Alaya Legal presents its Sixth Issue of the Oil & Gas E-Zine. Web links are provided for ready access to reference materials. The contents are presented with a view to providing comprehensive updates in a systematic manner from a legal perspective.
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.
MARKET DEVELOPMENTS – GLOBAL
Chevron Confirms First Oil Production from Tubular Bells Project
November 17, 2014
Chevron announced commencement of crude oil and natural gas production from the Tubular Bells deepwater project in the Gulf of Mexico. The project is expected to produce approximately 50,000 barrels of oil equivalent per day.
ONGC Approves Major Western Offshore Development Projects
November 14, 2014
ONGC approved investments exceeding ₹10,600 crore for redevelopment of Mumbai High South and integrated development of Mukta, Bassein and Panna formations.
The projects are expected to significantly enhance crude oil and gas production through new drilling programs and infrastructure upgrades.
GAIL to Participate in Development of TAPI Pipeline
November 13, 2014
GAIL joined gas companies from Turkmenistan, Afghanistan and Pakistan in establishing TAPI Pipeline Company Limited to develop the 1,800 km Turkmenistan–Afghanistan–Pakistan–India natural gas pipeline.
Rajahmundry Restarts Gas Supply to GAIL
November 12, 2014
ONGC resumed gas supplies from key gas collecting stations after restoration activities following disruption caused by a pipeline incident.
Schlumberger Releases Offshore Mozambique Seismic Data
November 10, 2014
Schlumberger made available an extensive seismic data library for offshore Mozambique, including more than 110,000 km of seismic data supporting exploration activities.
GAIL and SOCAR Sign LNG Cooperation MoU
November 3, 2014
GAIL and the State Oil Company of Azerbaijan (SOCAR) signed an agreement to pursue opportunities in LNG, upstream assets and petrochemical projects worldwide.
ONGC and ONGC Videsh Sign Agreements with PVEP, Vietnam
October 28, 2014
ONGC and ONGC Videsh entered into cooperation agreements with PetroVietnam Exploration Production Corporation for exploration opportunities in India and offshore Vietnam.
Chevron Sanctions Stampede Deepwater Project
October 28, 2014
Chevron approved the development of the Stampede Project in the deepwater Gulf of Mexico with an estimated investment of approximately USD 6 billion.
Chevron Announces First Gas from Bibiyana Expansion Project
October 27, 2014
Chevron commenced production from the Bibiyana Expansion Project in Bangladesh, increasing natural gas production capacity to approximately 1.4 billion cubic feet per day.
ONGC Videsh and PEMEX Sign Cooperation Agreement
September 27, 2014
ONGC Videsh and PEMEX entered into a Memorandum of Understanding to cooperate in upstream hydrocarbon opportunities in Mexico.
ONGC Videsh Signs Letter of Intent with PetroVietnam
September 16, 2014
The agreement provides for expanded exploration participation by ONGC Videsh in offshore Vietnam through additional exploration blocks.
GAIL Provides Alternate Gas Supply to Gujarat Industries
September 14, 2014
GAIL offered alternative gas supplies to industries affected by diversion of APM gas toward domestic PNG and transport CNG sectors.
ONGC Videsh and YPF Sign Strategic MoU
September 3, 2014
ONGC Videsh and Argentina’s YPF entered into a cooperation agreement for upstream hydrocarbon opportunities in Argentina, India and third countries.
ONGC Videsh Signs Myanmar Production Sharing Contracts
August 11, 2014
ONGC Videsh signed production sharing contracts for two onshore exploration blocks in Myanmar following successful participation in the Myanmar Onshore Bidding Round.
REGULATORY & JUDICIAL DEVELOPMENT – INDIA
Government Notifies New Domestic Gas Pricing Framework
October 29, 2014
The Ministry of Petroleum and Natural Gas notified a revised domestic gas price of USD 5.05 per MMBtu based on Gross Calorific Value (GCV), effective from November 1, 2014 to March 31, 2015.
Policy Framework for Early Monetization of Hydrocarbon Discoveries
November 10, 2014
The Government introduced a framework providing relaxations and extensions under Production Sharing Contracts to facilitate faster monetization of hydrocarbon discoveries.
- Extension of declaration of commerciality timelines.
- Extension of field development plan submission timelines.
- Adjustment of minimum work programme obligations.
- Swapping of 2D and 3D seismic commitments.
- Permission for appraisal drilling after commerciality declarations.
FEATURE
Annual Contract Quantity (ACQ) – Adjustments
The Annual Contract Quantity (ACQ) is a fundamental component of Gas Sales Agreements, representing the maximum quantity of gas that the seller is required to tender for delivery during a contract year.
ACQ may be adjusted through additions and deductions to arrive at the Adjusted Annual Contract Quantity (AACQ).
Key Additions to ACQ
- Make-Up Gas
- Recovery of previously prepaid take-or-pay quantities
- Price adjustment mechanisms for recovered quantities
- Seller liability provisions for delivery shortfalls
Key Deductions from ACQ
- Carry Forward Gas
- Shortfall Gas
- Undertake Gas
- Overtake Gas
Proper drafting of ACQ adjustment clauses is essential to balance commercial interests, operational flexibility and contractual certainty between buyers and sellers.
The Annual Contract Quantity forms the foundation of long-term gas supply obligations and requires careful adjustment mechanisms to address operational realities and market conditions.
NEXT ISSUE
April 2015
IN-HOUSE CONTRIBUTORS
- Sakshi Bawa – Oil & Gas Team (Downstream Sector)
- Neha – Oil & Gas Team (Downstream Sector)
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
The Philadelphia Zoo uses natural gas to cool a greenhouse housing one of the world’s most endangered bird species – the Micronesian Kingfisher.
DISCLAIMER
The information contained in this private circulation is not legal advice and should not be treated as such.
The information is sourced from the public domain 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: 6O&G14
