Hydrocarbon

- Exploring New Horizons of Petroleum Industry

Oil & gas newsletter

pectrum
28th February 2014 Volume 01, Issue 01

Peak At the peaks Crude Dungeon Oil Sector at a Glance Discovery & Innovation Gas Corner Gas Sector at a Glance Downstream & Refinery Section Out of Box Unconventional Sources Believe It Or Not Public Arcade Comments from Experts

Light Crude Discovery Near Newfoundland

ering a field holding between 300 million and 600 million barrels of oil at Bay du Nord in the Flemish Pass which is located 500 kilometers northeast of St. Johns. The discovery of 34 API gravity oil under 1,100 meters of water is the biggest achievement of Statoil outside Norway and ranks 12th globally, since 2010. Prior to this, Statoil has already found two wells named Harpoon and Mizzen covering an area of 8,500 square kilometers. Harpoon was drilled in June 2013 but requires additional evaluations and data to determine its magnitude, but Mizzen flowed 6,290 bpd of 22 degree API crude, and contained a resource of 100 to 200 million of recoverable light crude. It is being considered as the largest oil discovery off the coast of Newfoundland and Labrador in 30 years. According to the Canada-Newfoundland and Labrador Offshore Petroleum Board (the C-NLOBP), offshore production in the province is roughly 280,000 barrels of oil per day or about 40 per cent light crude of Canada. (Source: Alberta Oil Magazine Dated: 23rd January, 2014)

2-3 4-5 6

7
Oil Rig near Newfoundland

8-9 10 11
The discovery of light crude in the deep waters of Newfoundland has opened a fresh chapter in Atlantic Canadas offshore oil and gas industry. In late September 2013, Statoil ASA along with Husky Energy Inc. announced light crude discoveries in the Flemish Pass Basin, offshore Newfoundland. Statoil, which is 67 percent owned by the Norwegian government, revealed that it is close to commercially develop a trio of discoveries after uncov-

Facts and Figures

India

is

the

third

largest oil consumer in Asia, even though on per capita basis the consumption is mere 0.1 ton the per 26 year, the lowest in the region. Of sedimentary basins only eight have been explored so far. All this makes India the desired destination in ter ms of opportunities !!!

Sasol AnMBR Technology to Boost GTL Value

Sasol and GE have together developed new water technology that will clean waste water, while also providing biogas as a by-product for power generation. This new technology, known as Anaerobic Membrane Bioreactor Technology (AnMBR), will be further developed at a new demonstration plant . Mechanism: AnMBR involves anaerobic micro-organisms that are able to live in environments devoid of oxygen, such as sediment layers on floors of lakes, dams and the ocean. Sasol currently uses aerobic microbes to treat GTL and coal-to-liquids (CTL) effluents .One of the by-products from the Fischer-Tropsch (FT) process is an effluent stream rich in organic acids and alcohols. Benefits : The microbes convert these organics into a methane rich bio-gas which can then be used for power generation. This then results in an overall efficiency improvement in the GTL process. By converting the effluents to a valuable product (power) there is a resulting improvement in the GTL value proposition. (Source: www.prnewswire.com Dated: 6th November, 2013)

Www.forbes.com

Crude Dungeon - Oil Sector at a Glance

Government Policy Section

NELP Round 10 Offers New Block

The Government of India recently showcased 56 new oil and gas blocks to international investors and world leaders at the International Oil and Conference held for duration of three days from January 12-15 at Greater Noida. These blocks are to be put on offer during the tenth round of the New Exploration Licensing Policy (NELP). The Petroleum Secretary Mr. Vivek Rae had earlier remarked that the Ministry would seek to profile 56 blocks at the conference. However, the notice for invitation of bids for auction of these oil and gas blocks is expected to be issued next month. The International Oil and Conference organized under the aegis of Petrotech and the Oil and Natural Gas Corporation (ONGC) is a biennial platform for national and international experts in the oil and gas industry to share professional and technical expertise and at the same front be foretold about the upcoming challenges and innovations which could shape the future of the industry works. As per the new arrangement the NELP round X would require bidders to quote the amount of oil or gas output they were willing to offer to the government from the day one of production. The terms and conditions were same as those recommended by the panel, headed by Prime Ministers Economic Advisory Council Chairman C. Rangarajan, for awarding future oil and gas blocks. (Source:www.oilandgastechnolog y.ne/, Dated: 6th January 2013)

