 years to cater to growing demand.
8Given that competition is growing, the focus has shifted to higher levels of customer service standards and enhanced customer value proposition through retail automation, automated billing, soft payment options through credit-debit card facility, loyalty programs and branded fuels
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8The competition is likely to become more intensive as the public sector plans to retain its monopoly.
8The PSUs among themselves have 58,800 outlets.
8But an estimated 32,000 more retail outlets are needed over the next 10 years to cater to growing demand.
8Given that competition is growing, the focus has shifted to higher levels of customer service standards and enhanced customer value proposition through retail automation, automated billing, soft payment options through credit-debit card facility, loyalty programs and branded fuels
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8For the processing activity at Digboi refinery, following quantitative and quality requirement are proposed to be achieved:-
-- Recovered oil out of potential oil in feed sludge: 80.0% (Min.) to 85% (max.)
-- Water content in recovered oil ex sludge : 1.0 % Vol (Max.)
-- BS & W content in recovered oil ex sludge : 4.0 % WT (Max.)
-- Oil content in waste water ex Sludge : 100 ppm (Max)
-- Oil content in separated solid waste after : 10.0 % Wt (max)
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-- Recovered oil out of potential oil in feed sludge: 80.0% (Min.) to 85% (max.)
-- Water content in recovered oil ex sludge : 1.0 % Vol (Max.)
-- BS & W content in recovered oil ex sludge : 4.0 % WT (Max.)
-- Oil content in waste water ex Sludge : 100 ppm (Max)
-- Oil content in separated solid waste after : 10.0 % Wt (max)
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Forecast global LPG demand growth of 800 MBbl/d to 1 MMBbl/d by 2020 to be driven by petrochem projects in Asia and Middle East as well as residential, ommercial, alkylate and power generation demand
8Naphtha cracker conversion to LPG another potential demand driver that has not yet been factored into analyst estimates, adding about 1 MMBbl/d.
8Projects for extraction of C3 from LPG are coming up in large numbers in the China, Korea and US
8The market is growing at a CAGR of a rapid 9%
8Bulk of the additional supply is to come from the US.
8The demand is going to grow mainly in China, India and Saudi Arabia.
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8Naphtha cracker conversion to LPG another potential demand driver that has not yet been factored into analyst estimates, adding about 1 MMBbl/d.
8Projects for extraction of C3 from LPG are coming up in large numbers in the China, Korea and US
8The market is growing at a CAGR of a rapid 9%
8Bulk of the additional supply is to come from the US.
8The demand is going to grow mainly in China, India and Saudi Arabia.
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Going ahead with the project, BPCL currently plans to carry out the detailed feasibility study of the project.
8All the concerned pipeline specifications and technical details will be collected during the subsequent stages during the preparation of the report.
8The size and capacity of the proposed pipeline will be evaluated and finalized during the pre feasibility study.
8The detailed feasibility report is required to be prepared for the product pipeline which will include pumping facilities, main pipeline, tap-off points & piping manifold, receiving facilities excluding tankage.
8Presently there is a pumping station inside BPCL and HPCL refineries for pumping petroleum products.
8The suitability of these pumps for pumping shall be studied which shall include the necessary costs towards piping modification.
8The detailed cost estimate will also be prepared for both capital and operating cost for the project with an accuracy of +/- 10%.
8The completion time for preparing draft DFRs will be as under:
-- Two months for the pipelines
-- Another two months for the covering the seven receiving stations at Sewree Wasal complex.
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8All the concerned pipeline specifications and technical details will be collected during the subsequent stages during the preparation of the report.
8The size and capacity of the proposed pipeline will be evaluated and finalized during the pre feasibility study.
8The detailed feasibility report is required to be prepared for the product pipeline which will include pumping facilities, main pipeline, tap-off points & piping manifold, receiving facilities excluding tankage.
8Presently there is a pumping station inside BPCL and HPCL refineries for pumping petroleum products.
8The suitability of these pumps for pumping shall be studied which shall include the necessary costs towards piping modification.
8The detailed cost estimate will also be prepared for both capital and operating cost for the project with an accuracy of +/- 10%.
8The completion time for preparing draft DFRs will be as under:
-- Two months for the pipelines
-- Another two months for the covering the seven receiving stations at Sewree Wasal complex.
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Bharat Petroleum Corporation Limited ( BPCL) has chalked out a plan to lay a crosscountry pipeline from the Pirpau jetty to the Sewree Wadla complex, Mumbai.
8Currently, BPCL and other oil marketing companies receive petroleum products form the refineries through the dedicated pipelines already laid by Mumbai Port Trust (MbPT).
8This will come as a replacement of existing dormant above ground 14” pipeline which was being used for motor spirit, and it will be laid in the corridor of the existing petroleum product pipelines.
8The pipeline will supply the product from the tap-off points to all its seven OMCs being operated at Sewree - Wadala Complex.
8This pipeline can also be used for all products depending upon the study being conducted.
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8Currently, BPCL and other oil marketing companies receive petroleum products form the refineries through the dedicated pipelines already laid by Mumbai Port Trust (MbPT).
8This will come as a replacement of existing dormant above ground 14” pipeline which was being used for motor spirit, and it will be laid in the corridor of the existing petroleum product pipelines.
8The pipeline will supply the product from the tap-off points to all its seven OMCs being operated at Sewree - Wadala Complex.
8This pipeline can also be used for all products depending upon the study being conducted.
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The fall in crude oil prices and the attendant turmoil in attendant markets have sent the global oil and gas vessel and carrier related businesses into a tizzy.
8The performance of Garware Shipping his an example in this context shows resilience and tenacity.
8Garware has been able to place quite a few of its vessels on long term contracts but getting such conracts is now getting more and more difficult.
8Garware is of the view that certain markets such as India will continue their exploration activities unabated.
8Seeing the increasing energy demands of the Indian subcontinent, appetite for more carriers will only increase with time.
The fall back for shipping companies that have global ambitions is to come back to the domestic market as the carrier market goes into a tumble globally.
8uThe comnpany hgas been able to get a fixed three year contaract for some of it vessels.
8Hence, with two of the company’s vessels on contract with ONGC, and another 3 vessels working with other “India” based E&P companies, Garware's business is helped and protected by its Indian rather than its international footprint.
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8The performance of Garware Shipping his an example in this context shows resilience and tenacity.
8Garware has been able to place quite a few of its vessels on long term contracts but getting such conracts is now getting more and more difficult.
8Garware is of the view that certain markets such as India will continue their exploration activities unabated.
8Seeing the increasing energy demands of the Indian subcontinent, appetite for more carriers will only increase with time.
The fall back for shipping companies that have global ambitions is to come back to the domestic market as the carrier market goes into a tumble globally.
8uThe comnpany hgas been able to get a fixed three year contaract for some of it vessels.
8Hence, with two of the company’s vessels on contract with ONGC, and another 3 vessels working with other “India” based E&P companies, Garware's business is helped and protected by its Indian rather than its international footprint.
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While US crude and gas production scale new heights, there is a possibility of some of the oil companies falling into a debt trap.
8The results from the second-quarter 2015 financial statements suggest that a number of U.S. companies with onshore oil operations are facing a continued financial strain.
