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| British Firms Stake
in India's Major Gas Find by Richard Orange, The Business, London Sunday Business, London 7/31/2006 UK oil and gas giants BP, BG Group and Royal Dutch Shell are now leading the race to win a stake in India's largest ever gas discovery after US oil giant ExxonMobil, France's Total and seven other international oil companies were knocked out last week. Gujarat State Petroleum Company (GSPC) announced last year that it had found 20 trillion cubic feet of gas in a well in the Bay of Bengal, a massive discovery worth $50bn (E39bn, £27bn) if the cost of development and production is ignored. It has named the field Deen Dayal, or "Saviour of the Poor". UBS, which is managing the sale of a 20 percent stake in the field, has cut the 14 original bidders down to a shortlist of just five. US oil major Chevron and Italy's Eni are also still in the process. Other companies that have been dropped are Norway's Statoil, Brazil's Petrobras, Malaysia's Petronas, Spain's Repsol, US firm Anadarko, and Canada's Husky Energy. UBS plans to provide the remaining bidders with detailed data on the discovery over the next few weeks ahead of taking final bids. The winner will help GSPC develop the field and build some of the offshore infrastructure. A banker with one of the bidders told The Business: "They're looking for technical support and the infrastructure to develop the reservoir itself." He said GSPC already had the technical expertise to build a 3000km pipeline to ferry the gas across India to the booming cities of Gujarat. If BP, Shell or BG are successful, it would be by far the biggest investment by a UK oil and gas company in India. Until Edinburgh-based Cairn Energy made a massive discovery in Rajasthan two years ago, western oil companies had shied away from India, put off by the country's reputation for fearsome bureaucracy. UK gas specialist BG Group has the most highly developed position. It owns Gujarat Gas Company, a gas distributor, and has a 30 percent stake in three offshore gas fields. Since Cairn's discovery, the country's economic reform and a shortage of opportunities elsewhere has increased interest in India from oil explorers. BP bid last year for exploration licences, and Shell has developed the Hazira LNG terminal. Deen Dayal is one of many major oil and gas discoveries made in the Krishna-Godivari basin in the Bay of Bengal. India's Reliance Petroleum made a giant gas discovery in a next door exploration block in 2002 and has made a large number of oil discoveries. GSPC said in June it had made a new oil discovery in the block. Taking a stake would allow the UK companies to examine this highly prospective region. Western oil companies have also been looking to build oil refining and petrol station businesses in India, positioning themselves to benefit from the growing wealth of the country's vast population. Chevron took a 5 percent stake in Reliance Petroleum in April. BP's negotiations over building a $3bn refinery with India's Hindustan Petroleum fell apart earlier this year. Cairn Energy is planning to launch an initial public offering of its Indian business on the Bombay Stock Exchange in the last quarter of this year or in the first quarter of 2007. |
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| India to Start
Commercial CBM Production in 2007 Asia Pulse Pte Ltd 7/3/2006 Energy-hungry India will begin production of gas from below the coal seams from 2007 as it looks at hydrocarbon resources outside oil and gas fields to meet its energy security. Reliance Industries Ltd., India's largest private firm; state-owned Oil and Natural Gas Corp., the country's largest oil producer; and private-sector Great Eastern Energy Corp. Ltd have established 6.24 trillion cubic feet of Coal Bed Methane (CBM) reserves in coal-rich states, a top official said. The CBM reserves found in four blocks in Madhya Pradesh (two blocks), Jharkhand, and West Bengal are one-third of the recoverable reserves of India's largest gas field Bassein in Mumbai offshore. "The first commercial production of CBM in the country is expected in 2007. By 2010-11, CBM gas production in the country is expected to be about 8-10 million standard cubic meters per day," Sanjoy Joshi, Joint Secretary (Exploration), Ministry of Petroleum and Natural Gas said at a press conference called to announce bids received in third round of CBM block auction. RIL has found 1.69 tcf of reserves in Sohagpur (East) and 1.96 tcf reserves in Sohagpur (West) block in Madhya Pradesh. "Reliance has begin producing CBM and is generating power from it. (However), commercial production will begin in 2007," he said. ONGC has found 1.2 tcf reserves in Bokaro block while GEECL has struck 1.385 tcf reserves in Raniganj (East) block. V.K. Sibal, Director General, Directorate General of Hydrocarbons, said production potential from the 16 blocks awarded under first two rounds of auction was 23 mmscmd, one-fourth of current natural gas availability of 91 mmscmd. Bids for another 10 blocks, having a resource base of 586 billion cubic meters, were received on Friday. |