Oil Rig in Barmer Region by Cairn India

Facts and Figures

In 2011, Alberta's Total Proven Were Oil 170.2 Reserves Billion

India Approves the Policy of Shale Gas Exploration

In an act to bolster energy security The Government of India recently approved the much debated Shale and Oil production policy. The government plans to execute the policy in phases; an approach which gives room for analysis and risk management. Initially the policy is aimed to permit state-run Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) to explore shale resources from allotted inland blocks on nomination bases which were awarded before the advent of the New Exploration Licensing Policy (NELP) in 1999 following which exploration blocks are offered on bidding and block award basis. In the second phase, the government will offer shale oil and gas blocks to other companies through another Cabinet approval that is likely to occur in next few weeks.. The statement issued by the government states that NOCs can apply for grant of shale gas and oil rights in their interested PEL/ PML acreages and as per an additional requirement will be obligated to undertake a mandatory minimum work program. They will be permitted three assessment phases of a maximum period of three years each. Royalties and taxes will be payable at par with conventional oil/gas being produced from the respective areas. (Source: Hindustan Times, Dated: 24th September 2013)

Barrels which is about 11 % of Total global oil reserves (1,523 Billion barrels) !!! The State of Alaska has collected (in $157 billion 1959 !!! today's

dollars) from oil since

ONGC Decided to Invest KG Basin

Oil and Natural Gas Corp (ONGC) will invest over $9 billion in bringing to production an array of oil and gas discoveries in its prolific Krishna Godavari basin block off the east coast by 2017-18. ONGC has made 11 oil and gas discoveries in the Block KG-DWN-98/2, which sits next to Reliance Industries' KG-D6 Block and Gujarat State Petroleum Corp's Deendayal gas field. The block is divided into a Northern Discovery Area (NDA) and Southern Discovery Area (SDA). NDA holds an estimated 92.30 million tons of oil reserves and 97.568 billion cubic meters of in place gas reserves spread over seven fields The NDA comprises discoveries like Padmawati, Kanadurga, D, E, U and A. (Source: Economic Times, Dated: 5th January 2014)

KG Basin Block Distribution

Page 2

Hydrocarbon Spectrum

Recent Oil News

Exxon Mobil to Boost Acreage in Permian Basin

Exxon Mobil the worlds largest publically traded oil and gas multinational corporation announced that it aims to intensify and enrich its U.S. Oil and Natural Gas portfolio ,managed by its subsidiary -XTO Energy Incorporation .The subject has acquired limelight when presence of separate agreements by the company in the Permian Basin, Texas and Utica shale ,Ohio were disclosed. These transactions underscore our commitment to developing high-margin liquids growth in areas such as the Permian, while also efficiently funding development of our extensive domestic natural gas resource in emerging plays such as the Utica, said Randy Cleveland, president of XTO Energy Inc. Through an agreement with Endeavor Energy Resources, L.P., XTO will fund development to gain substantial operating equity in approximately 34,000 gross acres in the prolific liquids-rich Wolf camp formation in Midland and Upton counties. (Source: Oil & Gas Journal, Dated: 18th December 2013)

Oil Well in North Dakota Out of Control

A Whiting Petroleum Corp oil well in North Dakota was leaking drilling fluids after a blowout late on Thursday. A company spokesman said that the well lost control after a blowout preventer failed and was leaking between 50 and 70 barrels per day of fracking fluid that contains chemicals, water and sand. The leak, close to the frozen Cherry Creek in McKenzie County, was contained and the fluids were being collected and trucked from the site. No liquids entered the water. Fracking fluid is pumped into a well under pressure to fracture rock deep underground to release oil or natural gas. A blowout typically occurs when an unexpected burst of high pressure comes up the well, causing a loss of control. Measures: They are still trying to divert what's flowing from the well into storage tanks and hauling that." A three-foot berm has been placed around the well, containing the liquids within the site. Risk To Leakage: This large blowout and also in terms of health and human risk it's a big one. Pressure and control of a well is essentially priority number one for oil and gas companies. There would be a "very serious postmortem" conducted with the company. (Source: www.reuters.com/ article/2014/02/14/energy-crudeblowout, Dated: 14th February 2014)

Facts & Figures

Exxon Mobil is the worlds profitable in 2013. most company

Over

65

billion from Field,

barrels have been produced GhaRwar Oil Saudi Arab.

www.forbes.com

Cairn Begin Exploration in KG Offshore Block

Cairn India is set to begin exploration at a promising offshore block in the Krishna-Godavari basin, next to its prolific Ravva field on the eastern coast of the country. In the next quarter, the Anil Agarwal led company will begin seismic shoots (or imaging the earth below by sending shock waves and capturing their reflection) in the KG-OSN-2009/3 block, Chief Executive P Elango told Business Line. Cairn won the 1,988 sq. km block in 2010, in the eighth round of the NELP (New Exploration Licensing Policy) bidding of hydrocarbon assets. The Ministry of Defense put a stopper on Cairns plans for the block as it had plans for its own activities in the area. A two-year wait came to an end for Cairn two months back when the ministry, at the behest of the Cabinet Committee for Investments, agreed to let the oil company go ahead with its plans on one part of the block, which constitutes about 60 per cent of the area. Cairn told the Ministry of Petroleum and Natural Gas it would surrender the other 40 per cent, provided the latter would correspondingly reduce its agreed minimum work program for the block. In the hydrocarbons business, nobody can predict a find unless a company drills and gets to it, but since this block being next to the jewel Ravva, Cairn is optimistic. (Source: The Hindu Business Line, Dated: 9th February 2014)

