Natural Gas : October, 2013

In our current issue of Natural Gas: Information and Updates, we have covered various countries across the globe which have been grouped into medium concentration categories depending on the quantum
of proven ‘natural gas’ reserves present in such countries. This issuealso coversmarket and legal developments around the globe. Developments in the Republic of India are covered separately.

Medium Concentration Areas are India, Oman, Azerbaijan, Yemen, Argentina, Brazil, Mexico, Thailand, United Kingdom, Angola, and Syria.
GLOBAL SCENARIO

Statistics

India
Natural gas mainly serves as a substitute for coal for electricity generation in India. The country was self-sufficient in natural gas until 2004, when it began to import liquefied natural gas (LNG) from Qatar.
As it has not been able to create sufficient natural gas infrastructure on a national level to meet domestic demand, India increasingly relies on imported LNG. It was the sixth largest LNG importer in 2011 with over five percent of the global market, according to data from PFC Energy. Indian companies use both long-term supply contracts and more expensive spot LNG contracts. Indian companies have attempted to secure new longer-term deals with suppliers such as Russia’s Gazprom.
Gas consumption has grown at an annual rate of 10 percent from 2001-2011, although supply disruptions in 2011 halted some consumption. In 2011, India consumed 2.3 trillion cubic feet (Tcf), and LNG imports accounted for about a quarter of total gas demand. The Oil Ministry projects this trend to continue, with India’s gas demand more than doubling in the next five years.

Oman
Oman has proven reserves of natural gas of 30 trillion cubic feet (Tcf) as of January 2013, according to Oil & Gas Journal (OGJ). Due to increasing Enhanced Oil Recovery (EOR) applications, rising domestic demand, and export obligations, Oman’s gas demand has outpaced its production. The Ministry of Oil and Gas is aggressively seeking to increase exploration and production from its reserves. The ministry announced plans to reassess natural gas reserves, planning to increase reserves by a trillion cubic feet per year for the next 20 years and producing more through developing new gas fields, building more plants and through programs akin to the EOR projects implemented in the oil sector.

Azerbaijan
According to the OGJ, Azerbaijan’s proven natural gas reserves were roughly 35 trillion cubic feet (Tcf) as of January 2013. The vast majority of these reserves are associated with the Shah Deniz field. Recent discoveries of the Absheron and Umid formations, a further 15 Tcf of resources are estimated in place, according to Deutsche Bank.
Most of the natural gas production comes from the Shah Deniz field, although some volumes of natural gas are produced alongside oil in the ACG field.

Yemen
As of January 2013, Yemen held 16.9 trillion cubic feet (Tcf) of proved natural gas reserves according to the OGJ. One of the larger natural gas deposits in Yemen is in the oil-rich Marib-Jawf area, where there may be 18 Tcf in recoverable volumes of natural gas, according to Yemen’s government. Until 2009, Yemen re-injected nearly all of the natural gas it produced to aid in oil extraction. In 2009, the Yemen LNG facility opened, and the country began to divert dry natural gas away from the oil fields and towards domestic and international consumers.

Argentina
Argentina produces more natural gas than any other country in mainland South America, but its output has declined over 10 percent from peak levels in 2006. It is also the continent’s largest natural gas consumer. Recent assessments suggest that Argentina possesses one of the world’s largest endowments of shale gas, which has become a focus of efforts to reverse the sector’s recent decline.

Brazil
Natural gas constitutes only a small portion of Brazil’s total energy consumption.The OGJreported that Brazil had 14 trillion cubic feet (Tcf) of proved natural gas reserves as of January 2013. The Campos, Espírito Santo, and Santos Basins hold the majority of reserves, but sizable reserves also exist in the interior of the country. In 2012, Brazil produced 601 billion cubic feet (Bcf) of dry natural gas. Despite a 16% increase in natural gas consumption in 2011 to over 1 Tcf, natural gas consumption is a small part of the country’s overall energy mix, constituting less than 10% of total energy consumption in recent years.

