Standing Committee on Petroleum & Natural Gas directs IOC to adhere to project timelines to avoid cost overruns

July 23: Unimpressed by the progress achieved by Indian Oil Corporation (IOC) in the implementation of some of its major projects throughout the country, the Standing Committee on Petroleum & Natural Gas has asked the refinery major to pull up its socks and ensure adherence to project timelines. The committee has highlighted glaring delays in case of five out of a total of 11 projects which are at various stages of implementation. These projects include the expansion of the Panipat Refinery from 12 MMTPA to 15 MMTPA, the Paradip-Haldia crude pipeline, Koyali-Ratlam product pipeline, a new terminal at Chittaurgarh and another at Ratlam. The committee has observed that such time overruns in projects under execution not only upset Plan targets, but also lead to cost overruns in many cases. Apprehensive that overall physical progress on most of these ongoing projects does not portray a happy picture in relation to the corresponding anticipated completion schedules,  the committee has directed the corporation to take remedial measures to expedite the implementation of these projects. The major reasons cited by the refinery major for time overruns include delays in the supply of equipment, contractual bottlenecks, delays in obtaining forest and environmental clearances and land squabbles. (Click on Details for more information)   Details

CAG findings on internal controls of oil companies: Details

July 23: The Comptroller and Auditor General (CAG) of India has noted in its 2008 report certain deficiencies prevailing in the internal controls of various oil companies. These include:
8Bongaigaon Refinery and Petrochemicals Ltd (BRPL): The company has held on to unused, surplus stocks of obsolete and non-moving items in its stores worth Rs 2.64 crore for the last three years.
8GAIL: Apart from the failure of the System Analysis and Planning (SAP)-based ERP system for providing adequate analytical tools and execution reports at the company's Vijaipur plant, the gas major did not maintain the stipulated levels in its ERP system. Moreover, the company's Vijaipur plant possessed surplus, obsolete, non-moving items of raw material and finished goods which had been lying unused for the last three years. The company has yet to formulate a policy for identification and valuation of slow and non-moving items. Furthermore, the CAG has directed that the company's internal audit system should be strengthened with regard to coverage, periodicity, reporting status and level of compliance.
8Indian Oil Corporation Limited (IOC): The company had a stock of surplus, obsolete, non-moving items in its stores worth Rs 103.93 crore for a period of five years. The complete advantage of SAP in respect to inventory valuation, capital commitment, purchase order closure and debtors and creditors aging was found to be under tapped. In addition, the company's efforts in identification and capitalisation of mandatory spares and stores in its Panipat refinery were marked by delays.
8Guru Gobind Singh Refineries Limited: Inspite an internal audit conducted by the holding company, HPCL, the CAG has suggested the deployment of an independent auditor to audit the joint venture company's operations.

Reliance launches fresh exploratory programme in Gujarat-Saurashtra block

July 23: Private sector E&P firm Reliance Industries Ltd (RIL) has kick started its latest round of exploratory and appraisal drilling in the Gujarat-Saurashtra basin. "The operator is going to drill one exploratory well and one appraisal well in the GS-OSN-2000/1 offshore block during the fresh campaign," Reliance sources, familiar with block developments, revealed to our website on Wednesday (July 23, 2008). The exploratory well, dubbed M1 (fourth in the block) is likely to be drilled by the semi-submersible drilling rig Actinia, sources added. The well is targeted to drill to 4,326 metres. A previously drilling exploratory well, S1 (third well in the block), is being completed by the Aker H-3 designed semi-submersible rig C Kirk Rhein.
8Prior to S1, Reliance has drilled two exploratory wells in the offshore block. Last year the company struck gas in its second exploratory well, 1-B1, with flow rates of 18.6 million standard cubic feet of gas per day (MMSCFD) through a 56/64" choke, with flowing tubing pressure of 1,346 pounds per square inch (PSI). Data obtained from at least two intervals -- between 1,988 to 1,993 metres and 2,019 to 2038 metres -- have established the presence of reasonable hydrocarbon bearing sands. The first exploration well 1-A1 was spud in April, 2006 in the NELP-II block.
8Previously the petroleum ministry had given a 24-month extension under the Phase-I MWP -- in 2004 -- for the block. Since this extension left the Reliance-Hardy duo with hardly any time to undertake the Phase-II programme, the Director General of Hydrocarbons (DGH) recommended a one-year grace period. The DGH argued that the concession could be accorded because the delay in Phase-I work programme was due to reasons beyond the operator`s control. Reliance is expected to enter Phase-III of the work programme later this year. By Sadiq Shaban   Details