Cairn Rig in KG Offshore Block Volume 1, Issue 1

Page 3

Pacific Rubiales Unearthing Oil in Peru

Facts and Figures
worlds top 10 oil producing companies (million barrel per day): Saudi Aramco - 12.5 Gazprom - 9.7 NIOC - 6.4 ExxonMobil - 5.3 Petro China - 4.4 BP - 4.1 Royal Shell - 3.9 Pemex - 3.6 Chevron - 3.5 Kuwait Petro.3.2 BP PLC made an oil discovery at its Gila prospect in 4,900 ft. of water on Keathley Canyon Block 93 about 300 miles southwest of New Orleans in the Gulf of Mexico. The Gila discovery, which BP co-owns with ConocoPhillips, is the companys third in recent years in the emerging Paleogene trend. Past discoveries in this trend include Kaskida in 2006 and Tiber in 2009 .The well, which penetrated multiple Paleogeneaged reservoir sands, was drilled to a total depth of 29,221 ft. (Source: Oil & Gas Journal, Dated: 18th December 2013) Pacific Rubiales Oil Corp. has found oil in the Los Angeles-1X exploration well on Block 131 of Perus onshore Ucayali basin. The well reached a total depth of around12,409 ft. after being spud in September. Pacific Rubiales conducted three separate tests across different net pay intervals in the Cushabatay formation under swabbing and natural flow conditions and through variable choke sizes over 22-60-hr test periods. Final flow rates from the three test intervals were 135 b/d, 936 b/ d, and 2,351 b/d, respectively, of 44-45 API gravity sweet oil, the company said. Water cuts ranged from 10% in the lowest interval to 0.3% to nil in upper intervals. (Source: Oil & Gas Journal, Dated: 5th February 2014)

Discovery Section

Oil Discovery by BP & Conoco Phillips

Offshore Rig in Mexican Gulf

Source: www.forbes.com

Faroe makes small gas Discovery in Norwegian Sea

Faroe Petroleum has reported of a significant discovery in the Novus exploration well which is estimated at about 5 to 15 million barrels in oil and recoverable resources. The field is located about 5 miles south of the Statoil operated Heidrun field in the Norwegian Sea .the well which was drilled by West Navigator (DW Drillship) which was aimed to target Jurassic reservoirs, encountered a 39-foot net gas column and a 41-foot net oil column in a high-quality, thicker-than-expected Garn formation. Faroe confirmed about the prevalence of a large gas cap reservoir and claimed that the immediate plan of action would be plugging and abandonment of the field. In addition to this the firm confirmed of usage of the well to identify and reduce risks in nearby areas and hinted commercial usage in the future. The well result would thus offer a favorable geophysical model of the area and leads on license of identical potential drilling models. (Source: Faroe Petroleum, Dated: 14th January 2014)

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Hydrocarbon Spectrum

Innovation Section

Schlumberger Launches Quartet Wireless Downhole Reservoir Testing System

Schlumberger announced the release of the Quartet downhole reservoir testing system enabled by Muzic wireless telemetry, which provides data in real time for validation so that critical information is available to meet the well test objectives. While working in environments which require high cost such as deep -water, it is significant to be able to interact with downhole test equipments, administer wellbore events and refine well tests in real time, said Sameh Hanna, president, Testing Services, Schlumberger. With this new structure capability, clients can manage wellbore events and refine well tests to ensure their objectives are met, and to gain a better perspective of the reservoir. Wireless bidirectional communication is used by the Quartet system to provide downhole equipment status, and pressure and temperature data, which permits test design changes and validation of test data while reservoir testing is taking place. The system also improves testing efficiency by making probable the isolation, control, measurement and sampling of the reservoir in a single run. Field tests by means of the Quartet system along with wireless telemetry have been run in Egypt, Indonesia, Qatar, Brazil, and Angola in environments varying from onshore to deep-water. A total of 22 reservoir tests have been taken with data from downhole to surface at a 100% communication achievement rate. In Brazil, Petrobras and Schlumberger identified a chance to improve deep-water well test operations using a real-time communication solution on a well in the Presalt Santos basin. As a result of the collaboration, the Quartet system with wireless telemetry was successfully deployed, delivering flow and shut-in data to monitor operations and adjust the test course in real time. (Source: http://subseaworldnews.com/)

Aker Solutions Developed New Stabilizer Arm for Tubular Handling

The leading oilfield service providing company, Aker Solutions, has designed a Casing Stabilizer Arm (CSA) which could replace the labors requirement on derrick for tubular makeup. This technology is equipped with stabilizing and non load bearing mechanism which makes it safer and productive for tubular handling in onshore and offshore rigs. can be installed on offshore as well as offshore rigs. The stabilizing mechanism is placed approximately 10 m above the drilling floor and is incorporated with an internal hydraulic cylinder which extends and closes the padded jaws. This cylinder could be operated by radio remote control. equipped in tubular capacities of 27/8 22 diameter without changing the jaws. Technical Aspects: Rick Comeaux, (Business Development Manager, Aker Solutions) claims, Akers casing stabilizer arm offers superior performance and higher safety features when compared to similar units.

