Information – Oil Gas Future Energy
Reliance third well in Cauvery Basin turns out to be dry
Reliance third well in Cauvery Basin turns out to be dry
Drilling rig moved to Krishna-Godavari asset
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Digging for oil
In the Cauvery asset, RIL has no further drilling commitment.
The company struck hydrocarbon in the first well drilled in the block
The second well was abandoned due to a technical snag.
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Richa Mishra
New Delhi, Dec. 9 Reliance Industries Ltd (RIL) seems to have run out of luck in its deepwater Cauvery asset. The company has been able to strike hydrocarbon in only one of the three wells drilled in CY-DWN-2001/2 (CY-D5). In October, RIL had re-entered the asset to carve out the third well.
Sources told Business Line that drilling activity in the third well which started in October had been completed and the company had not done any hydrocarbon testing. RIL had earlier this year struck hydrocarbon in the first well drilled in the block and had to abandon the second well due to a technical snag.
As on date, RIL has 34 oil and gas blocks in its kitty, and has made about 34 discoveries (both commercial and non-commercial) in India with a success ratio of 60 per cent. The company has drilled over 30 dry wells till now.
Rig moved to KG basin
RIL has now moved the drilling rig to its Krishna Godavari asset KG-OSN-2001/1, the shallow water block where it has already made a discovery. In the Cauvery asset, RIL has no further drilling commitment. Sources said that in these kinds of blocks (CY-D5), called ‘wild cat blocks’, the success ratio is one in 10. Therefore, the company’s strike rate of one in three is not below the international average. The wild cat blocks are new frontier areas.
The financial implications of hitting a dry well would largely depend on the results of the first find, industry analysts say. “If size of the discovery is not very big in the first well, it would not be economically very viable.
Further, if two-three dry wells are drilled in the region, then the accumulated area is limited, thus making the success largely dependent on the size of the first discovery. Besides, the company may be required to rethink its exploration model,” analysts said.
The find in the first well showed there were two zones. In the first zone, as per the initial tests, RIL has found 550 barrels per day of oil and one million cubic ft per day of gas, while in the second zone, it found 31 million cubic ft per day of gas and 1,200 barrels per day of condensate.
RIL has already informed the Directorate General of Hydrocarbons about it. The block is 14,325 sq km in size.
RIL had deployed its rig Actinia to undertake the activity. The third well was altogether a separate geological structure, quite different from what has been discovered in the block.
When it re-entered the NELP-III block, RIL had the option of resuming activity in the abandoned second well.
However, the company decided against it and, based on seismic surveys, decided to carve out another area in the block, sources said. RIL holds 100 per cent interest in the block.
Kuwait Petro in JV talks with Reliance Industries
Kuwait Petro in JV talks with Reliance Industries
6 Dec, 2007, 0224 hrs IST,Rajeev Jayaswal & Soma Banerjee, TNN
NEW DELHI: Kuwait Petroleum (KPC) and Reliance Industries (RIL) have kicked off the first round of discussions for scripting a mega joint collaboration across the oil and gas vertical. KPC, the national oil major of Kuwait, is keen to rope in RIL as a partner in its upcoming projects in Kuwait in both refining and petrochemicals.
The KPC top brass, led by its vice-chairman & CEO Sa’ad Al-Shuwaib, is currently on an India tour. They were in the RIL headquarters on Wednesday to discuss the possibilities of such a collaboration. The visiting team will be holding talks with petroleum minister Murli Deora and senior petroleum ministry officials on Thursday.
Sources said KPC has concluded an agreement with Dow Chemicals by which it plans to jointly take up projects in Kuwait and third countries. Kuwait, which commands about 10% of the world’s oil reserves is building its downstream capacities including refineries and petrochemical plants to capitalise on its oil assets.
Collaborations with global majors who have expertise in downstream sectors is thus a part of the country’s strategy. A possible venture with RIL on the lines of the Dow Chemicals collaboration will make a strategic fit.