BPCL performance highlights for June, 2008: Refineries over-shoot crude throughput targets

July 23: The website carries here, for reference purposes, an overview of BPCL's performance in the refining, marketing and project segments specifically for the month of June, 2008 and also for the April-June, 2008 period..  The following are the highlights of the company's activities during the month:
Refining:
8BPCL's Mumbai Refinery achieved higher crude throughput than the MoU target set for the month. The refinery processed 1,042.1 TMT of crude -- comprising of 365.3 TMT of indigenous crude and 676.8 TMT of imported crude -- during June, 2008, as compared to the MOU target of 1,003.7 TMT, which comprised of 366.7 TMT of indigenous crude and 637 TMT of imported crude. High sulphur crude made up 51.2% of the crude throughput at at the refinery during the month.
8Crude throughput at the Kochi Refinery was also higher than targets. As against an MoU target of 637.9 TMT, comprising of 190.1 TMT of indigenous crude and 447.8 TMT of imported crude, the refinery achieved a throughput of 643.8 TMT, which included 206.7 TMT of indigenous crude and 437.1 TMT of imported crude.
8While light distillates (LD) constituted 240.2 TMT of crude throughput at the Mumbai Refinery during June, 2008, middle distillates (MD) constituted 517.4 TMT of the total throughput. At the Kochi Refinery, LD made up 166.7 TMT of crude throughput, while MD was 343 TMT of total refinery throughput during the month.
8Fuel and Loss at the Kochi Refinery -- at 40.1% -- was lower than the anticipated fuel and loss of 40.4% during the month. However, the Mumbai Refinery achieved higher fuel and loss of 75.4%, as against the target of 73.4% during the month.
Marketing:
8BPCL's product sales during June, 2008, registered growth of 3.2%, which amounted to 2.15 MMT. Pertinently, the Aviation and Lubes business registered the highest growth of 9.73% and 66.12% respectively, as compared to the industry average of 6.43% and 1.43%, respectively. BPCL's market share improved from 22.7% to 23.11% in June, 2008.
8On a cumulative basis (April to June, 2008), BPCL's all product sales stood at 7 MMT, registering growth of 10.56% against the industry average of 8.73%. Notably, the Aviation and Lubes businesses registered the highest growth rate of 12.41% and 64.93% as compared to the industry's average growth of 7.71% and 7.16% respectively. During the April-June, 2008 period, BPCL's market share improved from 22.7% to 23.11%. (Click on Details for more information)   Details

UK-based investor points out discrepancies in lowest ranked bids for S-type block under NELP-VII

