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IHS: India needs to reform gas prices

Uncertain reform of natural-gas pricing in India, if allowed to move forward, would revive oil and gas investment and help the government balance its accounts, according to a new study by IHS . Although the government has announced plans to allow gas prices to increase this year to $8.50/MMbtu from $4.20/MMbtu, it didn’t act before national elections held last month. A group led by Reliance Industries Ltd. issued a notice of arbitration when a price increase it expected under an agreement with the government covering the deepwater KG-D6 Block in the Bay of Bengal didn’t take effect on Apr. 1 ( OGJ Online, May 12, 2014 ). By weakening investment in exploration and accelerating consumption, the IHS study says, India’s policies on gas prices have increased the country’s reliance on external supply and helped make it the world’s fifth largest importer of LNG. Citing government documents, the study […]

Posted On : Published By : Tom Whipple
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Eni nabs deal in giant Venezuelan gas field

Italian energy company Eni said it signed an agreement to help develop the Perla gas field in Venezeula, one of the largest offshore finds in recent history. Eni CEO Claudio Descalzi met in Caracas with Venezuelan Energy Minister Rafael Ramiriz and Antonio Brufau , the head of Spanish energy company Repsol, to discuss exploiting the Perla field. Billed as one of the largest gas discoveries in the world, Eni said the Perla field off the coast of Venezuela holds an estimated 17 trillion cubic feet of natural gas. It’s situated about 30 miles offshore in the Cardon IV reserve area, which is operated in part through a joint venture between Eni and Repsol. "These agreements will grant Eni access to Perla’s liquids reserves," the Italian company said in a statement Wednesday. The trilateral agreement envisions a new mixed enterprise controlled by Venezuelan state-owned energy company Petroleos […]

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Venezuela Sacrifices Drinking Water to Pay Bondholders

At a time when Venezuela ’s record $25 billion in arrears to importers has its citizens waiting hours in line to buy drinking water and crossing borders in search of medicine, President Nicolas Maduro is using the nation’s dwindling supply of dollars to enrich bondholders. Venezuela, which imports just about everything, and its state oil producer have paid $2.8 billion in interest to overseas creditors this year, according to Barclays Plc. Including debt principal, bondholder outlays will balloon to almost $10 billion by year-end, the London-based firm estimates. By putting off the local companies responsible for supplying everything from diapers to cancer medications, Maduro can preserve access to debt markets and protect oil shipments that would be vulnerable to bondholder seizure, said Alejandro Arreaza, an analyst at Barclays. Even if that means fanning the world’s fastest inflation and inflaming protests over shortages that have left at least 42 people […]

Posted On : Published By : Tom Whipple
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India Gas Pricing Change Could Boost Investments, Cut Imports

Analysts are counting on Prime Minister Narendra Modi to raise gas prices in India. European Pressphoto Agency India may soon put a floor under years of sliding investment in natural gas production as the new government is likely to increase the price of the fuel offered to gas producers and explorers. The previous Congress Party-led government had proposed increasing the price of natural gas to $8 per million British thermal units from $4.20 per mmBtu, but this was put on hold ahead of the elections . The current level is about a third of the cost of gas imported into India, with imports meeting 35% of local gas needs. Now that voting is over , analysts are anticipating that the new Bharatiya Janata Party-led government will increase gas prices as it had campaigned on the promise of economic reforms and industrial development. Proponents say this is needed […]

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Moving mountains in China poses environmental threats, report says

Researchers said more collaboration among experts, government, construction companies necessary to avert disaster An environmental report called on China to stop flattening mountains until the effects of the practice can be studied. “Earth moving on this scale without scientific support is folly,”  the report  — titled “Environment: Accelerate research on land creation” and published in the scientific journal Nature — said, adding that the process had not been thought through environmentally, economically or technically. As China’s cities expand as its economy grows, the country has begun running out of land to build on — especially in mountainous areas where one-fifth of the population lives. “Land creation” is done by cutting off mountaintops and moving the massive quantity of dirt into valleys to create flat ground on which construction can begin. Such projects have been carried out in strip mining, notably in the eastern United States, where  residents in the […]

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Study: Removing Export Ban on Crude Will Create Jobs, But Opposition Strong