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| India's Gail
Interested in Picking Up Stake in Deen Dayal Block 7/4/2006 Asia Pulse Pte Ltd 7/4/2006 State gas utility GAIL (India) Ltd (BSE:532155) has said it is interested in picking up an equity stake in Gujarat State Petroleum Corp's (GSPC) Deen Dayal Block in the Krishna Godavari basin. "We are willing to participate in the block as an equity partner and will talk to GSPC once they have certified their gas reserves," GAIL Chairman and Managing Director Proshanto Banerjee said. GSPC recently announced a major oil and gas find in Deen Dayal Oilfield in KG basin, offshore Kakinada in east Godavari district of Andhra Pradesh. The new find is at 3,500 metre depth and from a crater which is spread in 60 to 90 square km area. According to sources, gas and oil finds in the second well of block KG-17 is expected to be larger than the Reliance gas finds of 2002, if the first well discovery of 2005 is taken into account. The first well of the Deen Dayal Oilfield was drilled last year, which has estimated gas reserves of around 20 tcf. Asked about the size of equity that GAIL is looking to acquire, Banerjee said, "We will decide about it once GSPC has ascertained its estimates. We are open about the size of the stake." Banerjee said GAIL is also willing to buy and market the entire supplies as the Government nominee. "We are open to any arrangement for evacuation of the product, which also involves buying the product," he said. Gujarat Chief Minister Narendra Modi while announcing the discovery had refused to confirm any number about the recoverable reserves from the new gas find. "GSPC has informed DGH about the discovery and its being assessed by DGH office," the Gujarat Chief Minister said. GSPC has said it plans to raise money to develop gas fields in the Deen Dayal block through an initial public offering and also by selling part of its 80 per cent interest in the block to an industry partner. To bring gas from the East Coast to the West Coast, GSPC has proposed to set up 3,000 km pipeline up to Ahmedabad. However, the company has not announced the kind of investment that would go into the pipeline project. "The pipeline will require huge investment so we may also explore possibility of some tie-up with some existing players", GSPC company said. Global oil companies including BP Plc, the BG Group, France's Total SA and Brazil's Petrobras have expressed interest in investing in Deen Dayal, India's biggest gas discovery. Indian Oil Corp Ltd (IOC) (BSE:530965) may also be interested in participating in the Block. GSPC succeeded in exploring gas bulk at the rate of 4.8 million standard cubic feet per day and oil bulk of 862 barrels per day from the new well. The gas available from KG 17 well is much superior with higher C2 and C3 propane and Ethane upto 17 per cent and 80 per cent methane. With rich gas available, GSPC plans to have LPG separation plant either in Gujarat or in Andhra Pradesh. The stock of high grade oil with light density from the well has raised hope for more oil as the new layer is located at lower depth of 3,500 metre which would reduce the cost of oil and gas production for GSPC and its partners in KG basin. The State-run gas utility company is also planning to set up underground gas storage facilities, both for strategic and commercial reasons. Talking about the plans, Banerjee said, "Various options were under consideration, including the conversion of depleted gas fields for storage." "We are in the process of appointing a consultant to do the feasibility study, which will take three-four months time,' he said. The idea of an underground gas storage facility was floated last year. GAIL had even appointed French consultants Gaz de France (GDF) to assist them in the project. The reserves were to serve as the natural insurance against supply disruptions and shortfalls from accidental or other factors. GAIL had even floated a tender for a consultant to advise on the development of an underground natural gas storage facility either in porous media such as depleted oil or gas fields or in salt-leached caverns. However, things did not materialize due to