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GAIL in talks to buy $500 mn E&P company

From Our Commodities Bureau / Mumbai
December 24, 2005
link to this article.

GAIL India is scouting to acquire a mid-sized oil exploration and production (E&P) company worth $500 million, and is in talks with three companies for the purpose.

The acquisition is aimed at gaining expertise in areas like reservoir engineering and geophysics, and is in talks with three companies for the purpose.

The acquisition is aimed at gaining expertise in areas like reservoir engineering and geophysics, an area where GAIL lacks expertise.

As part of the development, GAIL executives are in discussions with companies based in Oman, Malaysia, Australia, Qatar and Abu Dhabi. However, nothing has been finalised yet.

"We are evaluating the skill and expertise of the companies in E&P, as GAIL is novice in this segment. After the acquisition, the entity will spearhead GAIL's exploration activities worldwide," GAIL chairman and managing director Prashanto Banerjee told reporters here.

However, he has declined to divulge any details of the companies.

GAIL has participation interest in 12 exploration blocks, but is yet to begin work. The company has planned to use its cash surplus to fund the acquisition. There is bidding for oil and gas blocks in Australia, which will be decided in January.


GAIL starts talks with Myanmar for gas share

Jyoti Mukul
From New Delhi
December 19, 2005
link to this article.

GAIL (India) has started negotiations with the Myanmar government to buy its share of natural gas from A-1 block in that country. Myanmar had earlier agreed to consider GAIL as the preferential buyer of gas from the block.

It is estimated that A1 block has reserves of 4 trillion cubic feet gas. Production is anticipated to be about 16 million standard cubic metre a day (MMSCMD) during the plateau period of about 15 years.

A team from GAIL is expected to go to Myanmar shortly where it will hold discussions with the Ministry of Energy, government of Myanmar and the state-owned Myanmar Oil and Gas Enterprise (MOGE).

GAIL and ONGC Videsh Limited together hold 30 per cent share in the A-1 block. The other partners in the consortium are Daewoo, which is the operator with 60 per cent share, and KOGAS with 10 per cent share.

MOGE's share of gas in A1 block would be approximately 11 MMSCMD including royalty and share in profit gas by virtue of participation in the development project, said officials, adding that third-party reserve certification of the gas reserves is expected by May 2006 and commercial production expected to commence by 2009.

Block A-1 entered the third extension period last month, which is likely to be over by October 31, 2006, with a work programme of drilling of six appraisal/exploratory wells. The drilling campaign is already under way.

There are many potential buyers of gas from Myanmar, which includes Thailand to which it has been supplying from two offshore producing gas fields --- Yadana and Yetagun.

One of the crucial issues which the GAIL team is expected to discuss is the price. At present, Myanmar is delivering gas to other countries at a price which at the delivery point of the importing country border is indexed to fuel oil, US CPI and US Oil Machinery Index. It has a fixed element and includes pipeline transportation cost till the delivery point.

OVL and GAIL have also been granted a share in Block A3. OVL will hold 20 per cent equity, while GAIL will hold 10 per cent equity.


Activists to protest Indian oil and gas investments in Burma

Nem Davies
From Mizzima News
December 15, 2005
link to this article.

Burmese democracy activists and lobby groups will protest Indian oil and gas investment in Burma on Saturday morning at a rally in Janta Manta Park, New Delhi.
Kaung Mrat, a joint coordinator for the Shwe Gas Campaign-India, told Mizzima activists would demand the Indian government stop state-run groups, the Oil and Gas Corporation and GAIL from investing in Burma.
Most Burma-focused NGOs say foreign investment in Burma does not benefit its peoples but puts cash in the pockets of the military's generals, helping them stay in power.
Kaung Mrat said ethnic groups do not see any of the financial returns for the gas projects in Arakan state.
" . . . the native people in Arakan area would not get any benefits in the sense that they become the most suffering indigenous people and victims of human rights violation, force labour and sexual exploitation of women by the junta," he said.
He said one Arakan woman and Mathupi Chin woman were raped by soldiers on duty in project areas and that forced labour is often used for construction.
On October 3, OCG and GAIL signed an agreement with Daewoo International and the Korea Gas Corporation to explore gas prospects in Arakan states block-A 3.
OCG and GAIL have 20 percent and 10 percent stakes in the project respectively. The Burmese, Indian and Bangladesh governments signed agreements on the exploration of gas in the area in January.
The Shwe Gas Campaign has twice launched mass demonstrations in front of Daewoo International Offices and Embassies in South Korea and across the continent.


Energy hungry India keen to explore, have access to oil rich sources, says Minister

From New Delhi
December 13, 2005
link to this article.

