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Sep 2015
The onshore facilities for the project are expected to be located at either Kakinada, Krishnapattanam, Chennai or Vishakhapatnam ports.
8Cairn will use the existing facilities available at the ports and no new onshore facilities are envisaged to be constructed.
8A jetty will be hired either on a sole user basis or shared during the drilling campaign.
8There will be two anchor handling tug supply (AHTS) vessels and one multi-purpose support vessel (MSV) that will be deployed for transferring equipment and consumables from the port to the MODU.
8The AHTS vessels will be used for towing the jack-up unit or semi-sub to drilling location and anchoring it there.
Click on the Reports section for more. Details
8Cairn will use the existing facilities available at the ports and no new onshore facilities are envisaged to be constructed.
8A jetty will be hired either on a sole user basis or shared during the drilling campaign.
8There will be two anchor handling tug supply (AHTS) vessels and one multi-purpose support vessel (MSV) that will be deployed for transferring equipment and consumables from the port to the MODU.
8The AHTS vessels will be used for towing the jack-up unit or semi-sub to drilling location and anchoring it there.
Click on the Reports section for more. Details
Based on the depth of water at the drilling locations, different types of mobile offshore drilling unit ( MODU) will be used.
8In shallow waters, up to 120 m deep, independent leg jack up rigs will be used, whereas in water depths more than 120 m, semi submersibles (semi-subs) or drill ships will be used for drilling.
8The water based mud (WBM) drilling fluid will be used for the initial shallower sections but for the difficult formations, drilling will be done using synthetic based mud (SBM).
8The continuous power supply will be made available through diesel generator (DG) sets which are normally installed as part of the MODU infrastructure.
8It is estimated that approximately 4 MW of power will be required for the drilling activities on a daily basis.
8The fuel storage capacities of jack up units will be in the range of 480 – 640 KL while semi subs can store about 3200 - 4800 KL and the drill ships will store about 3200 – 8000 KL of fuel. Low sulphur high speed diesel (HSD) will be used primarily in the DG sets.
Click on the Reports section for more. Details
8In shallow waters, up to 120 m deep, independent leg jack up rigs will be used, whereas in water depths more than 120 m, semi submersibles (semi-subs) or drill ships will be used for drilling.
8The water based mud (WBM) drilling fluid will be used for the initial shallower sections but for the difficult formations, drilling will be done using synthetic based mud (SBM).
8The continuous power supply will be made available through diesel generator (DG) sets which are normally installed as part of the MODU infrastructure.
8It is estimated that approximately 4 MW of power will be required for the drilling activities on a daily basis.
8The fuel storage capacities of jack up units will be in the range of 480 – 640 KL while semi subs can store about 3200 - 4800 KL and the drill ships will store about 3200 – 8000 KL of fuel. Low sulphur high speed diesel (HSD) will be used primarily in the DG sets.
Click on the Reports section for more. Details
CIL has already acquired 1390 sq. km. of 3D seismic data from the block during the year 2014-15 and based on the seismic data interpretation and integration of geo-scientific data in the region, 13 leads and prospects have been identified.
8Cairn proposes to test the prospects by drilling up to 64 exploratory and appraisal wells in the block.
8Moreover, the detailed technical evaluation, suitability and optimization studies are currently on-going.
8The number and location of the exploration wells will be finalized on the basis of the results of these studies.
CIL intends to carry out exploration in the KG-OSN-2009/3 Block in two phases.
Phase - I comprises of 11 prospects, involving drilling of up to 55 exploration and appraisal wells.
Out of the 11 prospects, 7 prospects lie in the territorial waters within 12 NM from the coast.
None of the prospects falls within 1 km of the coast line.
Phase – II involves further exploration and appraisal in the remaining 2 prospects lying within the 10 km radius eco-sensitive zone of the Krishna wildlife sanctuary which will be decided in the long term after analyzing Phase-I performance.
Maximum of 9 wells may be drilled in these two prospects.
Click on the Reports section for more. Details
8Cairn proposes to test the prospects by drilling up to 64 exploratory and appraisal wells in the block.
8Moreover, the detailed technical evaluation, suitability and optimization studies are currently on-going.
8The number and location of the exploration wells will be finalized on the basis of the results of these studies.
CIL intends to carry out exploration in the KG-OSN-2009/3 Block in two phases.
Phase - I comprises of 11 prospects, involving drilling of up to 55 exploration and appraisal wells.
Out of the 11 prospects, 7 prospects lie in the territorial waters within 12 NM from the coast.
None of the prospects falls within 1 km of the coast line.
Phase – II involves further exploration and appraisal in the remaining 2 prospects lying within the 10 km radius eco-sensitive zone of the Krishna wildlife sanctuary which will be decided in the long term after analyzing Phase-I performance.
Maximum of 9 wells may be drilled in these two prospects.
Click on the Reports section for more. Details
Cairn India Limited (CIL) is all set to start its offshore drilling programme in its KG-OSN-2009/3 block with an initial cost of Rs 1320 crore.
8The initial drilling campaign will comprise of drilling minimum four exploratory and appraisal wells.
8All wells will be drilled in shallow waters of less than 100 m depth and the maximum target depth to be achieved for each well will be 5000 m.
8The initial estimated cost for drilling one exploration well in shallow waters at afore-mentioned target depths is approximately Rs 330 crore.
8The block is located in the shallow waters of the Indian ocean along the East coast of India adjacent to the Prakasam and Guntur districts of Andhra Pradesh.
8The present day organic carbon content for the current section ranges from 1-3% while the hydrogen index values range from 100 to 300.
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Details
8The initial drilling campaign will comprise of drilling minimum four exploratory and appraisal wells.
8All wells will be drilled in shallow waters of less than 100 m depth and the maximum target depth to be achieved for each well will be 5000 m.
8The initial estimated cost for drilling one exploration well in shallow waters at afore-mentioned target depths is approximately Rs 330 crore.
8The block is located in the shallow waters of the Indian ocean along the East coast of India adjacent to the Prakasam and Guntur districts of Andhra Pradesh.
8The present day organic carbon content for the current section ranges from 1-3% while the hydrogen index values range from 100 to 300.
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Details
For companies involved in civil construction, preparation of drilling sites before drilling operations begin can be a good source of business provides the number of sites are large enough to provide economies of scale.
8There is reasonable amount of work that is required to be done at these sites and even large contractors can spring a division to look at it as a business proposition.
The work involved in preparing a drilling site include:
--Soil removal
--Surface grading
--Earth filling
--Excavating
--Rubble soling
--Stone aggregates
--Construction of water bound macadam layer
--HDPE lining of pits, waste pit, mud put, water pit and coral pit
--Construction of RCC platforms
--Building approach roads Details
8There is reasonable amount of work that is required to be done at these sites and even large contractors can spring a division to look at it as a business proposition.
The work involved in preparing a drilling site include:
--Soil removal
--Surface grading
--Earth filling
--Excavating
--Rubble soling
--Stone aggregates
--Construction of water bound macadam layer
--HDPE lining of pits, waste pit, mud put, water pit and coral pit
--Construction of RCC platforms
--Building approach roads Details
Bharat Petro Resource Ltd (BPRL) has located six drill sites for drilling in the CB-ONN-2010/8 block in the Cambay basin in Gujarat.
8Depending on the drilling results of the four wells (Location A, B, C & D), BPRL may or may not decide to develop the remaining two optional drill sites.
8Drill sites ‘A’ and ‘D’ are clubbed together as a part of ‘Set - I’ and the remaining dill sites ‘B’ and ‘C’are part of “Set –II".
8The development works of one drillsite will be completed within 60 days, which includes the mobilization time.
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Details
8Depending on the drilling results of the four wells (Location A, B, C & D), BPRL may or may not decide to develop the remaining two optional drill sites.
8Drill sites ‘A’ and ‘D’ are clubbed together as a part of ‘Set - I’ and the remaining dill sites ‘B’ and ‘C’are part of “Set –II".
8The development works of one drillsite will be completed within 60 days, which includes the mobilization time.
Click on the Reports section for more.
Details
The total project cost is Rs 96 crore
8OIL ventured out of North East in the early eighties after its transition from a JV company to a national oil company.
8The company discovered gas in the Jaisalmer sub-basin of the Tanot fields and heavy oil in the Bikaner- Nagaur sub-basin of Rajasthan basin in early nineties.
8The Jaisalmer sub-basin is a pericratonic formation has a total area of 45,000 sq.km and the Bikaner-Nagaur basin of the intracratonic structure with an area of 70,000 sq. km.
8Total estimated drilling period for each well is for 35-45 days
8Production testing for each Well will be be 10-15 days
8A water based mud system will be used in the wells
8The anticipated volume of drill cutting for each well will be around 150-200 m3
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Details
8OIL ventured out of North East in the early eighties after its transition from a JV company to a national oil company.
8The company discovered gas in the Jaisalmer sub-basin of the Tanot fields and heavy oil in the Bikaner- Nagaur sub-basin of Rajasthan basin in early nineties.
8The Jaisalmer sub-basin is a pericratonic formation has a total area of 45,000 sq.km and the Bikaner-Nagaur basin of the intracratonic structure with an area of 70,000 sq. km.
8Total estimated drilling period for each well is for 35-45 days
8Production testing for each Well will be be 10-15 days
8A water based mud system will be used in the wells
8The anticipated volume of drill cutting for each well will be around 150-200 m3
Click on Reports for more
Details
The power requirements during the site preparation and construction phase will be met by DG sets.
8It is anticipated that the energy source will be the part of the drilling rig to be used.
8Six DG sets will suffice for rig operations and associated requirements.
8Fuel consumed will mainly be diesel (only low Sulphur <0.05%) HSD will be used.
8During the drilling phase, the fuel consumption is estimated to be about 2.5KLD of HSD per well.
At the DND-GPC: Power is provided at the DND-GPC through two 75 KVA diesel generator sets and an underground diesel storage vessel is provided with a capacity to meet 15 days requirement at the complex.
A diesel pump is provided for transferring diesel from the underground storage tank to the DG sets.