technical reasons. The Delhi-based gas utility had then thought of creating natural gas reserves of up to 1 billion standard cubic meters. Apart from GAIL, Oil and Natural Gas Corp (BSE:500312) and GAIL (India) Ltd will set up the underground natural gas storage through a special purpose vehicle and the gas will act as a strategic storage and fallback support to provide supply security. According to experts, the possible locations for underground storage in India could be depleted fields or aquifers likely to be found in Gujarat and Assam; could be in salt leached caverns likely to be found in Andhra Pradesh and in North India or in lined rock caverns that are likely to be found in Bihar, Madhya Pradesh, Rajasthan and Jharkhand. In India, given the growing importance of natural gas as the fuel/feedstock for key sectors like power, fertilizer, steel, transport and domestic, creation of strategic gas storage systems will be imperative to avoid abrupt disruption in gas supplies. It also assumes importance given that India has already become an importer of natural gas. In terms of global oil consumption, India is still a relatively small player. Although India is home to more than 15 per cent of the world's population, it accounts for only 3 per cent of world oil consumption. China, by contrast, consumes 7.6 per cent of the world's oil. India's energy needs are rising sharply, however. Last year alone, India's crude oil consumption increased by 10 per cent. Moreover, India is highly dependent on oil imports. Some 70 per cent of India's oil requirement is imported and oil imports account for one third of the total value of India's imports. By 2020 India is expected to import 80 per cent of its energy needs. GAIL India also recently launched an emergency response vehicle (ERV) to handle natural gas pipeline accidents throughout the city gas pipeline network of Delhi. The company has also entered into a Memorandum of Understanding with Indraprastha Gas Ltd (IGL) for mutual cooperation in tackling emergencies. The ERV has got the latest tools and equipment to perform various functions ranging from making the accident site accessible and providing rescue, repair and maintenance, it added. Conceptualized and designed indigenously at the company, the ERV can perform myriad functions ranging from making the accident site accessible, barricading the site, checking for leaks and pipeline coating, location and depth, and fire fighting. |
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 Oilex Assumes
Operatorship of Cambay Field in India Oilex 6/5/2006 Oilex has completed the transfer of operatorship for the Cambay Field, onshore Gujarat, India, taking over from Niko Resources Ltd, effective from June 1, 2006. Oilex is the Operator responsible for all operations, including production, in the Cambay block. Operations personnel are based out of new offices in Vadodara (Baroda) which is near to the Cambay Field. As a consequence of the transfer of operatorship for Cambay Field and the pending transfer of operatorship for Bhandut and Sabarmati Fields, six former employees of Niko, and the contract field maintenance and security staff have joined Oilex. The total complement of employees of the company in India is now 12, led by Rich Paces, Country Manager and Chief Operating Officer based in New Delhi and Tony Beckett, General Manager - Operations based in Vadodara. Earlier this year, Oilex acquired a 45% participating interest and the role of Operator in the Cambay Production Sharing Contract, 15% of which remains subject to the approval of the Government of India. Oilex will also become Operator of the Sabarmati and Bhandut Fields when the approval of the Government is received. Current operations on Cambay include completing the planning for the drilling program and construction of the 3 well sites for the first phase of drilling, now likely to commence in late June. |
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India_Rajasthan_Gas_Discovery
back to TurkistanGasNewsletterMay31 2006   |
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Focus Energy Ltd,
formerly known as Phoenix Overseas Ltd, has recorded a significant gas
discovery in its onshore Rajasthan Block RJ-ON/6 in well SGL-1. This is
a pre-New Exploration Licensing Policy (NELP) block, a company official
said, adding that the find is on the same stratigraphic trend as the
fields in Pakistan producing multi-trillion cubic feet. According to
the company, this is the first major stratigraphic discovery made with
excellent gas quality on the Indian side.
India has made a
discovery of large, high quality reserves of natural
gas Shahgarh sub-basin of