Oil Minister Mani Shankar Aiyer said on Tuesday that New Delhi is keen to explore and access oil-rich Central Asia, Iran, Myanmar along with countries like Indonesia, Australia and Qatar, to fulfill supplies for energy-hungry India.

Speaking at a conference on Asian Energy Security in the Indian capital, Aiyar said that though a heavy financial risk is involved, India should make the best of its geographic location.

"There is no place in the world that has as much natural gas as this combination of Iran, Central Asia and Myanmar, in the middle of which we find ourselves. It is for us to use our diplomacy to access the gas from all these sources. With the USP we have we are about the only one that can access it on all three sources by pipeline without having to go with all the bother to convert all the gas to LNG. And yet, at the same time this inner concentric circle of getting it by pipe gas doesn't exclude the slightly outside concentric circle of getting it by LNG from Qatar or Australia or Indonesia. But, we need to reach out to these countries. We need to take some very heavy financial risks in putting our money," Aiyar said.

India plans to build bridges with Central Asian oil producers to secure energy supplies, but analysts say Asia's third-largest oil consumer will take years to match rival China's success in oil diplomacy.

India is looking to Iran for gas supplies through a proposed seven to eight billion dollar pipeline that will go through Pakistan. American officials, however, have disapproved of the project.

Analysts feared the pipeline deal would be jeopardised by India's decision to join the United States in September and vote, referring Iran's nuclear programme to the U.N. Security Council for possible sanctions.

Until International Atomic Energy Agency (IAEA) vote, India had walked a tight rope between its traditional ties with Iran and a blossoming relationship with the United States.

Aiyar said India needs to put its foot down to work towards fulfilling its energy needs without being pressurized by big nations like the United States.

"Above all we should have confidence in ourselves. If we behave like frightened rabbits caught in the headlights of the Iran and U.S. stand off or doubts of whether Turkmenistan can actually make the supplies that it thinks it can or run from Bangladesh because you can't get it from Myanmar by pipeline except through Bangladesh. Then of course for want of imagination, for want of courage we would have lost our opportunity to eradicate poverty in India," he said.

A proposal to build a pipeline has been discussed for years but neasy relations between nuclear rivals Pakistan and India revented progress.

But the plan gained momentum after a peace process between the South Asian nations began last year.

Analysts say the project faces several hurdles such as the security of the pipeline, which would pass through volatile areas, and its funding.

Pakistan and India, seeking energy sources to fuel rapid economic growth, are also considering a gas pipeline from Turkmenistan through Afghanistan, but poor security in Afghanistan is likely to delay that project. (ANI)


Delhi may accept Dhaka's terms

Sharier Khan
From The Daily Star, Bangladesh
December 10, 2005
link to this article.

New Delhi may reconsider its objections to Bangladesh proposals on the tri-nation gas pipeline and accept the three conditions put earlier, it has been reliably learnt.

Sources in Dhaka quoting Indian energy ministry officials said that Delhi is likely to address a letter to the energy ministry adviser to this effect. The letter is expected to reach energy ministry later this week, the sources added.

The draft letter says that Indian government has no objection to the Bangladesh proposal and it requests Dhaka to provide the right of way for the tri-nation gas pipeline.

These three Bangladeshi conditions are: provision of transit facility through India to facilitate transmission of hydroelectricity from Nepal and Bhutan to Bangladesh, assured and unhindered utilisation of corridors for trading between Bangladesh, and Nepal or Bhutan through Indian territory and effective measures to reduce trade imbalance between India and Bangladesh.

The fate of the tri-nation gas pipeline has remained uncertain from March when Delhi took a position that it would not sign any bilateral treaty under these three conditions with Dhaka in a tripartite agreement between India, Bangladesh and Myanmar. Earlier in February however, India had agreed on these conditions and signed a draft Memorandum of Understanding (MoU).

Quoting Indian energy ministry officials, sources also said that India changed its mind because the option of bypassing Bangladesh and importing gas directly from Myanmar turned out to be difficult. In such a case, India would have to install an additional 1000 km of pipeline through an insurgency infested and geographically tough region. Such options are very risky and also very costly.

The sources said if India imports Myanmar gas bypassing Bangladesh, the price of gas at Kolkata point can go as high as 6 dollars to 6.5 dollars per million British thermal unit (MBTU). This price would be 2 to 3 dollars lower if imported through Bangladesh where the pipeline length would be only 290 km. Therefore, this option has been finally discarded.

India is the region's biggest energy consumer that is perennially facing energy shortage. To stay even with its power demand growth, India must add 100,000 megawatt new power generation by 2020. This is why India is tapping all kinds of resources.

