FOX PETROLEUM : ELEPHANT GETS SUPPORT OF LION;

FOX PETROLEUM : ELEPHANT GETS SUPPORT OF LION; GEOPOLITICS PLAYED IN PERSIAN GULF WILL MAKE IRAN NO. 01; LET US GIVE TIME TO ELEPHANT TO MOVE;

The Prime Minister HE Shri Narendra Modi is in the form of Dynamic Mahatma Gandhi of India;

 "The Father of our nation wanted to join with world without any border or color or power; But Our Prime Minister has difficult task, He is joining world with Border and with Business; He is dynamic in doing so, but adopted no casualty; Our Father of the Nation & Our Prime Minister both are from Gujrat, and both knows their Business with respect to time very perfectly in pursuit of the nation; I feel our Prime Minister has dynamism to join the world with borders to India; " 

 My Prime Ministers is the biggest Geopolitical Planner before the world leader; And He has shown it since last two years; GEOPOLITICAL IMPACT OF PRIME MINISTER HE SHRI NAREDRA MODI DUE TO HIS VISIT IN THE MIDDLE EAST WILL MAKE INDIA ANOTHER HUB IN ASIA FOR PERSIAN AND ARAB BUSINESS; He has joined Countries with economic ties which is more reliable ties than blood relations; For example – LNG with Qatar, Investment from Dubai; Crude and Gateway to central Asia with Iran, and very important tie with Saudi Arabia; Like I said,  LNG has made impact relating to politics, especially international relations, as influenced by geographical factors. Because, Crude Oil and Refined Petroleum products has been in control with almost all countries with the Governments, and further they have added Natural Gas business too into Government Subject. Private Players are merely working like an investor and contributing 3-4% average in developing countries. And in developed countries too, their investment share is not too high and that too depend on Government’s preference.  That is why, Oil & Gas business is playing major role in Geopolitics - rivalry or promise settlement; I mean, the counties are friendly can import Crude Oil and LNG if they have good relation where the American Stamp is in favor of both; If not, the deal is at risk; You know what I am talking, Iran is an example; Russia is an Example for Europe supply with dominance. 

 Now, India played the biggest economic geopolitical ties with Iran during Our Prime minister visit to Iran; It has turned Gas market to single point India; Iran’s Chahbahar Port will be linking Turkmenistan Gas Resource at the same time the natural resource of Afghanistan will be open to market and Afghanistan will end one day on foreign subsidy, that is the beauty of the Indian Prime Minister’s visit to Iran; As far as I know Iran is the persistent “elephant in the room” of international gas trade. The country could well become, one day, a major game changer of international gas markets but today its potential still remains fundamentally untapped due to a number of geopolitical and commercial reasons. Iran owns the first largest proven gas reserves in the world, but since 1997 it is basically a net-importer of gas. In fact, a full resolution of the nuclear issue will unlikely automatically change the Iranian gas market in the short term, as a number of commercial issues will continue to remain on the table. In other words, the “elephant” will need a bit of time to move. However, it is sure that its movement will ultimately have a profound and longlasting impact on international gas markets.

 Afghanistan has approximately $3 trillion USD worth of exploitable minerals, gems, oil and gas within its borders. There is considerable interest from the international community and the local government in exploiting this natural resource to ensure that Afghanistan has a future after the international community withdraws its financial support. The win win situation is for Afghanistan; And as an Indian we are happy to see Afghanistan our neighbor rising; Afghanistan rising means India will have more presence in Central Asia;

 The other most dynamic impact will be a flow of natural gas towards India from Central Asia; I mean from Turkmenistan; Among the Central Asian countries, Turkmenistan has the largest natural gas reserves and the world’s sixth largest reserves that amount 13,7 tcm. In 2015, Turkmenistan expects a total 48 bcm of natural gas exports comparing to 2014 figures of 45,1 bcm. At the same time, the country forecasted a 9 percent increase in natural gas production to 83,8 bcm in 2015. That means that Turkmenistan would have 35,8 bcm of natural gas for local consumption. That amount of gas might be too high for Turkmenistan’s domestic consumption, because the country burned roughly 22,3 bcm in 2013. Therefore, the margin between the production, consumption and export demonstrates that Turkmenistan has a significant potential to increase the export of its energy source.

