Monday 27 June 2011

Gas drilling might disappoint investors: NYT






While gas companies like ConocoPhillips and Chesapeake Energy Corporation are making big bets on wells to extract energy from shale formations, industry insiders have doubts that the companies will be able to deliver on their promises to investors.
which prepared a report based on an investigation of e-mails and documents, energy executive, industry lawyers, state geologists and market scepticism question whether natural gas companies are exaggerating how productive their wells will be.


 it researched well data and found that many of them are surrounded by less-productive zones that cost more to drill and operate than the resulting gas is worth.

The newspaper said its investigation found that in many of the wells, the amount of gas produced is falling faster than the companies had expected.

None of the e-mails explicitly accuse any companies of breaking the law.

Chesapeake could not be reached for comment.

ConocoPhillips, which on June 16 signed a deal with the Bangladesh government over exploration in the Bay of Bengal despite protests from citizen quarters, declined to comment on the issue.

The energy giant will start its seismic survey by December in deep sea blocks 10 and 11, an area of 5158 square kilometres. The depth of water is between 1,000 and 1,500 metres and the blocks are about 280 kilometres away from the Chittagong port.

The firm under its mandatory work programme must initiate seismic survey in a grid of 10km by 10km space over the whole of the blocks.

The Texas-based company has pledged $160 million bank guarantee for working in three phases and the contract period is nine years.

The oil giant won blocks 10 and 11 in 2008 in the second-round bidding for the production sharing contract (PSC), but could not sign the PSC with state-run Bangladesh Oil, Gas and Mineral Corporation, or Petrobangla, as parts of these blocks were also claimed by neighbouring India and Myanmar.

The country is divided into 52 blocks, 28 of which are in the Bay.

Experts say ConocoPhillips will have the authority to export 80 percent of gas, and Petrobangla will get the rest, which will have to be carried to the shore at its own cost — not an economically viable proposition for Bangladesh, in any case.

0 comments:

Post a Comment

Twitter Delicious Facebook Digg Stumbleupon Favorites More