The arm comprises of 3 hydraulic cylinders (i.e. lifting, extension and (Source:www.oilandgastechnology. clamping) to place, assemble and net, Dated: 28th November 2013) Design and Working: The CSA mobilize the pipe jaws and can be

Casing Stabilizer Arm

Sercel launches new 508 XT system

A new land seismic acquisition technology has been launched by Sercel recently, the 508XT system, designed to improve crew output, working flexibility and data value. The 508XT system is division of Sercels new generation of state-of-the-art land seismic acquisition systems. It is the combination of cabled and wireless system technologies and integrates various new capabilities. While conducting seismic operations, the 508XT offers crews the ability to record up to one million channels in real time, which leads to better image resolution. It also gives access to data with zero downtime thanks to a new generation of sharp networking technology. Particular features for local data storage, automatic rerouting, and new levels of redundancy and quality control ensure nonstop production. The 508XT provides a wide range of sensors (1C or multicomponent, digital or analog). Pascal Rouiller, CEO of Sercel CEO, said: The 508XT steers in a new era for land seismic data acquisition. It presents unparalleled data quality and integrity for continuous, very rapid acquisition. The X-Tech architecture combines the wireless and cabled technologies to commence a new level of acquisition flexibility and operational reliability for all types of geographies, climates and environments. (Source: www.cgg.com, Dated: 24th September 2013)

508 XT Wireless System Volume 1, Issue 1

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Gas Corner - Gas Sector at a Glance

Recent Gas News

Facts and Figures
top five oil & Gas over

New Gas Reserves Found In Jaisalmer

Focus Energy has discovered new gas reserves in Jaisalmer in the same block where it had found new reserves in October 2012. The gas reserve found is of very high quality and is found at a depth of 3,161m in an exploratory well drilled in Shahgarh block. The gas was estimated to have 88 to 91 per cent hydrocarbon. According to officials, the company found gas in nine wells a few days ago in SJL field in RJON/06 in Bachia, Lohar village in Shahgarh Bulj area. State Mines and Petroleum Minister Laxminarain Dave that the quality was similar to the gas struck at Miano and Swan fields in Pakistan. The flow rate of gas was tested with 900- pressure square inch (PSI) for about an hour and no pressure drop was found, indicating that the well had a large quantity of gas, said the Minister. Research Activities: Mr. Dave said the discovery had shown high prospects of hydrocarbon occurrence in Shahgarh sub-basin and would promote research activities and attract investments in the region. Focus Energy is using modern technology for exploring oil and gas. The firm has also applied to the state government for making new air strip to ferry the experts in charted planes. The testing for reserve estimation was underway by the operator company. Award: The Central Government had awarded the block to Phoenix Overseas and Oil and Natural Gas Corporation (ONGC) in joint venture for an area measuring 5,390 sq. km. The operator company has been carrying out exploration in the block since August 1999. (Source: www.petroleumbazaar.com/explorationnews.aspx , Dated: 3rd February 2014)

companies

made

$67 billion in profits the first half this year. Colorado Anadarko of operator Petroleum Energy

(who sits on the board Western Alliance) posted a $562 million profit compared to a $28 million net loss just one year ago !!!

Work on LNG Terminal in Chennai is Set to Start

Work on the Ennore LNG terminal near Chennai port is set to start as the government start the bidding for the 1175 Km pipeline which will link the terminal to the nagapattinum in south Tamil Nadu this pipeline will pass through the major cities thus providing supply of LNG for the entire eastern part of the Tamil Nadu. The Ministry of Environment and Forests gave its final clearance on February 10 to Indian Oil Corp (IOC) an approval for a 5-million-ton-a-year LNG terminal, to be set up jointly with Tamil Nadu Industrial Development Corp. The project will take 39 months to complete and is set to start from April. The project is set to be on 130 acre all of which has been approved except for a few formalities. Petroleum And Gas Regulatory Board has called for the bids of the pipeline so that the linkage is ready till the terminal reaches its completion and there will be no further delays on completion. Apart from industrial demand, there is also potential to lay a city gas distribution network in all the major towns and cities along the network. The pipeline project also envisages spur lines to link Nagapattinum-Tiruchi-Madurai with a 242-km line; NagapattinamRamanathanpuram-Tuticorin with a 318-km line; and a separate 290km line from Ennore to Bangalore. (Source: The Hindu Business Line, Dated: 18h February 2014)