8According to recent estimates, low oil prices have significantly reduced cash flow for U.S. oil producers, and to adjust to lower cash flows, companies have reduced capital expenditures and raised more cash from debt and equity.
8Hence, the large amount of debt accumulated from past years is causing a higher percentage of operating cash flow being devoted to servicing debt.
8Some companies have been able to refinance their debt—that is, paying off old debt and taking on new debt, perhaps with a different interest rate or longer maturity.
8This option has increasingly become more expensive, because interest rates for energy company debt issuance have risen as crude oil prices declined, and rates are now higher than for any other business sector.
8With a fixed debt repayments and the large reduction in cash from operations for these companies, the ratio of debt repayments to operating cash flow has increased recently.
8For the previous four quarters from July 1, 2014 to June 30, 2015, 83% of these companies' operating cash was being devoted to debt repayments, the highest since at least 2012.
8As the share of debt repayment to operating cash flow increases, a company is left with less cash to use for investment opportunities, dividends, or savings for future use.
8The reports indicates that with the next month's round of redeterminations—which considers the valuation of companies' reserves as collateral—some companies may face challenges in raising enough cash to maintain capital expenditures and meet liabilities.
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8The results from the second-quarter 2015 financial statements suggest that a number of U.S. companies with onshore oil operations are facing a continued financial strain.
8According to recent estimates, low oil prices have significantly reduced cash flow for U.S. oil producers, and to adjust to lower cash flows, companies have reduced capital expenditures and raised more cash from debt and equity.
8Hence, the large amount of debt accumulated from past years is causing a higher percentage of operating cash flow being devoted to servicing debt.
8Some companies have been able to refinance their debt—that is, paying off old debt and taking on new debt, perhaps with a different interest rate or longer maturity.
8This option has increasingly become more expensive, because interest rates for energy company debt issuance have risen as crude oil prices declined, and rates are now higher than for any other business sector.
8With a fixed debt repayments and the large reduction in cash from operations for these companies, the ratio of debt repayments to operating cash flow has increased recently.
8For the previous four quarters from July 1, 2014 to June 30, 2015, 83% of these companies' operating cash was being devoted to debt repayments, the highest since at least 2012.
8As the share of debt repayment to operating cash flow increases, a company is left with less cash to use for investment opportunities, dividends, or savings for future use.
8The reports indicates that with the next month's round of redeterminations—which considers the valuation of companies' reserves as collateral—some companies may face challenges in raising enough cash to maintain capital expenditures and meet liabilities.
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GAIL is planning to lay branch networks from its existing Dabhol-Bangalore and Kochi-Kootnaad-Bangalore-Mangalore pipelines
8This is being done to target some identified consumers in the states of Tamilnadu, Karnataka and Kerala.
8Subsequently, GAIL is inviting consultants to conduct the following surveys related to the branching:
-- Reconnaissance survey
-- Detailed route survey
-- Cadastral survey
8The surveys are fine but the problem is that GAIL's pipeline out of the South are stuck due to active opposition from state governments and local farmers. The basic issues have to addressed first before pipeline expansions can work.
8GAIL had earlier brazen it out with landowners in its quest to acquire ROUs for laying gas pipelines but the effort has been stalled in South India because of spirited opposition by farmers.
8The result is that the Kochi LNG terminal is gross under utilized because of lack of adequate evacuation network.
8While GAIL is now willing to pay adequate compensation, the damage has been done on account of the long stalemate.
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8This is being done to target some identified consumers in the states of Tamilnadu, Karnataka and Kerala.
8Subsequently, GAIL is inviting consultants to conduct the following surveys related to the branching:
-- Reconnaissance survey
-- Detailed route survey
-- Cadastral survey
8The surveys are fine but the problem is that GAIL's pipeline out of the South are stuck due to active opposition from state governments and local farmers. The basic issues have to addressed first before pipeline expansions can work.
8GAIL had earlier brazen it out with landowners in its quest to acquire ROUs for laying gas pipelines but the effort has been stalled in South India because of spirited opposition by farmers.
8The result is that the Kochi LNG terminal is gross under utilized because of lack of adequate evacuation network.
8While GAIL is now willing to pay adequate compensation, the damage has been done on account of the long stalemate.
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IOCL is planning to conduct an oil recovery project from sludge at Digboi refinery in Assam.
8The oily sludge is mainly generated in the refinery during the cleaning of API separators, storage tanks, ETP basin aong others.
8The average oil content present in the oily sludge generated from these sources varies up to 60% by weight, hence it proposes to process the sludge available in the refinery.
8The very purpose is to recover maximum amount of oil from oily sludge and to generate minimum quantity of residual sludge which will be processed by bio remediation inside the refinery premises for final disposal.
8Under this contract, of 13000 m3 of oily sludge having average oil content up to 60% by weight will be processed for 80% recovery of oil.
8The time period of completion of the contract will be 24 months from the date of issue of letter of acceptance.
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8The oily sludge is mainly generated in the refinery during the cleaning of API separators, storage tanks, ETP basin aong others.
8The average oil content present in the oily sludge generated from these sources varies up to 60% by weight, hence it proposes to process the sludge available in the refinery.
8The very purpose is to recover maximum amount of oil from oily sludge and to generate minimum quantity of residual sludge which will be processed by bio remediation inside the refinery premises for final disposal.
8Under this contract, of 13000 m3 of oily sludge having average oil content up to 60% by weight will be processed for 80% recovery of oil.
8The time period of completion of the contract will be 24 months from the date of issue of letter of acceptance.
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ONGC has made considerable progress during the first phase of the exploration activity.
8In 2011, clearance was obtained for 4 locations.
8Details of three wells is as follows:
-- Well Pandanallur-6 (PN-6) was drilled to a depth of 3226m and terminated, it gave indications of oil.
-- Well Pandanallur-7(PN-7) was drilled to a depth of 4115m and terminated in basement and it is a gas well.
-- Well pandanallur-8(PN-8) was drilled to a depth of 2982m and was completed in basement, it indicated oil and gas.
-- Work on the fourth well is in progress.
8Based on the analysis, it was confirmed that the discovery is of potential commercial interest and merits appraisal, therefore the consortium has applied for entering into exploration Phase-II.
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8In 2011, clearance was obtained for 4 locations.
8Details of three wells is as follows:
-- Well Pandanallur-6 (PN-6) was drilled to a depth of 3226m and terminated, it gave indications of oil.
-- Well Pandanallur-7(PN-7) was drilled to a depth of 4115m and terminated in basement and it is a gas well.
-- Well pandanallur-8(PN-8) was drilled to a depth of 2982m and was completed in basement, it indicated oil and gas.
-- Work on the fourth well is in progress.
8Based on the analysis, it was confirmed that the discovery is of potential commercial interest and merits appraisal, therefore the consortium has applied for entering into exploration Phase-II.
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BPCL is doing a wholesale audit of its LPG bottling plants, starting with its plant at Barelly, to bring down power consumption. .
The scope of jobs will include the following:
8To conduct comparative study of design parameters and the present load requirement of the following electrical equipments.
--Transformer
--Circuit Breakers
--Bus bars
--Electrical equipments in hazardous and non hazardous area.
8Calculation of load factors and method to reduce the maximum demand.
8Energy saving methods for minimization of power consumption.