Mexico
According to OGJ, Mexico had 17.3 trillion cubic feet (Tcf) of proven natural gas reserves as of the end of 2011. The southern region of the country contains the largest share of proven reserves. However, the northern region will likely be the centre of future reserves growth, as it contains almost ten times as much probable and possible natural gas reserves as the southern region. Mexico has one of the world’s largest shale gas resource bases, which could support increased levels of natural gas reserves and production. According to an initial EIA assessment of world shale gas resources, Mexico has an estimated 681 Tcf of technically recoverable shale gas resources — the fourth largest of any country examined in the study. Thailandz According to the OGJ, Thailand held 10.1 Trillion cubic feet (Tcf) of proven natural gas reserves as of January 2013, and reserves have experienced a general decline over the last few years. Almost all of the country’s natural gas fields are located offshore in the Gulf of Thailand. Natural gas production has risen steadily in the past decade, although not enough to keep up with the growth in domestic consumption. Thailand is seeking ways to secure gas supplies through greater domestic production, imports via pipeline and new liquefied natural gas (LNG), and overseas upstream investments by PTT.

United Kingdom
According tothe OGJ, the UK held an estimated 8.7 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2013. Most of these reserves occur in three distinct areas: 1) associated fields in the UKCS; 2) non-associated fields in the Southern Gas Basin, located adjacent to the Dutch sector of the North Sea; and 3) non-associated fields in the Irish Sea. The UK government has encouraged the use of natural gas as a substitute for coal and oil in industrial consumption and electricity production.Natural gas consumption in the UK reached 2.8 Tcf in 2011, falling about 15 percent compared with the prior year.

Angola
According to the OGJ estimates, at the end of 2011 Angola had proved reserves of natural gas of 10.95 trillion cubic feet (Tcf), that is the fifth-largest endowment in Africa, and ranks second in Sub-Saharan Africa behind only Nigeria. While the majority of Angolan natural gas is re-injected into the country’s oilfields to aid recovery—or simply flared off—efforts are underway to enhance Angola’s ability to produce and market its natural gas reserves. To date, these efforts have been focused on the development of the country’s first liquefied natural gas (LNG) terminal at Soyo. Angola’s natural gas sector is run through a subsidiary of national oil company Sonangol, called Sonangás. Syria The OGJ reported at the end of 2012 that Syria has proven natural gas reserves of 8.5 trillion cubic feet.Natural gas consumption in Syria rose by 33 percent between the years 2000 and 2011, while gross production rose by slightly more than 40 percent. In 2008, Syria became a net importer of natural gas, but the country’s current state of conflict—and the attendant sanctions—could impact the ability of Syria to receive volumes moving forward. Syria’s plans to convert all existing thermal power generation facilities to natural gas-fired plants (many are currently using refined petroleum products) hinge on these volumes being available, but this goal appears out of reach at least in the short term.

Market Updates- Global

Sino Gas & Energy Holdings Limited agrees to extend the exploration period
September 02, 2013
Sino Gas & Energy Holdings Limited has agreed to a three year extension to the exploration period on the Linxing PSC with its partner, China United Coalbed Methane (CUCBM).
The company has also submitted its first Chinese Reserve Report (CRR) on the Linxing Production Sharing Contact (PSC). CUCBM will then provide the report to the Chinese Ministry of Land & Resource (MOLAR) for approval, Sino Gas & Energy.

Saudi Arabia and Kuwait to cancel the development of Dorra offshore gas field
September 02, 2013
Saudi Arabia and Kuwait have decided to cancel the development of Dorra offshore gas field because of disagreement over how to share the gas back on land. Dorra has been a bone of contention between Kuwait and Iran, which also lays claim to part of the field. According to Reuters, the initial plan was to share an offshore facility and pump it down separate pipelines to the project partners. However, last year Saudi Arabia began pressing for all the gas to be piped first to Khafji, a town on the Saudi side of the border, before piping Kuwait’s share overland.A route via Saudi Arabia raises security of supply issues for Kuwait, Reuters said.

Tanzania all set for fourth oil and gas licensing round
September 01, 2013
Tanzania will go ahead with fourth oil and gas licensing round next October despite opposition from the local private sector and politicians. Mozambique has currently established that it has close to 200 trillion cubic feet of natural gas reserves while Tanzania has so far managed 43 million cubic feet.

Merger of Oman LNG and Qalhat LNG
August 31, 2013
Oman LNG and Qalhat LNG have merged and will jointly start operations. The merger will boost the Sultanate’s revenues from LNG exports by reducing cost of operations and offering better management of swaps and diversions of cargoes while maintaining a reliable supply of LNG cargoes.