At the TANOT-GGS: Power supply at the Tanot-GGS will be maintained by Solar PV Cell system and also one 30 KVA DG set.
Click on the Reports for more. Details
8It is anticipated that the energy source will be the part of the drilling rig to be used.
8Six DG sets will suffice for rig operations and associated requirements.
8Fuel consumed will mainly be diesel (only low Sulphur <0.05%) HSD will be used.
8During the drilling phase, the fuel consumption is estimated to be about 2.5KLD of HSD per well.
At the DND-GPC: Power is provided at the DND-GPC through two 75 KVA diesel generator sets and an underground diesel storage vessel is provided with a capacity to meet 15 days requirement at the complex.
A diesel pump is provided for transferring diesel from the underground storage tank to the DG sets.
At the TANOT-GGS: Power supply at the Tanot-GGS will be maintained by Solar PV Cell system and also one 30 KVA DG set.
Click on the Reports for more. Details
Oil India Ltd (OIL) intends to drill about 20 developmental wells in the Dandewala, Bagitibba and Tanot fields in the Jaisalmer PML block.
8The Jaisalmer PML Block which occupies an area of 250 sq.km.
8The total expected production from the wells is 1.0 MMSCMD.
8The wells will be drilled using a 1000 HP mobile drilling rig with a rotary drive system.
8Each well will take around 45 days for the completion with a drilling depth of 2200-3000 meters.
8The produced gas from Dandewala and Bagitibba fields will be brought for processing at Dandewala cas processing complex (DND-GPC).
8The processed gas will then be metered using a custody transfer meter and then will be dispatched to GAIL for further distribution to the RRVUNL's Ramgarh power plant.
8Whereas the well fluid collection and testing for the Tanot field will be done at Tanot GGS.
Click on the Reports for more. Details
8The Jaisalmer PML Block which occupies an area of 250 sq.km.
8The total expected production from the wells is 1.0 MMSCMD.
8The wells will be drilled using a 1000 HP mobile drilling rig with a rotary drive system.
8Each well will take around 45 days for the completion with a drilling depth of 2200-3000 meters.
8The produced gas from Dandewala and Bagitibba fields will be brought for processing at Dandewala cas processing complex (DND-GPC).
8The processed gas will then be metered using a custody transfer meter and then will be dispatched to GAIL for further distribution to the RRVUNL's Ramgarh power plant.
8Whereas the well fluid collection and testing for the Tanot field will be done at Tanot GGS.
Click on the Reports for more. Details
Part of the upgradation involves the Rs 620 crore expansion of the capacity of the Catalytic Reformer Unit (CRU) and the Naphtha Isomerisation Unit.
8The revamp of the naphtha isomerization unit will entail the Installation of a new naphtha hydrotreatment unit to reduce sulfur from present level of 50-100 ppmw to < 8ppmw, a change of catalyst along with installation of new reactors, feed effluent exchangers, trim coolers a makeup gas compressor.
Expansion of the CRU will allow for processing of a wider cut of RFN and will involve the requirement of the following equipment:
8An extra feed pump
8Modification in the furnace by increasing the diameter of the tubes
8Changing of of the compressor from reciprocating to centrifugal
8Installing new column internals of the Stabilizer and the Reformate Splitter
8Installing marginally higher capacity reactors on the same foundations
8Loading of high performance catalyst
Click on our Reports section for more Details
8The revamp of the naphtha isomerization unit will entail the Installation of a new naphtha hydrotreatment unit to reduce sulfur from present level of 50-100 ppmw to < 8ppmw, a change of catalyst along with installation of new reactors, feed effluent exchangers, trim coolers a makeup gas compressor.
Expansion of the CRU will allow for processing of a wider cut of RFN and will involve the requirement of the following equipment:
8An extra feed pump
8Modification in the furnace by increasing the diameter of the tubes
8Changing of of the compressor from reciprocating to centrifugal
8Installing new column internals of the Stabilizer and the Reformate Splitter
8Installing marginally higher capacity reactors on the same foundations
8Loading of high performance catalyst
Click on our Reports section for more Details
This website believes that the Modi government should reject two big proposals that Numaligarh refinery, a subsidiary of Bharat Petroleum Corporation Ltd (BPCL), is pushing for approval. One seeks a Rs 20,000 crore expansion of the refinery in Assam from 3 to 9 MMTPA and the other calls for installing a bio-refinery project using bamboo as the feedstock.
8BPCL has asked the central government for a Rs.8,800 crore capital subsidy for the Rs.20,000 crore expansion plan
8The capital subsidy alone will not be enough to make the refinery viable. BPCL has said that the excise duty relief of 50% already available on products sold by the Numaligarh refinery because it is based in the North East, should be made 100% to enable the expansion to take place.
8When the refinery is expanded, most of the the extra capacity will only cater to demand originating outside of the North East. The industrial climate in the region is poor and it is unlikely that enough demand for petroleum products will be created there to keep a 9 MMTPA refinery going. There are three other refineries already operational in Assam and jostling for market share. What is the point of importing crude via a pipeline all the way from the East Coast, either from Haldia or Paradip, and then taking finished products back, perhaps for the same distance to the mainland through a pipeline that will run parallel to the one importing crude?
8A 6 MMTPA refining capacity is sought to be built with a capital subsidy of Rs 8000 crore and a excise duty relief amounting to a whopping Rs 8400 crore a year! The 50% excise duty relief on the existing 3 MMTPA capacity is Rs 600 crore a year. And if the capacity is expanded by another 6 MMTPA and 100% relief is granted as sought by BPCL, the figure totals up to Rs 7200 crore on the incremental capacity. If duty relief is to cover the entire 9 MMTPA capacity, the subsidy will come to Rs 8400 crore.
8The question that immediately comes to mind is what really prompts BPCL to come up with such a preposterous demand and yet maintain a straight face. The only plausible answer is that the new government will buy the argument that the capacity is coming up in industry-deficient and militancy ridden North East of India where industrialization should be promoted. This was exactly the logic on which the existing refinery was set up when Rajiv Gandhi signed the Assam Accord with the agitating All Assam Students Union in 1984. But a lot of a water has flown down the Brahmaputra since then. It is stagnating crude production from the Assam fields that has prompted BPCL to suggest a 1,350 km crude import pipeline all the way from Paradip to feed the refinery expansion. It is also a well established fact that a state-of-art refinery employs very few people and the Numaligarh refinery per say had little or no economic linkages with the rest of Assam's economy. The crude is processed within the refinery and while some of the petrol and diesel is distributed locally the rest is shipped out to the mainland
8And who has really befitted from it? It is just a few hundred people employed in the refinery. Ironically though, the Numaligarh refinery has accentuated the social divide in Upper Assam as a small class of privileged public sector employees is created from amongst the mass of un-empowered and impoverished people dotting the surrounding landscape. A few hundred people lead an ivory tower existence amidst tight CISF provided security at Numaligarh with virtually no connection with the local economy or population. The crude is piped into the refinery from Oil India's fields around Duliajan and shipped out and that's about all there is to it. Clearly the model of using large publicly funded and subsidy driven industrial plants to act as a catalyst for industrial development of the North East has failed to work.
8It is also a myth that Numaligarh can help sell Indian petroleum products in Bangaldesh and Myanmar. The route to Myanmar is long and torturous, and traverses difficult terrain. A pipeline will be unviable given low offtake in areas bordering India and the fragile border roads will not be able to take the load of tankers ferrying MS and HSD from the plains of Assam to the Burmese border. 8A pipeline to Bangladesh may make more economic sense but it may not be an easy country to do business with. Currently we have a friendly regime in the neigbouring nation but when the tide turns and the regime changes, anything can happen.
8The website believes that it will not be wise for the Modi government to dole out a Rs 8,800 crore capital subsidy on a Rs 8400 crore excise relief to the refinery.
8If indeed the government is a mood to dole out subsidies, the capacity can be set up elsewhere in mainland India without any subsidy and can then be notionally attributed to Numaligarh refinery. The capital subsidy saved can be used through a Special Purpose Vehicle to develop schools, hospitals and infrastructure in Upper Assam. The annual excise dole sought by BPCL should be used to maintain and expand the infrastructure created by the capital subsidy.
8The Assam economy and its people will benefit much more that way than through an expansion of the Numaligarh refinery.
Click on our Reports section for more Details
8BPCL has asked the central government for a Rs.8,800 crore capital subsidy for the Rs.20,000 crore expansion plan
8The capital subsidy alone will not be enough to make the refinery viable. BPCL has said that the excise duty relief of 50% already available on products sold by the Numaligarh refinery because it is based in the North East, should be made 100% to enable the expansion to take place.
8When the refinery is expanded, most of the the extra capacity will only cater to demand originating outside of the North East. The industrial climate in the region is poor and it is unlikely that enough demand for petroleum products will be created there to keep a 9 MMTPA refinery going. There are three other refineries already operational in Assam and jostling for market share. What is the point of importing crude via a pipeline all the way from the East Coast, either from Haldia or Paradip, and then taking finished products back, perhaps for the same distance to the mainland through a pipeline that will run parallel to the one importing crude?
8A 6 MMTPA refining capacity is sought to be built with a capital subsidy of Rs 8000 crore and a excise duty relief amounting to a whopping Rs 8400 crore a year! The 50% excise duty relief on the existing 3 MMTPA capacity is Rs 600 crore a year. And if the capacity is expanded by another 6 MMTPA and 100% relief is granted as sought by BPCL, the figure totals up to Rs 7200 crore on the incremental capacity. If duty relief is to cover the entire 9 MMTPA capacity, the subsidy will come to Rs 8400 crore.