July 23: The Foresight Group, a UK-based investment firm, has complained to Petroleum Secretary M.S. Srinivasan that the two top-ranked provisional winners for one of the "S-Type" small blocks -- Block CB-ONN-2005/6 -- offered under the seventh round of the New Exploration Licensing Policy (NELP-VII) had given grossly undervalued and unrealistic biddable work programmes and fiscal packages in their offers. It cited the following discrepancies in the bids submitted separately by Omkaar National Resources Ltd (ONRL) and an ONGC-GSPC consortium:
ONRL
--The company bid 102 sq km of 3D at an estimated expenditure of $0.51 million. This means that company had worked out the cost of 3D API at $5,000 per sq km, whereas the market price for such onland services is in the range of $15,000 to $20,000 per sq km. Foresight also pointed out that the majority of the area of the blocks falls within the township of Ahmedabad and it is absolutely not possible to cover the whole block with 3D. This has been done knowingly by the bidder to score full marks and get away by paying penalty on any unfinished commitment.
--The company has offered 200 LKM of 2D API at an estimated expenditure of $0.4 million, which means the said company has worked out the cost of 2D acquisition at approximately $2,000 per LKM, whereas the average rate in India is about $5,500 to $8,000 per LKM. Furthermore, the company has indicated an additional expenditure of $0.01 million for the mandatory work programme in the block, which would involve an impossibly low rate of $200 per LKM of additional 2D seismic work.
--The company bid four exploratory wells with an accumulated well depth of 15,600 metres -- the first well to a depth of 2,200 metres, the second to 3,500 metres, the third well to 4,700 metres and the fourth well to 5,200 metres -- at a total estimated expenditure of $6.24 million. This would imply that the company`s cost of drilling would be just $400 per metres, whereas in the Cambay Basin, the cost of drilling per metre is not less than $1,200 per metre. It noted that the company had specified well depths in excess of 3,500 metres in its bid, whereas other bidders had stipulated depths of up to 1,800-2,000 metres at maximum.
--ONRL said that the estimated expenditure of the company based on prevailing market costs as per their bid parameters for Phase-I works out to $22.12 million, whereas the company had quoted a total work programme expenditure of $7.46 million. This would deprive the government of huge revenues.
8ONGC-GSPC:
--ONGC has offered four wells for the block with an accumulated well depth of 6,150 metres -- the first to a depth of 1,450 metres, the second to 1,500 metres and the third and fourth well to 1,600 metres -- at a total estimated expenditure of $4.613 million, which means that the cost of drilling would be around $700 per metres, whereas in the Cambay Basin, the cost of drilling per metre is not less than $1,200 per metres. The actual cost of drilling, according to Foresight, would be closer to $7.38 million.
8Foresight claims that such bids are not only keeping out serious overseas E&P companies from entering India, but also delaying the process of exploration and production. (Click on Details for more information)   Details

ONGC outlines measures taken to reduce gas flaring in Assam

July 23: 8Gas flaring in Assam seems to have gone up instead of coming down. Flaring was at 0.15 MMSCMD in 2005-06 on a gas output of 1.10 MMSCMD and this figure has gone up to ).24 MMSCMD on an output of 1.37 MMSCMD in 2006-07. The flaring figures have remained unchanged in 2007-08. This has attracted the attention of the Consultative Committee which said that steps should be taken to bring down the flaring rate. ONGC, on its part, has pointed out various reasons for gas flaring in Assam, which include:
---Gas flaring takes place at small isolated areas producing oil, where it is not economical to integrate with the main gas grid for utilisation.
---Technical flaring is done to maintain pilot flares for avoiding the escape of unburned hydrocarbons into the atmosphere during process upsets, so as to ensure safety and environmental protection. This also avoids the possibility of air ingression into the flare system.
8In its endeavour to minimise gas flaring and maximising utilisation of produced gas, ONGC has executed five schemes during the last three years in Assam Asset, with one scheme under implementation. The schemes are as under:
--8" x 14 km gas pipeline from Changmaigaon EPS to Geleki GGS-II: The scheme ended in June, 2005, leading to 40,000 SCMD reduction in gas flaring.
--8" x 8 Km gas pipeline from GGS-VI Lakwa to gas grid: The scheme which ended in May, 2006, resulted in an approximate reduction of gas flaring by 20,000 cubic metres per day.
--Hiring of 330 KVA gas generator set at GGS-III, Geleki: The scheme was exhausted in August, 2007, and was able to reduce 3,500 SCMD of gas flaring.
--Installation of 3 hired compressors in Geleki: The scheme was able to reduce 70,000 SCMD of gas flaring and expired in November, 2007.
--Gas based gensets at Geleki under “Gas to Wire” project: The scheme helped in reducing flaring of 5,000 SCMD of gas and was exhausted in October, 2007.
--Integration of Geleki, Lakwa and Rudrasagar gas compressor plants: The date for completion of this scheme, which is under implementation, is still not fixed, as it is the tendering phase. The scheme will help integrate the Geleki, Lakwa and Rudrasagar gas compressor plants under the Assam revamp project.
 (Click on Details for more information)   Details

