By Siddhartha Bhatnagar
Shale Gas a dramatic game changer has changed the drift of U.S. with a tag of once gas-importing nation will now be soon converting to a gas-exporting nation. Shale gas, an unconventional form of natural gas due to the cost of the economics involved in the extraction but because of the resolute technology, USA is able to explore its untapped potential having the second largest shale gas reserve after China. North America synonymous to inception of shale gas revolution was successful because of the already existing robust infrastructure i.e. 305000 miles pipeline, stalwart technology i.e. technology of hydraulic fracturing, horizontal drilling, government friendly policies and transparent regime. Political Landscape has changed as the country, which was planning to inject LNG import terminals, is now changing them to LNG export terminals.
Southern Asian Countries have shown big appetite in the gas consumption with Japan leading the chart courtesy nuclear program failure. India being a pygmy in the global gas arena and with its gas consumption substantially increased from 145.7 mmscmd in 2012-13 to 400 mmscmd in 2020-21. The demand supply of the gas economics in the country has already drifted courtesy dramatic decrease in the domestic gas production, government policies and regulatory framework. India is expected to import 143 mmscmd in 2016-17 and the figure is likely to rise albeit increase in the LNG import terminals.
Change in the energy landscape and political framework, Indian Companies have taken bold measures in acquiring vast assets in the energy surplus regions around the world with the help of joint ventures. This preposition projects Indian companies with a global vision and forecasting with mode of meeting the future requirement.
Reliance entered deal with the fastest growing opportunities of shale gas market with three upstream joint ventures, which could be a pillar in the deciding the future scope of the action and meeting the companys goal.
- Reliance Chevron Deal – Reliance through its subsidy Reliance Marcellus LLC entered a joint venture with Atlas Energy (owned by Chevron) with 40% interest and net are of approximate acreage of 300000 of underdeveloped Marcellus shale deposits in southern Pennsylvania. Chevron will act as a development operator and over the time Reliance will further act in the above-mentioned shoes with net potential of 13.3 TCFe (5.3 TCFe net to Reliance).
- Reliance Pioneer Deal Reliance through its subsidy Reliance Eagleford Upstream LP, entered into a joint venture with Pioneer Natural Resources Company with 45% interest and approximate acreage of 263000 acres in Pioneers core Eagle Ford shale acreage position. Reliance will act as development operator in the coming years for some certain regions. This region is marked as one of the most attractive economic destination for all the shale gas investment in North America with a net potential of 10 TCFe (4.5 TCFe net to RIL).
- Reliance – Carrizo Deal Reliance through its subsidy Marcellus II, LLC entered a joint venture with Carrizo Oil and gas, Inc. with 50% interest and net area of approximate acreage of 62,600 acres of Marcellus shale deposits in central and northeast Pennsylvania. This acreage is expected to have a potential of about 3.4 TCFe (2.0 TCFe net to Reliance).
Reliance is also eyeing to buy stakes from the current players in the Marcellus and Eagle Ford, which is highly lucrative business destination. Below is the table which Reliance, cash rich organization is targeting.
Reliance has added acquisitions in Peru, Yemen Oman, Kurdistan and Colombia, East Timor and Australia, which has added dynamic portfolios in the oil and gas sector.
Reliance strategy is to leverage the windfall gain in partnering with shale gas saga as it will provide rich experience in dealing with new technology; fertilizer business will blossom and will work well in dealing Asian contracts because of the high LNG demand by southern Asian countries. Shale gas policy once fully under execution will prove handy due to the hands on experience of shale gas exploration in the states.
References
- http://www.ril.com/html/business/exploration_production.html
- http://www.ey.com/Publication/vwLUAssets/Shale_Gas_-_Key_considerations_for_India/$FILE/EYIN1210-084-Shale-gas.pdf
- http://www.thehindu.com/search/simple.do;jsessionid=B7383E88B7B26E17A6482783108B14E6.route01
- http://www.thehindubusinessline.com/companies/gail-makes-first-shale-gas-asset-buy-partners-us-co/article2496191.ece
- http://www.business-standard.com/article/companies/ril-to-invest-5-1-bn-in-us-shale-gas-biz-113072100282_1.html
- http://www.businessworld.in/news/business/energy-and-power/how-us-shale-revolution-helps-indian-businesses/1087034/page-1.html
- http://www.businessworld.in/news/null/india-stumbles-over-shale-gas-contracts/1032633/page-1.html
- http://www.businessworld.in/news/business/corporate/ril-plans-rs-1-5-lakh-cr-investment-over-3-yrs/924965/page-1.html
- http://www.shalegas-europe.eu/en/docs/E&Y_Shale-gas-in-Europe_revolution-or-evolution.pdf
- http://mergersandacquisitionreviewcom.blogspot.in/2011/03/reliance-may-buy-more-us-shale-assets.html
- http://www.energy-pedia.com/news/usa/indias-reliance-industries-in-talks-to-buy-us-shale-assets
Siddhartha is currently pursuing MBA in Energy and Infrastructure from School Of Petroleum Management, Pandit Deendayal Petroleum University Gandhinagar, Gujarat. He has completed B.Tech (I.T.) from Jaypee University of Information Technology, H.P. and was with Infosys as Senior Systems Engineer. He believes India is energy scarce country and it needs personnel who can understand the complexity in this sector. A deep research mindset, voracious reading, and ability to simplify things will prove handy and that is where his contributions incline.