 To export natural gas to different markets, Turkmenistan needs to improve its pipeline infrastructure with Iran. It means Turkmenistan will have three networks for Hydro Carbon Business and safe too; At the time, there are two pipeline routes; one going to China with the current capacity of 55 bcm per year and another going to Russia with a capacity of 80 bcm. That too via Afghanistan to Chabahar Port;  

 As sourced on Afghanistan Govt Sources :http://www.afghanembassy.in/en/news/601-oman-india-gas-pipeline-project-to-have-afghanistan-on-board

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As a major step towards binding the countries of Oman and India economically, to meet the current demand for oil and natural gas to increase the regional economic interdependency, Fox Petroleum Group India in collaboration with the Government of the Sultanate of Oman has agreed to invest in a joint venture known as “Oman – India Deepwater Multipurpose Pipeline” for the transportation, storage and marketing of oil and natural gas blocks from Oman to India and vice-versa.

In a meeting with Mr. Sayed Mujtaba Ahmadi, Economic Counselor at the Embassy of Afghanistan, Mr. Ajay Kumar, Chairman and Managing Director of Fox Petroleum, briefed Mr. Ahmadi about their upcoming project. As a lucrative step towards building regional capacity and increasing self –reliability, Dr. Ajay proposed to integrate Afghanistan with their upcoming project. Describing about the importance of integrating Afghanistan along with this project, Dr. Ajay outlined the benefits and opportunities Afghanistan would be gaining from it. “Afghanistan being a resource-rich country with its versatile climate and strategic location is a potential hub of various mineral resources” said Dr. Ajay .The pipeline once constructed would be an alternative to TAPI project which would be serving the same purpose for Afghanistan i.e integrating Afghanistan with other regional partners and also at a very lesser cost.

Mr. Ajay further proposed his idea of investing in the field of exploration, production, transportation and storage of oil and natural gas blocks in Afghanistan. The products could then be transported to India via Turkmenistan, Iran and Oman, hence giving Afghanistan a huge market to sell its products. This would further create employment opportunities, increase investment in the resource sector and increase Afghanistan’s self-dependency.

Welcoming the idea, Mr. Ahmadi appreciated Mr. Ajays endeavor for investing In Afghanistan and assured him full cooperation and assistance from the Embassy’s side to communicate their concerns with the relevant Ministries in Afghanistan. "

It will boost our plan for Oman India gas Pipeline - As Chahbahar will be connected to Oman, the deal between Oman and Iran has been signed;  And Chahbahar will be gateway to Turkmenistan nad Afghanistan too; 

 

Let me explain you what Geopolitics means for me…. “Geopolitics” meant “the study of how factors such as geography and economics influence politics and relations between nations.”  Now it means politics among (not just between) nations and rivalries for international power.  A geopolitically successful nation delivers on promises to allies and threats to rivals or loses allies and strengthens rivals. And, earlier weapon was Crude Oil and now it’s is LNG, an added weapon to settle the score between the Countries.

Let me take this LNG Geopolitics in two parts – Firstly, Geopolitics of American – Europe and Russian impact. Sinking oil prices have put extra pressure on Russia’s government. Over two-thirds of Moscow’s state budgets come from taxes on Russian oil and gas firms. Destabilized oil revenues have caused the Ruble to fall 41 percent against the Dollar over the past year, creating fear that the economy could fall into a recession in 2015 which is worst then the past recession hit in the region. The World Bank sees a recession as likely, indicating it expects the Russian economy to shrink by .7 percent. Fears over Russia’s economic vitality have caused mass capital outflow, totaling to some $85 billion in 2014. And with lucrative energy projects like the South Stream pipeline on hold, Russian Government have to find ways to lessen his country’s exposure to turbulent oil markets. Thus European nations are increasingly - and justifiably - worried about the impending winter months when Russia could ratchet up the pressure on Europe, as it has done in the past, by imposing another gas halt with the consequent loss of life and negative economic impacts. However, instead of sending a clear message that LNG export licenses and American energy leadership are coming, the U.S. Senate has put off addressing legislation on LNG exports until September, a risky delay when U.S. LNG could be a life-saving game-changer for Europe.