EIA study of ONGC's exploration block CB-ONN-2004/1 located in the state of Gujarat: Details

July 23: 8The website carries here, for reference purposes, an Environmental Impact Assessment (EIA) analysis conducted by ONGC on NELP-VI block CB-ONN-2004/1 located in the Mehsana District of the state of Gujarat. The scope of the EIA study, conducted by Kadam Environmental Consultants, includes collection of baseline data with respect to major environmental components such as air, noise, water, land, biological and socio-economic components, impact assessment of proposed activities and preparation of an Environmental Management Plan (EMP).
8The analysis contains a detailed characterisation of the existing status of the land, water, air, biological and socio-economic environment within the block in addition to identification of potential environmental impacts of the project and formulation of an effective Environmental Management Plan (EMP) for mitigation of adverse environmental impacts. The report also studies important environmental aspects such as topography, air quality and noise, soil, land use, flora and fauna and socio-economic profiling.
8The block, CB-ONN-2004/1, is spread over an area of 32 sq km and was awarded to ONGC under NELP-VI. ONGC will be undertaking 2D and 3D seismic surveys of the whole area and drilling of two new exploratory wells. ONGC signed the Production Sharing Contract (PSC) with the government on March 2, 2007, while the application for the Petroleum Exploration Licence (PEL) was submitted on March 21, 2007. (Click on our Reports section to download the 135-page document)

Gross refinery Margins achieved by oil companies in 2007-08: Details

July 23: 8The website carries here, for our readers' perusal, a detailed note released by the petroleum ministry highlighting the latest Gross Refinery Margins (GRM) achieved by Oil Marketing Companies (OMCs) -- IOC, BPCL, HPCL -- as well as the subsidiary companies -- CPCL, NRL, BRPL and MRPL -- during the 2007-08 financial year. The data also provides details on the GRMs achieved by OMCs and their subsidiaries during 2004-05, 2005-06 and 2006-07. The GRM achieved by private major Reliance Industries Ltd (RIL) during the last three years is also illustrated in the data.
8The lowest GRM was recorded by BPCL's Mumbai Refinery at $4.60/bbl while the highest GRM was registered by IOC's Digboi refinery at $21.90/bbl.
8It should be noted that GRMs can vary from refinery to refinery for the following reasons:
--Plant configurations, types of crude processed
--Spreads between international crude & product prices;
--Better operating parameters such as higher thruput better distillate & lower fuel & loss. (Click on Details for more information)   Details

Timelines for implementation of IOC projects of different sizes: Details

July 23: An IOC study has shown the following gestation periods for refinery projects:
8A higher implementation time cycle of 28 to 38 months is applicable to projects having multiple units along with related utilities and offsite worth up to Rs 4,000 crore
8A lower cycle of 22 to 30 months is applicable for two to three process units worth Rs 1,500 crore for quality upgradation and related works like the Isomerisation unit and the Sulphur Recovery Unit.
8Mega expansion projects worth more than Rs 4,000 crore need an actual execution time ranging between 32 to 54 months.
8For grassroot mega projects, the completion period is between 48 to 60 months.
The time schedules mentioned above are from investment approval to commissioning of project and excludes time taken for pre- project activities like Detailed Feasibility Report (DFR) preparation including sourcing of process package for FEED & +/-10% estimate on the basis of which investment approval is obtained from IOC Board.
This data was provided to a query by Parliamentary Standing Committee on the gestation period of refinery projects in India in relation to international benchmarks. IOC is yet to provide data on the implementation timelines for similar projects abroad.
(Click on Details for more information)   Details