Bangladesh’s gas output reached highest
August 31, 2013
Bangladesh’s overall gas output has recorded highest ever to touch 2,315 million cubic feet per day (mmcfd). According to Financial Express, major contribution in the increase has come from international oil companies (IOCs).
Gas output by the IOCs accounted for 1,264 mmcfd,while local gas companies produced around 1,050 mmcfd, the newspaper reported.Of the 20 fields currently producing gas, 15 are state-owned and five are operated by international oil companies.

Pakistan designing backdoor diplomacy to seek waiver from US sanctions pertaining to Iran-Pakistan gas pipeline.
August 30, 2013
Pakistan is planning backdoor diplomacy to seek waiver from US sanctions pertaining to Iran-Pakistan gas pipeline. According to Pakistani newspaper the Nation, higher authorities had informed Prime Minister Nawaz Sharif about the possible imposition of the sanctions quoting the legal opinion of the Law Division.Further work on the IP gas pipeline project on Pakistan’s side would start after ensuring the US consent at top diplomatic level, the Nation said.

Apache Corporation sold 33% of its oil and gas business to China’s Sinopec Corporation for $3.1 billion.
August 30, 2013
Apache Corporation has sold 33% of its oil and gas business in Egypt to China’s Sinopec Corporation for $3.1 billion. The American firm will continue to be the operator of its Egypt upstream oil and gas business, it said in a statement.Net production from apache’s Egypt operations averaged 100,000 barrels of oil and 354 million cubic feet (MMcf) of natural gas per day in 2012.

Final decision on first phase development of AGL’s second coal seam gas project in NSW, at Gloucester north of Sydney is expected as soon as next year.
August 30, 2013
Final decision on first phase development of AGL’s second coal seam gas project in NSW, at Gloucester north of Sydney is expected as soon as next year. According to Brisbane Times, first stage of the Gloucester project involves drilling 110 wells, mostly on land held by coal miners such as Gloucester Coal and the privately held GRL, and would cost between $400 million and $500 million. The project is forecast to produce 20 petajoules to 30 petajoules of gas annually, which would account for 15 per cent to 20 per cent of annual gas demand in NSW, Brisbane Times reported.
The gas is likely to be transported through a pipeline to Newcastle, about 100 kilometres south of Gloucester, where AGL is constructing a $300 million gas storage centre.

Trans Globe Energy Corporation announced Jurassic gas/condensate test in Egypt’s Western Desert
August 30, 2013
TransGlobe Energy Corporation has announced a successful Jurassic gas/condensate test in Egypt’s Western Desert. The North Dabaa 1X exploration well was drilled to a total depth of 14,740 feet and cased as a Cretaceous oil and Jurassic gas condensate discovery. Based on open hole well logs and samples, the well encountered approx. 8 feet of net oil pay in the Abu Roash formation and 23 feet of net gas/condensate pay in the Khatatba formation.

Esso PNG Robin Limited (Esso), not to proceed with the Sale Agreement pertaining to Petroleum Prospecting Licence (PPL) 269 in Papua New Guinea.
August 30, 2013
Esso PNG Robin Limited (Esso), a subsidiary of Exxon Mobil Corporation, has informed New Guinea Energy that it will not proceed with the Sale Agreement pertaining to Petroleum Prospecting Licence (PPL) 269 in Papua New Guinea. The company has told NGE that it has been unable to reach alignment on a number of confidential commercial matters (which have not been disclosed to NGE) with the other joint venturers in PPL 269, NGE said in a statement.
In order to continue with its strategy of monetising gas assets to focus on exploration for oil in Papua New Guinea, NGE intends to re-engage with other parties who have approached NGE in connection with the possible acquisition of NGE’s interest in PPL 269.

OMV has found gas and condensate in the Sofiya-2 exploration well in the Mehar exploration license in Sindh, Pakistan.
August 29, 2013

OMV has found gas and condensate in the Sofiya-2 exploration well in the Mehar exploration license in Sindh, Pakistan.
During testing, a total of 18 mnscf/d of gas plus an additional 1,550 barrels of condensate (Gross 4500 boe/d) flowed from the Ranikot formation.Production from the Mehar field is expected to start in the fourth quarter of 2013.

Oilex Ltd has raised millions for costs associated with the Cambay Development PSC in Gujarat, India
August 29, 2013
Oilex Ltd. has raised $3.4 million through the placement of new shares to domestic and international investors.
Proceeds raised will be used for costs associated with the Cambay Development PSC in Gujarat, India including the drilling of the Cambay 77H Offset Well targeted for the December quarter 2013.