India is also hosting later this month a meeting of senior officials and experts to discuss the technical matters to explore the possibility of a trans-BIMSTEC power transmission grid. This will involve India, Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar and Thailand, says our Delhi correspondent Pallab Bhattacharya.

A Delhi energy ministry official said, "things are definitely moving in positive direction. Even if this is not resolved bilaterally, it will be resolved multilaterally."

At the first minister level meeting between Bangladesh, India and Myanmar on January 13, former state minister for energy AKM Mosharraf Hossain spelled out three conditions which the Indian minister assured of positive considerations.

Upon his return from Myanmar, former state minister for energy Mosharraf said that Bangladesh will not sign the tri-national gas pipeline agreement unless India signs the bilateral treaty with Bangladesh.

In the follow up first meeting of the techno-commercial working committee in Yangon on 24-25 February, the two-member Bangladeshi team comprising the then Petrobangla Chairman SR Osmani and Director of Gas Transmission Company Ltd (GTCL) Abu Salek Sufi were given India's initial response.

India's initial response to these conditions was: Nepal itself is facing power crisis and Bhutanese electricity is generated in Indian funded projects. Secondly, there is a limited transit facility for trade between Bangladesh and Nepal/Bhutan which itself remains under-utilised. Thirdly, to reduce trade imbalance, Bangladesh should increase its export basket by including items like pipeline project, road and rail transit to India's northeast-- instead of seeking a balance in commodity trade.

But India eventually agreed to the three conditions of Bangladesh and included them in the draft MoU signed between the three countries.

One month later some news reports dismissed the prospect of signing a bilateral treaty as part of the tri-national agreement and stated that if Dhaka does not move from its position, India would import Myanmar gas bypassing Bangladesh.

Officially India denied holding such a position but at the same time, it did not invite Bangladesh to hold the next round of meeting in March or April, as it was planned earlier. Instead, Delhi invited Dhaka in June to the follow up meeting--only a day prior to the event. Dhaka could not attend the meeting.

In August the then Indian foreign minister Natwar Singh visited Dhaka and held meetings with Finance Minister M Saifur Rahman and Energy Adviser Mahmudur Rahman that gave out positive signals. However there was no practical progress after that.

The trans-national pipeline project was conceived nine years ago. But following a political nod late last year, Dhaka moved ahead with it through a ministerial-level meeting in January.

As per the proposal, the pipeline will begin from Myanmar to transmit gas to India's Tripura and enter Bangladesh in the east to pass on to West Bengal.

Under this plan, Tripura will pump gas in the pipeline for transmission to West Bengal through Bangladesh. And Bangladesh can also add its own gas in the pipeline to transmit it from one point to another. Besides improvement of diplomatic relations, Bangladesh will earn a lot of foreign exchange through wheeling charge when the project is implemented, sources mentioned.


India to host BIMSTEC meeting of officials on regional grid

From New Delhi
December 9, 2005
link to this article.

Initiating the first step to explore the possibility of a trans-BIMSTEC power transmission grid, India will host later this month a meeting of senior officials and experts to discuss the technical matters related to the issue.
The Union Power Ministry has already written to the seven South and South-East Asian member countries inviting them for the meeting, which has been tentatively fixed for December 19, a senior power ministry official said.

The Ministry has also informed the External Affairs Ministry about the meeting, he said, adding that they were awaiting response from member nations to finalise the date.

The meeting comes just two months after Energy Ministers of Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation agreed in October to look into the possibility of a trans-regional gas pipeline and a power transmission network to enhance energy cooperation.

"This meeting would mainly discuss various technical and operational parameters such as frequency and voltage related to harmonisation of national grids," the official said.

Besides government officials, technical experts and senior officials from transmission companies and grid operators are likely to take part in the meeting, he added.

During the October meeting, representatives of BIMSTEC - which includes India, Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar and Thailand - had adopted a Declaration and a Plan of Action for greater energy cooperation in the region.

They had agreed to the concept of a power exchange and a common regulatory framework for grid interconnections by developing country to country grid interconnections to enable flow of electricity across the region.


South Korea looking for engineers in the pipeline

Song Jung-a
From !!!News Agency's Name!!!
December 8, 2005
link to this article.

The strong oil price is making happy people of not only global oil producers but also South Korean construction companies. A boom in overseas construction, especially in the Middle East, has boosted the profits of Korean contractors, who are suffering from dwindling orders at home.

Overseas construction orders jumped almost 70 per cent to $7.9bn in the first nine months of this year, with the bulk of them from the Middle East.


Total Resolves Tax Dispute Over Kharyaga PSC

From Total
Wednesday, December 07, 2005
link to this article.