LNG Terminal

Facts & Figures

Government Orders the Cost BreakUp of CNG

Alberta's total oil reserves 168.7 Petroleum minister Mr. M Veerappa Moily announced that all the natural gas distributors will billion barrels, or about 99 percent have to show the break-up of the cost of the natural gas provided by the government. Natural gas is the first fuel whose costs break-up will be the first fuel whose cost would be shown come from the oil sands; and the to the consumers. This includes the gas provided at the retailers for the automobiles and CGD. remaining 1.5 billion barrels come from Due to rejigged supplies of the natural gas petroleum ministry has been able to cut short the supply of the natural gas by a margin of 14.90 Rs per Kg in price of the CNG and 5 Rs. per conventional crude oil. Notably, Kg in price of the PNG piped natural gas. This cost break-up includes the expenditures since Alberta accounts for an overwhelming the company receives the gas till the delivery to the consumers and this should include all the taxes like the VAT, other auditable duties, companys exercise margin, profit, cost of the majority (about 98 percent) of supply, equipments, man power etc. All the companies have to comply from 30 April and annually have to provide break-up cost to the petroleum ministry on 30th April. Non compliCanada's oil reserves !!! ance of the submission of the cost break-up will lead to the cancellation of the license provided by the government. (Source: The Economic Times, Dated: 19th February 2014)

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Hydrocarbon Spectrum

Petroleum Downstream

HPCL & Mangalore Refineries will Lift the Crude

Hindustan Petroleum Corporation (HPCL) and Mangalore Refineries (MRPL) will lift crude from India's maiden crude caverns coming up in Vizag and Mangalore, respectively .These caverns are expected to come up on-stream by the later part of the next fiscal, said LN Gupta, secretary, Oil Industry Development Board (OIDB), a body under the ministry of petroleum and natural gas which assists oil companies with their funding requirements. OIDB, through its fully-owned subsidiary Indian Strategic Petroleum Reserves (ISPRL), is setting up three crude caverns at Vizag in Andhra Pradesh and Mangalore and Padur in Karnataka. Together, these caverns will have a total storage capacity of 5.33 million tons (mt.) and will primarily be used as emergency crude stockpiles for the country. Out of this, Vizag will have 1.33 mt. of strategic storage and will be built at a cost of 1,038 crore INR. This will be the first to be commissioned and will be ready by August 2014. The next will be R732 crore strategic storage space at Mangalore with a capacity of 1.5 mt. and the third at Padur, with a capacity to store 2.5 mt. and being built at R993 crore. Media reports suggest ISPRL is looking at creating additional storage space of 12.5 mt. at various locations in Karnataka, Orissa, Gujarat and Rajasthan. (Source: www.finentialexpress.com, Dated: 13th February 2014)

Refinery Section

HPCL & Mangalore Refinery

Vitol to pay Shell $2.9 billion for Australian Refinery and Assets
The biggest independent oil trader the Vitol Group has agreed to pay $2.9 billion to Royal Dutch Shell for the Australian refinery and filling stations; a move which is seen by analysts as an act to accelerate asset sales. The Geelong Refinery has a process rate of 120,000 barrels per day. The move is irked as result of weak margins in the fiscal year due to unprofitable shale projects in North America and low refinery profits. The local community sees the acquisition as an act to guarantee the functioning of the site which creates jobs for hundreds of contractors and caters to about 50% of Victorias ,25% of South Australias Oil demand. The deal is also stipulated to give control of about 867 filling stations to the Rotterdam giant. The acquisition is also likely to pit Vitol with arch rival Trafigura while the less nimble majors are trying to cut losses. The deal comfortably puts Shell dead ahead with its aim to have $15 billion of asset sales in the time period of two years as set by the New Chief Executive Ben Van Beurden.

(Source: Bloomberg and the Australian, Dated: 20th February 2014)

Geelong Refinery

Itronics Announces Breakthrough Invention: New Silver Refining Process

Itronics Inc. has announced that it has successfully tested and incorporated a process termed as Itromet Silver Refining Process"; a process to recover silver from the iron sulphate concentrates and thereby increasing efficiency and reducing cost. The company has already scaled the process up to the level one and plans full integration by the next quarter. Benefits of the new process are improved first pass recovery, elimination of an intermediate processing step that is now required to achieve full recovery, and a reduction in glass slag production. The process is also able to recover virtually all of the gold that may be present in the feed materials and the process significantly reduces refining cost. Bottom line is a significant improvement in silver refining economics and productivity. The process is now undergoing test with several varied feeds and the professionals were quick to comment about positive results all along. (Source: www.itonics.com , Dated: 22nd February 2014)