 And secondly Geopolitics of Arab World – Indian Sub Continent – Africa and Australian ;  However, access to energy sources is not the problem today for India, but India does face a problem, given its heavy dependence on the Persian Gulf countries and Iran for sourcing its oil and LNG. And, the problem is Sanction. A new theme is finding its way to the Indian discourses on energy security, as is bound to happen, drifting in from the West. Simply put, the United States is ending its dependence on oil imports from the Middle East and the geopolitics of the Middle East could never be the same again. The facts that could go into buttressing the thesis are rather meager and yet a fairly good case can be made out of them. New sources of fossil energy have appeared such as shale gas and new gas fields are being discovered. Besides, the US, the world’s number one consumer, is attaining self-sufficiency in LNG that may last for at least one century ahead. This comes as a game changer. The old assumptions regarding the West’s dependence on the steady flow of cheap oil from the Middle East and the politics that devolved upon it is becoming redundant. Also, the Middle East’s share of the global recoverable reserves is itself declining and is already below 16% while the locus is shifting to the US, Canada, Brazil, Russia, Central Asia and other countries. Conceivably, therefore, there is a method in the madness of the West and it does not seem to be very different from what George Kennan wrote over half a century ago – that control of the Middle East’s oil is extremely vital for the West’s prosperity. So, far Oil Reserve is concerned middle east can feed 5 Trillion Dollars Business every year, and this will enhance the relationship with the world; If India makes the business with – Saudi Arabia, Qatar, UAE and Oman for making a way to import LNG to India by proposed Oman India Pipeline or by Ship; It will make – a- Geopolitical impact in Asia; Because Gas imported in India will serve all SAARC Nations too. The major Geopolitical impact of LNG supply to India will be more realistic ties with Arab World with Republic of India leading to Australian Continent; Sinking crude oil price as less demand from Middle East to USA and Europe as well as India & China will force them to open their LNG supply to the market; Private Players are ready to bag the contract; Let’s see who is lucky;

Thank You.

Oil & Gas is risky, say it again .... .... ....

FOX PETROLEUM      "A foreign policy aimed at the achievement of total security in Oil & Gas is the one thing I can think of that is entirely capable of bringing this country to a point where it will have no security at all" . - Ajay Kumar -

The risk in Oil Sector is as common as other industries facing but it has some more grave concerns to deal with; General risks apply to every stock, such as management risk, but there are also more concentrated risks that affect that specific industry. In this article, we'll look at the biggest risks that oil and gas companies face. We teach but we don’t adopt about risk; Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so.

Politicians don’t take risk with business; Not taking risks one doesn't understand is often the best form of risk management that is best with political management; The primary way that politics can affect oil is in the regulatory sense, but it's not necessarily the only way. Typically, an oil and gas company is covered by a range of regulations that limit where, when and how extraction is done. This interpretation of laws and regulations can also differ from state to state. That said, political risk generally increases when oil and gas companies are working on deposits abroad.

Factually, India Government under Prime Minister HE Shri Narendra Modi, we see less complications in understanding policies related to oil and gas exploration, and production and marketing; that doesn’t mean we are free to do anything; But one thing is sure, he has eaten up the job of power brokers; Business people need to understand the psychology of risk more than the mathematics of risk;

Stability in Government is must to minimize the risk; the biggest threat to oil and gas industry is Join Venture Governments; India will show the strength if same Government continues for three terms minimum; Oil and gas companies tend to prefer countries with stable political systems and a history of granting and enforcing long-term leases and hence needs a stable Government. However, some companies simply go where the oil and gas is, even if a particular country doesn't quite match their preferences. Numerous issues may arise from this, including sudden nationalization and/or shifting political winds that change the regulatory environment. Depending on what country the oil is being extracted from, the deal a company starts with is not always the deal it ends up with, as the government may change its mind after the capital is invested, in order to take more profit for itself.