Total reports the resolution, out of court and as a result of constructive negotiations with representatives of the Russian Federal Government and Administration of the Nenets Autonomous Region, of all issues in regards to the Kharyaga Production Sharing Contract which were the subject of an international arbitration in Stockholm.
Within this framework the Production Sharing Agreement Joint Committee, the managing body of the Kharyaga project consisting of representatives of the Federal

Government, Nenets Autonomous Region Administration and partnered companies approved the relevant past annual work programs as well as past budgets and past cost recovery. As a result, the Russian Tax Authorities have revoked their tax claims.
Total is the operator of the field with a 50% participating interest along side Norsk Hydro also with a 40% interest, and the Nenets Oil Company with a 10% interest.


ONGC Videsh to Buy 45% Stake in Nigeria's Akpo Field

From AFX News Limited
Wednesday, December 07, 2005
link to this article.

ONGC Videsh is set to acquire a 45% stake in Nigeria's Akpo oil and gas field for about US $2 billion, the Economic Times reported, without citing sources.

South Atlantic Petroleum is selling the stake in the field, which is said to have an estimated reserve of 1.6 billion barrels of oil, the paper said.

It said the Indian government is set to give the final clearance for the investment shortly.

France's Total SA holds 24% of the field and Brazil's Petroleo Brasileiro SA owns 16%. The rest is held by South Atlantic and state-owned Nigeria National Petroleum Corp, the report said.

Total is the operator of the field, which is expected to begin production by 2008.


Gas grid to cost $22.4 bn

From Our Economy Bureau / New Delhi
November 26, 2005
link to this article.

Ernst & Young and Tracteble Engineers and Constructions today proposed a 22,491-km Asian gas grid at an estimated cost of $22.4 billion.
A study by the firms identified Iran, Uzbekistan, Turkmenistan, Russia, Kazakhstan, Azerbaijan, Myanmar, Bangladesh and Afghanistan as potential sellers with 70 trillion cubic feet (tcf) of natural gas supply which would be much more than the 40 tcf demand generated in Turkey, Thailand, Taiwan, South Korea, Pakistan, Japan, India and China.
The benefits of such a grid would be to the tune of $55.37 billion by the end of 2025 assuming that importing countries get $1 per million British thermal units and exporting countries get $2 considering the benefits accruing through development in the downstream sector.
The study said Asian economies, including India, China and South Korea, are currently growing at rates far higher than the United States and the Western Europe and the trend is likely to continue in future.
The spurt in international oil and gas prices had stimulated high interest in commodity prices, putting energy infrastructure higher on lender agenda, said the study. Globally, 170 pipeline projects have been planned, with $135 billion investment earmarked for them.
The creation of an Asian Gas Grid will not only lead to exchange of trade but also development of the electricity, petrochemicals and fertiliser industries.


Indian Oil Minister to Meet Norway Prime Minister

Himendra Kumar
From FWN Financial News
Wednesday, December 07, 2005
link to this article.

Indian Petroleum Minister Mani Shankar Aiyar is scheduled to meet Norway’s Prime Minister Jens Stoltenberg at 0700 GMT in New Delhi Thursday, a senior Indian government official said Wednesday.

"We want to strengthen bilateral energy ties by establishing a close working relationship with the new Norwegian government," the official told Dow Jones Newswires.

Stoltenberg is currently on a visit to India.

"The discussion between the two leaders would focus on the possibility of Indian and Norwegian companies collaborating in the oil and natural gas exploration ventures," the official added.

He also said India wants to tap Norwegian expertise in deep sea oil and gas exploration in the Bay of Bengal and get Norwegian energy majors to participate in the next round of government auction of Indian oil and gas exploration blocks.

In September, during Aiyar's Norway visit, the Indian state-run Oil & Natural Gas Corp. (500312.BY) signed a memorandum of understanding with Norway's second largest oil company, Norsk Hydro (NHY), to undertake joint exploration ventures in the Middle East and Cuba.


India, Russia evoke 'strategic partnership'

From AFP
December 7, 2005 Wednesday
link to this article.

MOSCOW, Dec 6: Russia and India intensified cooperation on defence and energy as Indian Prime Minister Manmohan Singh and Russian President Vladimir Putin met at the Kremlin on Tuesday and evoked a 'strategic Partnership,' "We have a very special relationship when it comes to matters related to defence," Manmohan Singh said at the start of the meeting, referring to a 'strategic partnership' between the two countries.

A key agreement was signed in the presence of the two leaders regulating intellectual property rights for Russian technology.

Russian officials had pushed for the deal as the two countries build on Soviet-era military ties and India starts to build arms using Russian technology.

India and Russia have increasingly been developing joint defence projects, with some production already carried out in India under licence, including building of Su-30 MKI fighter jets and T-90 tanks.

