Robert J. Delmar
India signing up joint venturesIndia has made new waves in opening up its oil market to the rest of the world. The government recently announced that it will permit national oil companies to establish joint ventures for upstream operations, a stipulation previously only allotted to the downstream market. The government has said that this initiative was established to meet the country's rapidly increasing demand for hydrocarbons and reduce dependence on imports. The government also sees joint ventures as a way of attracting the necessary capital, technology, and managerial skills that international cooperation brings to projects for the country's upstream market.
As part of this new initiative, the Indian Oil Corporation (IOC) has signed one agreement and is negotiating another agreement with two international oil companies. IOC recently signed on with Premier Oil and is negotiating with Petronas of Malaysia to jointly bid for blocks under the New Exploration Licensing Policy licensing round. IOC and Premier will jointly bid for blocks in the northeastern region of the licensing area, while the company plans to bid with Petronas for others once a deal is struck.
IOC also stated that it would not go after the deepwater alone. A company representative said that they wish to be minority partners in deepwater acreage and limit the company's exposure because they do not have deepwater expertise.
Another state-owned company, Oil and Natural Gas Corporation (ONGC), is also in negotiations, reportedly with three US-based companies and one other international company for bidding on the NELP blocks. All agreements are still subject to government approval.
Bangladesh gets US gas aidThe US Government has agreed to provide Bangladesh with help developing its natural gas reserves. Following a six-day visit to the country, US Department of Energy officials agreed to provide the technical assistance needed to help prove up the nation's gas reserves. A representative said that they would work closely with Bangladesh in exchanging energy information and analyze technical information on the country's energy sector.
Bangladesh has had several large commercial discoveries, both on and offshore, resulting from its first licensing round. These included discoveries by Cairn Energy and Occidental of the US. Current proven reserves are about 10.5 Tcf, which experts believe could increase to 50 Tcf at the current discovery rate.
However, about 20 foreign companies are still waiting to try and increase these reserves. The government has delayed awarding the rights to 15 blocks as part of a second licensing round held in 1997. The government is still trying to finalize conditions for exploratory programs and firm up regulatory issues. Several US firms are still on the waiting list, including Chevron, Enron, Mobil, Texaco, and Unocal.
Pogo and Chevron reach B8/32 agreementPogo Producing's Thailand subsidiary, Thaipo, and Chevron have come to terms over the Block B8/32 concession in the Gulf of Thailand. The two companies reached a definitive agreement dealing with future exploration and development activities on the block as part of a merger agreement between Chevron and Thaipo's joint venture partner in the Rutherford Moran block.
Under the agreement, Chevron will assume ownership of Rutherford's 46.3% interest in the block. Thaipo will retain its 46.3% ownership and serve as operator of the block until September 30, 1999, at which time Chevron will be granted the operatorship. The deal is contingent upon government approval.
The 734,000-acre Block B8/32 was originally awarded to a group of companies including Thaipo and Rutherford in 1991. The block is the location of the massive 102,000-acre Benchamas Field, which is expected to begin production from its first three platform locations in July.
The block is also home of the 68,000-acre Tantawan Field which began production in 1997. To date, the field has produced about 91 Bcf of gas and condensate, and a fifth platform is expected to begin production in June. Also located on the block are the 91,000-acre Maliwan Field and Jarmjuree Field. These fields are expected to begin production after 2000.
Australian activity hits record high in 1998Despite the Asian financial crisis that plagued the world in the second half of last year, Australia says that offshore exploration reached record levels during 1998. According to the Australian Petroleum Exploration and Development Activity report published by the Australian Geological Survey Organization, 74 offshore exploration wells were drilled, and more than 960,000 line km of seismic survey were recorded in Australian waters in 1998. These figures far surpass previous records held according to the report. The previous drilling record was set in 1990 with 64 wells and the previous seismic record was set in 1997 at half of the 1998 figure.
Most of the activity was in the Bonaparte, Browse, and Carnarvon Basins off Northwest Australia, and the Bass Basin off Tasmania. The report also noted several key discoveries such as Gipsy, Peck, Legendre South in the Carnarvon Basin, Caspar in the Browse Basin, and White Ibis in the Bass Basin.
The report does predict a drop in activity for this year due to the commodity price climate, not to much surprise. However, the govern ment expects to try to counter that with a release of several offshore exploration areas this year. Fifty-six new areas will be on offer this year in the Bonaparte and Arafura Basins off the Northern Territory, Central North West Shelf, and Carnarvon Basin off Western Australia, the Bight Basin off South Australia, Torquay Sub-Basin and Gippsland Basin off Victoria, and Bass Basin off Tasmania.
These areas are, for the most part, considered under-explored with some light drilling taking place in the past. Information on the licenses available will be presented at the annual APPEA conference on April 19, 1999 (Contact APPEA Limited, Tel: 61.2.6247.0960, fax: 61.2.6247.0548, E-mail: email@example.com).
The government awarded production and pipeline licenses for Blackback in the Bass Strait and the renewal of a retention lease for part of the Kipper Field in the Bass Strait earlier this year. The government also awarded the following exploration permits earlier this year:
- Area NT98-1 to Woodside, Shell, and BHP
- Area NT98-2 to Roma Petroleum and Guiness Peat
- Area NT98-6 to Woodside and Shell.
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