8The question that immediately comes to mind is what really prompts BPCL to come up with such a preposterous demand and yet maintain a straight face. The only plausible answer is that the new government will buy the argument that the capacity is coming up in industry-deficient and militancy ridden North East of India where industrialization should be promoted. This was exactly the logic on which the existing refinery was set up when Rajiv Gandhi signed the Assam Accord with the agitating All Assam Students Union in 1984. But a lot of a water has flown down the Brahmaputra since then. It is stagnating crude production from the Assam fields that has prompted BPCL to suggest a 1,350 km crude import pipeline all the way from Paradip to feed the refinery expansion. It is also a well established fact that a state-of-art refinery employs very few people and the Numaligarh refinery per say had little or no economic linkages with the rest of Assam's economy. The crude is processed within the refinery and while some of the petrol and diesel is distributed locally the rest is shipped out to the mainland
8And who has really befitted from it? It is just a few hundred people employed in the refinery. Ironically though, the Numaligarh refinery has accentuated the social divide in Upper Assam as a small class of privileged public sector employees is created from amongst the mass of un-empowered and impoverished people dotting the surrounding landscape. A few hundred people lead an ivory tower existence amidst tight CISF provided security at Numaligarh with virtually no connection with the local economy or population. The crude is piped into the refinery from Oil India's fields around Duliajan and shipped out and that's about all there is to it. Clearly the model of using large publicly funded and subsidy driven industrial plants to act as a catalyst for industrial development of the North East has failed to work.
8It is also a myth that Numaligarh can help sell Indian petroleum products in Bangaldesh and Myanmar. The route to Myanmar is long and torturous, and traverses difficult terrain. A pipeline will be unviable given low offtake in areas bordering India and the fragile border roads will not be able to take the load of tankers ferrying MS and HSD from the plains of Assam to the Burmese border. 8A pipeline to Bangladesh may make more economic sense but it may not be an easy country to do business with. Currently we have a friendly regime in the neigbouring nation but when the tide turns and the regime changes, anything can happen.
8The website believes that it will not be wise for the Modi government to dole out a Rs 8,800 crore capital subsidy on a Rs 8400 crore excise relief to the refinery.
8If indeed the government is a mood to dole out subsidies, the capacity can be set up elsewhere in mainland India without any subsidy and can then be notionally attributed to Numaligarh refinery. The capital subsidy saved can be used through a Special Purpose Vehicle to develop schools, hospitals and infrastructure in Upper Assam. The annual excise dole sought by BPCL should be used to maintain and expand the infrastructure created by the capital subsidy.
8The Assam economy and its people will benefit much more that way than through an expansion of the Numaligarh refinery.
Click on our Reports section for more Details
IOC is planning to augment its pipeline network from Paradeep to Barauni to be able to ferry imported crude to its Bongaigoan and Guwahati units.
8Along with the expansion, the company may be tempted to try and significantly expand the capacities of its Assam based refineries but this must not be allowed to happen.
8BPCL's Numaligarh refinery had drawn up plans to raise its capacity in a massive Rs 20,000 crore expansion but its plans have since been grounded after this website questioned the financial viability of such a project.
8The argument for both IOC and BPCL is the same.
8The refinery process crude that is brought in all the way from Paradeep and then the products out of the refinery will then have to be sent back on a parallel pipeline to the mainland for sale.
8Given the transport cost and the low economies of scale of Bongaingoan refinery, expansion of capacity would not make sense at all.
8Viability of such capacity is only ensured if the central government continues to extend the 50% excise duty relief on BRPL's products as is done for its existing capacity.
8The website believes that there are few backward linkages of a well managed refinery with the local economy in Assam and the doling out of the excise relief is a sheer waste of public money.
8Instead, a similar refinery capacity can be set up elsewhere in India, where a refinery can survive without tax relief, and the excise duty saved for nothing build that notional capacity in the North East should be pumped into building of social infrastructure in the region.
Click on our Reports section for more Details
8Along with the expansion, the company may be tempted to try and significantly expand the capacities of its Assam based refineries but this must not be allowed to happen.
8BPCL's Numaligarh refinery had drawn up plans to raise its capacity in a massive Rs 20,000 crore expansion but its plans have since been grounded after this website questioned the financial viability of such a project.
8The argument for both IOC and BPCL is the same.
8The refinery process crude that is brought in all the way from Paradeep and then the products out of the refinery will then have to be sent back on a parallel pipeline to the mainland for sale.
8Given the transport cost and the low economies of scale of Bongaingoan refinery, expansion of capacity would not make sense at all.
8Viability of such capacity is only ensured if the central government continues to extend the 50% excise duty relief on BRPL's products as is done for its existing capacity.
8The website believes that there are few backward linkages of a well managed refinery with the local economy in Assam and the doling out of the excise relief is a sheer waste of public money.
8Instead, a similar refinery capacity can be set up elsewhere in India, where a refinery can survive without tax relief, and the excise duty saved for nothing build that notional capacity in the North East should be pumped into building of social infrastructure in the region.
Click on our Reports section for more Details
BRPL will undertake a Rs 200 crore DHDT capacity enhancement project that wil raise the throughput from 1,200 TMTPA to 1,800 TMTPA to be able to meet BS-IV standards. Currently, the refinery can make only make BS-III compatible diesel.
For suppliers of equipment, what will be of interest is the demand for the following:
8Additional feed pump and feed affluent exchangers
8Revamp of recycle gas compressor
8Furnace tube size change from existing 6" to higher size to reduce the high pressure drop.
8Change of around 12 control valves to higher sizes.
8New internals of stripper & stabilizer columns
8New head exchangers of stripper & stabilizer.
8Change in piping can be estimated during detailed engineering.
8One new fractionating column for continuous production of ATF & HSD from the present blocked out mode operation.
8Partial change of catalyst with a bed of hydro-cracking catalyst in the last reactor to have improvement in 95% recovery
8Offsite transfer pumps
8Installation of Hot Separator
Click on our Reports section for more Details
For suppliers of equipment, what will be of interest is the demand for the following:
8Additional feed pump and feed affluent exchangers
8Revamp of recycle gas compressor
8Furnace tube size change from existing 6" to higher size to reduce the high pressure drop.
8Change of around 12 control valves to higher sizes.
8New internals of stripper & stabilizer columns
8New head exchangers of stripper & stabilizer.
8Change in piping can be estimated during detailed engineering.
8One new fractionating column for continuous production of ATF & HSD from the present blocked out mode operation.
8Partial change of catalyst with a bed of hydro-cracking catalyst in the last reactor to have improvement in 95% recovery
8Offsite transfer pumps
8Installation of Hot Separator
Click on our Reports section for more Details
Bongaigaon Refinery and Petrochemicals Ltd (BRPL), an IOC subsidiary, has announced plans to set up a Rs 3300 crore capacity expansion-cum-upgradation project to meet BS-IV specifications.
The details of the new projects are:
8Crude processing capacity enhancement from 2.35 to 2.7 MMTPA
8DHDT capacity enhancement from 1,200 TMTPA to 1,800 TMTPA to meet BS-V/VI HSD specification
8CRU-MSQ revamp to meet BS-V/VI MS specification
8Selective Desulphurisation (SDS) Unit
8An INDMAX project along with an Indmax Gasoline De-Sulphurisation Unit
8The capacity expansion is taking place because the capacity of the Haldia-Barauni pipeline that supplies low sulphur imported crude -- over and above sweet crude from the Assam fields -- is being expanded. The crude availability at the refinery now stands at 2.7 MMTPA.
8Bongaigoan has two CDUs and it is the capacity of the second CDU that is going to be raised from 1 to 1.35 MMTPA.
Click on our Reports section for more Details
The details of the new projects are:
8Crude processing capacity enhancement from 2.35 to 2.7 MMTPA
8DHDT capacity enhancement from 1,200 TMTPA to 1,800 TMTPA to meet BS-V/VI HSD specification
8CRU-MSQ revamp to meet BS-V/VI MS specification
8Selective Desulphurisation (SDS) Unit
8An INDMAX project along with an Indmax Gasoline De-Sulphurisation Unit
8The capacity expansion is taking place because the capacity of the Haldia-Barauni pipeline that supplies low sulphur imported crude -- over and above sweet crude from the Assam fields -- is being expanded. The crude availability at the refinery now stands at 2.7 MMTPA.
8Bongaigoan has two CDUs and it is the capacity of the second CDU that is going to be raised from 1 to 1.35 MMTPA.
Click on our Reports section for more Details
BRPL will also witness the installation of an INDMAX FCC unit that is the pride of IOC's R&D division. The company is a joint licensor of the project with Lummus Technology Inc of the US.
8The unit will eliminate the production of demand limited black oils such as LDO, LVFO, LSHS as well as naphtha and instead will produce high value products such as LPG and MS conforming to BS-IV specifications.
8The unit will have a design capacity of 740,000 MTPA.
8The LPG treatment facility will be part of the INDMAX unit.
8What is more there will be an Indmax Gasoline De-Sulphurisation Unit too, with a design capacity of 312,000 MTPA to reduce Sulphur content in Indmax Gasoline so to meet BS- IV/V/VI equivalent specifications for MS.
8The ballpark cost estimate of the proposed Indmax project is Rs. 2,500 Crore.
8IRR for the Indmax project at 90% capacity utilization based on feed availability is calculated at 11.2% post-tax considering debt-equity ratio of 1:1 with interest rate of 9.0% and a 15 year- operating life.
8The project is scheduled to be completed by April, 2019.
Comment: Is there a conflict of interest in licensor also being a captive buyer? In the attempt to promote its own R&D can it cause a loss to BRPL because a tender process will not be adopted to select the best technology for translating black oil into value added products? The post tax IRR of 11.2% is just about ok but is there any other licensor that can provide a better IRR? A company like IOC should never venture into becoming a process licensor because it does not pay to become one. No other refinery will want to buy the process on account of competitive principles. There are already licensors in the business who know how best to do these things. Eventually, it will up to the CAG to comment on whether it is fair on the part of IOC to place a Rs 2500 crore order on itself on a nomination basis. The other question is: Is IOC taking advantage of the excise duty relief to push through its INDMAX unit in Bongaigoan?
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8The unit will eliminate the production of demand limited black oils such as LDO, LVFO, LSHS as well as naphtha and instead will produce high value products such as LPG and MS conforming to BS-IV specifications.
8The unit will have a design capacity of 740,000 MTPA.
8The LPG treatment facility will be part of the INDMAX unit.
8What is more there will be an Indmax Gasoline De-Sulphurisation Unit too, with a design capacity of 312,000 MTPA to reduce Sulphur content in Indmax Gasoline so to meet BS- IV/V/VI equivalent specifications for MS.