China‘s investment in oil and gas exploration is likely to touch 80 billion yuan
August 29, 2013
As stated by the Ministry of Land and Resources, China, the country’s investment in oil and gas exploration is likely to touch 80 billion yuan by the end of 2013.
The country’s natural gas output had reached 58.8 billion cubic meters, in the mid of the year. Sichuan Basin gas field made notable gas discovery. South China Sea unconventional oil and gas exploration in Xinjiang Oilfield also contributed to the development in natural gas.

NuEnergy Gas to drill its second pilot well
August 28, 2013
NuEnergy Gas is in process to drill its second pilot well to a depth of 800 metres in the MuaraEnim Production Sharing Contract in South Sumatra, Indonesia. After completion of drilling, the well will be linked to the pilot production plant situated at the MuaraEnim Pilot Well.

Market Update- Republic of India
IOCL to buildRs 5,000 cr natural gas terminal in Odisha
July 29, 2013
Indian Oil Corporation signed an MoU with state-owned Industrial Infrastructure Development Corporation of Odisha for development of a natural gas terminal at an investment of Rs 5,000 crore in the State. The natural gas terminal will be set up at Dhamra coast in Odisha’sBhadrak district at an investment of Rs 5,000 crore. The terminal construction work will be completed by 2018.

Greka Drilling Limited is willing to expand its trailto India in by end of 2013.
August 29, 2013
Greka Drilling Limited has proposed to develop its business from China onto India this year.

ONGC and OIL eligible for shale oil and gas exploration
September 25, 2013
The Cabinet’s policy has permitted a shale gas and oil exploration policy, which will pave way for State-run ONGC and Oil India to hunt for non-conventional resources in blocks awarded to them without auction, government officials said. But, the policy will prevent participation of successful private explorers such as Reliance Industries, GSPC and Cairn India and restrict exploration of shale resources in only five onland basins. The policy also bars exploration of shale oil and gas in 254 blocks, awarded to several public and private sector energy firms in nine rounds under the new exploration licensing policy (Nelp) regime in last 15 years.

ONGC Videsh in talks to buy oil, gas blocks in Kazakhstan
September 25, 2013
ONGC Videsh Ltd., the overseas arm of State-owned Oil and Natural Gas Corporation (ONGC), is in talks to acquire more oil and gas blocks in Kazakhstan after losing a giant Caspian sea oil field deal to China National Petroleum Corporation (CNPC). Kazakhstan had recently blocked OVL’s USD 5 billion deal to buy 8.4 per cent stake in its giant Kashagan oil field and instead transferred the interest to CNPC.

ONGC to drill first well to explore shale oil and gas next month
September 25, 2013
Oil & Natural Gas Corporation (ONGC) has decided to drill first well in the Cambay basin next month to explore shale oil and gas after the cabinet allowed state explorers to find shale resources in blocks held by them. The company anticipates that the proposed land acquisition legislation would become one of the major impediments in exploration of the non-conventional energy resource in the country. The land acquisition bill, which was passed by the parliament last month, empowers landowners and local inhabitants. The new legislation, which is good for the landowners, may create problems because shale exploration requires large piece of land.

ONGC Videsh to borrow record $4 bn for Mozambique stake
September 25, 2013

ONGC Videsh Ltd., the overseas arm of State-owned Oil and Natural Gas Corporation (ONGC), plans to borrow a record $4 billion to fund its back-to-back acquisitions of stakes in a giant Mozambique gas field. OVL and Oil India Ltd. (OIL) are jointly buying 10 per cent stake in Mozambique’s offshore Rovuma Area 1 from Videocon for $2.475 billion. OVL followed this deal with the acquisition of another 10 per cent stake in the same field from US energy firm Anadarko Petroleum for $2.64 billion.

ONGC to increase natural gas output 53% as new fields start
September 25, 2013
Oil and Natural Gas Corporation (ONGC) said its natural gas output will rise by over 53 per cent to 100 million standard cubic metres a day by 2017-18 as new fields start off the west and east coasts.
Natural gas production will rise from about 65 mmscmd currently to over 100 mmscmd in 2017-18. ONGC’s western offshore C-Series gas field has proved to be more prolific than previously predicted. ONGC signed a memorandum of understanding with MukeshAmbani-run Reliance in July to explore the possibility of sharing the east coast infrastructural facility.