Although, at this point, the talks between RIL and KPC are at a nascent stage, the two oil majors are planning to explore possibilities of investments particularly in Kuwait’s refining and petrochem business. Possibilities of joint investments in third world countries too have not been ruled out. The two companies have decided to set up working groups to explore synergy areas and possible ventures where RIL can come in.
A source in the know said KPC was particularly “impressed with the on-going projects of RIL, particularly in the refinery sector and said that KPC would be keen to look at some sort of cooperation and presence in the new refinery being planned by Reliance. KPC will look at this cooperation in conjunction with Dow Chemicals which has an extensive exposure in Kuwait.”
Mr Al-Shuwaib is also expected to meet GAIL chief executive in Delhi. He is meeting petroleum minister Murli Deora in the capital on Thursday. Before becoming the CEO of KPC, Mr Al Shuwaib was the chairman & managing director of Petrochemicals Industries (PIC), a subsidiary of KPC. Recently PIC has moved towards production of high-value petrochemicals.
Emaar EC signs MoU with Saudi Total to set up lubricant plant
BY OUR CORRESPONDENT
KHALEJ TIMES 2 December 2007
JEDDAH — A lubricant products plant is to be set up in the King Abdullah Economic City (KAEC) for which Emaar, the Economic City (Emaar. E.C.), has signed a memorandum of understanding (MOU) with Saudi Total Lubricants Company (SATLUB) to lease land in the industrial zone of KAEC.
Emaar, the Tadawul-listed company is developing King Abdullah Economic City, the largest private sector-led mega project in the region
SATLUB will manufacture and market the entire range of lubricants and specialty products for the automotive, industrial and marine sectors within the Kingdom and for future exports under the Total brand.
The state-of-the-art plant will be commissioned in two years and will be the most modern blending plant using fully automated technologies. The initial production capacity of the plant will be 35,000 MT of finished products per year, with the potential for capacity expansion.
Located in the KAEC Industrial Zone, the plant will be the first lubricant facility of Total in Saudi Arabia. Total is one of the world’s leading oil and gas companies, and marks the evolution of KAEC as a prime driver of the manufacturing sector of the Kingdom. SATLUB is a joint venture of Total and Al-Zahid Group, a diversified Saudi group.
Dr. Abdulraouf Mannaa, managing director and CEO, Emaar E.C. signed the MOU with Jacques Souplet, Total’s regional director, Middle East and Central Asia.
Shell and Occidental Petroleum vie for multi-billion dollar project
Shell and Occidental Petroleum vie for multi-billion dollar project(Reuters)9 November 2007
DUBAI —Royal Dutch Shell and U.S. Occidental Petroleum are the front-runners to win a multibillion-dollar project to develop sour gas reserves in the United Arab Emirates, industry sources said yesterday.
The project is one of the biggest this year available to international companies competing for limited access to the Middle East’s oil and gas fields.
“Shell and Oxy are still in the race,” said one industry source. “They’re in a sort of final within a final. It may be one or the other that wins, or they may work together.”
Shell and Oxy have the edge over the other two bidders for the project, US majors Exxon Mobil and ConocoPhillips, sources said. The four companies submitted bids to state-run Abu Dhabi National Oil Company (Adnoc) in August.
Adnoc was expected to decide on the winner of the project by the end of the year, a source at an oil major said.
Adnoc officials contacted by Reuters declined to comment.
Once a winner is selected for the project, Adnoc was expected to move ahead quickly as it needs to bring online new gas supplies to meet spiralling domestic demand.
Record oil revenues have fuelled economic expansion and boosted demand for gas from the power sector and heavy industry in the United Arab Emirates.
The winner will take a 40 per cent stake in the project, while Adnoc will hold the rest.
The bidding round was the second for the sour gas reserves after the UAE revised the terms of its initial tender in April that also included the Bab field.
The project to develop both fields had an estimated cost of around $10 billion. It is not clear what the cost of developing the Shah field alone will be.
The complexity of developing both fields led Abu Dhabi to split the tender. The UAE has said the Bab field would be developed later.
The UAE holds the world’s fifth-largest gas reserves at nearly 214 trillion cubic feet and is the world’s sixth-largest oil exporter.