8The ballpark cost estimate of the proposed Indmax project is Rs. 2,500 Crore.
8IRR for the Indmax project at 90% capacity utilization based on feed availability is calculated at 11.2% post-tax considering debt-equity ratio of 1:1 with interest rate of 9.0% and a 15 year- operating life.
8The project is scheduled to be completed by April, 2019.
Comment: Is there a conflict of interest in licensor also being a captive buyer? In the attempt to promote its own R&D can it cause a loss to BRPL because a tender process will not be adopted to select the best technology for translating black oil into value added products? The post tax IRR of 11.2% is just about ok but is there any other licensor that can provide a better IRR? A company like IOC should never venture into becoming a process licensor because it does not pay to become one. No other refinery will want to buy the process on account of competitive principles. There are already licensors in the business who know how best to do these things. Eventually, it will up to the CAG to comment on whether it is fair on the part of IOC to place a Rs 2500 crore order on itself on a nomination basis. The other question is: Is IOC taking advantage of the excise duty relief to push through its INDMAX unit in Bongaigoan?
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IOC is conducting a safety audit of its pipelines around its Paradeep refinery now that the refinery is in commissioning mode.
8A study is to be conducted of the existing Cathodic Protection System of these pipelines.
8The idea is to indentification of cathodically protected portions and vulnerable stretches.
8The consultant must make the following recommendations eventually on the need, if any, for:
8Coating refurbishment in vulnerable stretches
8Installation of new CP stations, if any
8Relocation of existing CP stations, if needed.
8Renovation/ relocation of ground beds.
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8A study is to be conducted of the existing Cathodic Protection System of these pipelines.
8The idea is to indentification of cathodically protected portions and vulnerable stretches.
8The consultant must make the following recommendations eventually on the need, if any, for:
8Coating refurbishment in vulnerable stretches
8Installation of new CP stations, if any
8Relocation of existing CP stations, if needed.
8Renovation/ relocation of ground beds.
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PNGRB has planned to make the following pipelines into common carrier lines, claiming that in most of these pipelines a large amount of spare capacity is available which can be used by third parties for ferrying their own products:
8Bina-Kota (BPCL)
8Mumbai-Manmad-Bijwasan (BPCL)
8Barauni-Kanpur (IOC)
8Koyali-Ahmedabad (IOC)
8Mathura-Delhi (IOC)
8Mathura-Tundla (IOC)
8Mathura-Bharatpur (IOC)
8Panipat-Delhi (IOC)
8Panipat-Ambala-Jalandhar (IOC)
8Panipat-Rewari (IOC)
8Digboi-Tinsukia (IOC)
8Koyali-Ratnam (IOC)
8Panipat-Jhalandar (IOC)
8Chennai-Bangalore (IOC)
8Panipat-Bhatinda (IOC)
8Guwahati-Siliguri (IOC)
8Bijwasan-Panipat (IOC)
8Haldia-Mourigram-Rajbandh (IOC)
8Vijaipur-Guna (GAIL)
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8Bina-Kota (BPCL)
8Mumbai-Manmad-Bijwasan (BPCL)
8Barauni-Kanpur (IOC)
8Koyali-Ahmedabad (IOC)
8Mathura-Delhi (IOC)
8Mathura-Tundla (IOC)
8Mathura-Bharatpur (IOC)
8Panipat-Delhi (IOC)
8Panipat-Ambala-Jalandhar (IOC)
8Panipat-Rewari (IOC)
8Digboi-Tinsukia (IOC)
8Koyali-Ratnam (IOC)
8Panipat-Jhalandar (IOC)
8Chennai-Bangalore (IOC)
8Panipat-Bhatinda (IOC)
8Guwahati-Siliguri (IOC)
8Bijwasan-Panipat (IOC)
8Haldia-Mourigram-Rajbandh (IOC)
8Vijaipur-Guna (GAIL)
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In one sweep, the PNGRB plans to declare as many as 24 petroleum product pipelines belonging to IOC, BPCL and GAIL as contract or common carrier lines.
8This will then firmly bring these pipelines under the ambit of the PNGRB.
8The PNGRB can then fix tariffs and allow third parties to ferry their products through these pipelines
8The move has been opposed tooth and nail by all the three companies.
8The regulator's proposal will dramatically change the dynamics of market place for petroleum products.
8With the deregulation in prices, and the advent of the private sector, these pipelines are likely to help private players such as RIL and Essar to make inroads into the hinterland of India.
8The private players will then be able to set up retail networks across the length and breath of the country using the very pipeline networks that the public sector oil companies have been using captively so far.
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8This will then firmly bring these pipelines under the ambit of the PNGRB.
8The PNGRB can then fix tariffs and allow third parties to ferry their products through these pipelines
8The move has been opposed tooth and nail by all the three companies.
8The regulator's proposal will dramatically change the dynamics of market place for petroleum products.
8With the deregulation in prices, and the advent of the private sector, these pipelines are likely to help private players such as RIL and Essar to make inroads into the hinterland of India.
8The private players will then be able to set up retail networks across the length and breath of the country using the very pipeline networks that the public sector oil companies have been using captively so far.
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BPCL has not taken kindly to PNGRB's announcement that the Bina-Kota and the Mumbai-Manmad-Bijwasan pipelines will be converted into common carrier lines.
8The company has said that the the Mumbai-Manmad-Bijwasan pipeline was a dedicated pipeline and it was laid even before the PNGRB came into existence.
8BPCL says that it is a refinery originating from its refinery and it will be unwise logistically, and in terms of safety and security to allow third parties to use the line.
8What is more, the pipeline utilization is already at 100%, the argument goes.
8For the Manmad-Bijwasan pipeline too that caters captively for the Bina refinery, BPCL's argument is that any attempt to declare it as a common carrier will jeopardise the refinery operations.
8No explanation was however given as to how such operations will be jeopardized.
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8The company has said that the the Mumbai-Manmad-Bijwasan pipeline was a dedicated pipeline and it was laid even before the PNGRB came into existence.
8BPCL says that it is a refinery originating from its refinery and it will be unwise logistically, and in terms of safety and security to allow third parties to use the line.
8What is more, the pipeline utilization is already at 100%, the argument goes.
8For the Manmad-Bijwasan pipeline too that caters captively for the Bina refinery, BPCL's argument is that any attempt to declare it as a common carrier will jeopardise the refinery operations.
8No explanation was however given as to how such operations will be jeopardized.
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More than BPCL, it is IOC that has come out vehemently against the declaration of the bulk of its product pipeline network as common carriers.
8The control on these pipelines will then pass on the PNGRB, which will then set tariff rates and enforce third party transit rights on petroleum products through them, thereby ending IOC's monopoly over product transit across the country.
8IOC has submitted a legal opinion from Meharia & Company which argues that the pipelines are used on a dedicated basis and there are no provisions in the PNGRB Act to convert dedicated lines into common carrier pipelines.
8The company has also argued that product pipelines are not natural monopolies like gas pipelines because alternate modes of transport via road and rail are available for product lines.
8The legal submission goes on to claim that the common carrier principle does not include pipelines that are used for transmission to a specific consumer, in this case to IOC itself.
8There are several other arguments put forward by IOC to make its point that none of the pipelines identified by the PNGRB should fall under the common carrier banner.
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8The control on these pipelines will then pass on the PNGRB, which will then set tariff rates and enforce third party transit rights on petroleum products through them, thereby ending IOC's monopoly over product transit across the country.
8IOC has submitted a legal opinion from Meharia & Company which argues that the pipelines are used on a dedicated basis and there are no provisions in the PNGRB Act to convert dedicated lines into common carrier pipelines.
8The company has also argued that product pipelines are not natural monopolies like gas pipelines because alternate modes of transport via road and rail are available for product lines.
8The legal submission goes on to claim that the common carrier principle does not include pipelines that are used for transmission to a specific consumer, in this case to IOC itself.
8There are several other arguments put forward by IOC to make its point that none of the pipelines identified by the PNGRB should fall under the common carrier banner.
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For reference purposes, the website carries here the following details as of August, 2015:
--Latest crude price analysis
--World oil demand & supply.
--Oil demand/Supply ratio
--Oil Supply: OPEC & Non-OPEC
--Crude oil output
--Oil Demand: World
--Oil Demand: World, OECD, Non-OECD
--Oil Demand: G7
--Oil Demand: Europe
--Oil Demand: Asia, OPEC, Middle East
--Oil Demand: Asia
--Oil Demand: FSU & Eastern Europe
--Oil Demand: Latin America
--Oil Supply: OPEC
--Oil Supply: Non-OPEC Americas
--Oil Supply: Non-OPEC Europe
--Oil Supply: Non-OPEC Africa/Middle East
--Oil Supply: Non-OPEC Asia
--Oil Supply: Big producers
Click on report for more details. Details
--Latest crude price analysis
--World oil demand & supply.
--Oil demand/Supply ratio
--Oil Supply: OPEC & Non-OPEC
--Crude oil output
--Oil Demand: World
--Oil Demand: World, OECD, Non-OECD
--Oil Demand: G7
--Oil Demand: Europe
--Oil Demand: Asia, OPEC, Middle East
--Oil Demand: Asia
--Oil Demand: FSU & Eastern Europe
--Oil Demand: Latin America
--Oil Supply: OPEC
--Oil Supply: Non-OPEC Americas
--Oil Supply: Non-OPEC Europe
--Oil Supply: Non-OPEC Africa/Middle East
--Oil Supply: Non-OPEC Asia
--Oil Supply: Big producers
Click on report for more details. Details
Everyone is looking at the possible lifting of US restrictions on crude oil export as another trigger for a slump in oil prices.
8But an extensive study has proven that removal of current restrictions on US export of crude will have only a marginal impact if any on global prices.
8The study says that the impact at best will be a small reduction in global crude price.
8What will determine global crude price movements will be other normal factors that affect global supply and demand.
8While removing restrictions on U.S. crude oil exports either leaves global prices unchanged or lowers them modestly, global price drivers unrelated to U.S. crude oil export
policy will affect growth in U.S. crude oil production and exports of crude oil and products whether or not current export restrictions are removed.