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The scope of jobs will include the following:
8To conduct comparative study of design parameters and the present load requirement of the following electrical equipments.
--Transformer
--Circuit Breakers
--Bus bars
--Electrical equipments in hazardous and non hazardous area.
8Calculation of load factors and method to reduce the maximum demand.
8Energy saving methods for minimization of power consumption.
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Oil and Natural Gas Corporation Ltd (ONGC) will soon start further exploration activity in its CY-ONN-2004/2 block, cost pegged at Rs 200 crore.
8The project involves exploratory drilling of 10 appraisal wells with all locations covering an area of 140 sq.km in Udaiyarpalayam and Sendurai taluks of the Ariyalur district in Tami Nadu.
8The objective of these proposed wells is to test the Basement, Andimadam and Bhuvanagiri formations.
8This block was awarded to ONGC (80%) and BPCL (20%) with ONGC as the operator under the NELP VI round in the year 2008.
8The Production Sharing Contract (PSC) between ONGC and BPCL was signed on 02.03.2007.
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8The project involves exploratory drilling of 10 appraisal wells with all locations covering an area of 140 sq.km in Udaiyarpalayam and Sendurai taluks of the Ariyalur district in Tami Nadu.
8The objective of these proposed wells is to test the Basement, Andimadam and Bhuvanagiri formations.
8This block was awarded to ONGC (80%) and BPCL (20%) with ONGC as the operator under the NELP VI round in the year 2008.
8The Production Sharing Contract (PSC) between ONGC and BPCL was signed on 02.03.2007.
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The target depth of these wells will be between 3000-4500 meter/ basement.
8The drilling rig used in the block will be electrically operated.
8Only the water based drilling mud will be used for drilling appraisal wells.
8For the proposed project 4 to 5 acres of land will be acquired for each well.
8Drilling will continue for about 60-75 days for each well in the block.
8The power requirement of the drilling rig will be met by using the six DG sets.
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8The drilling rig used in the block will be electrically operated.
8Only the water based drilling mud will be used for drilling appraisal wells.
8For the proposed project 4 to 5 acres of land will be acquired for each well.
8Drilling will continue for about 60-75 days for each well in the block.
8The power requirement of the drilling rig will be met by using the six DG sets.
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GE Oil & Gas introduced its most efficient aero derivative gas turbine , the LM6000-PF+, to the oil and gas industry.
8The newly upgraded turbine has enhanced efficiency, excellent reliability and fuel flexibility in both power generation and mechanical-drive applications, whether installed onshore or offshore.
8LM6000 PF+’s compact size and weight make it ideal for FLNG and FPSO, offering faster installation and commissioning.
8The LM6000-PF+ aero derivative gas turbine is the product of GE’s cross-sector technology.
8The modularized design and advanced composite materials were keys to reduce overall package weight and size, while enhancing operability and maintenance performance - vital for offshore installations. It will cut installation time by 30 %.
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8The newly upgraded turbine has enhanced efficiency, excellent reliability and fuel flexibility in both power generation and mechanical-drive applications, whether installed onshore or offshore.
8LM6000 PF+’s compact size and weight make it ideal for FLNG and FPSO, offering faster installation and commissioning.
8The LM6000-PF+ aero derivative gas turbine is the product of GE’s cross-sector technology.
8The modularized design and advanced composite materials were keys to reduce overall package weight and size, while enhancing operability and maintenance performance - vital for offshore installations. It will cut installation time by 30 %.
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The government of India announced the revival of an additional 5 partly stranded gas based power generation plants with an installed capacity of 3,455.64 MW.
8The plants had already bid through a transparent and competitive reverse e-auction process.
8These plants would generate 1.43 billion units of electricity which will be supplied at or below Rs 3.39 per unit to the purchaser Discoms during the period from 1st Oct 2015 to 31st Mar 2016.
8The project will involve government support of Rs. 278.38 crore from the Power System Development Fund.
8Eleven plants with a cumulative installed capacity of 5,858.67 MW had participated in the Technical bid round and were declared as technically qualified.
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8The plants had already bid through a transparent and competitive reverse e-auction process.
8These plants would generate 1.43 billion units of electricity which will be supplied at or below Rs 3.39 per unit to the purchaser Discoms during the period from 1st Oct 2015 to 31st Mar 2016.
8The project will involve government support of Rs. 278.38 crore from the Power System Development Fund.
8Eleven plants with a cumulative installed capacity of 5,858.67 MW had participated in the Technical bid round and were declared as technically qualified.
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Technology is playing a vital role in raising diesel demand. The re-launching of petrol car models in their diesel formats has now become a common trend
8Diesel cars provide better fuel economy than petrol cars and also improved performance.
8Diesel based engines have an inherent efficiency advantage over petrol cars because the compression-ignition combustion process helps make them about 45% efficient in converting fuel energy to mechanical energy.
8The calorific value of diesel fuel is roughly 43 mega joules per kilogram (MJ/kg) and it is lower than that of petrol
8Diesel fuel is denser than petrol and contains about 11% more energy by volume.
8Following parameters are influencing demand for petrol and diesel in the market:
--Carbon and CO2 reduction policies
--Emissions standards
--Taxation issues
--Congestion zones and low emission zones
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8Diesel cars provide better fuel economy than petrol cars and also improved performance.
8Diesel based engines have an inherent efficiency advantage over petrol cars because the compression-ignition combustion process helps make them about 45% efficient in converting fuel energy to mechanical energy.
8The calorific value of diesel fuel is roughly 43 mega joules per kilogram (MJ/kg) and it is lower than that of petrol
8Diesel fuel is denser than petrol and contains about 11% more energy by volume.
8Following parameters are influencing demand for petrol and diesel in the market:
--Carbon and CO2 reduction policies
--Emissions standards
--Taxation issues
--Congestion zones and low emission zones
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Technology is playing a vital role in raising diesel demand. The re-launching of petrol car models in their diesel formats has now become a common trend
8Diesel cars provide better fuel economy than petrol cars and also improved performance.
8Diesel based engines have an inherent efficiency advantage over petrol cars because the compression-ignition combustion process helps make them about 45% efficient in converting fuel energy to mechanical energy.
8The calorific value of diesel fuel is roughly 43 mega joules per kilogram (MJ/kg) and it is lower than that of petrol
8Diesel fuel is denser than petrol and contains about 11% more energy by volume.
8Following parameters are influencing demand for petrol and diesel in the market:
--Carbon and CO2 reduction policies
--Emissions standards
--Taxation issues
--Congestion zones and low emission zones
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8Diesel cars provide better fuel economy than petrol cars and also improved performance.
8Diesel based engines have an inherent efficiency advantage over petrol cars because the compression-ignition combustion process helps make them about 45% efficient in converting fuel energy to mechanical energy.
8The calorific value of diesel fuel is roughly 43 mega joules per kilogram (MJ/kg) and it is lower than that of petrol
8Diesel fuel is denser than petrol and contains about 11% more energy by volume.
8Following parameters are influencing demand for petrol and diesel in the market:
--Carbon and CO2 reduction policies
--Emissions standards
--Taxation issues
--Congestion zones and low emission zones
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Global prices of crude oil are the single-most important determinant of U.S. gasoline prices. Allowing U.S. crude oil exports would increase supply, putting downward pressure on gasoline prices, a US based bipartisan study has shown.