The two countries are jointly building BrahMos anti-ship missiles, while their militaries held joint exercises in Rajasthan in October.

"Our aim is to be moved towards collaborating on projects involving the design, development and production of the next generation of military products," Mr Singh said.

The two leaders also emphasized their hopes of increasing cooperation in energy, already given a boost by the purchase in 2001 by India’s Oil and Natural Gas Corporation (ONGC) of a 20 percent-stake in the Sakhalin-1 oil and gas project off Russia's Pacific coast.

"India's need for commercial energy is increasing very rapidly. We are a net importer of commercial energy and this dependence on the outside world is going to increase," Mr Singh said.

"We are aware of the interest of our Indian partners in increasing oil and gas supplies and... we are working on different ways for assisting our partners," Mr Putin said.

He also signalled Russia's hopes of increasing involvement in India's nuclear energy sector.

"We hope Russia will take part in rather large and grand projects in the sphere of peaceful nuclear energy" in India, Mr Putin said, although he did not go into specifics.

Indian officials said before the Moscow talks that India hoped to invest in Russian energy majors, to invest in oil exploration blocks in Siberia and to play a role in another huge project, Sakhalin III.

Two other agreements signed on Tuesday will allow India's use of a Russian navigation system made up of 14 satellites known as Glonass, and Indian involvement in a Russian solar research project.

Official figures estimated Indian-Russian annual trade turnover at $1.8 billion


ONGC Hires Floating Unit to Replace BHN Platform

Paul Cuckoo
From The Economic Times, India
Tuesday, December 06, 2005
link to this article.

ONGC has hired a floating facility for production, storage and offloading of oil to replace the BHN platform, that was ravaged by a fire in July this year.

A floating system is the quickest way to restart production, even as a conventional platform is being built, company sources said.

This is the first time such a system, called an FPSO (floating production storage and offloading vessel), is being used in India. ONGC has hired the vessel Crystal Sea from Norwegian company Sea-tanker on a 5-year charter. It will cost the company about Rs 160 crore per year. Related Pictures

Oil production from Bombay High has slumped from 2,65,000 barrels per day to 2,25,000. The BHN platform was connected to a sub-sea network of about 20 oil wells as well as two other platforms. ONGC engineers are also currently working on diverting oil and gas to other platforms. Production will go up by 10,000 barrels a day by the end of this month as a result of this, NK Mitra, director-offshore, ONGC, estimated.

The company is also looking at hiring more FPSOs for rapid increase in production from its small and marginal fields, he said.

A combination of the two measures is expected to help the company return to its pre-accident production rate by June next year.

Explaining the function of an FPSO, oil industry sources said, oil from wells in the seabed is drawn through pipes to the FPSO and is stored in the tanks provided in its hull after some processing on its deck. The produced crude oil is then offloaded onto shuttle tankers periodically. These vessels are typically suitable for middle and small scale oil fields located far away from landfall. The world’s largest FPSO is the Kizomba A, which has a storage capacity of 2.2m barrels of oil.


Indian Oil improves to 21st posn in Patts world energy rankings

From New Delhi
December 6, 2005
link to this article.

State-owned Indian Oil Corporation has moved five places to occupy the 21st position in the Patts Top 250 Global Energy Company ranking.
The corporation, which is the only Indian firm to be featured amongst the top 25 energy companies world-wide, has also been ranked second in the sectoral listing of oil marketing and refining companies of the world, a company release said.

Indian Oil is also among the top three entry companies in Asia in this listing followed by China’s PetroChina (ranked 7) and China Petroleum (12) it added.

US-based ExxonMobil was at top in the rankings, followed by France-based Total SA, while the Chevron Corp got the third position, it said.

Chevron moved to 3rd position this year from its 25th position in 2004, however Royal Dutch/Shell, which was ranked as number one, slipped to the 5th position this year, it added.

Patts measures the annual performance of energy companies around the world using parameters such as asset worth, revenues, profits, earnings per share and return on invested capital.

Other Indian Companies that figure in the top 250 global listing includes ONGC (rank 26), Reliance industries (rank 49) BPCL (rank 76), Nevyelli Lignite Corporation (rank 190) and MRPL (rank 227).


India and China: An Energy Team?

Vandana Hari
From Platts Oilgram News
Tuesday, December 06, 2005
link to this article.

India's globe-trotting Oil Minister Mani Shankar Aiyar is paving the way for what could become the cornerstone of his unique brand of oil diplomacy during a trip to Beijing in January, 2006. Aiyar plans to sign a broad memorandum of understanding with Ma Kai, chairman of China's state energy policy planner, the National Development Reform Commission, that would have the competing Asian giants join hands in their quest for energy resources.