8The debate on removing export restrictions is not yet over following forecasts that US crude output will fall to 9.0 million barrels per day in 2016 as against 9.4 million b/d in 2015 following changes in drilling activity following the sharp decline in oil prices since 2014.
8The situation however must be looked at from the perspective that output has arisen from 5.6 million barrels per day (b/d) in 2011 to 8.7 million b/d in 2014, going up to 9.4 million b/d this year.
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8But an extensive study has proven that removal of current restrictions on US export of crude will have only a marginal impact if any on global prices.
8The study says that the impact at best will be a small reduction in global crude price.
8What will determine global crude price movements will be other normal factors that affect global supply and demand.
8While removing restrictions on U.S. crude oil exports either leaves global prices unchanged or lowers them modestly, global price drivers unrelated to U.S. crude oil export
policy will affect growth in U.S. crude oil production and exports of crude oil and products whether or not current export restrictions are removed.
8The debate on removing export restrictions is not yet over following forecasts that US crude output will fall to 9.0 million barrels per day in 2016 as against 9.4 million b/d in 2015 following changes in drilling activity following the sharp decline in oil prices since 2014.
8The situation however must be looked at from the perspective that output has arisen from 5.6 million barrels per day (b/d) in 2011 to 8.7 million b/d in 2014, going up to 9.4 million b/d this year.
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The cabinet has finally approved the Marginal Fields Policy that will allow small and marginal fields from the nomination blocks of ONGC and OIL to be auctioned out through a competitive bidding process.
8These oil fields have not been developed earlier as they were considered as marginal fields, and hence were of lower priority.
8The bidding will be done on the basis of the government's share of the gross revenue from the sale of oil, gas and other hydrocarbon reserves in the fields.
8Importantly, the licence granted to the successful bidder will cover all hydrocarbons found in the field. Earlier, the licence was restricted to one item only (like gas or oil) and separate licence was required if any other hydrocarbon.
8The new policy for these marginal fields also allows the successful bidder to sell at the prevailing market price of gas, rather than at administered price.
Comment:This is clearly one of the best marginal field policies to come out. The parameters are clear and the government can step back and pick up a share of the gross revenues. No other questions asked. It is pertinent to note that it was a similar policy in 1992-93 which lead to the auctioning of medium and small fields that saw the likes of Cairn Energy, Videocon and RIL emerge as big players in the oil and gas business. Today there are a total of 28 contracts that produce close to 40000 BOPD of crude and around 7.5 mmscmd of gas emerging out of that policy format. The big advantage of the policy was that international price was given for crude oil. The government has now smoothened out the creases by offering royalty rates as applicable to the NELP regime. Another problem with the 1992-93 policy was that they were production sharing contracts which were subsequently mired in arbitration and litigation. This hurdle is now being bypassed by getting into a straight revenue sharing model with the contractor. Expect a big rush of bidders this time around. Details
8These oil fields have not been developed earlier as they were considered as marginal fields, and hence were of lower priority.
8The bidding will be done on the basis of the government's share of the gross revenue from the sale of oil, gas and other hydrocarbon reserves in the fields.
8Importantly, the licence granted to the successful bidder will cover all hydrocarbons found in the field. Earlier, the licence was restricted to one item only (like gas or oil) and separate licence was required if any other hydrocarbon.
8The new policy for these marginal fields also allows the successful bidder to sell at the prevailing market price of gas, rather than at administered price.
Comment:This is clearly one of the best marginal field policies to come out. The parameters are clear and the government can step back and pick up a share of the gross revenues. No other questions asked. It is pertinent to note that it was a similar policy in 1992-93 which lead to the auctioning of medium and small fields that saw the likes of Cairn Energy, Videocon and RIL emerge as big players in the oil and gas business. Today there are a total of 28 contracts that produce close to 40000 BOPD of crude and around 7.5 mmscmd of gas emerging out of that policy format. The big advantage of the policy was that international price was given for crude oil. The government has now smoothened out the creases by offering royalty rates as applicable to the NELP regime. Another problem with the 1992-93 policy was that they were production sharing contracts which were subsequently mired in arbitration and litigation. This hurdle is now being bypassed by getting into a straight revenue sharing model with the contractor. Expect a big rush of bidders this time around. Details
Ironically, even though these marginal fields are being taken out from the inventory of ONGC and OIL, eventually it is quite likely that they may go back to them as they been allowed to compete in the auctioning these blocks.
8The main problem with these fields was that the fiscal regime was too restrictive for them to be developed.
8Once free market prices are given, and the fiscal regime is made less rigorous, it is quite likely that the two national oil companies may bid aggressively with the others for these fields.
8The reported relaxation from payment of cess and a seven year tax holiday are seen as giving the requisite impetus to develop these fields.
8But it still likely that the high overheads of the two companies may deter them from bidding for some really marginal fields with little or no prospect but overall the duo will know better than the others on which fields to bid for. Details
8The main problem with these fields was that the fiscal regime was too restrictive for them to be developed.
8Once free market prices are given, and the fiscal regime is made less rigorous, it is quite likely that the two national oil companies may bid aggressively with the others for these fields.
8The reported relaxation from payment of cess and a seven year tax holiday are seen as giving the requisite impetus to develop these fields.
8But it still likely that the high overheads of the two companies may deter them from bidding for some really marginal fields with little or no prospect but overall the duo will know better than the others on which fields to bid for. Details
The average time taken for monetization of NELP contracts is around four years and six years from the date of notification of discoveries in case of oil and gas discoveries respectively.
8The rule book says that the FDP has to be submitted within around 74 months. Further, in case of gas, development of the field has to start within 10 years or else the discovery will have to be relinquished.
8But it is learnt from our sources in the government that under the new regime, production from the small and medium sized fields has to commence within 2 years for an on-land and 4 years in case of offshore acerages. The deadline will be set from the date of signing of the contract or grant of Petroleum Mining Lease (PML), whichever is later.
8In case of offshore blocks with water depth more than 400 meters, either fully or partly in that depth, the monetization time will have to be within 6 years.
8Any discovery which is not put on production, within the timelines given, will stand relinquished and the PBG will be revoked or Liquidated Damages will have to be paid by the contractor.
8The issue of transfer of mining lease to the contractor of marginal fields was discussed in the cabinet meeting and it has been resolved that the right of the licencee can be transferred with the written permission of the central government subject to the fulfillment of certain caveats Details
8The rule book says that the FDP has to be submitted within around 74 months. Further, in case of gas, development of the field has to start within 10 years or else the discovery will have to be relinquished.
8But it is learnt from our sources in the government that under the new regime, production from the small and medium sized fields has to commence within 2 years for an on-land and 4 years in case of offshore acerages. The deadline will be set from the date of signing of the contract or grant of Petroleum Mining Lease (PML), whichever is later.
8In case of offshore blocks with water depth more than 400 meters, either fully or partly in that depth, the monetization time will have to be within 6 years.
8Any discovery which is not put on production, within the timelines given, will stand relinquished and the PBG will be revoked or Liquidated Damages will have to be paid by the contractor.
8The issue of transfer of mining lease to the contractor of marginal fields was discussed in the cabinet meeting and it has been resolved that the right of the licencee can be transferred with the written permission of the central government subject to the fulfillment of certain caveats Details
The petroleum ministry has been able to identify a total of 69 marginal fields that have been lying with ONGC and OIL and have not been developed for various reasons.
8As a sop for giving up the fields, the government is allowing both ONGC and OIL to participate in the ICB process for these fields
8Some of the provisions of the Model Revenue Sharing Contract (MRSC) -- which is meant to substitute NELP auctions -- as developed by PriceWaterhouseCoopers (PWC) has been incorporated in the marginal fields policy as well.
8As there is less exploration risk in these marginal discoveries, it is suggested that they be offered on Revenue Sharing Contract (RSC) Model in line with the already approved Uniform Licensing Policy (ULP) as sanctioned by the Rangarajan Committee.
8In view of the expected marginal nature of such discoveries, the RSC model would be more appropriate and easy to administer, it is felt.
8Already, the CBM policy is based on revenue sharing with the contractor bidding for a work programme and with attendant Production Linked Payments (PLPs) on a liner scale.
8So moving this model on to marginal fields wasn't really very difficult. Details
8As a sop for giving up the fields, the government is allowing both ONGC and OIL to participate in the ICB process for these fields
8Some of the provisions of the Model Revenue Sharing Contract (MRSC) -- which is meant to substitute NELP auctions -- as developed by PriceWaterhouseCoopers (PWC) has been incorporated in the marginal fields policy as well.
8As there is less exploration risk in these marginal discoveries, it is suggested that they be offered on Revenue Sharing Contract (RSC) Model in line with the already approved Uniform Licensing Policy (ULP) as sanctioned by the Rangarajan Committee.
8In view of the expected marginal nature of such discoveries, the RSC model would be more appropriate and easy to administer, it is felt.
8Already, the CBM policy is based on revenue sharing with the contractor bidding for a work programme and with attendant Production Linked Payments (PLPs) on a liner scale.
8So moving this model on to marginal fields wasn't really very difficult. Details
Why were marginal fields left undeveloped by ONGC and OIL.
8There could be several reasons for that, and among them were:
8The size of the reserves were too small for the national oil companies to put men and material to them.
8The fields are isolated and there no customers available.
8Moving drilling infrastructure to such fields would have been expensive and overheads would have been high.
8The tax and fiscal regime was not lucrative enough.
8There may have been technical constraints in developing some fields that required advance drilling systems that were not found viable to be deployed. Details
8There could be several reasons for that, and among them were:
8The size of the reserves were too small for the national oil companies to put men and material to them.
8The fields are isolated and there no customers available.
8Moving drilling infrastructure to such fields would have been expensive and overheads would have been high.
8The tax and fiscal regime was not lucrative enough.
8There may have been technical constraints in developing some fields that required advance drilling systems that were not found viable to be deployed. Details
ONGC chairman Subir Raha created quite a stir on April 28, 2004 when he broke from the past and handed over six marginal fields in a ceremony in Delhi to private companies for development on a service contract basis. Subsequently, another round of fields were given out under the same provisions.