8As the US is emerging as one of the largest producers of petroleum, its global presence will create a ripple effect on the supply paradigm.
8Gasoline and refined products are traded on the international market therefore gasoline prices in the United States follow global crude and refined product prices rather than domestic crude benchmarks.
8U.S. crude oil will provide stability for a traditionally volatile global market. As domestic gasoline prices are influenced by international oil prices, the introduction of greater, stable volumes of U.S. crude on the market will push global oil prices down.
8All this factors will help the US to strengthen and diversify its presence in the global oil market as well as protect domestic consumers from higher costs at gas stations.
8Reports says that if export restrictions are lifted, consumers’ annual fuel costs would be reduced by an estimated $5.8 billion from 2015 to 2035.
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8As the US is emerging as one of the largest producers of petroleum, its global presence will create a ripple effect on the supply paradigm.
8Gasoline and refined products are traded on the international market therefore gasoline prices in the United States follow global crude and refined product prices rather than domestic crude benchmarks.
8U.S. crude oil will provide stability for a traditionally volatile global market. As domestic gasoline prices are influenced by international oil prices, the introduction of greater, stable volumes of U.S. crude on the market will push global oil prices down.
8All this factors will help the US to strengthen and diversify its presence in the global oil market as well as protect domestic consumers from higher costs at gas stations.
8Reports says that if export restrictions are lifted, consumers’ annual fuel costs would be reduced by an estimated $5.8 billion from 2015 to 2035.
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Apologist for lifting the crude oil export ban in the US has claimed that the move will benefit the US economy in a big way.
8Studies says that the GDP will go up by $ 165 billion between 2019-2021.
8One specific study has claimed that the GDP boost can be as much as $ 1.8 trillion by 2039
8The United States can augment its position as the world's biggest oil producer and could reduce the trade deficit by 22 billion dollar by 2020, the argument goes.
8Lifting the crude oil ban will also show a positive effect in US employability ratios. There will be an increase up to 964,000 new jobs by 2018 and average of 394,000 new jobs from 2016-2030.
8The United States is currently producing four billion barrels per day more crude oil than it was producing ten years ago.
8The adverse environmental impact is the only negative impact of the lifting of the ban on exports. Studies predict that increase in crude oil production will impact climate change and increases environmental pollution.
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8Studies says that the GDP will go up by $ 165 billion between 2019-2021.
8One specific study has claimed that the GDP boost can be as much as $ 1.8 trillion by 2039
8The United States can augment its position as the world's biggest oil producer and could reduce the trade deficit by 22 billion dollar by 2020, the argument goes.
8Lifting the crude oil ban will also show a positive effect in US employability ratios. There will be an increase up to 964,000 new jobs by 2018 and average of 394,000 new jobs from 2016-2030.
8The United States is currently producing four billion barrels per day more crude oil than it was producing ten years ago.
8The adverse environmental impact is the only negative impact of the lifting of the ban on exports. Studies predict that increase in crude oil production will impact climate change and increases environmental pollution.
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Bahrain’s economy seems to be the most vulnerable to the oil price fall.The that growth will moderate to 2.6% in 2015, down from close to 5% in 2014.
In June 2015, Bahrain’s country risk assessment was placed under negative watch.
Moreover, at a $125 fiscal break-even point, Bahrain remains the most vulnerable of the gulf countries to the drop in oil prices.
8This is a because of the heavy dependence of government revenues on the hydrocarbon sector.
8Moreover, the public debt that already represents more than 43% of the GDP is forecast to increase to 54% of GDP in 2015. The budget deficit, a structural weakness for Bahrain, will peak in 2015 on the back of lower oil prices and the lack of new restrictive measures on expenditure.
8The UAE’s economy is one of the most diversified among the gulf countries. Hydrocarbon revenues account only for 25% of GDP and 20% of total export revenues.
8Yet in fiscal terms, more than 60% of the country’s budget revenues still depend on the hydrocarbon sector. The economic activity is expected to edge up on the back of non-oil sector development and the federation is slated to post a strong growth of 4% in 2015.
8With the appreciation of the US dollar and further deterioration in Abu Dhabi’s revenues, if the drop in oil prices continues, the attractiveness of the Dubai real estate market may drop and non-oil sector growth may decline.
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In June 2015, Bahrain’s country risk assessment was placed under negative watch.
Moreover, at a $125 fiscal break-even point, Bahrain remains the most vulnerable of the gulf countries to the drop in oil prices.
8This is a because of the heavy dependence of government revenues on the hydrocarbon sector.
8Moreover, the public debt that already represents more than 43% of the GDP is forecast to increase to 54% of GDP in 2015. The budget deficit, a structural weakness for Bahrain, will peak in 2015 on the back of lower oil prices and the lack of new restrictive measures on expenditure.
8The UAE’s economy is one of the most diversified among the gulf countries. Hydrocarbon revenues account only for 25% of GDP and 20% of total export revenues.
8Yet in fiscal terms, more than 60% of the country’s budget revenues still depend on the hydrocarbon sector. The economic activity is expected to edge up on the back of non-oil sector development and the federation is slated to post a strong growth of 4% in 2015.
8With the appreciation of the US dollar and further deterioration in Abu Dhabi’s revenues, if the drop in oil prices continues, the attractiveness of the Dubai real estate market may drop and non-oil sector growth may decline.
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It needs a lot of courage for a country like Saudi Arabia to stay firm and keep pumping crude in the face of such a dramatic fall in crude prices.
8Oil makes up 90% of government revenues, and its price, roughly $40 a barrel, is much less than half what it was in June last year. That is partly Saudi Arabia’s doing: it has not reined in its production, as it typically does when the price falls, but instead pumped record amounts in the hope of putting producers with higher costs out of business.
8Saudi Arabia has now resorted to borrowing to balance its books. On August 10th Saudi Arabia issued bonds worth 20 billion riyals ($5.3 billion). Borrowings are estimated to reach 100 billion riyals in the coming months.
8The IMF claims that the budget deficit will be 20% of the GDP but this may be an underestimate.
8What is more the cost of running the economy has been growing. Lavish public-sector wages, grandiose infrastructure projects and hefty subsidies on power, fuel and other consumer goods have long gobbled up most of the budget. But Saudi Arabia’s new king, Salman, who came to power in January, is also pursuing a more active, and expensive, foreign policy. He and his son, the defence minister and second-in-line to the throne, have launched a war in Yemen (involving bonus pay for the army) and are spending on aid projects to counter Iran’s influence across the region.
8The Saudis however are refusing to blink perhaps emboldened by the fact that they have plenty of leeway to borrow. Before the new bonds were issued, its debts stood at just 1.6% of GDP.
8Against that, it held foreign reserves of $672 billion in June, or 93% of GDP. In the 1990s, after a prolonged spell of low oil prices, Saudi Arabia’s debt rose to more than 100% of GDP without sending its borrowing costs spiraling.
8The way things are going, the Saudis may tire out the Americans if prices continue to fall. Details
8Oil makes up 90% of government revenues, and its price, roughly $40 a barrel, is much less than half what it was in June last year. That is partly Saudi Arabia’s doing: it has not reined in its production, as it typically does when the price falls, but instead pumped record amounts in the hope of putting producers with higher costs out of business.