A presentation by RPL made in July, 2008

July 23: The website carries here, for reference purposes, a presentation made by Reliance Petroleum Limited (RPL) on the progress in setting up a 27-MMTPA refining complex in Jamnagar, which is 94% complete. According to the company, the project is on track for completion before the deadline of December, 2008. The presentation contains photographs of the construction site, including the crude complex, the hydrotreating complex, the aromatics complex with platforming, the alkylation complex, the clean fuels complex, the polypropylene complex, the sulphur complex, the coker complex, the hydrogen complex and the nitrogen plant. The presentation contains a summary of project progress along with sections on construction progress update and pre-commissioning activities. (Click on our Reports section to download the whole presentation)

India-Kuwait Working Group on Energy-I: Kuwait asks for formal offer from India on Dahej and Mangalore petrochemicals projects

July 23: 8Kuwait recently affirmed its interest in ONGC's upcoming Dahej petrochemicals plant at the second meeting of the Working Group on Energy, Petroleum, Petrochemicals and Fertilizers under the Indo-Kuwait Ministerial Commission for Trade, Economic, Scientific and Technological Cooperation, intimating the Indian government that while it was apprised of the prospects for equity participation by Kuwaiti companies at the last meeting of the group, there had been no formal proposal for investment since. The Indian side had informed Kuwait Petroleum International (KPI) and Kuwait Petrochemical Industries Company (PIC) that the project was intended for setting up a 1.2-MMTPA capacity dual feed cracker plant based on C2-C3 and naphtha as feed.
8Kuwait has also expressed interest in MRPL's aromatics project in Mangalore, which was also offered in the previous meeting. Kuwait did not get a formal proposal on the opportunity. The project envisages manufacture of paraxylene, ortho and meta-xylene and benzene. The Indian side has now agreed to make detailed proposals for investment in the projects, in which Kuwait was invited to participate.
8Kuwait has indicated that it is willing to participate in petrochemical business opportunities in the areas of olefins, aromatics and basic chemicals in India. GAIL and IOC have also expressed their willingness to participate in petrochemical projects jointly with Kuwaiti companies in countries where adequate feedstock of rich natural gas is available, such as Egypt, Algeria and any other West Asia and North African countries, including Kuwait. In addition to equity, the Indian side offered support of operation, maintenance and marketing services. GAIL has also indicated that it wants to set up a propane-based polypropylene plant (PDH-PP) in India jointly with Kuwaiti companies, provided adequate long-term supply of propane is available from Kuwait. (Click on Details for more information)   Details

India-Kuwait Working Group on Energy-II: Two countries deliberate over E&P projects of mutual interest

July 23: 8India sought to ascertain the latest status of the proposed development of four Northern Kuwaiti oilfields at a recent meeting of the Working Group on Energy, Petroleum, Petrochemicals and Fertilizers under the Indo-Kuwait Ministerial Commission for Trade, Economic, Scientific and Technological Cooperation, with Kuwait expected to announce a Final Tender Protocol (FTP) later this year. An IOC-OVL alliance with BP and Occidental is eager to participate and has been short-listed for submitting an offer. Kuwait has indicated that final approval for the project rests with the Kuwaiti Parliament and the exact timeline is not known at this stage. It assured that the Indian side will be informed formally, just like other companies which have been short-listed.
8Interestingly, Kuwait Oil Company, a state-run exploration and production firm, has enquired into the availability of high-level consultancy services for oil and gas exploration and production for onshore and offshore areas -- in addition to providing support on midstream areas like pipeline JVs for gas transportation, health, safety and environment, manpower and IT -- in India. In response, the Indian side agreed to revert on these issues to KOC, scheduling a meeting in the last quarter of 2008.
8The Kuwait Foreign Petroleum Exploration Company (KUFPEC) informed the government that they are keen to invest and participate in joint ventures with Indian companies through farm-ins or Memorandums of Understanding. It has highlighted the difficulties faced by the company in entering the Indian market an requested government support in this regard. It asked India to define opportunities that will allow KUFPEC to obtain onshore and offshore projects. (Click on Details for more information)   Details