ONGC Videsh to raise $1.5 bn in 3-4 months to fund Mozambique acquisition
September 26, 2013

The overseas unit of Oil and Natural Gas Corporation plans to raise $1.5 billion to refinance a bridge loan that it expects to finalise soon to buy a 10 percent stake in Mozambique’s Rovuma gas field from Videocon group. ONGC, along with state firm Oil India, acquired a 10 percent stake in the Mozambique gas field from Videocon for $2.48 billion. ONGC separately acquired another 10 percent stake in the block from Anadarko Petroleum Corporation for $2.64 billion later.

ONGC signs MoU with RIL on Eastern Offshore facility sharing arrangement
July 27, 2013
ONGC signed anMoU with Reliance Industries Ltd. (RIL) on July 27, 2013 to explore the possibility of sharing RIL’s infrastructural facilities on East Coast. Infrastructure sharing shall not minimize ONGC’s initial Capex and also expedite ONGC’s field development, resulting in early monetization of its deep-water fields adjacent to the RIL fields.

New gas pricing policy will apply uniformly to all: M.VeerappaMoily
September 26, 2013
M.VeerappaMoily said that the new gas pricing policy will apply uniformly to all.There are no grey areas. The policy is based on the recommendation of the Rangarajan Committee will be applicable to everyone.

ONGC Videsh expresses interest to bid for Tanzania blocks
September 26, 2013
ONGC Videsh Ltd., the overseas arm of State-owned Oil and Natural Gas Corporation, has expressed interest in bidding in the next round of licensing for offshore and onshore oil/gas blocks in Tanzania. The matter came up for discussions between Minister of State for Commerce and Industry and Tanzanian Industry and Trade Minister.

10thround of oil and gas block auction likely in January
September 26, 2013
India is likely to launch the 10th round of auction of oil and gas blocks in January as the country looks to attract foreign investors to boost domestic production.The Oil Ministry is looking at offering as many as 68 blocks or areas for exploration of oil and gas in the 10th round of New Exploration Licensing Policy (NELP). The round is likely to be announced at the Petrotech Conference.

New land bill may hit shale gas exploration: ONGC
September 26, 2013

The new land acquisition law will obstruct shale gas operations in the country unless landowners have the incentive to participate, Oil and Natural Gas Corporation’s (ONGC) director, exploration, said. The State-run company plans to spend up to Rs 200 crore to drill wells in the Cambay basin next month to explore shale oil and gas, responding quickly to the Cabinet’s decision to allow state explorers to find shale resources in blocks held by them.

Government to allow private energy firms to explore shale oil and gas from their blocks: VeerappaMoily
September 26, 2013
Oil Minister VeerappaMoily said that the Government would soon allow private energy firms such as Reliance Industries, Cairn India,BP and BG to explore shale oil and gas from their existing fields.The cabinet has approved shale gas exploration policy for national oil companies, Oil India and ONGC. Soon, the same will be extended to other companies including private energy players.

VGS designs second barge-base LNG facility for Tamil Nadu
September 26, 2013
The US-based VGS Group has completed the design of its second $400 million ‘Floating LNG Regasification Unit’ (FRU) and said it will start supplying gas to the Tamil Nadu market from 2016.It will be similar to VGS’s FRU project in Kakinada, which is scheduled to commence commercial operations in the first quarter of 2015. The terminal has attracted three players, including a leading power company in India, to store gas at VGS terminal on the East Coast of the country.The $400 million VGS East Coast India LNG Import Terminal would supply gas to Andhra Pradesh market.

Oil India bets big on shale assets, to raise US output
September 30, 2013
India’s second-largest State-run energy explorer Oil India is now betting big on its prospects in the shale oil and gas arena. Globally, it is on the cusp of raising shale oil production in its acreage in the US, and it will alsobe appointing a newconsultant to advise on its shale exploration strategy in north-east India. Oil India and the Indian Oil (IOC) jointly bought a 30% stake in Houston-based Carrizo Oil &Gas’ shale assets in Colorado for $82.5 million in October 2012. Oil India acquired a 20% stakewhileIOC pickedup 10% in this acreage, making it their maiden investment in the shale arena in the US.

OVL and OIL sign definitive agreements to acquire interest in the Rovuma Area 1 Offshore Block in Mozambique
June 25, 2013
ONGC Videsh Limited (OVL) and Oil India Limited (OIL) have signed definitive agreements in Singapore on 25thJune 2013 with Videocon Mauritius Energy Limited to acquire 100% of shares in Videocon Mozambique Rovuma 1 Limited, the company holding 10% participating interest in the Rovuma Area 1 Offshore Block in Mozambique (Area 1) for US$ 2,475 million. The acquisition is expected to be implemented via a newly incorporated entity, in which OVL and OIL are expected to hold 60% stake and 40% stake respectively. The acquisition is subject to the approvals of the Governments of Mozambique and India, relevant regulatory approvals, pre-emption rights and other customary conditions. The transaction is expected to close in the fourth quarter of 2013.