Aiyar's trip has been tentatively scheduled for Jan. 10-16. It will begin symbolically at Kunming, the southeastern Chinese city that received an oil pipeline laid from Ledo in India's northeastern Assam state across northern Myanmar more than six decades ago -- which fueled China's liberation from Japanese occupation in World War II.

"I believe that China and India can cooperate across a range of matters relating to the hydrocarbons value chain," Aiyar told Platts in an interview conducted over two separate sessions around a ministerial roundtable of Asian oil consumers and producers he had organized in New Delhi Nov. 25.

"A MONOPSONY." Significantly, one of four to five pacts that will be signed at the corporate level under the umbrella ministerial MoU will call for Indian and Chinese state companies to bid jointly for oil and gas assets. "This won't be possible on every occasion," Aiyar conceded. "Market circumstances might dictate that we end up competing. But we will keep each other posted as far as possible and discuss possible joint bids on a case-by-case basis."

"The theoretical proposition is that it is better for two principal buyers to join hands and present a monopsony, if you like, to the monopoly of the seller," Aiyar said.

The Indian Oil Minister cites the $600 million he says China National Petroleum "simply kissed away" to trump a rival bid by an Indian consortium and acquire Canadian independent PetroKazakhstan. CNPC upped its cash bid for the Kazakhstan producer to $4.18 billion in August, to top the original best offer from India's OMEL, a joint venture of state-owned ONGC Videsh Ltd. and the private Mittal Group.

BETTER TO COLLABORATE. Chinese state oil giants have so far had an edge over their Indian counterparts in the search for energy resources because of a head start and deeper pockets. They've beaten Indian rivals in the race for some blocks in Angola, Myanmar, and Indonesia. But the Chinese see the importance of collaboration over confrontation, Aiyar asserts, citing a string of discussions between his ministry and authorities in Beijing since early 2005.

"If I hadn't had it confirmed through several conversations that I've had - let's take it one-by-one: with the vice-chairman of NDRC who came [to India] in January, then the team that accompanied the Premier who came in April, then the delegation I sent under Talmiz Ahmed [additional secretary in the Oil Ministry] in August, and then the conversations we had with the Chinese in Johannesburg at the World Petroleum Congress -- if all of this had not been put together, then I wouldn't be going to China," Aiyar said.

But it seems Indian and Chinese outfits aren't waiting for the formalities of Aiyar's January trip. News emerged last week that India's OVL and CNPC have submitted a groundbreaking, 50-50 joint bid for PetroCanada's (PCZ) stake in Syrian oil-producing assets, held in a consortium with Royal Dutch Shell (RDS.B) and Syrian Petroleum and valued around $1 billion.

AUCTION COMPLAINTS. India hasn't given up on PetroKazakhstan either. Aiyar last month lashed out against the company's Canadian management and adviser Goldman Sachs (GS) for what he termed as a "lack of propriety and transparency" in the auction. He says he also lodged his complaint with Kazakh Oil Minister Vladimir Shkolnik during a visit to the Central Asian republic in early October.

"I told Mr. Shkolnik that I thought it was extremely unfair.... He said he was unaware, but since the company was Canadian, that's where I should take my complaint," Aiyar said. Ultimately, it was up to OMEL, which decided not to pursue the case, the minister said.

A more "constructive" way going forward, and one that should yield "some conclusion" in February, was for India to take a stake in PetroKazakhstan assets to be acquired by the Kazakh government, according to Aiyar. "Since it was the intention of the Kazakhstan government to obtain 50% control over PetroKazakh and PetroKazakh assets, it is clear that on the day it all comes together, there will be an opportunity for India to farm in to at least the Kazakh-owned assets of PetroKazakh. And so I put in my expression of interest and it will take a while for things to get sorted out," he said.

FLEXING MUSCLE. CNPC has agreed to sell 33% of PetroKazakhstan and 50% of the latter's Shymkent refinery to state KazMunaiGaz.

"We are going to have a major opportunity in February to come to some conclusion, when the India-Kazakh joint mission [Joint Business Council] meets here, in our country," Aiyar said. "Mr. Shkolnik is my counterpart and co-chairman. He has time between now and then." Aiyar also will use the opportunity to discuss OVL's interest in two Kazakh exploration blocks in the Caspian Sea, "unless the agreements are already tied up."

The 64-year-old minister, who had built a long career in India's foreign diplomatic corps before joining politics, emerged optimistic from the Nov. 25 roundtable concerning cooperation between North and Central Asian producers and the main regional consumers China, Japan, South Korea, and India. He used the occasion to reiterate his call to former Soviet bloc producers and the vital transit country of Turkey to pay adequate attention to Eastern markets, instead of focusing solely on Europe.

