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Surge in Investment Recharges India’s Sputtering Power Sector

ByKenan Machado A pedestrian walked past a pole hosting mangled electricity wires at a slum in New Delhi in 2009. Agence France-Presse/Getty Images MUMBAI—Investors are ploughing money into India’s energy sector again, betting that there are brighter days ahead as the country’s new government clears the path for power producers and distributors. India’s utilities and energy companies—which have struggled for years with high government restrictions and low returns—have attracted a total of $2.61 billion in investment so far this year, according to data from Dealogic. The last time the sector attracted so much money was before the global financial crisis, when $2.67 billion was invested over the same period in 2006. “People expect the economy to grow,” said Tan Cheng Guan, an executive vice president at Singapore utilities company Sembcorp Industries Ltd. which invested $204 million this year, buying stakes in two Indian power plants . India needs its power […]

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Exxon Ends Oil Search With Total in South Sudan as War Rages

Exxon Mobil Corp. (XOM) , the U.S.’s largest oil company, ended exploration plans with Total SA (FP) in South Sudan, Total and the government said, a sign of faltering investor confidence in the African nation as a civil war enters its eighth month. Exxon in April didn’t renew an agreement with Total to negotiate for joint-exploration over parts of a 120,000 square-kilometer (46,300 square-mile) concession in Jonglei state, Total spokeswoman Anastasia Zhivulina said in an Aug. 12 e-mailed response to questions. Total is still bidding to explore in partnership with Kuwait’s state-owned Kuwait Foreign Exploration Petroleum Co. she said. Exxon spokesman Patrick McGinn said by e-mail that the company doesn’t comment on specific ventures. “Losing the American oil company’s interest is definitely a blow for the future prospects of South Sudan ’s oil industry,” Luke Patey, a researcher on the country’s industry at the Danish Institute for International Studies, […]

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Tanzania’s Natural Gas Outlook is Promising, Says IMF

A BG survey vessel gathering data off the coast of Tanzania. CGG Tanzania has a good chance of becoming a major producer and exporter of natural gas over the next decade, said the International Monetary Fund. Significant offshore discoveries have been made over the last two-to-three years and further exploration is underway, the fund said in its recent country report for Tanzania. “Although gas resources haven’t yet been declared commercially viable, estimates of discoveries indicate recoverable offshore gas resources of at least 24 trillion-26 trillion cubic feet, potentially sufficient for a four-train Liquid Natural Gas plant (possibly as a common facility for several upstream gas fields),” it said. “A final investment decision is expected at the earliest in 2016 or 2017.” Total investment during the development phase could amount to $20 billion-$40 billion, depending on the scale of the project. This would be the largest investment ever […]

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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 […]

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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 […]

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Statoil, ExxonMobil make another gas discovery offshore Tanzania

Statoil ASA and coventurer ExxonMobil Corp. have made what the companies are calling a “high-impact” gas discovery in the Piri prospect offshore Tanzania, marking the sixth discovery on Block 2 by the firms ( OGJ Online, Dec. 6, 2013 ). Piri-1, drilled by the Discoverer Americas drillship, is 2 km southwest of the Lavani-1 well in 2,360 m of water. Discoverer Americas is now drilling the Binzari prospect on Block 2. The discovery was made in the same Lower Cretaceous sandstones as the gas discovery in the Zafarani-1 well drilled in 2012 ( OGJ Online, Dec. 22, 2012 ). Statoil says discovery of an additional 2-3 tcf of gas in place in the Piri-1 well brings to 20 tcf the total of in-place volumes on the block. Additional prospectivity has been mapped and will be tested throughout this year and next, Statoil said, adding that the company expects […]

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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 […]

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East African Energy-Boom Investments Take Focus in Budgets

Kenya, Uganda and Tanzania plan to allocate money in their annual budgets to spur investment in infrastructure to exploit oil and natural gas from deposits that companies including Tullow Oil Plc (TLW) are developing. Ugandan and Kenyan oil discoveries, made in 2006 and 2012 respectively, and new gas finds off the coast of Tanzania that have boosted reserves to as much as 46 trillion cubic feet have seen East Africa become a frontier for petroleum exploration. The three countries, along with Rwanda, which are all members of the East African Community , will tomorrow present their budget statements for the financial year starting July 1. “If there is one thing most EAC partner states agree upon it’s infrastructural development,” Ahmed Salim, a senior associate based in Dubai for research consultancy Teneo Intelligence, said in an e-mailed response to questions. State spending will go toward “development of their respective extractive […]

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South Sudan: Is South Sudan Falling Into Oil Resource Curse?

The notion of resource curse has engulfed African countries, which are rich in natural resources and heavily depend on revenues from these resources. The resource curse is characterized by poverty-stricken, corruption and violent. Relatively small group ( Elite ) captures vast wealth while leaving the entire society without basics need such as clean drinking water, electricity, shelter and consumption goods that define the absolute minimum resources necessary for long-term physical well-being. Political instability triggered the oil resource curse; the evident suggests that countries with bad institutions are likely to experience the natural resource curse. One of solution to get out from oil curse is to improve institutions, good governance, accountability and transparency. South Sudan can voluntarily signed up to the Extractive Industries Transparency Initiative (EITI) promoted by former British Prime Minister Tony Blair in 2002 that became an independent NGO in 2007. The main point of this is […]

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South Sudan: Government Admits Conflict Has Hampered Oil Production

Juba — South Sudan government admitted on Sunday that the ongoing conflict has affected the country’s oil production, with production now at just 165,000 barrels per day. Petroleum minister, Stephen Dhieu Dau, told Sudan Tribune that the country continues receiving revenues from oil produced in Upper Nile state, where production rate is reportedly on the decline since no additional explorations takes place in the area. "The oil production is continuing in Upper Nile. The current output is not bad, but there is a drop. At the moment the level of output stands at 165,000 barrel per day from 245,000 barrels per day before the current crisis erupted last year", said Dau. "This [oil] is produced in Paloch", added the petroleum minister. He commended government troops for providing protection and defense to the only remaining oil wells in the country, despite several attempts by rebels to control it. "There is […]

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