 

New Gas Findings

India

Jubilant Energy and GAIL made gas discovery in Tripura
June 3, 2013
Jubilant Energy has discovered North Atharamura-1 well on Tripura Block AA-ONN-2002/1 in northeastern India. It holds 20% participating interest in the block through Jubilant Oil & Gas Pvt. Ltd., and GAIL India Ltd. holds 80%.

RIL, BP made new gas discovery in Cauvery basin
August 23, 2013
RIL which has 70% participating interest along with its partner BP plc which has remaining 30% participating interest, made a new gas discovery in deepwater block CY-DWN-2001/2 (CYD5), which is in the east coast in the Cauvery basin.It is the second gas discovery in the block.

ONGC notifies four Oil and Gas discoveries in Q1
August, 2013
ONGC notified the following four hydrocarbon discoveries (1 New Prospect and 3 New Pools) in the first quarter of fiscal 2013-14. Exploratory well KGOSN041NANL-2, in NELP block KG-OSN-2004/1, around 21 km south of Narasapur. This is the 4th discovery in the block, after Chandrika South, Alankari and Saveri, signifying the hydrocarbon potential of the block. This discovery will further boost ONGC’s efforts to attain critical hydrocarbon volumes necessary to ensure viability of a possible cluster development for the block.

Norway

Statoil makes gas discovery at Iskrystall in Barents Sea
September 23, 2013
Statoil ASA has made a gas discovery at the Iskrystall prospect on PL 608 in the Barents Sea offshore Norway. Well 7219/8-2 proved a 200-m gas column in the Sto and Nordmela formations. Statoil estimated volumes at 6-25 million boe.Statoil has 50%, EniNorge 30%, and Petoro 20%.

Egypt
BP makes gas discovery with Salamat well offshore Egypt
September 10, 2013
BP Egypt has made gas discovery in Salamat exploration well in the East Nile Delta.

Pakistan

OMV group gauges gas-condensate in Pakistan
August 29, 2013

OMV AG’s Pakistan subsidiary has gauged a gas-condensate discovery on the Mehar block in Sindh Province of Pakistan. The Sofiya-2 well, 10 km north of Mehar gas-condensate field, tested at the rate of 18 MMscfd of gas plus 1,550 b/d of condensate through a 48/64-in. choke from the Lower Cretaceous-PaleogeneRanikot formation.

Mozambique

Eni group has wet gas find on Mozambique Area 4
September 3, 2013

Eni has made a discovery in the southern part of Area 4 offshore Mozambique that early estimates indicate could contain 5-7 tcf of gas in place. The group is planning an appraisal strategy for the Agulha structure, on which it drilled the discovery well to a total depth of 6,203 m in 2,492 m of water 80 km off Cape Delgado and encountered 160 m of wet gas pay in good quality Paleocene and Cretaceous reservoirs.
The group will drill three more wells in 2014 in the southern part of Area 4.

Tanzania

BG-Ophir hit gas discovery offshore Tanzania
July 30, 2013
BG Group and Ophir Energy PLC reported a ninth gas discovery in Tanzania at the Mkizi-1 well on offshore Block 1.

Australia

Apache’s Bianchi wildcat finds gas off Western Australia
July 16, 2013
Apache Energy has made a natural gas discovery with its Bianchi-1 wildcat, which was drilled in retention lease WA-49-R offshore Western Australia. The find is within a separate fault block down-dip and 6 km northeast of the company’s April 2011 Zola-1 gas discovery and about 11 km north of the earlier Antelope find.Apache has 30.25% of both permits, Santos has 24.75%, OMV Australia has 20%, JX Nippon 15%, and Tap Oil of Australia 10%.

