Sensible gas pricing can unlock 6.75-tcf
If you believe the government it's decision to let explorers price deepwater gas against imported fuel could unlock an impressive 6.75-tcf in 28 undeveloped discoveries worth an estimated $28.35bn.
That's the ambitious conclusion of a March 10 government statement telling operators they can price gas from deepwater, ultra-deepwater and high pressure/temperature discoveries made before January 1, 2016 (where commercial production has not begun) against the landed $USD/mmbtu price of a) fuel oil b) a combination of naphtha, coal and fuel oil or c) LNG, whichever is lower. But there's a catch, anyone embroiled in litigation beware.
The statement adds: "In case of discoveries yet to begin commercial production by January 1, 2016 if there is pending arbitration/litigation directly pertaining to gas pricing covering such fields this policy guideline shall be made applicable only on conclusion/withdrawal of such litigation/arbitration and the attendant legal proceedings."