Petroleum : Information and Updates
February, 2013
Alaya Legal introduces its Petroleum: Information and Updates, with a view to present in a systematic, organized and comprehensive manner the developments in the petroleum or crude oil segment across the globe and the Republic of India.
The publication is intended to serve as a canvas for understanding various legal developments in this segment.
Introduction
Various countries across the globe have been grouped into categories depending on the quantum of petroleum reserves present in such countries.
The categories are:
- High Concentration of Crude Oil Reserves
- Medium Concentration of Crude Oil Reserves
- Low Concentration of Crude Oil Reserves
This issue covers countries falling under the category of High Concentration of Crude Oil Reserves.
Zoning
The map represents the global scenario of proven oil reserves.
According to the map, reserves in the world have been divided into:
- High Concentration – 110 bn bbl to 267 bn bbl
- Medium Concentration – 30 bn bbl to 110 bn bbl
- Low Concentration – 0 bn bbl to 30 bn bbl
According to the UN Classification of the World, Canada, Venezuela, Russia, Saudi Arabia, Iraq, Iran and Qatar have high concentration of oil reserves.
Global Scenario
Statistics
Canada
Canada, endowed with rich and varied natural resources, is one of the world’s five largest energy producers and a principal source of U.S. energy imports.
Canada produced an estimated 18.2 quadrillion British thermal units (Btu) of primary energy in 2009 compared to 13.0 quadrillion Btu consumed.
Venezuela
Venezuela’s oil revenues account for approximately:
- 94% of export earnings
- Over 50% of federal budget revenues
- Nearly 30% of GDP
Oil dominates Venezuela’s energy consumption while hydroelectricity and natural gas contribute significantly.
Petroleum exports have declined substantially since peaking at 3.06 million barrels per day in 1997.
Russia
Russia was the second-largest producer of petroleum liquids in 2011 after Saudi Arabia.
Russia produced approximately 10.2 million barrels per day in 2011 and consumed approximately 3.1 million barrels per day.
Russia exported approximately 7 million barrels per day including crude oil and petroleum products.
Saudi Arabia
Saudi Arabia is the world’s largest producer and exporter of petroleum liquids and the second-largest crude oil producer after Russia.
Oil revenues account for nearly 80–90 percent of total Saudi revenues and over 40 percent of GDP.
Saudi Aramco has achieved production capacity of 12 million barrels per day.
Iraq
Iraq possesses the world’s fourth-largest proven petroleum reserves after Saudi Arabia, Canada and Iran.
A significant portion of Iraq’s known oil reserves remain underdeveloped.
Qatar
Qatar is a member of OPEC and a major oil producer with approximately 25.4 billion barrels of proven oil reserves.
Qatar ranked as the sixteenth largest crude oil exporter globally in 2009.
Iran
Iran ranks amongst the world’s top holders of proven oil and natural gas reserves.
Iran possesses approximately 137 billion barrels of proven oil reserves, representing:
- 9.3% of world reserves
- Over 12% of OPEC reserves
Market Update
Canada Looking Towards Asian Markets
Canada is attempting to expand oil pipeline infrastructure to access Asian markets including India and China.
Canada possesses the world’s third-largest oil reserves and exports the majority of its oil and natural gas to the United States.
Projects under consideration include:
- Keystone XL Pipeline
- Enbridge Northern Gateway Pipeline
- Pipeline conversion projects for eastern Canada
Venezuela Oil Imports from US Increase
According to the U.S. Energy Information Administration, Venezuela imported approximately 196,000 barrels of crude oil per day in September 2012.
Imports increased due to operational disruptions at Venezuelan refineries following explosions and reduced refinery capacity.
Russia Running Out of Cheap Oil
Studies indicate that Russia’s oil production may decline between 2015 and 2020 due to depletion of low-cost oil fields in Western Siberia.
Declining oil revenues may affect public expenditure and economic stability.
Saudi Arabia Exports to Asia to Rise
According to HSBC Trade Forecast Reports, Asia will become the primary export market for Saudi Arabia and Gulf countries until 2030.
Key trading partners include:
- China
- India
- Japan
- Korea
- Malaysia
- Vietnam
US Continues Waivers on Iran Oil Exports
The United States extended sanctions waivers to several countries importing Iranian oil including:
- India
- China
- South Korea
- Malaysia
- Turkey
- Singapore
- South Africa
- Sri Lanka
- Taiwan
The waivers protected banks and financial institutions dealing with Iranian oil transactions.
Qatar Petroleum and Total Renew Agreement
Qatar Petroleum and Total renewed their Heads of Agreement relating to the Al Khalij offshore oil field for an additional 25 years.
The field is located approximately 130 kilometres east of the Qatari coast.
Republic of India
Statistics
India possesses approximately 8.935 billion barrels of proven oil reserves as of January 2012.
India produced approximately:
- 950 thousand barrels per day of total liquids
- 750 thousand barrels per day of crude oil
India consumed approximately 3.2 million barrels per day in 2010.
Market Updates
Reliance India Limited Acquires Egyptian Crude Oil Supply
Reliance Industries Limited (RIL) and British Petroleum secured Egyptian crude oil supply tenders for 2013.
RIL and BP are expected to receive:
- 18 cargoes
- 15 cargoes respectively
The companies are jointly investing approximately USD 7.2 billion in India.
HPCL Requests Rajasthan Crude Oil Allocation
Hindustan Petroleum Corporation Limited requested allocation of Rajasthan crude oil for its proposed refinery project at Barmer, Rajasthan.
The proposed refinery is expected to produce 15 million tonnes annually.
India to Assess Dependence on Iranian Crude Oil
India announced plans to evaluate its dependence on Iranian crude oil imports.
Iranian imports declined from over 16 percent in 2008–09 to approximately 10 percent in 2011–12.
Oil Ministry Allows RIL to Assess Cauvery Basin Discovery
The Oil Ministry permitted RIL and BP to explore discoveries in the Cauvery Basin and expand their deep-water portfolio beyond the KG-D6 block.
New Gas Findings
Brazil
Petrobras announced oil discoveries in the Sergipe-Alagoas Basin offshore Brazil.
Additional discoveries included:
- Moita Bonita
- Barra
- Farfan
Australia
Drillsearch Energy Limited and Beach Energy Limited discovered multiple oil zones in the Eromanga Basin of South Australia.
Estimated accessible reserves exceed 2 million barrels.
Mexico
Pemex announced discovery of light crude oil reserves in the Navegante-1 well in Southern Mexico.
Estimated reserves are up to 500 million barrels.
India
ONGC announced discovery of oil in the D1 oilfield off the west coast near Mumbai in August 2012.
Estimated reserves exceed 1 billion barrels.
Sources
- Economic Times
- Washington Post
- U.S. Energy Information Administration
- Oil & Gas Financial Journal
- New York Times
- HSBC Trade Forecast Reports
- Qatar Petroleum
- HPCL Reports
Did You Know?
The term “Petroleum” was first used in the treatise De Natura Fossilium, published in 1546 by the German mineralogist Georg Bauer, also known as Georgius Agricola.
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