Pakistan

PPL tests gas-condensate from Basal Goru in Sindh
July 3, 2013
Pakistan Petroleum Ltd. has tested gas-condensate from the Lower Basal sands of the Cretaceous Lower Goru formation in the Sanghar District of Sindh Province, Pakistan, 145 miles northeast of Karachi. Vietnam

Idemitsu group finds gas-condensate off Vietnam
June 7, 2013
Idemitsu Oil & Gas Co. Ltd., Tokyo, has made a gas-condensate discovery at the third well drilled on blocks 05-1b and 05-1c offshore 300 km southeast of Ho Chi Minh City, Vietnam. Idemitsu signed a production sharing contract with Petrovietnam on October 28, 2004. Operator Idemitsu holds a 35% stake in the venture, JX Nippon Oil & Gas Exploration Corporation. has 35%, and Teikoku Oil (Con Son) Co. Ltd. has 30%.

Legal Developments

DG (I & R) v. Indraprastha Gas Service
MTPE 01/2008
Decided On: 22.08.2013

Issue: Whether IGL was justified charging higher rate for Piped Natural Gas (PNG)?
Ratio Decidendi:
“Charging of higher rate for consummation of natural gas shall not be challenged if party failed to prove that price is excessive.”
Held: The Commission did not find it necessary to proceed with the matter particularly because the grievance of the consumers generally was being looked into by the Petroleum & Natural Gas Regulatory Board (‘PNGRB’) which has taken up the exercise to decide and to enquire into the price structure of CNG/PNG by all the entities engaged in the business which would include the supplies made in Mumbai, Gujarat and Calcutta, etc..
If the PNGRB was already doing that exercise, there would be no need for the Commission to go into the further state of affairs particularly in view of the absence of total evidence except the balance sheet of IGL suggesting that IGL had made some profits and statistics before the Commission.
Thus, it was not deemed fit to proceed in the matter particularly in the absence of the evidence and also because a body like PNGRB with all the necessary statistics was enquiring into the matter.

National Chamber of Industries and Commerce U.P. &Ors. v.GAIL (India) Ltd. &Ors. 2013(6)ADJ435
Decided On: 12.07.2013

Issue: The dispute is with regard to the fixation of price of natural gas, earlier supplied by Gail (India) Ltd. and now by Gail Gas Ltd., to the industrial units of Agra and Firozabad falling in the Taj Trapezium Zone.

Held: The Hon’ble Court was of the view that it was clear to the parties that price of natural gas was to be progressively increased to reflect the market price.It was provided that seller should have the right to fix price of gas, which was to be as per the directives, instructions, orders etc. of the Government of India, which was likely to be market related in accordance with existing policy of Government of India.

Common Cause & Ors.v. U.O.I &Ors.
30 September, 2013

Writ Petition (Civil) No.728 of 2013
The Supreme Court issued notice to Centre, Reliance Industries Ltd (RIL) and others on a PIL seeking cancellation of contract for exploration of oil and gas concerning the KG block and to impose penalty for failure in adhering to commitments.
GAIL India Ltd v. Gujarat State Petroleum Corporation Limited Civil Appeal No.8263 of 2013
On fixation of re-gasified liquified natural gas (RLNG) prices, the Supreme Court endorsed GAIL (India) decision to terminate the contract with the State-owned oil and gas exploration company, Gujarat State Petroleum Corporation, for providing natural gas imported from Qatar.
The Apex Court observed“Letters and the correspondence exchanged between the appellant and the respondent give a clue of the complex nature of the price fixation mechanism. Therefore, the High Court should have relegated the respondent to the remedy of arbitration and the Arbitral Tribunal could have decided complicated dispute between the parties by availing the services of experts.”
“Unfortunately, the High Court presumed that the negotiations held between the appellant and therespondent were not fair and that the respondent was entitled to the benefit of the policy decision taken by the Government of India despite the fact that it had not only challenged that decision but had also shown disinclination to accept the offer made by the appellant to supply gas at the pooled price and had insisted on mutually agreed price.”
The bench further stated “A reading of the draft RLNG contract and Price Side Letter sent by the appellant to the respondent also shows that the appellant had offered to supply gas to the respondent at the pooled price but the latter did not agree and insisted on negotiation for the contract price of RLNG to be effective from 1.10.2009.”

Sources Norwegian Petroleum Directorate U.S Energy Information Administration The International Energy Agency Economic Times [India] Natural Gas Asia and Europe Oil & Gas Journal(OGJ)     Natural gas arrived in homes during the first century A.D. in Persia. It seeped from the ground and was ignited by lightning, producing an‘eternal flame’ that burned day and night. Seeking to take advantage of this continuous heating source — and since pipelines wouldn’t come around until the 1800’s — the king of Persia built his royal kitchen next to it.