8But down the years, it has been seen that developing marginal fields through the service contract route did not work. The contractors found the terms too stiff to comply with.
8For one, ONGC imposed a maximum ceiling price for crude -- $20/bbl in the first round and $35/bbl in the second -- within which contractors were forced to bid. Everything else being equal, the winning bidder was selected on the basis of how low a share of crude price was he willing to take to develop a field. The cot of development was not recoverable and was to be borne by the bidder.
8When rude prices went up sharply so did development cost. Soon, the contractors found it not worth their while to put in money in these service contracts.
8Even at that point of time, the response was lukewarm. In one round, 17 fields were on auction. Finally, only 10 fields were announced to be awarded to 5 short-listed bidders. But when the contracts were finally announced, only six fields were awarded to two companies. Details
8But down the years, it has been seen that developing marginal fields through the service contract route did not work. The contractors found the terms too stiff to comply with.
8For one, ONGC imposed a maximum ceiling price for crude -- $20/bbl in the first round and $35/bbl in the second -- within which contractors were forced to bid. Everything else being equal, the winning bidder was selected on the basis of how low a share of crude price was he willing to take to develop a field. The cot of development was not recoverable and was to be borne by the bidder.
8When rude prices went up sharply so did development cost. Soon, the contractors found it not worth their while to put in money in these service contracts.
8Even at that point of time, the response was lukewarm. In one round, 17 fields were on auction. Finally, only 10 fields were announced to be awarded to 5 short-listed bidders. But when the contracts were finally announced, only six fields were awarded to two companies. Details
That the marginal field policy was poorly structured was evident from the fact that some contracts were terminated while a few others are now tied up in arbitration. Details of contracts terminated are:
--Assam Company Ltd: Contracts for three fields namely, Bihubar, Barsilla and Laxmijan in the Assam awarded to Assam company Ltd were terminated after the operator failed to fulfill the committed work programme even after several extensions were granted. ONGC was forced to invoke the performance bank guarantee (PBG) furnished by the bidder. The dispute is now under arbitration.
--GSPC: The E&P major invoked the bank guarantee as GSPC backtracked on signing the contracts for two onshore fields -- South Patan and Kamboi -- after the fields were awarded to the state sector company on a nomination basis.
--Prize Petroleum: ONGC terminated the contract and invoked the PBG for two blocks -- Khambel and West Becharji -- after the contractor could not complete the committed work programme on time. The case was, subsequently, referred to arbitration.
--Shiv-Vani Oil & Gas Exploration: The contract was terminated and the PBG was confiscated after the company failed to complete the committed work program within time.
8Moreover, for another three fields, namely Karaikal, Vadatheru and Neyveli in the Cauvery asset, the contractor -- a consortium of KEI-RSOS Petroleum Energy Ltd, KEI-RSOS Maritime Ltd and Apollo Energy -- had requested for extensions of assessment periods after they failed complete the work programmes for the fields. But the request for extension was rejected
8ONGC had also terminated the contracts for three offshore fields -- B-192, B-45 and WO-24 -- as the work programme could not be completed on time. The company had also enchased the PBG furnished by the consortium of Prize Petroleum, HPCL and Trenergy for the fields. Details
--Assam Company Ltd: Contracts for three fields namely, Bihubar, Barsilla and Laxmijan in the Assam awarded to Assam company Ltd were terminated after the operator failed to fulfill the committed work programme even after several extensions were granted. ONGC was forced to invoke the performance bank guarantee (PBG) furnished by the bidder. The dispute is now under arbitration.
--GSPC: The E&P major invoked the bank guarantee as GSPC backtracked on signing the contracts for two onshore fields -- South Patan and Kamboi -- after the fields were awarded to the state sector company on a nomination basis.
--Prize Petroleum: ONGC terminated the contract and invoked the PBG for two blocks -- Khambel and West Becharji -- after the contractor could not complete the committed work programme on time. The case was, subsequently, referred to arbitration.
--Shiv-Vani Oil & Gas Exploration: The contract was terminated and the PBG was confiscated after the company failed to complete the committed work program within time.
8Moreover, for another three fields, namely Karaikal, Vadatheru and Neyveli in the Cauvery asset, the contractor -- a consortium of KEI-RSOS Petroleum Energy Ltd, KEI-RSOS Maritime Ltd and Apollo Energy -- had requested for extensions of assessment periods after they failed complete the work programmes for the fields. But the request for extension was rejected
8ONGC had also terminated the contracts for three offshore fields -- B-192, B-45 and WO-24 -- as the work programme could not be completed on time. The company had also enchased the PBG furnished by the consortium of Prize Petroleum, HPCL and Trenergy for the fields. Details
It has been confirmed that the contractors under the Marginal Fields Policy will be allowed to market the gas at market prices.
8The Rangarajan gas pricing formula will not apply to production from these fields.
8The pricing mechanism will be as per recent government notification that allows sale of gas from small and marginal fields in accordance with market determined pricing.
8The new pricing policy was announced under "Guidelines for selection of customers for domestic gas available from small/isolated fields" in January, 2012 and was subsequently updated in July and November, 2013. These notifications are publicly available.
8Sources have not clarified yet whether there will be cap on the gas that can be supplied at market prices.
8The current notifications allow sale of gas up to 2 mmscmd through the bidding process without a sectoral or a price cap. It is not known yet whether this cap has been removed. Then again, for offshore gas the buzz was that the limit will be 1 mmscmd before the gas pricing formula becomes applicable.
8The press release does not mention a cap, and if this is the case, it will be a huge incentive indeed for developers of these fields. Details
8The Rangarajan gas pricing formula will not apply to production from these fields.
8The pricing mechanism will be as per recent government notification that allows sale of gas from small and marginal fields in accordance with market determined pricing.
8The new pricing policy was announced under "Guidelines for selection of customers for domestic gas available from small/isolated fields" in January, 2012 and was subsequently updated in July and November, 2013. These notifications are publicly available.
8Sources have not clarified yet whether there will be cap on the gas that can be supplied at market prices.
8The current notifications allow sale of gas up to 2 mmscmd through the bidding process without a sectoral or a price cap. It is not known yet whether this cap has been removed. Then again, for offshore gas the buzz was that the limit will be 1 mmscmd before the gas pricing formula becomes applicable.
8The press release does not mention a cap, and if this is the case, it will be a huge incentive indeed for developers of these fields. Details
IOC's pipeline division is now seeking a professional agency to conduct testing of crude oil samples received at its west coast installations
8The locations are at Vadinar and Mundra in Gujarat.
8IOC imports various cargoes of crude oil from different sources at its installations on the west coast for refining at its refineries.
8The company requires to carry out prompt testing of certain physical and chemical parameters of the samples of these crude oil cargoes for analysis and quality assurance purposes.
8The following testing methods will be used at the Vadinar and Mundra installation:
--ASTM D4006/4007, ASTM D4294, ASTM D445, ASTM D4629
--ASTM D 1298, ASTM D5949, ASTM DE6560, ASTM D664 and ASTM IOCM123.
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8The locations are at Vadinar and Mundra in Gujarat.
8IOC imports various cargoes of crude oil from different sources at its installations on the west coast for refining at its refineries.
8The company requires to carry out prompt testing of certain physical and chemical parameters of the samples of these crude oil cargoes for analysis and quality assurance purposes.
8The following testing methods will be used at the Vadinar and Mundra installation:
--ASTM D4006/4007, ASTM D4294, ASTM D445, ASTM D4629
--ASTM D 1298, ASTM D5949, ASTM DE6560, ASTM D664 and ASTM IOCM123.
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Cairn India has drawn up a plan to shortlist a set of international engineering consultants for its upcoming oil and gas projects in its Rajasthan block RJ-ON-90/1.
8The RJ-ON-90/1 block contains the highly prolific Mangala, Bhagyam,, Aishwarya, Rageshwari and other satellite fields and gas discoveries.
8The engineering services are required for upgradation of existing facilities and development of new facilities.
8The engineering services that are needed in the existing block are as follows:
--Adequacy / optimization studies, techno commercial and feasibility studies
--FEED and basic engineering studies
--Cost estimation, assessment of new / alternative technologies, design of packages etc.
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8The RJ-ON-90/1 block contains the highly prolific Mangala, Bhagyam,, Aishwarya, Rageshwari and other satellite fields and gas discoveries.
8The engineering services are required for upgradation of existing facilities and development of new facilities.
8The engineering services that are needed in the existing block are as follows:
--Adequacy / optimization studies, techno commercial and feasibility studies
--FEED and basic engineering studies
--Cost estimation, assessment of new / alternative technologies, design of packages etc.
Click on report section for more details. Details
For any large oil and gas company, the estimated cost is the very basis of a tendering process for equipment and services.
8Price reasonability is established on the basis of a reserve price.
8What is more, an estimated cost matrix is the basis for all planning and budgeting and a large company like ONGC cannot get that wrong.
8In this context, ONGC has now re-circulated the following broad guidelines that will help its various divisions to come up with the price estimate:
--Preparation of cost estimates is primarily responsibility of the indenting division and for highly complex procurement and limited internal capability, an external consultant can be used for cost estimation, The internal cost estimation team should apply their own due diligence subsequent to a report submitted by the consultants to arrive at the final cost estimate.
--The estimated cost should be realistic, logical and scientific and should reflect the true market conditions as far as possible
--.Before the preparation of cost estimates, the scope of work specifications are to be clearly defined and cost estimates should be based upon the specific requirement of the job.
--In case of procurement of materials, the last purchase rate (LPR) should be considered for reference, but the actual market scenario must also be taken into account. Suitable escalation or reduction must also be considered over the LPR considering the time lag from the LPR date, the rate of inflation, foreign exchange rate fluctuation and changes in taxes and duties.
--In case of procurement of chemicals, cost estimates of each type of chemical should be prepared separately instead of putting alt or group of chemicals together.
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8Price reasonability is established on the basis of a reserve price.
8What is more, an estimated cost matrix is the basis for all planning and budgeting and a large company like ONGC cannot get that wrong.