Volume 1, Issue 1

Page 7

Out of Box - Unconventional Resources

Water Evaporation System Starts Up

The SAGD produced water evaporation system which was awarded to Veolia water solutions in 2010 get started. This system is now the largest operating system in Alberta. This system is able to treat a capacity of 40,000 bbl. of water per day. Configuration of this system comprises of three high pressure evaporators. This provides the benefits of removing the silica which can acts as a potential foulant in the pipelines. As of its starting the Veolia system is operating on capacity less than the full potential but will reach its maximum operating capacity till the mid 2014 as the production via the SAGD will reach its nameplate capacity. Veolia water solution and technologies is the subsidiary of Veolia which specializes in the water treating project the subsidiary owns this evaporation system and has recorded a revenue of 3.1 billion $ in 2013. (Source: New Tech Magazine, Dated: 3rd January 2014)

Oil Section

Water Evaporation System Using SAGD

Facts and Figures

Industry has yet to

Red Leaf Secures Permit for Oil Shale

Red Leaf Resources Inc. has announced that it has cleared the regulatory hurdle and is going to launch the first commercial scale oil shale production in North America. Michael Binnion, president and chief executive officer of Questerre the partner company of the Red leaf said that they are very pleased that red leaf has secured the necessary regulatorty approvals and they will the first to begin the field work. Red leaf currently hold the oil shale lease on school trust lands in Utah, which will be developed under a joint venture with French energy conglomerate TOTAL S.A. Red leaf has additional oil shale leases on land leased in Wyoming, which will be developed under a joint venture with Questerre. Oil shale is sometimes confused with the shale oil but the shale oil is necessarily to be obtained from the shale rock while the oil shale referred to the kerogen rich which is converted to crude by means of application of heat. (Source: www.newtechmagazine.com, Dated: 21st December 2013)

develop 7,000 drilling permits: The U.S. Bureau of Land Management testified in

recently

committee that the oil and gas industry has a b o u t undeveloped 7 , 0 0 0 permits

where industry has a green light to drill.

www.Forbes.com

Oil Shale Rock

Shell Canada & Caterpillar Joint Venture

Shell Canada and Caterpillar which is the leading manufacturer of the mining equipment have ventured together to test a new engine a fuel mix using liquefied natural gas which will help them to reduce the cost and the environmental concern via reduced emissions from the oil sand mining in the northern Alberta. Caterpillar will leverage its experience with LNG in other applications and will continue development work to design and build a fully integrated mining truck which will replace the diesel powered engines. Caterpillar will test its truck in the Fort McMurray. This trial follows a trend for shell in looking at options for utilizing the resources of natural gas present in the Canada. The testing of the trucks will begin in the early 2016 which will last up to a year while the shell Canada will test its exiting trucks by replacing with the new engines. (Source: New Tech Magazine, Dated: 22nd January 2014)

Oil Sand Mining

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Hydrocarbon Spectrum

Gas Section

Japan Claims Big In the Gas Hydrates

Japan made landmark progress in 2013 in methane hydrate development carrying out the worlds maiden offshore production test and confirming the presence of the substantial amount of methane in the sea of Japan in the northwest part. we will be able to commercialize methane hydrate in the next 10 years and for commercialization, we will need to enhance the reliability and stability said Ryo Minami, director of the petroleum and natural gas division of the agency for natural resources and energy at the ministry of economy, trade and industry. Japan has been in research for more than a decade and is finally able to produce an amount of 20,000 m3/ day. This could be seen as the next step towards the development of the resources as gas hydrates are a good of methane and are present in abundance all over the world but their production has been a matter of concern but with positive outcomes like Japan, world could get fuel for the forthcoming years.

Methane Hydrate or Clathrate

(Source: www.platts.com, Dated: 30th December 2013)

Dart to acquire East Kalimantan CBM block in Indonesia

The pioneer company Dart Energy International Pte. Ltd., Singapore, plans to initiate work in mid to late 2013 on the 411 sq. km Bontang Bengalon coalbed methane block in the central Kutei basin in East Kalimantan, Indonesia. Three core wells and one pilot well are planned in the exploratory work program in the first 3-year period. production sharing contract of 30 year period is expected to be signed within 1 to 2 months. Dart is going to operate Bontang Bengalon with a 100% working interest. Bontang LNG facility is nearby to the southern part of the two-part block and the northern part is 62 km north of that facility and close to the Sangatta West PSC in which Dart is a net 24% participant and joint operator. Bontang Bengalon is considered as highly prospective given the significant exploratory and pilot appraisal work undertaken on the neighboring Sangatta West block, where CBM reserves and commercial viability have already been developed. Dart said the local market has substantial need for gas, including the Bontang LNG facility. (Source: www.naturalgaseurope.com, Dated: 10th February 2014)