BPCL Phase-II Capacity Expansion and Modernisation Project at Kochi Refinery: Preparations begin for transporting the VGO reactor to site

July 23: 8With the delivery schedule for the reactor of the Vacuum Gas Oil-Hydro Desulphurisation (VGO/HDS) unit of the Rs 2,600 crore Phase-II Capacity Expansion and Modernisation Project (CEMP-II) at the Kochi Refinery witnessing a delay of two months after the contractor sought a two-month extension in the delivery deadline due to "replacement of the shell plate material with forgings", BPCL is not taking any chances of further delays. Taking note of the fact that the project is already running late by five months over the original completion deadline of September, 2009, the downstream major has now decided to prepare well in advance to ensure delivery of the reactor to the project site -- which is expected by July, 2009 -- once it is stationed at the Cochin port by China Petroleum Technology and Development Corporation (CPTDC). Notably, the corporation has sought competitive bids from domestic vendors to receive, transport and deliver the 720 MT reactor from under the hook of the heavy lift at the Cochin port to the Kochi Refinery. The contractor will be required to conduct a survey of the entire route from the Cochin port to the refinery. The bids for the contract are slated to be opened on September 1, 2008.
8Readers will recall that the Rs 2,600 crore CEMP-II project is now projected to be completed by February, 2010. The project entails quality upgradation of MS and HSD facilities to meet Euro-III norms and low cost expansion of the refinery from 7.5 MMTPA to 9.5 MMTPA. The project has witnessed problems owing to an increase in the delivery time for the VGO-HSD unit reactor, which was compromised due to technology supplier UOP defaulting on the release of process data sheets for critical equipment for the VGO-HDS unit. (Click on our Tenders section for more information) By Neeraj Dhankher

Attrition of ONGC officers averages just 0.5% per annum, but on the rise

July 23: According to detailed statistics available with this website, attrition of a total of 947 officers from ONGC's services, drilling, exploration, finance, operations, P&A allied and technical divisions during the last five years was far lower in comparison to other industries. During the five-year period between 2003 and 2007, the average rate of attrition is 0.5% per annum. A total of 55 officers left the company in 2003 -- eight from drilling, 26 from exploration, seven from finance, five from operations, one from P&A allied and eight from technical services -- and in 2007, another 57 employees -- nine from drilling services, 12 from exploration, eight from finance, nine from operations and 19 from technical services -- left the company. Attrition grew worse in subsequent years. It jumped to 144 in 2005 -- with 33 drilling, 49 exploration, 20 finance, 19 operations, 5 P&A allied and 18 technical personnel leaving during the year -- and then to 354 in 2006, with 354 drilling person, 83 exploration personel, 25 finance personel, 60 operations personnel, nine P&A allied personnel and 53 technical personnel leaving for greener pastures. The number of personnel who left the company in 2007 was 337, comprising 83 drilling, 123 exploration, 12 finance, 56 operations, five P&A allied and 58 technical personnel. Clearly, private sector players are indulging in systematic poaching of the oil PSU's personnel, particularly drilling and exploration experts. This would effectively defeat the E&P major's claims of lower attrition if its best people are being bought over. For reference purposes, this website also carries detailed information on attrition from Oil India Ltd (OIL) during the past five years as well. (Click on Details for more information)   Details

Deora assures Karunanidhi of timely intervention to help sort the fuel crisis in Tamil Nadu