8Saudi Arabia has now resorted to borrowing to balance its books. On August 10th Saudi Arabia issued bonds worth 20 billion riyals ($5.3 billion). Borrowings are estimated to reach 100 billion riyals in the coming months.
8The IMF claims that the budget deficit will be 20% of the GDP but this may be an underestimate.
8What is more the cost of running the economy has been growing. Lavish public-sector wages, grandiose infrastructure projects and hefty subsidies on power, fuel and other consumer goods have long gobbled up most of the budget. But Saudi Arabia’s new king, Salman, who came to power in January, is also pursuing a more active, and expensive, foreign policy. He and his son, the defence minister and second-in-line to the throne, have launched a war in Yemen (involving bonus pay for the army) and are spending on aid projects to counter Iran’s influence across the region.
8The Saudis however are refusing to blink perhaps emboldened by the fact that they have plenty of leeway to borrow. Before the new bonds were issued, its debts stood at just 1.6% of GDP.
8Against that, it held foreign reserves of $672 billion in June, or 93% of GDP. In the 1990s, after a prolonged spell of low oil prices, Saudi Arabia’s debt rose to more than 100% of GDP without sending its borrowing costs spiraling.
8The way things are going, the Saudis may tire out the Americans if prices continue to fall. Details
Oil prices have fallen from around 110 USD per barrel in mid-2014, to around 50 USD in mid-2015.
8The IMF forecasts that annual average oil prices will stand at 59 USD in 2015, before slightly rising to 64 USD in 2016.
8The hydrocarbon sector provides nearly 43% of the Gulf region's total output, 65% of exports and 78% of budget revenues.
8In the past these countries posted budget surpluses on the back of high oil prices.
8Lower oil prices have reversed this situation. Rising government spending, coupled with falling oil prices, may transform the region’s budget surplus of around 10% in 2013 into a significant deficit in 2015.
8The same situation applies to current account balances. It is estimated that the current account surplus will dip from around 20% of the region’s GDP in 2013, to close to 2% in 2015.
8Nevertheless, not all the Gulf countries are alike. Despite their similarities in terms of economic structure, they differ in terms of economic size, population, key sectors of economic diversification, fiscal break even prices and other factors.
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8The IMF forecasts that annual average oil prices will stand at 59 USD in 2015, before slightly rising to 64 USD in 2016.
8The hydrocarbon sector provides nearly 43% of the Gulf region's total output, 65% of exports and 78% of budget revenues.
8In the past these countries posted budget surpluses on the back of high oil prices.
8Lower oil prices have reversed this situation. Rising government spending, coupled with falling oil prices, may transform the region’s budget surplus of around 10% in 2013 into a significant deficit in 2015.
8The same situation applies to current account balances. It is estimated that the current account surplus will dip from around 20% of the region’s GDP in 2013, to close to 2% in 2015.
8Nevertheless, not all the Gulf countries are alike. Despite their similarities in terms of economic structure, they differ in terms of economic size, population, key sectors of economic diversification, fiscal break even prices and other factors.
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The Gulf countries control a big part of the global oil reserves falling crude prices have hit them harder than most.
8The impact of lower oil prices effects the gulf countries more because they are almost entirely dependent on oil revenues to fund their economies.
8According to a recent report, Middle East holds 47.7% of the world’s proven oil reserves, with Saudi Arabia in the lead (15.7%), followed by Iran (9.3%), Iraq (8.8%), Kuwait (6%) and the United Arab Emirates (5.8%).
8Together they produced 28.6 million barrels per day in 2014, equivalent to 32.3% of total global production.
8The lower oil prices affect all gulf countries, but the magnitude of the shock varies from one country to another as they have different break even prices -- at which their budgets balance out -- for oil.
8The report estimates that countries will grow by 3.4% in 2015 and by 3.7% in 2016 as they resort to borrowings to fund their economies.
8Although these rates can still be considered as high compared with many emerging and advanced economies, they remain below the region’s average growth rate of 5.8% between 2000 and 2011.
8The main reason for this slowdown is the decline in oil prices. The economies of Oman and Bahrain appear to be the most vulnerable while Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Qatar are comparatively less adversely impacted.
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8The impact of lower oil prices effects the gulf countries more because they are almost entirely dependent on oil revenues to fund their economies.
8According to a recent report, Middle East holds 47.7% of the world’s proven oil reserves, with Saudi Arabia in the lead (15.7%), followed by Iran (9.3%), Iraq (8.8%), Kuwait (6%) and the United Arab Emirates (5.8%).
8Together they produced 28.6 million barrels per day in 2014, equivalent to 32.3% of total global production.
8The lower oil prices affect all gulf countries, but the magnitude of the shock varies from one country to another as they have different break even prices -- at which their budgets balance out -- for oil.
8The report estimates that countries will grow by 3.4% in 2015 and by 3.7% in 2016 as they resort to borrowings to fund their economies.
8Although these rates can still be considered as high compared with many emerging and advanced economies, they remain below the region’s average growth rate of 5.8% between 2000 and 2011.
8The main reason for this slowdown is the decline in oil prices. The economies of Oman and Bahrain appear to be the most vulnerable while Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Qatar are comparatively less adversely impacted.
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India’s state-operated oil and gas company Gujarat State Petroleum (GSPC) is in the process of selecting the winner for its tender for two spot cargoes.
8GSPC was seeking one cargo for October and one for November through the tender, which closed on 16 September.
8The validity period for the bids is until 21 September.
8Both cargoes are expected to be delivered to the 10mtpa Dahej LNG terminal, which is operated by Petronet, although GSPC also has a slot at the 5mtpa Hazira LNG terminal.
8Its pricing expectations were initially in the low-$7.00s/MMBtu, but have declined since the fall of spot prices over the course of last week.
8As a result, GSPC could secure a cargo at the $6.90-6.95/MMBtu range, according to one portfolio seller active in India.
8GSPC has indicated in its tender that it requires both cargoes to be offered on a fixed-price basis and that potential sellers have a master sales agreement (MSA) in place with the company.
8Sellers are, however, required to demonstrate an equity worth of at least $25m for the MSA. No history of previous cargo discharge is required.
8GSPC has direct supply contracts for gas with the downstream buyers as part of its gas transmission and distribution business.
8As such, the falling price of crude oil and associated opportunities in the competitive fuel market are seen as largely irrelevant in this case, as the company is working on a back-to-back basis with downstream gas buyers that do not have fuel-switching capacity.
8Besides GSPC, the list of India’s LNG buyers active in the short-term market now includes gas-network operator GAIL and Indian Oil Corp (IOC), traders said.
8Two buyers are, however, entirely out of the prompt market due to the low cost of competitive fuels, namely fuel oil.
8Indian oil company Bharat Petroleum Corp and Mumbai-based conglomerate Reliance Industries primarily purchase LNG as a feedstock for their refinery operations, rather than the downstream gas network.
8Both companies are out of the market because the alternative sources of feedstock are cheaper.
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8GSPC was seeking one cargo for October and one for November through the tender, which closed on 16 September.
8The validity period for the bids is until 21 September.
8Both cargoes are expected to be delivered to the 10mtpa Dahej LNG terminal, which is operated by Petronet, although GSPC also has a slot at the 5mtpa Hazira LNG terminal.