Texas could gain nearly 41,000 new jobs by 2020, and add $5.21 billion to the state economy during the same time period if the crude oil export ban is overturned, according to a recently released study. A number of other states also stand to gain jobs and a boost to their economy, as well; however, overturning the ban will not be a slam dunk, according to the American Petroleum Institute (API). The study was done by ICF International and EnSys Energy, and it concluded that in addition to the new jobs and the boost to the economies in several states, consumers could save up to an average of $5.8 billion in fuel costs per year between 2015 and 2035 as higher production and more efficient markets boost supplies and lower costs. Besides Texas, 17 other states could gain over 5,000 jobs each in 2020 from exports of U.S. crude […]

Posted On : Published By : Tom Whipple
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New York's Highest Court to Rule on Towns' Fracking Bans

The New York Court of Appeals, the highest court in the state, heard oral arguments this week in two cases regarding whether municipalities can use local zoning laws to prohibit hydraulic fracturing within the city boundaries, or whether the state’s law regulating oil and gas development within the state preempts a municipality’s local zoning laws. Presenting their cases before the seven judges on the bench, attorneys for the upstate New York towns of Dryden and Middlefield argued on the side of local zoning laws being able to prohibit oil and gas activities within a municipality’s boundaries, while a trustee for Oslo, Norway-based Norse Energy challenged the Dryden ban. Cooperstown Holstein, a dairy farm that leased land for drilling, challenged the ban by Middlefield. Lower courts had found no express or implied preemption. The Appellate Division, Third Department affirmed in May 2013 earlier Supreme Court decisions that dismissed both lawsuits, […]

Posted On : Published By : Tom Whipple
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New York’s Highest Court to Rule on Towns’ Fracking Bans

The New York Court of Appeals, the highest court in the state, heard oral arguments this week in two cases regarding whether municipalities can use local zoning laws to prohibit hydraulic fracturing within the city boundaries, or whether the state’s law regulating oil and gas development within the state preempts a municipality’s local zoning laws. Presenting their cases before the seven judges on the bench, attorneys for the upstate New York towns of Dryden and Middlefield argued on the side of local zoning laws being able to prohibit oil and gas activities within a municipality’s boundaries, while a trustee for Oslo, Norway-based Norse Energy challenged the Dryden ban. Cooperstown Holstein, a dairy farm that leased land for drilling, challenged the ban by Middlefield. Lower courts had found no express or implied preemption. The Appellate Division, Third Department affirmed in May 2013 earlier Supreme Court decisions that dismissed both lawsuits, […]

Posted On : Published By : Tom Whipple
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Tight Oil, Shale Gas to Drive Lower 48 Production

A handful of unconventional plays will drive U.S. Lower 48 oil and gas production growth, according to a recent analysis by Wood Mackenzie. Tight oil production is expected to reach 6 million barrels per day (MMbpd) by 2020 in the Lower 48, thanks to production in the Eagle Ford, Bakken and Bone Spring/Wolfcamp plays in the Permian Basin, John Dunn, who manages Wood Mackenzie’s Lower 48 upstream research, told reporters at a media briefing Wednesday in Houston. Overall U.S. liquids production in 2020 is forecast to reach nearly 9 MMbpd. Oil and condensate production from the Eagle Ford play in South Texas is expected to reach 2 MMbpd by 2020, while Bakken production is forecast to hit 1.7 MMbpd by 2020, according to Wood Mackenzie estimates. By 2020, oil and condensate production from the Bone Spring/Wolfcamp play in the Permian Basin – the new kid on the block – […]

Posted On : Published By : Tom Whipple
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North Dakota Flaring Crackdown May Slow Oil Field Growth

North Dakota is cracking down on flaring, the wasteful burning of natural gas, with strict rules that may stymie development in areas far from pipelines in a state that is one of the fastest-growing U.S. oil fields. The new rules also will effectively reinforce the competitive advantage enjoyed by producers that have already taken steps to curb flaring. The state’s Industrial Commission, a three-member regulator chaired by Governor Jack Dalrymple, changed its policy on June 1 to require energy companies to submit a plan to capture any natural gas that could be released by a new well when filing for permits. Without a plan, applications for new wells will not be approved, state officials said. In addition, new rules for existing wells are slated to be announced July 1. The goal is to reduce the amount of gas flared, an economic and environmental […]

Posted On : Published By : Tom Whipple