July 23: Petroleum Minister Murli Deora has assured Tamil Nadu Chief Minister M. Karunanidhi of swift steps to help the state tide over the spiraling fuel crisis. The Tamil Nadu chief minister had, in a written communication to Deora, requested the minister to streamline supply of petroleum products and reassure their government of timely stock availability and dependable supply of fuel. Karunanidhi, lamenting the situation, pointed to the mayhem in the state because of the reduction of petrol and diesel supply to dealers and consumers. The reduction in supplies to dealers is a direct result of the paucity of stocks of petroleum products with oil companies. The chief minister felt that the situation, if not dealt with in a timely manner, has the potential to rankle both the Union and state governments. Furthermore, reports of stock-out signs for some petroleum products at some retail outlets was also creating anxiety and brewing the fear of shortages amongst consumers in Tamil Nadu. Karunanidhi also informed Deora about complaints that oil companies and petrol bunks had deliberately complelled consumers to purchase premium brands while withholding the supply of ordinary grade fuels to customers. Taking cognizance of the situation, Deora has advised Petroleum Secretary M.S. Srinivasan, to look into the matter and take action urgently.(Click on Details for more information)   Details

Forthcoming oil and gas events: A round-up

July 23: The website carries here, for our readers' perusal, a list of petroleum events being held all over the world:
8Deepwater Southeast Asia Congress-2008 will be held from October 9-11, 2009, in Shanghai, China. The conference will focus on deepwater exploration, which is becoming the new frontier for global offshore E&P activities and will further address the investment environment and opportunities in regions such as China, Malaysia, Indonesia, Vietnam and Philippines. The conference will identify investment opportunities in emerging deepwater areas surrounding the South China Sea, introducing the latest trends in technical innovation and their applications in deepwater blocks in Southeast Asia, while also studying the economic modeling of deepwater E&P activities to optimise field operations in a cost effective fashion.
8A conference on Offshore Projects will be held from October 12-15, 2008 in Abu Dhabi, United Arab Emirates. The conference is the region’s first dedicated event to examine the unique engineering, procurement and construction challenges for the offshore industry and will bring together offshore project experts from around the globe. The conference will be attended by national and international oil and gas companies offshore project teams, offshore engineering-contracting experts, offshore consultants, procurement experts and providers of the most advanced technological solutions designed to cater to the oil and gas industry.
8The Nano Petroleum, Gas and Petro-Chemical Industries Conference: “Providing Nano-Powered Solutions” will be held from January 24-27, 2009, in Egypt, Cairo. Petroleum and gas companies from all over the world are starting to realise the potential of nanotech research to revolutionise operations in the petroleum and the gas industry. The conference is designed to bring together industry representatives, scientists and engineers to produce a nano-roadmap for the Petroleum and Gas industries. (Click on Details for more information)   Details

OMCs get in-principle approval for marketing domestic LPG through composite cylinders

July 23: The petroleum ministry has announced that it has accorded "in-principle" approval to the Public Sector Oil Marketing Companies (OMCs) for introduction of composite cylinders for marketing domestic LPG, subject to there being no subsidy element in the LPG. The petroleum ministry was replying to a suggestion forwarded by CPI(M) MP A.P. Abdullakutty, who represents the communist citadel of Kannur in North Kerala, on the need for Oil Marketing Companies (OMCs) to introduce value added high quality LPG on the lines of premium fuel brands like X-tra Mile and Speed, so as to market LPG without subsidy.
8Taking the issue forward, Indian Oil Corporation Limited (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have shown interest in importing some cylinders by floating a global tender and launching them in select cities. The composite cylinders are translucent and will show the level of LPG present in the cylinder. Meanwhile, the OMCs have reported that the approval of the CCOE has been obtained for use of the composite cylinders for LPG. LPG cylinders procured by these oil firms have to compulsorily meet specified quality standards to ensure user safety. (Click on Details for more information)   Details