SECURITY IS KEY. While the message went down well with the producers - Russia, Kazakhstan, Azerbaijan, Uzbekistan, and Turkmenistan -- Aiyar found an especially strong ally in Turkish counterpart Mehmet Hilmi Guler. "Hilmi Guler belongs to an Islamic conservative party and therefore has some sense of discomfort with a purely Western orientation," Aiyar told reporters in a post-event briefing. "He has become a great advocate," said Aiyar, referring to a "north-south" oil and gas supply relationship he has championed with Turkey in the past few months.

At the roundtable, Aiyar flagged India's interest in joining the proposed 1,700-km Turkmenistan-Afghanistan-Pakistan, or TAP, gas-pipeline project as the final destination. New Delhi has until now been noncommittal to receiving the 3 billion-cubic-feet-per-day pipeline amid doubts expressed by Afghanistan and Pakistan that Turkmenistan has enough gas to make the venture viable, apart from security issues posed by the passage through Afghanistan. Aiyar said the visiting Turkmen delegation had presented him gas reserve estimates that could provide supplies into TAP 'for years...decades.' But he conceded it wasn't clear how the figures had been arrived at or how much gas was already pledged on a term basis to Russia.

A way out could be for Azerbaijan, Russia, Kazakhstan, and Uzbekistan to pool gas resources and make it an 'ARUKUTAPI' pipeline, he told the roundtable. In that event, Turkmenistan's Dauletabad field wouldn't be just a supply source, but 'a junction that will collect gas from the east and west and export it.' The concept is at the heart of a pan-Asian oil and gas grid mooted at the roundtable to afford security of supply and of markets to the region's buyers and sellers, a '21st century silk route,' in Aiyar's words.


Myanmar to offer 13 deepwater blocks

From Oil and Gas Journal
December 1, 2005
link to this article.

Myanmar plans to offer 13 deepwater blocks in addition to the existing five offshore blocks that have not been taken up yet, Myanmar Oil and Gas Enterprise (MOGE) managing director San Lwin told the 8th ASCOPE conference and exhibition in Manila on November 30.

"Our target is to find more hydrocarbon to supply to the region," he said in a country report to the ASEAN Council on Petroleum (ASCOPE) and responding to Asian markets facing severe energy shortage.

Local demand would be met through onshore fields by raising production to 50,000 b/d in five years from the current 10,000 b/d.

"To achieve self-sufficiency in oil and gas, MOGE is planning to increase its exploration activities in onshore areas, especially by deploying new deep drilling rigs to explore deeper reservoirs in existing fields and increasing exploration acreages," San Lwin says.

For offshore, San Lwin disclosed that Daewoo Exploration Co. of South Korea was proceeding with its two offshore discoveries in the Gulf of Martaban.

Appraisal drilling will be made in Shwe Phyu, an estimated 10 tcf discovery made early this year in A-1 block.

Three options were being considered for the development of the Shwe Phyu, he says. The first option was to lay pipelines to neighboring countries, the second was to set up a liquefied natural gas plant, and the third was to land the gas in a special economic zone along the Myanmar coast.

Daewoo, and is partners Korea Gas Co., Gas Authority of India Ltd., and Oil and Natural Gas Corp. of India, would also be doing further exploration in A-1 block, says San Lwin.

The four partners have jointly drilled five appraisal wells in block A-1's Shwe & Shwe fields, which were discovered last year.

In an update on the two major gas fields, Total, Unocal, PTTEP, and MOGE were jointly implementing the SEIN field development in blocks 5 and 6, home to the 6.5 tcf Yadana gas field, says San Lwin.

The plan is to increase domestic gas supply by an additional 110 MMcf/d from the SEIN field in addition to the 50 MMcf/d being supplied by Yadana, while 650 MMcf/d is exported to Thailand.

One hundred-twenty miles of 20-inch pipeline would be laid for the additional gas, which would replace liquid fuels being used by industries, says San Lwin.

Exploratory drilling was being planned in the satellite areas to increase gas supply by 100 MMcf/d from the Yetagun gas project in blocks 12,13, and14.

The field, with 3.2 tcf of reserves, currently produces 450 MMcf/d of gas for export to Thailand and 13,000 b/d of condensate, says San Lwin.


Myanmar top leader meets Bangladesh Chief of Army Staff

From Xinhuanet, China
November 28,2005
link to this article.

Chairman of the Myanmar State Peace and Development Council (SPDC) Senior-General Than Shwe met with visiting Bangladesh Chief of Army Staff Lieutenant-General Moeen UAhmed here Monday, said a night report of the state-run Radio Myanmar.
Moeen arrived here on Sunday on a goodwill visit to Myanmar at the invitation of SPDC Vice-Chairman Vice Senior-General Maung Aye.
The visit came after Myanmar SPDC member General Thura Shwe Mann toured Dhaka in September this year.