The gas has a content of around 30 per cent of potentially deadly hydrogen sulphide, making it tougher to produce than conventional gas reserves.
UAE to boost oil production capacity by start of next decade
UAE to boost oil production capacity by start of next decade
WAM Published: November 28, 2007, 13:27
Dubai: The UAE plans to increase its oil production capacity.
Government owned news agency WAM said the oil output of the UAE is expected to rise from 2.7 million to 3.5 million barrels per day at the beginning of the next decade.
It’s refinery capacity, which currently stands at 600,000 barrels per day is expected to rise to 1.1 million in the near future.
The UAE has 8.1 per cent of the world’s oil reserves as well as an estimated gas reserve of Six trillion cubic metres.
Abu Dhabi to supply extra crude
Abu Dhabi to supply extra crude
Reuters Published: November 29, 2007, 00:20
Singapore: Abu Dhabi will supply full term volumes of crude oil to its Asian customers for January and additional barrels to at least three buyers to meet winter demand, lifters said on Wednesday.
This is only the second month since November 2006 that Abu Dhabi, the main producer in Opec-member the UAE, is supplying additional volumes, but the move may not herald the organisation’s plan to lift output again when it meets next week.
“We received the notice. It is full volume and a small incremental,” one term lifter said.
Abu Dhabi occasionally sells extra crude to its term buyers in Asia, its main export market, although the exact volumes to be supplied this time were not immediately known.
Opec is meeting in Abu Dhabi on December 5 and is under pressure to supply more crude to world markets to stop prices from breaching new records and put further strain on the global economy.
While top Gulf Opec officials have expressed deep concern at prices threatening to top $100, they reiterated that markets were well supplied and steered clear of saying whether Opec would raise production at its policy meeting.
The incremental Abu Dhabi supplies for December came after a sharp cut-back in November due to offshore oilfield mainten-ance, and were in line with Opec’s decision to boost daily output by 500,000 barrels from November 1, which failed to stop prices from rocketing.
Written notice
Two lifters confirmed receiving written notice that they would get full term volumes for a second month in January.
Four lifters said they had not requested extra barrels, while three others had asked for additions, leaving it unclear whether Abu Dhabi will supply more crude to Asia for January than for December.
But unlike the December barrels, Adnoc did not not actively offer additional volumes for January. It may also not be able to satisfy all requests for additional crude, with one lifter saying it had sought a full additional 500,000-barrel cargo but received less.
Adnoc set to resume production at Lower Zakum West next week
Adnoc set to resume production at Lower Zakum West next week
Bloomberg Published: November 28, 2007, 00:31
Abu Dhabi: Abu Dhabi National Oil Co (Adnoc), the biggest oil-producer in the UAE, will resume production from its 280,000 barrel-a-day Lower Zakum West field on December 6, a company official said.
The field, which produces more than 10 per cent of the UAE’s daily oil output, has been completely shut since the end of October for the installation of a gas facility.
The new facility will inject gas into the oil wells to exert pressure in the reservoir so more oil can be pumped out.
Adnoc, the second-larg-est Arab oil company by production, reduced its output this month by a quarter, or about 600,000 barrels a day, because of planned maintenance at the Upper Zakum, Lower Zakum West and Umm Shaif oilfields.
Umm Shaif has resumed production, the official, who declined to be identified because of company policy, said. Lower Zakum includes Lower Zakum West and Lower Zakum Central.
Zakum Central continues to produce about 60,000 barrels a day while the rest of the field undergoes maintenance, the official said.
Lower Zakum and Umm Shaif are operated by Abu Dhabi Marine Operating Co, also a unit of Adnoc.
An Adnoc official responsible for maintenance at the Upper Zakum field declined to confirm output at that field had resumed. Upper Zakum, which contributes about 200,000 barrels a day to UAE daily oil production, is operated by Adnoc unit Zakum Development Co.
The UAE, the third-largest oil exporter in the Organisation of Petroleum Exporting Countries, is planning to raise oil output to four million barrels a day from about 2.6 million barrels a day at present.