But I feel dictatorship Governments are more viable than any elected Government in Oil and gas sector, as policy is designed to suit the dictator and his galaxy of friends; And they have done well; Political risk can be obvious, such as developing in countries with an unstable dictatorship and a history of sudden nationalization - or more subtle - as found in nations that adjust foreign ownership rules to guarantee that domestic corporations gain an interest. An important approach that a company takes in mitigating this risk is careful analysis and building sustainable relationships with its international oil and gas partners, if it hopes to remain in there for the long run.

Second most risky environment is geology of the location of OIL; I mean Geological risk also effects oil & gas job; Many of the easy-to-get oil and gas is already tapped out, or in the process of being tapped out and it has always been done by favoritism of the Government. Exploration has moved on to areas that involve drilling in less friendly environments - like on a platform in the middle of an undulating ocean. There is a wide variety of unconventional oil and gas extraction techniques that have helped squeeze out resources in areas where it would have otherwise been impossible.

When the map and the territory don’t agree, always believe the territory. Geological risk refers to both the difficulty of extraction, Supply and the possibility that the accessible reserves in any deposit will be smaller than estimated. Oil and gas geologists work hard to minimize geological risk by testing frequently, so it is rare that estimates are way off. In fact, they use the terms "proven," "probable" and "possible" before reserve estimates, to express their level of confidence in the findings. Still the game inside the earth has been played by horizontal drilling; Squeezing others oil crossing the border;

Third most dangerous thing is Capital intensive and less security in pricing formations; BUT HARDLY THEY LOSS ANY MONEY; CAPEX and OPEX can be achieved at any point of time, but they suffer from – “LOSS IN PROFIT MARGIN”. Pricing is a false cry with respect to investment and oil reserve intimated; Beyond the geological risk, the price of oil and gas is the primary factor in deciding whether a reserve is economically feasible. Basically, the higher the geological barriers to easy extraction, the more price risk a given project faces. This is because unconventional extraction usually costs more than a vertical drill down to a deposit. This doesn't mean that oil and gas companies automatically mothball a project that becomes unprofitable due to a price dip. Often, these projects can't be quickly shut down and then restarted. Instead, O&G companies attempt to forecast the likely prices over the term of the project in order to decide whether to begin. Once a project has begun, price risk is a constant companion.


Oil & Gas Experts are like artist; An artist that makes art merely to meet a demand is a slave to what his patrons wants to see, or, hear. The theory of supply demand has very less implications on Oil & Gas industry; Supply and demand shocks are a very real risk for oil and gas companies is a paper tantrum. Yes it is true, as mentioned, operations take a lot of capital and time to get going, and they are not easy to suspend when prices go south, or ramp up when they go north. The uneven nature of production is part of what makes the price of oil and gas so volatile. Other economic factors also play into this, as financial crises and macroeconomic factors can dry up capital or otherwise affect the industry independently of the usual price risks. It may have risk from some Black Colored Oil is mixed in supply with Black supply of Oil; Like ISIS is doing in SYRIA and IRAQ;

All of these preceding risks feed into the biggest of them all - operational costs. The more onerous the regulation and the more difficult the drill, the more expensive a project becomes. Couple this with uncertain prices due to worldwide production beyond any one company's control, and you have some real cost concerns. This is not the end, however, as many oil and gas companies struggle to find and retain the qualified workers that they need during boom times, so payroll can quickly rise to add another cost to the overall picture. These costs, in turn, have made oil and gas a very capital-intensive industry, with fewer and fewer players all the time.

Never take both hands off the pump. As an entrepreneur, you need to be on constant lookout for opportunity, and that will involve risk. But you minimize those risks by keeping one hand on the pump that is producing for you. Oil and gas investing isn't going anywhere. Despite the risks, there is still a very real demand for energy, and oil and gas fills part of that demand. Investors can still find rewards in oil and gas, but it helps to know the potential risks that go along with those potential rewards.



My Views in short - Government Priorities for the Development of LNG in India

FOX PETROLEUM Just because you have stolen someone's heart, luckily owned and occupied as a home, doesn't give you the audacity to enforce hurtful policies. ---> 

Government Priorities for the Development of LNG in India: The current Government has shown substantial economic growth in India coupled with increased energy consumption to drive a fast growing economy. As set by Government of India the future growth aspirations of economy, it is very well clear that access to abundant and economically viable energy will be critical to sustaining the momentum of this growth due to lack of Energy Infrastructure specially the fuel side like LNG Infrastructure. Liquefied Natural Gas (LNG) can be a long term solution to India's needs in particular that it is a proven and procured or explored from commercially viable energy source.

