OVL, GAIL Planning to Enter Into Separate MoUs with SOCAR
ONGC Videsh and GAIL India are planning to enter into separate memorandum of understanding with the State Oil Company of Azerbaijan (Socar) for jointly undertaking oil and gas exploration in the Caspian Sea.
As many 35 international oil and gas companies including British Petroleum, Stat Oil of Norway, Exxon Mobil, Encana, Shell and Unocal have their presence in this region. British Petroleum alone has committed investments of $20 billion in undertaking various oil and gas projects in Azerbaijan. In addition to undertaking new projects with Socar, GAIL is keen to pick up a stake in the Shah Deniz gas and condensate development project in Azerbaijan, 8th largest energy project in the world.
OVL, too, is interested in a 5% equity in the Azeri-Chirag-Gunashli (ACG) oil field with the present production profile of 140,000 barrels of oil per day. However, Azerbaijani officials said it will be difficult to accommodate any new company in any of the two producing assets. But co-operation in many other projects could be pursued jointly, they said.
GAIL's director (business development), BS Negi said, "we have discussed co-operation with Socar in as many as eight areas including the gas monetization project for the Shah Deniz gas project. The gas field produces around 14 million standard cubic meters of gas per day (mmscmd) but more than half of this is being flared and Azerbaijan has to import about 12 mmscmd of gas to meet its domestic consumption.
"Gas monetization can reduce flaring considerably and we have offered our expertise to Socar in this regard", he said adding that gas processing is another area which GAIL is looking at. "The gas here is very rich and we can process it to make LPG and from condensate we can extract petrochemicals. CNG and city gas distribution is the other project we have discussed with Socar", he said.
Managing director of OVL RS Butola said the two companies would jointly pursue exploration and production (E&P) opportunities in the Caspian region including the disputed territories. Besides other areas, there is a lot of scope for finding oil and gas in certain disputed areas in the Caspian sea. Once the dispute is over, we will have an added advantage over other companies to pursue E&P activities in those blocks with Socar.
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Company: Gas Authority India Ltd. (GAIL) more info
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