Enoc gets new chief executive officer
Enoc gets new chief executive officer
Staff Report GULF NEWS Published: November 28, 2007, 00:31
Dubai: Emirates National Oil Company (Enoc) Board yesterday appointed Saeed Abdullah Khoury as its chief executive officer effective from December 1.
Khoury takes over from Hussain Sultan, who retires as group chief executive of Enoc, a position he held for 35 years since the group’s start-up.
Ahmad Humaid Al Tayer, Enoc’s vice-chairman, said: “With 28 years’ experience in Adnoc, Khoury is an expert in both upstream and downstream activities in the Emirates and is well placed to be a strategic implementer for Enoc’s growth.”
Khoury said: “We will continue to focus our activities to remain an important player in the local and international energy industry.” He added: “Enoc already operates many international businesses, which will be a major focus of our growth in the future, and will help to extend our excellent brand vision across the world.”
With a strong industry background, Khoury has been responsible for several industry achievements and is set to spearhead the future growth of the leading oil and gas company.
Total seeks quick deal on Kashagan
Total seeks quick deal on Kashagan Reuters Published: November 23, 2007, 01:04
Tienen: France’s Total hopes for a swift end to the dispute between Kazakhstan and operators of its Kashagan oil field, but a deadline of November 30 will be hard to meet, the head of Total said.
Christophe de Margerie said Total was also keen to pursue its projects in Iran, which have been bogged down by discussions over terms and the French government’s request to French companies not to invest in Iran.
Kazakhstan’s energy minister said last week the settlement of the dispute over Kashagan, the world’s biggest oil find in three decades, could go beyond the November 30 deadline but that a deal was possible by the end of the year.
De Margerie said it would be hard to meet the formal deadline given that time is now so short, but was keen to see a settlement quickly.
“Let’s do it as fast as possible. One must not give too much importance to deadlines… The goal is to find a solution as fast as possible,” de Margerie said on the sidelines of the inauguration of a solar energy production plant in Belgium.
Kashagan’s development has been plagued by cost overruns and delays which have irked Kazakhstan.
The oil-rich country has accused ENI and its partners of ecological and other violations.
ONGC Mittal under scanner in Nigeria
ONGC Mittal under scanner in Nigeria
17 Nov, 2007, 0128 hrs IST,Rajeev Jayaswal, TNN
RIYADH: ONGC Mittal Energy (OMEL) — a joint venture between ONGC and LN Mittal group — seems to be have run into trouble in Nigeria. The new government in that country has decided to review oil block contracts awarded by the previous regime following allegations of irregularities.
According to top Nigerian officials, there are apprehensions over licences won by OMEL.
Based on the apprehensions, the company’s deals in the country are under scanner. According to official sources, the deals under review include two blocks — 285 and 279 — awarded to OMEL.
Confirming the move to ET, Nigeria’s minister of state for energy (petroleum) Odein Ajumogobia said, “We are reviewing award of blocks by the previous government. There were complaints about the procedure used in awarding some of the blocks, and we are now investigating that.”
He, however, did not specify the identity of the blocks. Official sources, however, said that the two blocks awarded to OMEL are also under review, he said.
While there was no formal confirmation about the identity of the blocks and the companies involved, industry sources said some domestic and foreign entities that obtained licences to explore oil in the energy-rich African nation through ‘back door’ may end up losing them.
OMEL had won rights to explore in OPL 279 and OPL 285 in 2005 after committing investment of $6 billion in an 1,80,000-barrels-per-day greenfield refinery, a 2,000 mw power plant and a railway line running from east to the west of Nigeria. OMEL paid a signature bonus of $50 million for OPL 285 and $75 million for OPL 279.
OMEL was given preferential bidding rights for another block (OPL 250) in another licensing round that happened just before the change in the government. The company, however, did not submit a bid for the block.
Preferential bidding rights are like the first right of refusal where the company has the right to match the highest bid for the block and bag the exploration acreage. It is understood from the sources that OMEL did calculate the political risk and opted out of the deal.
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