Petroleum Briefs

July 23: 8Rig E-1400-17 of ONGC`s Rajahmundry Asset has achieved a cumulative drilling metreage of two lakh metres with the drilling of well KWDL to the depth of 463 metres. Till date, the rig has drilled 79 wells and one work-over well with a cumulative metreage of 201,962 metres, with an average commercial speed of 1,526 metres per rig month and an average cycle speed of 1,047 metres per rig month, which is the best performance amongst all of ONGC owned rigs. Amongst ONGC`s own rigs, E-1400-17 has been the most successful in bringing hydrocarbons to the surface with its success ratio of 52 gas or oil bearing wells out of a total of 79 wells drilled till date.
8ONGC onshore director A.K. Hazarika recently laid the foundation stone of the new office building of the cementing services of ONGC`s Assam Asset at Nazira. On this occasion, Hazarika advised cementing services to take wider responsibilities as service providers to the asset, in order to achieve higher production. Any underperformance needs to be analysed and remedial measures need to be taken in time. He also emphasised upon the need to maintain the highest standards of house-keeping. The meeting was attended by senior executives of the asset.
8ONGC recently organised the Keshava Deva Malaviya Institute of Petroleum Exploration (KDMIPE) Seminar 2008 under the theme, "Exploring R&D Initiatives in E&P Business - Synergy to Energy." The seminar was inaugurated by ONGC chairman R.S. Sharma in Dehradun. Around 300 delegates from various work centres of ONGC across the country, oil companies, universities and institutions have been invited to participate in the seminar.

DGH recommends 108-day extension for excusable delays in getting environmental clearance for ONGC Block KK-OSN-2001/2

July 23: The Directorate General of Hydrocarbons (DGH) has turned down a request from ONGC for a 228-day extension of the first phase of exploration in its Kerala-Konkan Block KK-OSN-2001/2 on account of excusable delays, seeing fit to only grant a 108-day reprieve to the Indian E&P major. ONGC had submitted the proposal in light of an inordinate delay in the grant of environmental clearance for the project. The shallow water block was awarded to ONGC on February 4, 2003 under the third round of the New Exploration Licensing Policy (NELP-III).
8ONGC had applied for environmental clearance on February 28, 2005. But on September 14, 2006, new guidelines were issued and it was made mandatory to obtain a fresh clearance certificate, irrespective of project cost. ONGC applied again as per new guidelines on November 29, 2008, but was granted Environmental Clearance only on April 28, 2008. This had prompted it to seek an extension of the Production Sharing Contract (PSC) phase by 228 days.
8However, the Directorate General of Hydrocarbons (DGH) made the observation that as the cost of the project was less than 100 crore, it was not necessary to obtain clearance from Ministry of Environment and Forests, (MOEF) to carry out drilling. Consequently, the period, from February 2, 2005, to September 14, 2006, would not be considered for the delay. Notably, it took 160 days from November 29, 2006 to May 8, 2007 for ONGC's documents to be processed under the new guidelines, besides another 68 days from February 20, 2008, to April 28, 2008, for the actual grant of the environmental clearance certificate.
8Given that PSC guidelines stipulate the maximum time for getting environmental clearance as 120 days, the DGH said that this makes the effective delay in getting the certificate for ONGC's KK-OSN-2001/2 block only 108 days. The DGH has accordingly recommended that ONGC should be allowed a 108-day extension of Phase-I exploration in the KK-OSN-2001/2 block against excusable delays. In case a further extension is sought, ONGC will have to shell out an amount towards the unfinished work programme. (Click on Details for more information)   Details

E-procurement through reverse auction: ONGC extends it to Western Onshore but single tenders exempted

July 23: E&P major ONGC has finally sought to extend its e-procurement initiative across all of its work centres in its Western Onshore asset for all cases of procurement of value exceeding Rs 100 lakhs. But all cases of  in which single tender nominations, Original Equipment Manufacturers (OEMs), Original Equipment Suppliers (OESs) and Proprietary Article Certificates (PAC) from e-procurement irrespective of value.
8The need for the modifications arose because it was found that out of 126 cases where exemption has been granted from e-procurernent, almost half the cases were of the nature of single tender nominations. In such nomination tenders, where there is necessarily a single bidder, it is not required to conduct competing in reverse auction transctions.
8ONGC also plans to extend the Supplier Relationship Management (SRM) module, with reverse auctioning processes, to ONGC's Western Onshore asset. Pertinently, the SRM module with reverse a auctioning process was already extended to most categories of procurement, including services and turn key contracts, in ONGC's  Western Offshore. 
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