8Its pricing expectations were initially in the low-$7.00s/MMBtu, but have declined since the fall of spot prices over the course of last week.
8As a result, GSPC could secure a cargo at the $6.90-6.95/MMBtu range, according to one portfolio seller active in India.
8GSPC has indicated in its tender that it requires both cargoes to be offered on a fixed-price basis and that potential sellers have a master sales agreement (MSA) in place with the company.
8Sellers are, however, required to demonstrate an equity worth of at least $25m for the MSA. No history of previous cargo discharge is required.
8GSPC has direct supply contracts for gas with the downstream buyers as part of its gas transmission and distribution business.
8As such, the falling price of crude oil and associated opportunities in the competitive fuel market are seen as largely irrelevant in this case, as the company is working on a back-to-back basis with downstream gas buyers that do not have fuel-switching capacity.
8Besides GSPC, the list of India’s LNG buyers active in the short-term market now includes gas-network operator GAIL and Indian Oil Corp (IOC), traders said.
8Two buyers are, however, entirely out of the prompt market due to the low cost of competitive fuels, namely fuel oil.
8Indian oil company Bharat Petroleum Corp and Mumbai-based conglomerate Reliance Industries primarily purchase LNG as a feedstock for their refinery operations, rather than the downstream gas network.
8Both companies are out of the market because the alternative sources of feedstock are cheaper.
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A new type of drilling fluid can reduce drilling time significantly in difficult geological formations
8In an experimental environment, the operator replaced a water-based fluid system with a flat-rheology oil-based system and ended up drilling to target within a record time that was 31% faster than the previous record in the field.
8Some of the challenges faced by the operator in the field includes lost circulation, wellbore instability, tight hole and logistic constraints.
8Additionally, the wells in the exhibited a narrow drilling window between pore pressure and the fracture gradient, so the operator wanted a drilling fluid that would help with equivalent circulating density (ECD) management.
8On implementing the new oil-based fluid system, the inhibitive and lubricious fluid significantly improved well bore stability, reduced the risk of stuck pipe and helped in improving the tripping efficiency.
8Further, it eliminated bit balling that could impair penetration rates.
8After adequate lab testing, risk assessments and a technical presentation of the results, the operator has approved the use of the new drilling fluid system.
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8In an experimental environment, the operator replaced a water-based fluid system with a flat-rheology oil-based system and ended up drilling to target within a record time that was 31% faster than the previous record in the field.
8Some of the challenges faced by the operator in the field includes lost circulation, wellbore instability, tight hole and logistic constraints.
8Additionally, the wells in the exhibited a narrow drilling window between pore pressure and the fracture gradient, so the operator wanted a drilling fluid that would help with equivalent circulating density (ECD) management.
8On implementing the new oil-based fluid system, the inhibitive and lubricious fluid significantly improved well bore stability, reduced the risk of stuck pipe and helped in improving the tripping efficiency.
8Further, it eliminated bit balling that could impair penetration rates.
8After adequate lab testing, risk assessments and a technical presentation of the results, the operator has approved the use of the new drilling fluid system.
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Essar Oil, which owns and operates India’s second largest single location refinery of 20 MMTPA (405,000 BBL/day) will undertake a planned shutdown of its Vadinar Refinery for 30 days from September 18th to October 17th 2015.
8There will be no production during this period.
8During this period, Essar Oil will undertake major maintenance and inspection jobs of all its refinery units and also complete the conversion of the Vacuum Gas Oil Hydroteater (VGOHT) unit to Mild Hydrocracker unit (D-Max Project).
8DAll the units will be thoroughly inspected and wherever required, repairs will be carried out.
8Moreover, this opportunity will also be used for undertaking debottlenecking activities and improvement in facilities.
8The last such major planned shutdown was taken in Sept/Oct 2011, when it connected the base refinery with expanded units, which were then bought on-stream in phases in 2012.
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8There will be no production during this period.
8During this period, Essar Oil will undertake major maintenance and inspection jobs of all its refinery units and also complete the conversion of the Vacuum Gas Oil Hydroteater (VGOHT) unit to Mild Hydrocracker unit (D-Max Project).
8DAll the units will be thoroughly inspected and wherever required, repairs will be carried out.
8Moreover, this opportunity will also be used for undertaking debottlenecking activities and improvement in facilities.
8The last such major planned shutdown was taken in Sept/Oct 2011, when it connected the base refinery with expanded units, which were then bought on-stream in phases in 2012.
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The 4th meeting of the India-Kuwait Joint Working Group on Hydrocarbons was held on 15th September 2015 in New Delhi.
8Dr. Ahmed Al-Quattan had represented the Kuwait oil sector where as Indian side was headed by Mr. Ashutosh Jindal.
8Both Ministry discussed various issues of bilateral engagement in the hydrocarbon sector.
8They also expressed satisfaction at the progress achieved on the decisions taken during the 3rd Joint Working Group signed in 2014 in Kuwait.
8The ministers from both side also discussed opportunities for joint investment in the oil & gas sector in India and abroad.
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8Dr. Ahmed Al-Quattan had represented the Kuwait oil sector where as Indian side was headed by Mr. Ashutosh Jindal.
8Both Ministry discussed various issues of bilateral engagement in the hydrocarbon sector.
8They also expressed satisfaction at the progress achieved on the decisions taken during the 3rd Joint Working Group signed in 2014 in Kuwait.
8The ministers from both side also discussed opportunities for joint investment in the oil & gas sector in India and abroad.
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The Indian petroleum minister Shri Dharmendra Pradhan called on Prime Minister of Sri Lanka, Shri Ranil Wickremesinghe in New Delhi on September 15, 2015.
8Shri Pradhan apprised the Sri Lankan Prime Minister about the existing cooperation in oil and gas sector between India and Sri Lanka.
8Mr. Pradhan also discussed the willingness of Indian public sector companies to work in all streams of oil and gas sector in Sri Lanka.
8India's major oil company IOCL is already operating 183 Retail Outlets in Sri Lanka and has about 20% market share of petroleum products in Sri Lanka.
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8Shri Pradhan apprised the Sri Lankan Prime Minister about the existing cooperation in oil and gas sector between India and Sri Lanka.
8Mr. Pradhan also discussed the willingness of Indian public sector companies to work in all streams of oil and gas sector in Sri Lanka.
8India's major oil company IOCL is already operating 183 Retail Outlets in Sri Lanka and has about 20% market share of petroleum products in Sri Lanka.
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GAIL India has started the work for the first phase of Jagdishpur-Haldia pipeline connecting HFCL Barauni to IOCL Barauni.
8The phase I of pipeline project consists of laying of trunk pipeline from Phulpur (Allahabad) to Dobhi (Gaya) for a length of 341km and spur pipeline connectivity to Barauni and Patna from Dobhi for a length of 228 km.
8This gas network will supply fuel to major industries such as the Barauni Refinery and the Barauni fertilizer plant besides power and steel plants.
8The pipeline will also help in setting up of City Gas Networks in major cities of Bihar including capital Patna.
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8The phase I of pipeline project consists of laying of trunk pipeline from Phulpur (Allahabad) to Dobhi (Gaya) for a length of 341km and spur pipeline connectivity to Barauni and Patna from Dobhi for a length of 228 km.
