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India’s Oil and Gas Jewel Needs Polish

Bloomberg News India’s government calls Oil & Natural Gas Corp. one of its "nine jewels," sparkling state-owned assets with brilliant potential. New Prime Minister Narendra Modi wants to sell part of these family jewels before he does anything to help realize that potential. The government, which owns more than two-thirds of ONGC, may float 5% of the shares sometime after October, according to officials this week. Last week’s Indian budget has aggressive targets for revenue, including for selling stakes in state firms that, in theory, investors would love to get a hold of. India’s largest energy producer by output is such a company, boasting low costs and low debt. Yet this crown jewel needs polish due to the country’s oil and gas subsidy programs, which saddles ONGC with huge costs. The […]

Posted On : Published By : Tom Whipple
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Ukraine Suspects Terrorism in Pipeline Explosion

A major natural gas pipeline exploded in central Ukraine on Tuesday, a day after the Russian energy behemoth Gazprom said that it was cutting off supplies to Ukraine in a dispute over pricing, and officials immediately labeled it a possible act of sabotage. Utility officials said that natural gas deliveries were not interrupted and that supplies to Ukrainian customers and other European countries were flowing through alternative pipes. The blast occurred in a sparsely populated area of the Poltava region, which lies between Kiev, the capital, and the embattled regions of eastern Ukraine where a civil war is effectively underway between pro-Russian separatists and the Ukrainian military. Video from the scene showed a huge plume of fire shooting hundreds of feet into the sky. The explosion destroyed a section of the Urengoy-Pomary-Uzhgorod pipeline, which runs more than 1,800 miles from Russia’s Arctic north through Ukraine to the […]

Posted On : Published By : Tom Whipple
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Cold economics may limit big LNG ambitions

Natural gas enthusiasts from Texas to Capitol Hill insist the world is clamoring to buy American supplies of the fuel and the only major obstacle is the federal government. But there’s an even bigger economic reality standing in the way: The facilities to super-chill gas for transport cost billions to build, and even with permits, few will ever make it past the drawing board. "It’s very easy for us in this country to blame everything on our regulators, but economics are the biggest driver here," said Joe Fagan, a partner at Day Pitney who advises clients on liquefied natural gas import and export matters. "Even […]

Posted On : Published By : Tom Whipple
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Egypt plans dam-busting diplomatic offensive against Ethiopia

CAIRO, Feb. 27 (UPI) — Egypt may be in the throes of political turmoil, but the government has begun a diplomatic offensive aimed at stopping Ethiopia from building a huge hydroelectric dam on the Nile River that Cairo says will be a disaster for the Arab world’s most populous nation. The military-backed administration began its effort to internationalize the thorny issue in hopes of gathering support for its case against Ethiopia, where the Blue Nile rises in the northwestern highlands, after bilateral negotiations deadlocked in January. "The campaign initiated by Egypt … aims to persuade the international community to reject the dam’s construction because it may lead to further conflict and instability in the region of the Nile Basin," an Egyptian diplomatic source in Cairo told the Middle East’s al-Monitor website Feb.19. "More negotiations with Ethiopia only waste time and directly threaten Egypt’s water security," said the source, who […]

Posted On : Published By : Tom Whipple
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Battle of the Nile: Egypt, Ethiopia clash over mega-dam

Egypt and Ethiopia remain at loggerheads over Addis Ababa’s plan to build a $4.2 billion, 6,000-megawatt dam on a major tributary of the Nile River that Cairo says will greatly reduce the flow of water that is Egypt’s lifeline. Tension between the two African states rose sharply in January after Ethiopia rejected Egypt’s demand it suspend construction of the Grand Ethiopian Renaissance Dam on the Blue Nile, the main tributary of the 4,130-mile river, the world’s longest. Egypt has vowed to protect its "historical rights" to the Nile "at any cost" and says it could lose 20 percent of its water if the giant dam in northwestern Ethiopia, one of several hydroelectric projects planned by Addis Ababa, is completed. "It would be a disaster for Egypt," Mohamed Nasr Allam, a former Egyptian water minister, lamented to the Guardian daily of London in 2013. […]

Posted On : Published By : Tom Whipple
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Tullow announces dry hole onshore Ethiopia

Despite several recent successes in East Africa, Tullow Oil PLC has announced that its most recent Ethiopian wildcat is a duster. The company reached a total depth of 6,893 ft on its Tultule-1 exploration well in the South Omo block onshore Ethiopia. Tullow reported that the well will now be plugged and abandoned as a dry hole. The Tultule-1 was targeting oil-bearing sand drilled in its nearby Sabisa-1 well, but the formation was not encountered. The company did report however that gas shows were present. Results from both the Sabisa-1 and the Tultule-1 wells will now be analyzed to organize future exploration plans in the region. Tullow serves as operator of the Tultule-1 well with a 50% interest along with partners Africa Oil Corp. (30%) and Marathon Oil Corp. (20%). Tullow is now moving into Ethiopia’s Chew Bahir basin to drill the Shimela prospect, also in the South Omo […]

Posted On : Published By : Tom Whipple
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Tullow dry but unfazed by Ethiopian drilling efforts

British energy explorer Tullow Oil said Monday it encountered natural gas but no oil while drilling into a frontier area in Ethiopia. Tullow said its Tultule-1 wildcat well, a well positioned in a region not known previously to contain oil and natural gas reserves, will be categorized as a dry hole after drilling to a depth of 6,893 feet in the South Omo prospect. Tullow said it was targeting a region similar to another area in Ethiopia that had oil potential, though no oil was encountered during the drilling. The company said Monday it found some natural gas deposits, which it says proves the presence of a hydrocarbon source in the region. Tullow said it would move its drilling rig to a different section of the South Omo prospect “where new seismic [survey information] has delineated a number of exciting new prospects.” New wells […]

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Ethiopia sees oil and gas exploration, but rebels are a threat

ADDIS ABABA, Ethiopia, Oct. 25 (UPI) — Amid East Africa’s oil and gas boom, the more adventurous oilmen are starting to gravitate toward the vast Ogaden desert region of Ethiopia, where drilling activity has been sparse since rebels attacked an exploration team in 2007, killing nine Chinese and 65 Ethiopians. Oilmen believe Ethiopia lies on the same oil-bearing strata as the massive discovery in Kenya by British-based Tullow Oil in early 2012. Initial estimates are that Ethiopia has oil reserves of around 2.7 billion barrels. That’s a modest enough total in global terms, but it’s a potential bonanza for an impoverished state like Ethiopia, which has been land-locked since Eritrea broke away to form an independent state on the Red Sea in 1991 after a 30-year separatist war. The Horn of Africa country has not produced any oil in commercial quantities since its first oil seep was reported in […]

Posted On : Published By : Tom Whipple