UPI Energy Watch

India awards new production contracts

India's PTI and Oil and Natural Gas Corp., Reliance Industries, Australia's BHP Billiton and U.K.-based British Petroleum were among the firms that signed oil and gas exploration contracts in 44 areas in India recently.

The total investment commitment is estimated at $1.5 billion.

A total of 57 blocks were offered in the auction, but there were only bids received for 45 of the blocks, The Hindu reported.

ONGC and partners signed production-sharing contracts for the maximum of 29 blocks. BHP Billiton and GVK Power partnered on agreements for seven deep-sea blocks, and Reliance Industries partnered with British Petroleum to snag one block in the Krishna-Godavari basin.

Of the 57 blocks offered, seven deep-sea blocks, two shallow-water blocks and three onshore blocks did not receive any bids.

Contract winners are obligated to offer $321.15 million in investments for deep-sea exploration, $598.255 million for shallow-water exploration and $572.75 million for onshore exploration. Those awarded contracts are also contracted to complete seismic surveys and 141 exploration wells.

The government has said 100 more blocks will be auctioned in February.

Gazprom and Ukraine battle over gas

European customers of Russia's gas giant Gazprom may face a shortage of natural gas again this winter as Russia and Ukraine face off in another dispute.

Gazprom is threatening to again cut off gas supplies to Kiev unless Ukraine's Naftogaz pays back its $2.4 billion in debt.

Ukraine is a major transit route for Russian gas exports going to the European Union, and during a similar dispute three years ago supplies were disrupted during a particularly cold winter, Deutsche Welle reported.

Russian Deputy Prime Minister Viktor Zubkov told EU member nations that Gazprom will continue to carry out its delivery contracts despite its issues with Ukraine, and a senior Ukrainian official said Ukraine will continue to meet any of its demands, but there really is no telling what will happen to Europe if Ukraine's supplies are cut off again.

Russia and Serbia to sign oil deal

The deal, expected to be signed later this week, will allow Russia's Gazprom Neft to purchase a controlling share of Serbia's NIS, Serbian Deputy Energy Minister Dusan Mrakic said.

A preliminary agreement was signed earlier this year and includes the following stipulations: Gazprom will acquire a 51-percent stake in Serbia's state-owned Naftna Industrija Srbije for $400 million, and Gazprom will invest $500 million in Serbia's gas storage facilities and in Serbia's segment of the proposed South Stream pipeline, Itar-Tass news agency reported.

The Serbia segment includes 248 miles of pipeline so Russia can supply natural gas to the Balkans.

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Closing oil prices, Dec. 23, 3 p.m., London

Brent Crude oil: $41.29

West Texas Intermediate crude oil: $42.88

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(e-mail: energy@upi.com)