8This gas network will supply fuel to major industries such as the Barauni Refinery and the Barauni fertilizer plant besides power and steel plants.
8The pipeline will also help in setting up of City Gas Networks in major cities of Bihar including capital Patna.
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Low prices will push share of LNG in India’s gas consumption basket to 47 percent in fiscal 2017-18 (Apr-Mar) from 33 percent in 2013-14, said Raghu Yabaluri, Director Strategy and India's gas consumption in 2013-14 was 144 mmscmd, while it is estimated to reach 262 mmscmd by 2017-18, according to Deloitte.
8Yabaluri added that long term and spot LNG prices are competitive vis-a-vis traditional fuels in India such as furnace oil, naphtha, liquefied petroleum gas and high speed diesel.
8Coal is the only traditional fuel source still cheaper than LNG but, according to Yabaluri, environmental concerns will gradually restrict its usage.
8Clearly, the potential for LNG usage is very high in India and despite roadblocks, the LNG terminals that are coming up will become fully utilized in the years ahead.
8The LNG usage will also be high because of lack of concomitant gas supply from domestic sources in the face of rising demand.
8Low prices help too as the Indian market is highly price sensitive.
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8Yabaluri added that long term and spot LNG prices are competitive vis-a-vis traditional fuels in India such as furnace oil, naphtha, liquefied petroleum gas and high speed diesel.
8Coal is the only traditional fuel source still cheaper than LNG but, according to Yabaluri, environmental concerns will gradually restrict its usage.
8Clearly, the potential for LNG usage is very high in India and despite roadblocks, the LNG terminals that are coming up will become fully utilized in the years ahead.
8The LNG usage will also be high because of lack of concomitant gas supply from domestic sources in the face of rising demand.
8Low prices help too as the Indian market is highly price sensitive.
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Prudence is the better part of valour.
8This adage applies for Indian oil and gas companies which did not indulge in an asset buying spree as did their Chinese counterparts when the going was good.
China National Petroleum Corp, China’s largest oil company, is shedding a raft of non-core businesses, including a chain of hotels and a taxi business, as state-owned companies come under pressure from the government to dispose of lucrative but often corrupt enterprises.
8China’s two-year, anticorruption drive has targeted the perks of office of government and state-owned enterprise employees, ranging from annual New Years’ banquets and gifts of mooncakes to company trips, expensive meals and privileges that allow people employed by the Chinese state to enjoy a quality of life well above their official salary levels
8Some of the oil and gas assets that the Chinese companies bought into are now at significantly lower value on account of the dramatic fall in crude prices than their buying price.
8The Chinese are slowing down in acquiring E&P assets abroad even though some of the deals can now be had at bargain prices.
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8This adage applies for Indian oil and gas companies which did not indulge in an asset buying spree as did their Chinese counterparts when the going was good.
China National Petroleum Corp, China’s largest oil company, is shedding a raft of non-core businesses, including a chain of hotels and a taxi business, as state-owned companies come under pressure from the government to dispose of lucrative but often corrupt enterprises.
8China’s two-year, anticorruption drive has targeted the perks of office of government and state-owned enterprise employees, ranging from annual New Years’ banquets and gifts of mooncakes to company trips, expensive meals and privileges that allow people employed by the Chinese state to enjoy a quality of life well above their official salary levels
8Some of the oil and gas assets that the Chinese companies bought into are now at significantly lower value on account of the dramatic fall in crude prices than their buying price.
8The Chinese are slowing down in acquiring E&P assets abroad even though some of the deals can now be had at bargain prices.
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India has also been steadily pushing Russia to open up its oil and gas sector to Indian companies.
8Some movement can now be seen on the ground.
8India’s Essar Oil Limited signed a term sheet (non-binding) on July 8, 2015 for sale of a 49 percent stake in the Essar Oil division to Rosneft.
Rosneft clinched a deal to supply close to 10 million tons of crude oil annually to Essar Oil for a period of ten years.
8Russia’s decision to invest in India’s Essar Oil is a highly strategic one.
8Apart from the Essar deal, Rosneft has also sold a 15 percent stake in Vankorneft (a subsidiary of Rosneft that was formed in 2004 for developing and maintaining a major Russian oil and gas field called Vankor) to ONGC for a reported $1.25 billion. While the deal with India has been sealed, Rosneft is still negotiating with China’s National Nuclear Corporation (CNPS) for a stake in Vankorneft. One can clearly see that Russia’s energy deals with India have been on schedule without any significant delays and hurdles, unlike the deals struck with China.
8Back in 2007, Putin predicted that Russia would be exporting 35 percent of its total crude oil and 25 percent of its total gas supply to China by the year 2025. Putin even expected that China would become a major trading partner of Russia and would surpass the EU by the year 2030.
8However, with the ongoing Chinese economic slowdown and other project delays, expectations may have been raised too high.
8Clearly, India seems to be the focus of attention just now in Kremlin Details
8Some movement can now be seen on the ground.
8India’s Essar Oil Limited signed a term sheet (non-binding) on July 8, 2015 for sale of a 49 percent stake in the Essar Oil division to Rosneft.
Rosneft clinched a deal to supply close to 10 million tons of crude oil annually to Essar Oil for a period of ten years.
8Russia’s decision to invest in India’s Essar Oil is a highly strategic one.
8Apart from the Essar deal, Rosneft has also sold a 15 percent stake in Vankorneft (a subsidiary of Rosneft that was formed in 2004 for developing and maintaining a major Russian oil and gas field called Vankor) to ONGC for a reported $1.25 billion. While the deal with India has been sealed, Rosneft is still negotiating with China’s National Nuclear Corporation (CNPS) for a stake in Vankorneft. One can clearly see that Russia’s energy deals with India have been on schedule without any significant delays and hurdles, unlike the deals struck with China.
8Back in 2007, Putin predicted that Russia would be exporting 35 percent of its total crude oil and 25 percent of its total gas supply to China by the year 2025. Putin even expected that China would become a major trading partner of Russia and would surpass the EU by the year 2030.
8However, with the ongoing Chinese economic slowdown and other project delays, expectations may have been raised too high.
8Clearly, India seems to be the focus of attention just now in Kremlin Details
Russia seems to be turning to India for a market for its oil now that its deals with the Chinese are not working out.
8China and Russia finalized a gas deal in May 2014 which involved construction of two pipelines that would transport Russia’s gas to China. The first pipeline, originating in East Siberia was called the ‘Power of Siberia’ pipeline while the one originating in West Siberia was called the ‘Power of Siberia 2’ or ‘Altai’ pipeline. The equity firms in China suspended the ‘Power of Siberia 2’ project in July, leaving the Russians in jeopardy.
8The ongoing Chinese economic slowdown and stock market crash would mean that Russia needs to be extremely wary China’s investment plans. Statistics from InvestorIntel even revealed that Russia’s exports to China dipped by 20 percent when compared to last year.
