The Oil & Gas: Ezine December 2017

Alaya Legal presents its fifteenth issue of the Oil and Gas: Ezine to its Readers. Web-links are provided for ready access to certain reference material. The contents are presented with a view to allow comprehensive update in a systematic manner, from the legal perspective.

Reference material

• Categories of proven reserves of oil and natural gas across the globe may be accessed at, https://www.alayalegal.com/docs/alaya_legal/Oil%20&%20Petroleum%20Information%20&%20Updates/Zones.html
• Explanation with respect to broad categorisation in the Oil and Natural Gas Industry may be accessed at,https://www.alayalegal.com/docs/alaya_legal/Oil%20&%20Petroleum%20Information%20&%20Updates/Upstream,%20Midstream%20and%20Downstream.html

China National Offshore Oil Company’s BD Gas Field in Indonesia Commences Production
August 1, 2017

CNOOC Limited holds 40% in Husky-CNOOC Madura Limited (HCML), i.e. the operator of the Product Sharing Contract of the BD gas field along with Husky (40%) and Samudra Energy (20%). The gas field, located in Madura Strait at a water depth of approximately 55 meters currently has 2 wells in production and its gas and condensate sales production is approximately 7,200 barrels oil equivalent per day, and is expected to reach its Overall Development Program designed peak production of approximately 25,500 BOE per day in 2018.

Essar Oil Limited sold to Rosneft and Trafigura-UCP Consortium
August 21, 2017

The controlling shareholders of Essar Oil Limited (EOL) — Essar Energy Holdings Limited and Oil Bidco (Mauritius) Limited, both companies incorporated and managed under the laws of Mauritius have announced the sale of 98.26% of EOL. Rosneft (through its subsidiary, Petrol Complex Pte. Ltd) has acquired 49.13% stake, and Trafigura-UCP consortium (through Kesani Enterprises Company Limited) has acquired an equal stake. The remaining 1.74% stake continues to be held by retail shareholders.

IndianOil’s first domestic gas & condensate field starts production
August 29, 2017

On August 26, 2017 IndianOil commenced production of gas and condensate from Dirok field in its Pre-NELP block AAP-ON-94/1. This is IndianOil’s first domestic exploration asset maturing from exploration stage to a producing asset. IndianOil holds 29.03% participating interest in the block, located near Digboi in Assam, along with Hindustan Oil Exploration Company (HOEC 26.88%, Operator) and Oil India Limited (OIL 44.08%, Licensee). The initial production from the field, termed Phase-I, is estimated at ~10 MMSCFD of Gas and 120-140 bopd of Condensate from three wells namely Dirok-1, 2 & 4.

ONGC Videsh Limited’s ACG PSA with the Azerbaijan Government extended till 2049
September 18, 2017

ONGC Videsh Limited along with the Consortium partners of the giant ACG Fields in Azerbaijan have entered into an agreement with Azerbaijan Government and State Oil Company of the Azerbaijan Republic (SOCAR) for extension of duration of the Production Sharing Agreement (PSA) for Azeri-Chirag-Deep water portion of Gunashli (ACG) oil fields until December 31, 2049. ONGC Videsh Limited holds a participating interest in ACG oil fields in the Azerbaijan Sector of Caspian Sea. The other partners in the Consortium are BP, Chevron, INPEX, Statoil, ExxonMobil, TPAO and ITOCHU.

Procedural update on Cairns dispute with the Government of India under the UK India Bilateral Investment Treaty
September 20, 2017

The arbitration proceedings in the tax dispute between Cairn and the Government of Indian are well advanced, and the Tribunal and parties have now agreed the process and timetable for finalising document production, submissions and hearings. Including some extensions to the previously agreed schedule, and taking into account the Tribunal and Parties’ availability, the final hearing has now been scheduled for August 2018.

First crude oil cargo from the US received at Paradip – IndianOil
October 2, 2017

The first US crude oil cargo of 1.6 million barrels bought by Indian Oil Corporation Limited (IndianOil) from the US was received at Paradip Port on October 2, 2017. IndianOil became the first Indian public sector refiner from India to source US crude and has placed a cumulative order 3.9 million barrel from the US. 

Asia’s largest single mounded LPG storage facility inaugurated at Kochi Refinery
October 4, 2017

BPCL inaugurated Asia’s largest single mounded LPG storage facility at its Kochi Refinery on 25 September 2017. Each bullet of the storage facility is of 8 M dia. and 80M T/T length, with a design Capacity of 4270 Metre Cube and the total Mound Area which is approximately 1.4 Acre is comparable to the size of a football court and houses six bullets. Four bullets have been designed for storing Propylene as well. The total product storage capacity of the storage facility is at 12 TMT.

