REGULATORY & JUDICIAL DEVELOPMENT – INDIA
Alaya Legal presents its Ninth Issue of the Oil & Gas E-Zine. The publication provides systematic legal and industry updates from the oil and gas sector with a focus on regulatory developments and significant market events.
Reference Material
- Categories of proven oil and natural gas reserves across the globe.
- Overview of Upstream, Midstream and Downstream sectors in the Oil & Natural Gas Industry.
Niko Resources Ltd. v. Gujarat State Petronet Ltd. (GSPL)
August 14, 2015
Niko Resources filed a complaint before the Petroleum and Natural Gas Regulatory Board (PNGRB) regarding its locus standi in tariff determination proceedings relating to a natural gas pipeline connecting the Hazira field to Village Mora.
The dispute arose after a joint venture pipeline project involving Niko Resources and Gujarat State Petroleum Corporation (GSPC) was transferred to Gujarat State Petronet Limited (GSPL).
PNGRB examined whether Niko qualified as a stakeholder for purposes of participating in tariff determination proceedings.
Referring to the amended PNGRB Tariff Regulations and judicial precedents, PNGRB held that Niko was a stakeholder and therefore entitled to be heard during tariff determination proceedings.
Marginal Field Policy (MFP) of ONGC & OIL
October 14, 2015
The Ministry of Petroleum and Natural Gas introduced the Marginal Field Policy to accelerate development of marginal oil and gas fields owned by ONGC and Oil India Limited.
The policy aims to increase domestic production by addressing challenges such as isolated field locations, technological constraints, small field sizes, and development costs.
Key features include:
- Single licence for conventional and unconventional hydrocarbons
- No restriction on exploration during contract period
- Flexible pricing mechanisms
- Customized bidding model
- Royalty and fiscal reforms
- Site restoration provisions
The policy applies to 69 marginal fields identified under ONGC and OIL portfolios.
MARKET DEVELOPMENTS – GLOBAL
ONGC Videsh to Acquire Stake in Russia’s Vankor Field
September 4, 2015
ONGC Videsh signed definitive agreements to acquire up to 15% interest in Vankorneft, owner of the Vankor oil field and North Vankor licence in Russia.
The acquisition strengthens India’s overseas energy portfolio and contributes significantly to long-term energy security objectives.
Commencement of GAIL’s Jagdishpur–Haldia Pipeline Project
September 15, 2015
GAIL commenced pipeline welding work connecting Barauni facilities as part of Phase I of the Jagdishpur–Haldia Pipeline Project.
The project will supply natural gas to industrial facilities and support city gas distribution infrastructure across Bihar.
ExxonMobil Expands Synthetic Lubricant Production in Singapore
September 15, 2015
ExxonMobil announced expansion of its Jurong manufacturing facilities to produce Mobil 1 synthetic engine oil and other synthetic lubricant products for the Asia-Pacific market.
ExxonMobil Starts Erha North Phase 2 Production in Nigeria
September 16, 2015
ExxonMobil commenced production from the Erha North Phase 2 offshore development project ahead of schedule and under budget.
The project is expected to develop an additional 165 million barrels of oil resources.
Shell Commences Production from Bonga Phase 3 Project
October 5, 2015
Shell Nigeria Exploration and Production Company started production from the Bonga Phase 3 development, with peak output expected at approximately 50,000 barrels of oil equivalent per day.
Jharkhand Government and GAIL Sign Gas Cooperation Agreement
October 15, 2015
The Government of Jharkhand and GAIL signed a Gas Cooperation Agreement for development of natural gas and city gas distribution infrastructure under the Urja Ganga initiative.
Gazprom and Pavilion Gas Sign LNG Supply Agreement
October 27, 2015
Gazprom Marketing & Trading Singapore and Pavilion Gas entered into a ten-year LNG Sale and Purchase Agreement for supply of LNG to Asian markets.
Iran Awards Oil Projects to JSC Zarubezhneft
October 25, 2015
Russia’s state-owned energy company Zarubezhneft announced participation in multiple oil industry projects in Iran valued at approximately USD 6 billion.
Chevron Commences Production from Lianzi Development
November 2, 2015
Chevron started production from the Lianzi Field located offshore between the Republic of Congo and Angola, producing an estimated 40,000 barrels of crude oil per day.
Schlumberger Acquires Fluid Inclusion Technologies
November 16, 2015
Schlumberger acquired Fluid Inclusion Technologies, enhancing its capabilities in laboratory rock-fluid analysis and borehole gas analysis technologies.
Indian Oil’s Paradip Refinery Begins Product Dispatch
November 23, 2015
Indian Oil Corporation commenced dispatch of diesel, kerosene and LPG from its 15 MMTPA Paradip Refinery, one of India’s most advanced refining facilities.
FEATURE
Undertake Gas Under Gas Sales Agreement
Undertake gas refers to the quantity of gas delivered by the seller but not accepted by the buyer at the delivery point under a Gas Sales Agreement (GSA).
GSAs generally impose obligations on buyers to take nominated quantities of gas and may require compensation for losses suffered by sellers due to undertakes.
Key contractual considerations include:
- Undertake gas tolerance limits
- Buyer compensation obligations
- Premium pricing mechanisms
- Caps on liability
- Force majeure exclusions
- Take-or-pay interactions
Buyers often seek protection against double counting of liabilities and prefer compensation based on proven losses rather than predetermined penalties.
Undertake Gas Tolerance generally allows a predefined percentage variation before quantities are treated as undertake gas under a Gas Sales Agreement.
China was the first country known to use bamboo pipelines for transporting natural gas as early as 500 BC. These pipelines were used to transport gas for boiling seawater and extracting salt.
NEXT ISSUE
April 2016
IN-HOUSE CONTRIBUTORS
- Sakshi Bawa – Oil & Gas Team (Downstream)
- Neha – Oil & Gas Team (Upstream)
SOURCES
- Norwegian Petroleum Directorate
- U.S. Energy Information Administration
- The International Energy Agency
- Organisation of the Petroleum Exporting Countries
- The Oil and Gas Journal
- Official Websites of Various Oil & Gas Companies
- Peter Roberts, Gas Sales and Gas Transportation Agreements – Principles and Practice
DISCLAIMER
The information contained in this private circulation is not legal advice and should not be relied upon as such.
The information is sourced from publicly available materials and is intended solely for private and non-commercial purposes.
No representation is made regarding the accuracy, completeness or reliability of the information provided.
This disclaimer shall be governed by and construed in accordance with the laws of India and any disputes shall be subject to the exclusive jurisdiction of Indian courts.
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Doc ID: 4O&G15