8With the China story fizzling out, Russia is now planning to build up its presence in China’s neighbor India. With huge internal energy consumption and a bustling economy, India is set to grow faster than China in 2015 and 2016 according to the recent projections from the IMF. After China, India is the next best logical alternative for Russia to strengthen its Asian ties and move away from western sanctions. Details
8China and Russia finalized a gas deal in May 2014 which involved construction of two pipelines that would transport Russia’s gas to China. The first pipeline, originating in East Siberia was called the ‘Power of Siberia’ pipeline while the one originating in West Siberia was called the ‘Power of Siberia 2’ or ‘Altai’ pipeline. The equity firms in China suspended the ‘Power of Siberia 2’ project in July, leaving the Russians in jeopardy.
8The ongoing Chinese economic slowdown and stock market crash would mean that Russia needs to be extremely wary China’s investment plans. Statistics from InvestorIntel even revealed that Russia’s exports to China dipped by 20 percent when compared to last year.
8With the China story fizzling out, Russia is now planning to build up its presence in China’s neighbor India. With huge internal energy consumption and a bustling economy, India is set to grow faster than China in 2015 and 2016 according to the recent projections from the IMF. After China, India is the next best logical alternative for Russia to strengthen its Asian ties and move away from western sanctions. Details
Production from a conventional field follows a well-defined pattern, ramping up quickly, then stabilising near the peak for a few years, before entering a long slow decline.
8Output rises initially as the field is developed from a single well to a full array of producing holes deployed to drain the reservoir efficiently.
8But as the oil, gas and water contained in the producing formations is depleted, pressure falls and the reservoir's natural energy declines.
8Eventually, production starts to fall as the wells flow more slowly and produce a higher proportion of water rather than oil.
8Field operators employ a variety of strategies to prolong production as long as possible and delay the onset of natural decline or at least reduce the decline rate.
8Associated gas brought to the surface with the oil can be re-injected to help maintain field pressure or gas can be pumped in from other sources.
8Fields can be placed on artificial lift with the installation of surface beam pumps (the famous nodding donkeys) or more commonly these days the installation of downhole electric submersible pumps (ESPs).
8And water, natural gas, carbon dioxide or special polymers can be injected into the fringes of the field to drive the remaining oil towards the producing wells
8Field management plans can increase the ultimate amount of oil recovered significantly, but eventually the fate of all wells and fields is the same: they produce mostly water and are eventually shut down.
8The operating costs of running the pumps and injecting water, gas or other materials eventually become greater than the value of the oil and the field becomes marginal and is abandoned.
8And this is going to happen sooner now than earlier because oil prices have come down.
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8Output rises initially as the field is developed from a single well to a full array of producing holes deployed to drain the reservoir efficiently.
8But as the oil, gas and water contained in the producing formations is depleted, pressure falls and the reservoir's natural energy declines.
8Eventually, production starts to fall as the wells flow more slowly and produce a higher proportion of water rather than oil.
8Field operators employ a variety of strategies to prolong production as long as possible and delay the onset of natural decline or at least reduce the decline rate.
8Associated gas brought to the surface with the oil can be re-injected to help maintain field pressure or gas can be pumped in from other sources.
8Fields can be placed on artificial lift with the installation of surface beam pumps (the famous nodding donkeys) or more commonly these days the installation of downhole electric submersible pumps (ESPs).
8And water, natural gas, carbon dioxide or special polymers can be injected into the fringes of the field to drive the remaining oil towards the producing wells
8Field management plans can increase the ultimate amount of oil recovered significantly, but eventually the fate of all wells and fields is the same: they produce mostly water and are eventually shut down.
8The operating costs of running the pumps and injecting water, gas or other materials eventually become greater than the value of the oil and the field becomes marginal and is abandoned.
8And this is going to happen sooner now than earlier because oil prices have come down.
Click on the details for more. Details
According to Reuters, Oil companies have to invest heavily simply to offset the impact of natural decline rates on their existing fields, and even more if they want actually to increase production.
8The need for continued investment and drilling to maintain output as a result of the rapid decline rates on shale wells has been widely discussed.
8But decline rates on conventional oil fields are even more important because they account for more than 90 percent of global production.
8Decline rates on conventional fields will play a critical part rebalancing the oil market and determining where oil prices settle in the longer term.
8Decline rates will cut output by several million barrels per day each year in 2016 and 2017 unless oil producers invest to maintain production levels from existing fields and develop replacement fields.
8But with oil prices below $50 per barrel, almost all companies, from the super-majors to national oil companies and independents, are slashing exploration and production budgets hard to conserve cash.
8Cuts will hit sustaining expenditure on existing fields as well as frontier exploration. In a typical example, Iraq's oil ministry wrote to contractors on September 6 warning it will cut exploration and field development spending nextyear.
8Some of the cuts in spending reflect a successful efficiency drive and efforts to squeeze the costs of supplies and oilfield services. But there are also real cuts in exploration and development programmes which will have a directimpact on the replacement of declining output.
8The IEA agency predicts non-OPEC oil supply could decline as much as 500,000 barrels per day (bpd) in 2016 because of the capital shortage, which would be the biggest annual fall in 24 years.
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8The need for continued investment and drilling to maintain output as a result of the rapid decline rates on shale wells has been widely discussed.
8But decline rates on conventional oil fields are even more important because they account for more than 90 percent of global production.
8Decline rates on conventional fields will play a critical part rebalancing the oil market and determining where oil prices settle in the longer term.
8Decline rates will cut output by several million barrels per day each year in 2016 and 2017 unless oil producers invest to maintain production levels from existing fields and develop replacement fields.
8But with oil prices below $50 per barrel, almost all companies, from the super-majors to national oil companies and independents, are slashing exploration and production budgets hard to conserve cash.
8Cuts will hit sustaining expenditure on existing fields as well as frontier exploration. In a typical example, Iraq's oil ministry wrote to contractors on September 6 warning it will cut exploration and field development spending nextyear.
8Some of the cuts in spending reflect a successful efficiency drive and efforts to squeeze the costs of supplies and oilfield services. But there are also real cuts in exploration and development programmes which will have a directimpact on the replacement of declining output.
8The IEA agency predicts non-OPEC oil supply could decline as much as 500,000 barrels per day (bpd) in 2016 because of the capital shortage, which would be the biggest annual fall in 24 years.
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The website also carries here a primer on ocean tankers. These are ships designed to transport liquids in bulk, by way of seaborne movement of cargo. Oil and gas products contributed 30% to the total global seaborne trade in 2015.
8Tankers are categorized depending on their deadweight tonnage ("DWT") and their cargo carrying capacity. The following are the type of tankers with their capacities (in '000 barrels):
--Very Large Crude Carrier capacity 2,000
--Crude Carrier capacity 1,000
--Clean/Crude Carrier capacity 750
--Crude/Clean/Chemicals/Products Carrier capacity 400
--Clean/Chemicals Products Carrier capacity 360
--Clean/Chemicals Products Carrier capacity 270
--Clean/Chemicals Products Carrier capacity 100
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8Tankers are categorized depending on their deadweight tonnage ("DWT") and their cargo carrying capacity. The following are the type of tankers with their capacities (in '000 barrels):
--Very Large Crude Carrier capacity 2,000
--Crude Carrier capacity 1,000
--Clean/Crude Carrier capacity 750
--Crude/Clean/Chemicals/Products Carrier capacity 400
--Clean/Chemicals Products Carrier capacity 360
--Clean/Chemicals Products Carrier capacity 270
--Clean/Chemicals Products Carrier capacity 100
Click on Report for more details. Details