I am very blunt may cause some problem to me – because I need to learn which questions are unanswerable, and not to answer them: this skill is most needful in times of stress and darkness. What to do …feeling very sad to state that – 50 years old LNG industry, India is still a new comer to the celebration since it missed the first round of LNG trade growth and infrastructure development. Whereas  LNG usage has risen dramatically in the country in last decades, but it has done so in an unplanned manner that the industry was not able to utilize its fracking for economic growth rather it has created debts of developed infrastructure;

 Government is keen in development of LNG Infrastructure and LNG import for power plants; You can see that from his speech during election time in 2014 when the Current Prime Minister HE Shri Narendra Modi has stated in public meetings about 16000 MW Power Plant are shortage of fuel; It shows from day one the commitment of this Government towards LNG needs in India. Our Prime Minister vision seems that Commerce with all nations, alliance with tech transfers, Joint Participation for use of commerce and technology at ground zero India – it all sums up – Make in India.

What role will LNG play in India’s future energy mix? – Natural gas became the beneficiary of this trend as countries realized the utility of a fuel that had until then been flared as a waste product during crude oil extraction. Over the next few decades, extraction became more viable, enabling commercialization of natural gas in a number of applications as a substitute to coal and crude oil derivatives. I think use of natural gas in trucks will cut emission ratio as well efficiency of the machines on road; It will vest down environmental politics of India – THE NGO GAME; There are several advantages of natural gas over traditional fossil fuels like oil and coal. It is the cleanest burning fossil fuel. The combustion of natural gas produces 60–90 percent less emissions of hydrocarbons in the atmosphere as compared to oil. No soot or ash is left behind after combustion, thus reducing pollution levels further. Natural gas infrastructure, once established, is convenient and economical. The gas can be piped directly to the customer facility, eliminating the need for regular deliveries as is the case with oil, leading to a more reliable supply.

Natural gas is the economy's great white hope. As a fuel, gas is underrepresented in India's energy mix, accounting for a mere ~12 percent of primary energy consumption, well below the world average of 23 percent. The Planning Commission has an ambitious target of increasing the share of natural gas to 20 percent from the current levels by 2025.

 

Ajay Kumar Chairman Fox Petroleum

The bulk of this shift towards a gas economy will come from four consuming sectors: power, fertilizers, industrial (petrochemicals, refining, steel etc) and City Gas Distribution (CGD). It is estimated that by 2029–30, these four sectors will account for 746 MMSCMD of gas demand. The capacity of domestic gas production to serve this demand is limited and there is substantial uncertainty around trans– national pipelines. By implication, LNG will play a critical part in establishing the foundation of India's aspirational gas economy, and by extension, its energy security endeavour. In this section, we will investigate the gas demand and supply in detail and identify the LNG opportunity.

How does the government seek to promote city gas distribution? – No idea, when we don’t LNG supply grid to station to station it is impossible to talk about LNG City Gas distribution network; India doesn’t have LPG Grid, how come we say we will create LNG Grid; Huge players with heavy investments are waiting but Government wants to wait more on seeing its pros and cons; Like Oman India Pipeline will be fully funded, if it happens it will transport minimum 8 trillion cubic feet of gas in 20 years; It will enhance use in Power plant, fertilizers and daily use in replacement of diesel trucks and cargo trains;  

What tax and regulation measures can be used to promote LNG consumption? – I am not interested in relaxation of tax on importation, but when it goes to end user, I support end user not to be charged extra on the second sale of gas in the name of tax as import duty on gas is already been charged to importer;

Can LNG meet India’s international carbon reduction commitments? – India is far better in carbon reduction before LNG import and after it will be known as pioneer in carbon reduction commitment of the Government before world leader; We don’t need lessons from anywhere on carbon reduction; We pollute less despite having number two in situation of population. 

Ajay Kumar Chairman Fox Petroleum