Bontang LNG Facility, Indonesia

Scenario of Shale gas bloom in United Kingdom

After the sudden gas bloom in the States the analysts had imagined that a single handed monopoly would carve in but its UK which has been grabbing the headlines for the subject quite some time now. On an assistive and gratifying move to the investors The UK Government has made clear its strong support for the rapid development of the UK shale gas industry, hurrying through various legal and fiscal measures to support the industry and taking a hard line against attempts by European legislators to introduce new European-wide regulation of the sector.in an identical move it has been announced that Total has been granted two independent licenses to operate in Northern England. In June 2013, the British Geological Survey estimated the gas in place within the Bowland Shale of central Britain to be within the range of 822 TCF to 2281 TCF, with a central estimate of 1,329 trillion cubic feet (37,600 km3).over the years number of companies have recorded sizeable discoveries such as IGas Energy , Cuadrilla. Thus the picture seems comforting with claims that to cater to tangibl profits to the investors.

Shale resource estimation by British Geological Survey Volume 1, Issue 1

(Source: BBC News, Dated: 26th February 2014)

Page 9

Believe It or Not
Hydrocarbon Trivia

Door To Hell
Also called as Darvaze, meaning gate is a natural gas field in Derweze, Ahal province Turkmenistan. The Door to hell is legendary for the natural gas fire that is continuously burning inside it since it was lit by Soviet petrochemical scientists in 1971.The fire is fed by the rich natural gas deposits in the nearby area. The field is situated near the Derweze village in the middle of karakum desert which is 250km north of Ashgabat. The gas reserve which is present here is one of the largest in the world. The name Door to Hell was given by locals due to the fire, boiling mud and orange flames in the Derwezes large crater of Diameter 70 meters. The hot spot ranges over an area of 60 meters and a depth of 20 meters. The site was first discovered by soviet scientists in 1971. It was considered to be a substantial oil field site. A drilling rig was installed and drilling was started to access amount of natural gas. After finding the natural gas soviets started storing the gas which led to the collapsing of entire rig area. Large quantities of methane was released which was becoming a disaster for the environment. The scientists let the gas burn and anticipated that it will burn out In few weeks but from 1971 till now 2014 it is still burning!!! (Source: http://en.wikipedia.org/wiki/Door_to_Hell)

Burning Door of Hell, Turkmenistan

Deep Water Horizon Oil Spill

Also known as BP oil spill, the BP oil disaster, the gulf of Mexico oil spill, and the Macondo Blowout started on 20 April 2010 in the Gulf of Mexico on the British Petroleum operated Macondo Prospect. It is claimed as the largest disaster happened in history of oil and gas industry, approximate of 8% to 31% largest than previous largest, the lxtoc 1oil spill. This was followed by the explosion and sinking of Deep-water Horizon Oil Rig, a sea floor oil gusher flowed for 87 days, until it was restricted on 15 July 2010. The government of United States estimated the total discharge of 4.9 million barrels (210 million US gallon that is 780,000 m3). After various failed attempts the well was finally sealed on 19 September 2010, according to some reports the well is still leaking. A massive response ensued to protect beaches, wetlands, and estuaries from the spilled oil with the help of skimming ships, floating booms, controlled burns and 1.84 million US gallons of Corexit oil dispersant. In 2013 Al Jazeera reported that the Gulf ecosystem was in crisis citing a turn down in seafood catches, deformities and lesions found in fish. In Louisiana 4.6 million pounds of oily material was removed from beaches in 2013 which was just double than collected in 2012.Various investigations explored the causes of the spill, the US government 2011 report pointed to the use of defective cement on the well, faulting mostly BP also Rig operator Transocean and contractor Halliburton. As of February 2013 various settlements and penalty payments to a trust fund had cost company around $42.2 billion. (Source: http://en.wikipedia.org/ Oil Spill In Mexican Gulf wiki/Deepwater_Horizon_oil_spill)

Invasion in Kuwait by Iran

The massive Rumaila oil field situated on the border of Iraq and Kuwait and is shared by the two countries. Rumaila has recently been in news later than the compromise to develop the Iraq side of the field was awarded to a BP-led consortium. However, it strike the headlines for all the false motives back in 1990 as accusations of Kuwait by the use of slant- drilling techniques to steal oil from the Iraq side of the field was used as an excuse by Saddam Husseins regime to begin the invasion of Kuwait that led to the first Gulf War. Relations between the two countries were frosty to the point of freezing in the lead up to the invasion due to furious argument over US $40 billion loans that Kuwait gave to Iraq during Iraq-Iran war. Kuwait rejects to release the debt which led Iraq to promise to repay the money by increasing the price of oil through OPEC production cuts. However, Kuwait decided to increase the production of oil thus preventing an increase in oil prices. This resulted in a loss of US $14 billion in a year in oil revenues. So, at 2AM on 2 nd August 1990. Iraq invaded Kuwait which caused several environmental losses and 600 oil wells were set alight while retreating Iraqi forces. (Source: http://www.arabianoilandgas.com/)