8In this context, ONGC has now re-circulated the following broad guidelines that will help its various divisions to come up with the price estimate:
--Preparation of cost estimates is primarily responsibility of the indenting division and for highly complex procurement and limited internal capability, an external consultant can be used for cost estimation, The internal cost estimation team should apply their own due diligence subsequent to a report submitted by the consultants to arrive at the final cost estimate.
--The estimated cost should be realistic, logical and scientific and should reflect the true market conditions as far as possible
--.Before the preparation of cost estimates, the scope of work specifications are to be clearly defined and cost estimates should be based upon the specific requirement of the job.
--In case of procurement of materials, the last purchase rate (LPR) should be considered for reference, but the actual market scenario must also be taken into account. Suitable escalation or reduction must also be considered over the LPR considering the time lag from the LPR date, the rate of inflation, foreign exchange rate fluctuation and changes in taxes and duties.
--In case of procurement of chemicals, cost estimates of each type of chemical should be prepared separately instead of putting alt or group of chemicals together.
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It looks like ONGC is messing up its tendering process on account of unrealistic reserve price estimates.
8The E&P major was rapped on its knuckles by vigilance for preparing unrealistic cost estimates that created complication in evaluation of tenders.
8A case at point pertains to the hiring of drilling fluid services for onshore blocks that required induction of workover rigs and new technology but a mess up in the cost estimate introduced serious complications at the time of evaluation of tenders.
8Then there was yet another instance, that involved a mobilization advance to a contractor, where instruction issued by the CVC on mobilization advance to contractor against submission of bank guarantee was not adhered to by one of the work centers.
8The company's management has now issued instructions to its various work centres to prepare realistic estimates. Guidelines have now been incorporated in the Integrated MM Manual, wherein provisions on estimation of costs have been detailed.
8The company has now recalculated the CVCs guidelines on mobilization advance so that no mistakes are made again.
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8The E&P major was rapped on its knuckles by vigilance for preparing unrealistic cost estimates that created complication in evaluation of tenders.
8A case at point pertains to the hiring of drilling fluid services for onshore blocks that required induction of workover rigs and new technology but a mess up in the cost estimate introduced serious complications at the time of evaluation of tenders.
8Then there was yet another instance, that involved a mobilization advance to a contractor, where instruction issued by the CVC on mobilization advance to contractor against submission of bank guarantee was not adhered to by one of the work centers.
8The company's management has now issued instructions to its various work centres to prepare realistic estimates. Guidelines have now been incorporated in the Integrated MM Manual, wherein provisions on estimation of costs have been detailed.
8The company has now recalculated the CVCs guidelines on mobilization advance so that no mistakes are made again.
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Oil and gas companies have begun lobbying with the Expert Committee on Regulatory Approvals in the Department of Industrial Policy & Promotion for streamlining the troublesome approval process for oil and gas operations in India.
8The attempt seems to be to replace multiple prior permissions with a pre-existing regularity mechanism with safeguards.
8Sensing that the new government may want to take more proactive steps to clean up the regulatory maze than the previous regime, ONGC has put in a petition saying that E&P blocks should be handed over to operators only after prior approvals or clearances are obtained by DGH and the petroleum ministry from other departments and state governments
8Each case should be carefully evaluated prior to giving consent. Also, 'exceptions" and and 'no-go areas' must be highlighted.
8What is more, permissions given must be honored unilaterally by the agencies falling under such ministry's control as well by state governments.
8Under no circumstances, there should be a need to obtain re-approval by the operator. Details
8The attempt seems to be to replace multiple prior permissions with a pre-existing regularity mechanism with safeguards.
8Sensing that the new government may want to take more proactive steps to clean up the regulatory maze than the previous regime, ONGC has put in a petition saying that E&P blocks should be handed over to operators only after prior approvals or clearances are obtained by DGH and the petroleum ministry from other departments and state governments
8Each case should be carefully evaluated prior to giving consent. Also, 'exceptions" and and 'no-go areas' must be highlighted.
8What is more, permissions given must be honored unilaterally by the agencies falling under such ministry's control as well by state governments.
8Under no circumstances, there should be a need to obtain re-approval by the operator. Details
ONGC has highlighted that the PSC is notoriously silent on timelines to obtaining clearances by E&P operators.
8The rule now is that petroleum operations commence from the date of issuance of the Petroleum Exploration License (PEL) and in many cases it has been observed that the operator is issued a PEL but does not have the necessary approvals from the concerned ministry or state governments to start work.
8Everything gets stuck against despite the PEL.
8The petroleum ministry does provide extensions for such delays under "excusable delays" but the problem is that even these "excusable delays" are granted after a .considerable loss of time, adversely impacting the working schedules of E&P operators.
8Under the existing system, petroleum operations can take place only after a PEL is granted and once commerciality is established, the operator has to obtain a Petroleum Mining Lease (PML)
8ONGC has claimed that while the central government issues the a PML for offshore blocks more or less on time, state governments often procrastinate in issuing such licenses for offshore blocks. Details
8The rule now is that petroleum operations commence from the date of issuance of the Petroleum Exploration License (PEL) and in many cases it has been observed that the operator is issued a PEL but does not have the necessary approvals from the concerned ministry or state governments to start work.
8Everything gets stuck against despite the PEL.
8The petroleum ministry does provide extensions for such delays under "excusable delays" but the problem is that even these "excusable delays" are granted after a .considerable loss of time, adversely impacting the working schedules of E&P operators.
8Under the existing system, petroleum operations can take place only after a PEL is granted and once commerciality is established, the operator has to obtain a Petroleum Mining Lease (PML)
8ONGC has claimed that while the central government issues the a PML for offshore blocks more or less on time, state governments often procrastinate in issuing such licenses for offshore blocks. Details
The suggestion that has now been made by ONGC is that the Directorate General of Hydrocarbons~(DGH), the technical arm of petroleum ministry, should be empowered with necessary powers to liaise with appropriate government agencies for necessary licenses, clearances and approvals, as may be required at the time of award of the block to start the E&P operations
8The recommendation from the public sector E&P major is that the operator should be allowed to submit the prerequisite documents electronically.
8Subsequently the operator must be provided the desired approvals in a expeditiously manner but not later than a month.
8In case of any other activity related approvals required during the exploration or development of a block, necessary approvals should be provided to the operator within a short time, preferably not later than 15 days.
8Provision for submission of applications electronically in the prescribed format with the capability to track progress should also be incorporated.
8These formats should be made available on the DGH site and similarly all approvals should be provided in the same manner in a fixed time frame.
8Prescribing time limits for approvals. In case, the approvals are not granted in time, it should be deemed as approved, ONGC has argued. Details
8The recommendation from the public sector E&P major is that the operator should be allowed to submit the prerequisite documents electronically.
8Subsequently the operator must be provided the desired approvals in a expeditiously manner but not later than a month.
8In case of any other activity related approvals required during the exploration or development of a block, necessary approvals should be provided to the operator within a short time, preferably not later than 15 days.
8Provision for submission of applications electronically in the prescribed format with the capability to track progress should also be incorporated.
8These formats should be made available on the DGH site and similarly all approvals should be provided in the same manner in a fixed time frame.
8Prescribing time limits for approvals. In case, the approvals are not granted in time, it should be deemed as approved, ONGC has argued. Details
After RIL, it is Cairn India now testing the waters for hiring two offshore drilling rigs in India.
Company sources said that they are looking at a 30% cut in hire rates from those prevailing last year.
Cairn plans to deploy the rigs in operations involving four offshore blocks, CB-OS/2 (located on the West Coast of India), Ravva, KG-OSN-2009/3 and PR-OSN-2004/1 (located on the East Coast of India).
8The scope of this EOI covers the following services :
8Drilling Unit for CB-OS/2 block Independent Leg Jack Up Drilling Unit (ILJDU) with the following specification:
--Rated drilling capacity: 16,000 to 20,000 ft or above.
--Rig design: ILJDU’s with Le Tourneau Class 116 or 116C or Baker Marine Pacific Class 375, Keppel FELS Class B Design or Gusto MSC CJ46 or equivalent
--Leg length below the hull: 220ft
--Capability to drill with, store and handle, synthetic oil based mud(SBM)
--Pointed spud can design with strong legs to operate in water depths of 8 meters to 50 meters
8Drilling Unit for Blocks: KG-OSN-2009/3, PR-OSN-2004/1 & RAVVA : Offshore drilling rig with either of the following options
--Mat supported drilling unit cantilever / slot type for drilling in water depths up to 250 ft.
--Independent Leg Jack Up Drilling Unit Cantilever/Slot Type for drilling in water depths up to 250ft. (for KG-OSN-2009/3 & PR-OSN-2004/1 blocks only)
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Company sources said that they are looking at a 30% cut in hire rates from those prevailing last year.
Cairn plans to deploy the rigs in operations involving four offshore blocks, CB-OS/2 (located on the West Coast of India), Ravva, KG-OSN-2009/3 and PR-OSN-2004/1 (located on the East Coast of India).
8The scope of this EOI covers the following services :
8Drilling Unit for CB-OS/2 block Independent Leg Jack Up Drilling Unit (ILJDU) with the following specification:
--Rated drilling capacity: 16,000 to 20,000 ft or above.
--Rig design: ILJDU’s with Le Tourneau Class 116 or 116C or Baker Marine Pacific Class 375, Keppel FELS Class B Design or Gusto MSC CJ46 or equivalent
--Leg length below the hull: 220ft
--Capability to drill with, store and handle, synthetic oil based mud(SBM)
--Pointed spud can design with strong legs to operate in water depths of 8 meters to 50 meters
8Drilling Unit for Blocks: KG-OSN-2009/3, PR-OSN-2004/1 & RAVVA : Offshore drilling rig with either of the following options
--Mat supported drilling unit cantilever / slot type for drilling in water depths up to 250 ft.
--Independent Leg Jack Up Drilling Unit Cantilever/Slot Type for drilling in water depths up to 250ft. (for KG-OSN-2009/3 & PR-OSN-2004/1 blocks only)
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BPCL plans invest Rs 35 crore in the modernization of its Piyali LPG bottling plant near Faridabad, Haryana.