There were some exchanges at high level between Myanmar and Bangladesh in recent years. In December 2002, Myanmar SPDC Chairman Senior-General Than Shwe visited Dhaka. In 2003, Bangladesh Prime Minister Khaleda Zia came to Yangon, during which the two countries signed two memorandums of understanding (MoUs) on account trade arrangement and the establishment of a joint trade commission and an agreement on coastal and maritime shipping.

In 2004, three more MoUs were signed on cooperation in agriculture, establishment of the road links and mutual visa exemption for holders of diplomatic and official passports.

Meanwhile, Myanmar and Bangladesh are due to finalize a draft agreement here soon on a proposed cross-border highway project. Once the draft is adopted, the building of the 133-kilometer (km) highway that links Buthidaung in Myanmar's Rakhine state and Bangladesh's Ramu in Chittagong province would start by October, according to Bangladesh sources.

The MoU to build the highway was signed in April last year and funding is being sought from the Asian Development Bank and other sources. Bangladesh statistics show that Bangladesh's export to Myanmar stands around 1.5 million dollars a year as against Myanmar's exports to Bangladesh of about 8 million.


GAIL bags industry leadership award

From New Delhi
December 2, 2005
link to this article.

State-owned GAIL (India) Ltd has received the prestigious Platts Global Industry Leadership Award 2005 in New York.
The award was presented to GAIL “in recognition of its commitment, continous good work and collective efforts over a period of 2 decades for the hydrocarbon industry at global level,� the company said in a press release.

GAIL was selected for the award out of 200 global competing companies. Over 500 industry stalwarts from all over the globe attended the glittering award ceremony.

“Apart from the track record and the operating style of GAIL, the judges took notice of the range of other activities relating to environment and customer care, safety, commercial success and innovative skills,� the release said.

The judgement process for the year 2005 relied on the expertise of a panel of international energy experts, including energy ministers, national regulators, former heads of major energy companies, and leading academics and legislators.

The judges evaluated the entrants and selected the finalists and winners based on the criteria listed in each caterogy, taking into consideration the company’s profile and financial performance from within the designated timeframe.

The Global Energy Awards were instituted in 1999 to recognise outstanding achievement. The mission of the Platts Global Energy Awards is to single out the energy industry’s star performers, recognising corporate achievements, the strongest individual efforts, and the most compelling community supporters.


ONGC and BG India Strengthen Relationship

Friday, December 02, 2005
link to this article.

Oil and Natural Gas Corporation Ltd. (ONGC) and BG Exploration and Production India Limited (BGEPIL) have reached agreement to jointly operate three offshore deepwater exploration blocks on the east coast of India.
The blocks, KG-OS-DW III (GD), KG-OS-DW (KD) and KG-OS-DW (KD Extn), are located in the Krishna Godavari Basin, and in the vicinity of several blocks in which there have been recent discoveries. These three blocks cover a total area of 3,090 square kilometers. Subject to agreeing farm-in arrangements and Government approval, BGEPIL and ONGC will each own a 50 percent interest in these blocks.

The deepwater exploration blocks were assigned to ONGC by the Government of India on a nomination basis and on New Exploration Licencing Policy (NELP) terms for exploration and development in partnership with a global major oil and gas company. ONGC had marketed these blocks during NELP-V with the Ministry of Petroleum & Natural Gas.
BGEPIL has agreed to pay a US$5 million up front payment for each block upon receipt of Government approval of the farm-in, and additional consideration will be paid towards exploration costs as well as a payment made upon discovery.

ONGC and BG India have also agreed to explore other mutually beneficial opportunities in India and overseas.

Announcing the agreement at the World Oil & Gas Assembly in Jaipur, Mr Subir Raha, Chairman and Managing Director, Oil and Natural Gas Corporation Ltd, said: "ONGC is happy to welcome BG, after Cairn and Eni, as joint operator in these exploration blocks. We are happy that the joint operatorship framework promoted by ONGC in the Panna, Mukta and Tapti producing fields has generated the confidence for such a partnership in India and abroad."

Frank Chapman, Chief Executive, BG Group plc, said: "This arrangement marks the beginning of BG India's diversification of its upstream portfolio from current interests in producing fields on the west coast of India to a new growing hydrocarbon region on the east coast. The Krishna Godavari Basin looks set to become an important gas province for India and we are committed to playing a part in its development. We also look forward to working in closer partnership with ONGC and strengthening our existing relationship with them."

BGEPIL and ONGC are partners with Reliance Industries in the offshore Panna/Mukta and Tapti joint venture on the west coast of Mumbai.



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