Invasion in Kuwait by Iraq

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Hydrocarbon Spectrum

Public Arcade - Comments from Experts

VE to VAVE for Reducing Project Cost

Petro Articles Section

Value Engineering (VE) is a step wise analytical technique to determine whether any item of cost can be reduced or eliminated without compromising on function and quality of a product. As the name surmises, VE was found to bring benefit to the organization. A scope existed on analyzing the VE steps, which can bring about further improvements. Additional steps were introduced which modified the VE step sequence, and yielded much more benefits than that of VE. Value Engineering (VE) was modified for maximizing worth by improving the functions desired by the consumers at an incremental cost and for reducing unnecessary cost or avoiding such costs. It can be applied in all industrial applications and to a certain extent consumer goods also, and this is how MOVE (Modified Value Engineering) was born. VE identifies substitutes in present goods, services, and equipments, without compromising on function and quality mission statement built in. Companys make change in top management to give impetus to growth and organization. Also time is focused and results are clear. In VE- diagnostic journey, perusal of product gets eliminated during Group Discussion. Ideas are generated and silly ideas are encouraged. Stealthy slippage of errors, wastages, mistakes are identified analyzed and evaluated. Also are analyzed the symptoms and causes of symptoms testing theories. In No Value Addition Activity, any activity still remaining (though normally gets eliminated) is fixed with magnitude and expunged after micro analysis. Audit contributes to the effectiveness of VE, whereas comparative analysis gives effectiveness of VE and modified VE. Various stages in a Project are: Concept/ Conceptualization, Draft feasibility report; Fixing consultant, Final feasibility report; Critical examination of the project report, Company approval; PFD/P&ID preparation, Tender, Bid evaluation; Tendering, Bid evaluation and award of contract; Construction and erection, Precommissioning and start up; Commissioning and performance test, Handing over to client. METHODOLOGY OF APPLICATION OF MOVE IN THREE PROJECTS OF ONGC Application of MOVE was used in three projects of ONGC Ltd. Each one of the 13 stages in project planning are applied, the 12 steps of MOVE (the appropriate steps of MOVE relevant to a particular stage of project). The deviation and impact (by way of delay cost and time) of this deviation, if any, were found out/calculated for all the above steps of MOVE for each of the three projects. The impact in terms of monetary gain or loss were summarized, analyzed and presented. Modified Value Engineering Application (Project 1 of ONGC Ltd Hazira): Capacity Enhancement of Kerosene Recovery Unit (KRU) from 1.07 MMTPA to 1.45 MMTPA (was being implemented then). VE Phases Orientation Phase Information Phase Function Phase Creative Phase Evaluation Phase MOVE Phases Orientation Phase Information Phase; Mission and modified mission statement phase Function Phase; Diagnostic and remedial journey phase Creative Phase; No value addition activity phase Evaluation Phase

Prof., Department of Petroleum Engineering & Earth Sciences, UPES

Recommendation Phase Recommendation Phase Implementation Phase Adult Phase Possible GAIN Implementation Phase; Detailed Comparative analysis phase Adult Phase 25.3 Crore INR; Avoidable Loss 34.6 Crore INR

B.E (Chemical Engineering), MBA (Finance Management), Ph.D. (Application of Modified Value Engineering in Project Management in ONGC) E-mail: mrsrinivasan@ddn.upes.ac.in
MOVE AHEAD FOR VAVE (VALUE ADDED VALUE ENGINEERING) TO FURTHER BENEFITS The application of MOVE benefits your organization and business, and as a first step MOVE can be applied not only to projects but also in services, contracts and purchases, administration and decision making. An awareness of the importance of the application need to be created amongst the masses. People need to be trained and should be prepared to innovate. Training need to be restructured so that an emphasis is given on application techniques. MOVE to VAVE reduces project cost.

Modified Value Engineering Application--(Project 2 of ONGC Ltd Hazira): Initial Commissioning of KRU Possible GAIN 1.07 MMTPA (was already executed and was in operation). Avoidable Loss 52.2 Crore INR

7.6 Crore INR;

Modified Value Engineering Application--(Project 3 of ONGC Ltd Hazira): Aviation Turbine Fuel (ATF) from KRU (was to be executed in 6 - 12 months). Possible GAIN 2.6 Crore INR; Avoidable Loss 1.9 Crore INR.

Volume 1, Issue 1

Page 11

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About Us Team Members Deepak Pandey Deepak Verma Editorial Team Rishabh Sharma Rohit Bansal I.t. Team Satyendra Poswal Vanshika Johri Hydrocarbon Spectrum Newsletter is founded by the B. Tech students of University of Petroleum & Energy Studies, Dehradun. The main objective of this newsletter is to provide a digital collection of all oil and gas sector news, editorials and articles in one newsletter. This will help all oil and gas sector professionals to update themselves without loosing time and money, and it can be referred anywhere & anytime in future.

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