Chevron Achieves First LNG Production at Wheatstone
October 8, 2017

Chevron Corporation started production of liquefied natural gas (LNG) at the Wheatstone Project in Western Australia. The Wheatstone LNG facility is a joint venture between Australian subsidiaries of Chevron (64.14 percent), Kuwait Foreign Petroleum Exploration Company (KUFPEC) (13.4 percent), Woodside Petroleum Limited (13 percent), and Kyushu Electric Power Company (1.46 percent), together with PE Wheatstone Pty Ltd, part owned by JERA (8 percent). Chevron is the operator and holds an 80.2 percent interest in the offshore licenses containing the Wheatstone and Iago fields. At full capacity, the Wheatstone Project’s two train LNG facility is set to supply 8.9 million metric tons of LNG per year for export to customers in Asia. The LNG facility is located 7.5 miles (12 kilometers) west of Onslow and processes natural gas from the Chevron-operated Wheatstone and Iago fields.

Schlumberger, and Torxen Energy sign Agreement to Purchase Palliser Block in Canada from Cenovus Energy
October 19, 2017

Schlumberger and Torxen Energy, a private Canadian E&P company, have entered into a definitive agreement for the purchase of the Palliser Block located in Alberta, Canada, from Cenovus Energy, an integrated Canadian oil company, for cash consideration of approximately USD 1 billion. The Palliser Block consists of oil and gas wells, surface facilities, a pipeline network, and approximately 800,000 acres of oil and gas development rights. The asset has current production of approximately 54,000 BOE/d.

Adani Transmission Limited attains a new milestone of 8500 ckt kms (circuit length) of transmission lines in operation
November 1, 2017

ATL, completed the acquisition of 100% stake of Western Region Transmission Maharashtra and Western Region Transmission Gujarat, having operational transmission lines aggregating 3063 ckt kms with deal valued at INR 1,000 Crore. With this acquisition, the cumulative network of ATL is around 11350 ckt kms, out of which approximate 9000 ckt kms are under operation (including 458 ckt kms under process of acquisition) and approximate 2350 ckt kms under various stages of construction. The assets of ATL also include 28 substations with more than 16,200 MVA of transformation capacity across the country. With this scale of operations, ATL enjoys substantial benefits of scale in terms of cost optimization, shared resources and will fortify its position of being the largest private sector transmission company in the country.

Ingenious ‘Top Divided Wall Column’ a First in the world at BPCL Mumbai Refinery
November 16, 2017

A brilliant innovation at Mumbai Refinery of BPCL has resulted in making India, the first in the history of refining, to produce stringent quality hexane as a byproduct along with isomerate – a motor spirit blend component – from its Isomerization unit. Semi regeneration reformer at BPCL Mumbai Refinery was upgraded into an isomerization unit so as to enable India on the road of total Bharat Stage (BS) IV motor spirit sufficiency. This isomerization unit is inclusive of a divided wall column.

IndianOil launches first charging station for electric vehicles at Company-owned fuel station in Nagpur
November 19, 2017

India’s downstream energy major Indian Oil Corporation Limited (IndianOil) has in collaboration with Ola, made an attempt to contribute towards the vision of Green India by launching the country’s first electric charging station at one of its petrol/diesel stations in Nagpur.

Ola has built the Electric Vehicle (EV) eco-system from a nascent stage in Nagpur and IndianOil has partnered with them in their efforts. EVs have the ability to solve some of the key issues that are currently prevalent with respect to vehicular pollution and air quality; and as large-scale companies in their respective sectors, IndianOil and Ola intend to bring about a catalytic change.

ONGC Videsh to acquire 15% interest in Petroleum Exploration License 0030, Offshore Namibia
November 21, 2017

On 20 November 2017, ONGC Videsh through its wholly owned indirect subsidiary ONGC Videsh Vankorneft Pte. Ltd. (OVVL) signed definitive binding agreements with Tullow Namibia Limited (Tullow), a wholly owned subsidiary of Tullow Oil plc, for acquiring 15% participating interest in Namibia Petroleum Exploration License 0030 for Block 2012A and related agreements (License) from Tullow’s existing participating interest of 25% in the License. The License is currently under First Renewal Exploration Period and the joint venture partners are carrying out data evaluation for identifying a drill prospect.