Bill Would Clear Path for Oil Project Approvals

- Bill Would Clear Path for Oil Project Approvals

Monday, July 11, 2011
The Bakersfield Californian
by John Cox

A bill advancing through the state Legislature could help Kern County's oil industry by providing a clearer path of approval for certain drilling-related activities.

Senate Bill 682, sponsored by Sen. Michael Rubio, D-Bakersfield, proposes to assign the state Division of Oil, Gas and Geothermal Resources direct responsibility for overseeing underground injection of produced gases, a common if controversial method of disposing of oil field byproducts such as hydrogen sulfide, or sour gas.

DOGGR, as the division is known, has regulated such projects for more than a decade. But since new leadership was installed at the division two years ago, a backlog of underground injection applications has grown to about 200, frustrating oil companies and local politicians who say the delays are stalling investment and potential job growth.

"We want someone to process those applications -- either deny or approve them so we can put people to work across the San Joaquin Valley and, particularly, Kern County," Rubio said in a phone interview.

DOGGR has taken no official position on the bill and therefore declined to comment. But earlier this year the division acknowledged a slowdown in project approvals, a situation it blamed on inadequate staffing and the complexity of engineering and geological issues involved. It has also pointed to a lack of clear legal authority to regulate what it considers an environmentally risky practice that has the potential to contaminate sources of drinking water.

On Thursday, despite opposition by the Sierra Club, the bill cleared the Assembly Environmental Safety & Toxic Materials Committee by a vote of 8-0. It is scheduled for consideration soon by the Assembly Natural Resources Committee.

Representatives of the Sierra Club's California lobbying arm could not be reached for comment Friday.

The head of the California Independent Petroleum Association expressed hope that the bill, if signed into law, would help expedite oil companies' injection applications, some of them as much as two years old.

"This allows (DOGGR) to consider those old permits," CIPA CEO Rock Zierman said.

"We really appreciate Sen. Rubio's leadership on this," he added.

Rubio said the bill represents the "first step" in a longer process of addressing DOGGR's concerns about underground injection projects. Related issues still to be worked out, he said, regard how California oil producers handle toxic waste, water and other environmental issues.

Copyright (c) 2011, The Bakersfield Californian

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RIL Asks Govt to Expedite Approvals for $7.2B BP Deal

- RIL Asks Govt to Expedite Approvals for $7.2B BP Deal

Tuesday, July 05, 2011
Knight Ridder/Tribune Business News
by Anupama Airy and Gaurav Choudhury, Hindustan Times

Amidst concerns raised by central intelligence agencies over the $7.2-billion (Rs 32,400-crore) Reliance Industries Ltd (RIL)-BP deal, RIL is pushing for speedy approvals to the deal and has cited BP's entry into India as a "major boost to the energy security of the country." Mukesh-Ambani led RIL had signed a deal to sell a 30% stake in 23 oil and gas fields to BP.

RIL's letter dated June 10, asking the petroleum ministry to "expedite approvals" for its deal with BP, comes within days of a June-1 note of the ministry of home affairs conveying concerns of intelligence agencies. The agencies had voiced concerns over the handling of a "natural resource" such as gas by a new player with BP's financial muscle, which would not only take away a large chunk of the gas marketing and transportation business of India's national gas carrier GAIL India Ltd, but will also raise the cost of oil and gas for user industries.

While conveying its "security no-objection certificate" to the RIL-BP deal, the home ministry has asked the petroleum ministry to "take into account" these observations while "considering the case."

However, RIL said that "BP's entry will add value to India's exploration and production (E&P) sector...BP's entry as an international oil and gas major with proven deep ater experience will be a major boost to the energy security of India."

RIL has rebutted the intelligence agencies' observation that it needs to be ascertained whether the New Exploration and Licensing Policy (NELP) contract has a provision of sale of assets and whether it allows BP to sell or transport gas outside the country.

The gas marketing joint venture "is not part of NELP and is governed by a different policy framework for which we will obtain necessary approvals from the authorities concerned," RIL has told the petroleum ministry.

A RIL spokesperson said the company does not want to comment on any inter-ministerial communication and the June 10 letter to the petroleum ministry was self-explanatory.

The deal marked one of the biggest foreign direct investments in a single year in India. Europe's second-biggest oil company bought a 30% stake in 23 oil and gas blocks owned by RIL by paying $7.2 billion or Rs 32,400 crore. RIL will get another $1.8 billion if it strikes more oil or gas. However, the petroleum ministry approval is a mandatory pre-requisite for the deal to go through.

Copyright (c) 2011, Hindustan Times, New Delhi

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