8The proposed project is a modernization project of the existing LPG terminal at Piyali in which the storage capacity of the terminal will remain unchanged.
8BPCL now wants to install a new 72 station carousel in the existing bottling plant
8The bottling plant supplies LPG to Delhi, Faridabad , Gurgaon, Panipat, Sonepat, Bahadurgarh and Palwal.
8The licensed storage capacity of the LPG Terminal is 8050 MT consisting of seven (7) spheres. The plant has an installed capacity of 132 TMTPA with an achievable capacity of 250 TMTPA.
8The Piyali plant receives bulk LPG from RIL and Essar Oil Ltd from Jamnagar through a pipeline transfer and also through tank wagons. The LPG Terminal also has eight (8) bay tank lorry gantry for loading lorries and also dispatching to other bottling plants in the northern region of India.
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8The proposed project is a modernization project of the existing LPG terminal at Piyali in which the storage capacity of the terminal will remain unchanged.
8BPCL now wants to install a new 72 station carousel in the existing bottling plant
8The bottling plant supplies LPG to Delhi, Faridabad , Gurgaon, Panipat, Sonepat, Bahadurgarh and Palwal.
8The licensed storage capacity of the LPG Terminal is 8050 MT consisting of seven (7) spheres. The plant has an installed capacity of 132 TMTPA with an achievable capacity of 250 TMTPA.
8The Piyali plant receives bulk LPG from RIL and Essar Oil Ltd from Jamnagar through a pipeline transfer and also through tank wagons. The LPG Terminal also has eight (8) bay tank lorry gantry for loading lorries and also dispatching to other bottling plants in the northern region of India.
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Matix Fertilizers and Chemicals Ltd has its hands full trying to commission its long delayed ammonia-urea complex based on CBM but the company is now eying the coal gasification route to produce urea.
8In a presentation, Matix claims that given coal gasification is now a proven technology and a success in China, and must be put to use.
8The company says that the high ash content in India coal will be required to be blended with imported coal to get the right mix that will be required for gasification.
8Matix says that coal allocation must also be made to the fertilizer sector in addition to allocations made to power, steel and cement.
8The company is of the view that “Make In India” urea would be cheap and cost competitive in comparison to gas based urea.
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8In a presentation, Matix claims that given coal gasification is now a proven technology and a success in China, and must be put to use.
8The company says that the high ash content in India coal will be required to be blended with imported coal to get the right mix that will be required for gasification.
8Matix says that coal allocation must also be made to the fertilizer sector in addition to allocations made to power, steel and cement.
8The company is of the view that “Make In India” urea would be cheap and cost competitive in comparison to gas based urea.
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Matix Fertilizers and Chemicals Ltd has its hands full trying to commission its long delayed ammonia-urea complex based on CBM but the company is now eying the coal gasification route to produce urea.
8In a presentation, Matix claims that given coal gasification is now a proven technology and a success in China, and must be put to use.
8The company says that the high ash content in India coal will be required to be blended with imported coal to get the right mix that will be required for gasification.
8Matix says that coal allocation must also be made to the fertilizer sector in addition to allocations made to power, steel and cement.
8The company is of the view that “Make In India” urea would be cheap and cost competitive in comparison to gas based urea.
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8In a presentation, Matix claims that given coal gasification is now a proven technology and a success in China, and must be put to use.
8The company says that the high ash content in India coal will be required to be blended with imported coal to get the right mix that will be required for gasification.
8Matix says that coal allocation must also be made to the fertilizer sector in addition to allocations made to power, steel and cement.
8The company is of the view that “Make In India” urea would be cheap and cost competitive in comparison to gas based urea.
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The following are the details:
8Land requirements: The LPG plant is spread over an area of 98 acres of which 29 acres is the area for green belt.
8The plant has two LPG spheres with storage capacity of 650 MT and five spheres with a capacity of 1350 MT.
8The bottling facility can cater to five type of cylinders – 5kg, 14.2 kg, 19kg, 47.5kg and 35 kg, presently. BPCL can bottle around 11500 cylinders of 14.2 kg capacity per carousal per shift.
8Water requirement and source: The present monthly water requirement of the plant is 4800kl/month which is met from the ETP plant, four borewells, rain water harvesting and municipal water supply.
8Power requirement: Power is received from the Dakshin Haryana Bijli Vitaran Nigam Ltd (DHBVNL), Haryana. Power is being supplied to the LPG bottling plant by a 11 kV line.
8Fire fighting facility: The existing fire fighting facility will be upgraded during the proposed expansion of the LPG bottling plant.
8Gas detection system: 63 gas monitoring sensors made by Pentax are provided at various critical locations of the plant.
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8Land requirements: The LPG plant is spread over an area of 98 acres of which 29 acres is the area for green belt.
8The plant has two LPG spheres with storage capacity of 650 MT and five spheres with a capacity of 1350 MT.
8The bottling facility can cater to five type of cylinders – 5kg, 14.2 kg, 19kg, 47.5kg and 35 kg, presently. BPCL can bottle around 11500 cylinders of 14.2 kg capacity per carousal per shift.
8Water requirement and source: The present monthly water requirement of the plant is 4800kl/month which is met from the ETP plant, four borewells, rain water harvesting and municipal water supply.
8Power requirement: Power is received from the Dakshin Haryana Bijli Vitaran Nigam Ltd (DHBVNL), Haryana. Power is being supplied to the LPG bottling plant by a 11 kV line.
8Fire fighting facility: The existing fire fighting facility will be upgraded during the proposed expansion of the LPG bottling plant.
8Gas detection system: 63 gas monitoring sensors made by Pentax are provided at various critical locations of the plant.
click on reports for more details. Details
The OPEC would like the believe that the sudden 30% rise in three days in the price of crude oil -- though the price has dropped 7% subsequently -- are the first signs of a revival in global oil prices.
8The oil producers association has always maintained the view that demand will eventually outstrip supply and oil prices will settle at much higher levels than at present.
8OPEC had continued to pump crude oil into the market instead of regulating supply with the hope of getting the better of the shale oil producers in the US and it may finally be succeeding in its strategy.
8An OEPC paper claims that lower prices will help push demand up. Three of the industry’s main authoritative institutions OPEC, the International Energy Agency (IEA) in Paris and the Energy Information Administration (EIA) of the United States, all forecast oil demand improving going into next year.
8Their forecasts show that this will occur on the back of an expected increase in global economic growth, which, in turn, should also help crude prices to strengthen.
8Countries like India whose gross domestic product is expected to grow at over 7% is a big respite for oil producing countries.
8OPEC figures show that world oil demand this year is now expected to rise by 1.38 million barrels/day from its 2014 level to 92.70m b/d, while in 2016 it is expected to add another 1.34m b/d to growth.
8The other view point held by OPEC is that the fall in price will starve the E&P business of investments and this will hamper capacity additions.
8With the long lead times associated with bringing new oil to market, the lapse in spending, will eventually show up on the supply front even as demand continues to rise
8All of these factors will ultimately increase the price of crude, OPEC feels
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8The oil producers association has always maintained the view that demand will eventually outstrip supply and oil prices will settle at much higher levels than at present.
8OPEC had continued to pump crude oil into the market instead of regulating supply with the hope of getting the better of the shale oil producers in the US and it may finally be succeeding in its strategy.
8An OEPC paper claims that lower prices will help push demand up. Three of the industry’s main authoritative institutions OPEC, the International Energy Agency (IEA) in Paris and the Energy Information Administration (EIA) of the United States, all forecast oil demand improving going into next year.
8Their forecasts show that this will occur on the back of an expected increase in global economic growth, which, in turn, should also help crude prices to strengthen.
8Countries like India whose gross domestic product is expected to grow at over 7% is a big respite for oil producing countries.
8OPEC figures show that world oil demand this year is now expected to rise by 1.38 million barrels/day from its 2014 level to 92.70m b/d, while in 2016 it is expected to add another 1.34m b/d to growth.
8The other view point held by OPEC is that the fall in price will starve the E&P business of investments and this will hamper capacity additions.
8With the long lead times associated with bringing new oil to market, the lapse in spending, will eventually show up on the supply front even as demand continues to rise
8All of these factors will ultimately increase the price of crude, OPEC feels
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The ONGC circular suggests that budgetary quotes for equipment and services procured by ONGC should be taken as a last resort for calculation of reserve price prior to the issuance of a tender.
8It is only when the last Purchase Price is not available should cost estimates be prepared on the basis of budgetary quotes. For this purpose, three quotes are to be obtained from reputed vendors and manufacturers.
8This is where the problem lies in ONGC's tendering system.
8For any other estimate, be it the LPR or any other methodology, will not reflect market conditions unless budgetary quotes or Request for Quotations are taken also taken in a parallel exercise.
This will allow OBGC to get a feel of the market and ensure that necessary course corrections can be made to the estimates that they may already have in hand.
8It has often been seen that the actual bids are significantly at variance from the internal cost estimates and all kinds of maneuverings are done to fit the winning bid within the cost band prepared by the internal team.
8Compromises are made in the process. Sometimes, bids are rejected because the internal estimates are way off the bid values.
8Such mistakes can be avoided if budgetary quotes are part of the cost estimation exercise.
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8It is only when the last Purchase Price is not available should cost estimates be prepared on the basis of budgetary quotes. For this purpose, three quotes are to be obtained from reputed vendors and manufacturers.
8This is where the problem lies in ONGC's tendering system.
8For any other estimate, be it the LPR or any other methodology, will not reflect market conditions unless budgetary quotes or Request for Quotations are taken also taken in a parallel exercise.
This will allow OBGC to get a feel of the market and ensure that necessary course corrections can be made to the estimates that they may already have in hand.
8It has often been seen that the actual bids are significantly at variance from the internal cost estimates and all kinds of maneuverings are done to fit the winning bid within the cost band prepared by the internal team.
8Compromises are made in the process. Sometimes, bids are rejected because the internal estimates are way off the bid values.
8Such mistakes can be avoided if budgetary quotes are part of the cost estimation exercise.
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