Investments and innovation in unconventional hydrocarbons

Investments and innovation in unconventional hydrocarbons

Azerbaijan, Baku, 27 july /Trend/

Even with abundant conventional hydrocarbon resources, CIS oil and gas producers still show little interest in unconventional hydrocarbons, according to the report Coalbed methane from Ernst & Young. This fact will constrain investments in unconventional hydrocarbons for many years ahead.

Prioritizing coalbed methane prospects in the CIS is the key output of this work. Ernst & Young considered fields of 100 sq. km so they could perform a comparative analysis. The larger a field is, the more interesting the project is to potential investors.

"As characteristics of the discussed parameters often demonstrated excessive spreads, a decision was made to independently interpret the available information," said Andrey Kobzev, Ernst & Young Director, Moscow Oil and Gas Center. "Obviously, reliance only on public sources enables just a very general evaluation of specific acreages in terms of potential for developing coalbed methane."

"In such terms, Kemerovo's total coal resources make the region an unquestioned leader," said Victor Borodin, Ernst & Young Tax Partner. "However, we decided to summarize a number of parameters in one table, such as recoverable reserves per well, discounted production cost (including capex), number of wells in a field and each well's calculated absolute open flow and a field's overall guaranteed production rate (plateau production). As mentioned above, it is now difficult to forecast the output of pilot coalbed methane projects. Therefore, we developed three potential scenarios, including low productivity, expected productivity and high potential."

By comparing Kazakhstan's, Ukraine's and Russia's figures, Ernst & Young concluded that coalbed methane projects are very attractive in the Kuznetsk Basin.

Ernst & Young's estimates are derived from preliminary data and cannot form the only basis for a decision. The company ranked countries based on aggregate results and concluded that projects have strong potential in Russia, while Ukraine and Kazakhstan are about equally competitive.

"But the technical component is often not the main consideration in the choice of a country for investing. Potential investors would also evaluate debt burden, costs to overcome administrative barriers and other factors inherent in major projects", said Alexey Kondrashov, Ernst & Young Partner, Moscow Oil and Gas Center and Global Oil and Gas Tax Leader.

"Estimating and forecasting permeability of reservoir rocks at planned development sites is the most relevant issue in the CIS," noted Andrey Kobzev. "Of course, companies could ignore that stage and immediately proceed with implementation, but they will face this issue again at a later stage when testing different technologies and well designs."

Such projects will drive technological innovation and investments in logistics and infrastructure. They will also boost economic growth in the regions which have coal reserves.

"We estimate potential investments in such projects in the CIS at hundreds of millions of US dollars," commented Victor Borodin. "Addressing the issues described above will help accelerate investments. Hopefully, we will see at the 'round table' not only company executives interested in coalbed methane projects, but also regulators. It is time to discuss burning issues. If the dialogue takes place, we may see an independent sector emerge in three to five years that will rely on innovative technology and management solutions."

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young expands its services and resources in accordance with clients' needs throughout the CIS. 3,500 professionals work at 18 offices including Moscow, St. Petersburg, Baku, Almaty, Astana, Kyiv, Tbilisi and other locations.

Kyrgyzstan reports 26 new COVID-19 cases
Kyrgyzstan reports 26 new COVID-19 cases
FAO, WFP to jointly support Kyrgyz rural families to combat COVID-19
FAO, WFP to jointly support Kyrgyz rural families to combat COVID-19
Turkmenistan participates in UNWTO-led discussion on fighting COVID-19
Turkmenistan participates in UNWTO-led discussion on fighting COVID-19
Loading Bars
Latest
Iran to discuss details of budget plan reform
Azerbaijani minister talks Chamber of Accounts' report on state budget
Kulevi oil terminal holds annual inspection of all safety equipment
Assets of Azerbaijan’s AccessBank surge
Malaysia reports 19 new coronavirus cases, one new death
Kazakh-German oil extracting JV to buy spare parts via tender
Singapore heading for record unemployment in 2020
Uzbekistan sells state shares in Shahrisabz Star Hotel
Trade turnover between Turkey, Tajikistan slides
Iran reports COVID-19 data for June 5
Azerbaijan explains rules for shopping prior to weekends, amid hard quarantine
Uzbekistan's exporters, Azerbaijan's entrepreneurs to hold online business forum
Kazakh Gas Refinery to buy pumps via tender
Turkish export of fruit, vegetables from January through May 2020 spikes
Indonesia reports 703 new coronavirus infections, 49 new deaths
Crude market to be in deficit also in August
Turkey reveals volume of diesel transshipped through country ports
European Investment Bank talks recent projects in Georgia
Kazakhstan considering approaches to unify some social payments
Azerbaijan has all prospects for economic growth in post-pandemic period
Data on cargo shipment via Turkish Bartin port disclosed
President of Association of Turkish Travel Agencies talks partnership with Uzbekistan
Road infrastructure of Tashkent to be upgraded
Azerbaijan's ADY Container boosts railroad transit volumes
Turkmenistan reaches new agreements with Russia's Tatarstan
Cargo transshipment through Turkish Iskenderun port unveiled
Steel export from Turkey to int'l markets drops
Kazakhstan-Spain trade down twofold in 1Q2020
Russia's coronavirus infections near 450,000
Turkey discloses info on cargo shipment via its Bandirma port
Turkish cement export to int'l markets on decline
Turkey reveals data on cargo movement through its Gemlik port
Kazakhstan's Air Astana modifying its planes to transport cargo
Azerbaijani-Chinese joint venture to expand export geography
Russia says OPEC+ meeting to be held on Saturday
Singapore reports 261 new coronavirus cases, smallest rise in two months
Prices of Azerbaijani oil change
Kazakhstan's KazMunayGas to give up its subsidiaries to shareholder
Turkmenistan, Italian Eni discuss co-op in fuel & energy sector
Kazakh national postal service operator opens tender for vehicle repair
Some museums, exhibition halls in Baku on lockdown due to tightened quarantine
Minister: Georgia's economy to start growing from 2021
Kazakhstan eyes turning its household waste into electricity
Georgian Nectar company plans to increase juice exports
Enrique Mora: EU ready to support Azerbaijan in eliminating COVID-19 consequences (PHOTO)
US commits funds to support Georgia’s COVID-19 response
Georgia joins world leaders in global vaccine summit
Russian MFA: Optimism remains over settlement of Karabakh conflict
Georgia reports 4 new COVID-19 confirmed cases
French Europcar Mobility Group has exclusive representative company in Georgia
New power plants in Iran's Bushehr Province to help boost shrimp production
Azercell “Telegram Bot” – your new guide in digital world!
CISCO talks 'Smart City' system benefits in Azerbaijan
Google remains most used search engine in Azerbaijan, Yandex follows
Uzbek gov't sells state share in Kafolat Insurance to Uzbek IT company
Gold prices grow in Azerbaijan on June 5
Azerbaijani currency rates for June 5
Amount of payment cards in Azerbaijan grows
Armenia violates ceasefire with Azerbaijan 25 times
Uzbekistan reports 91 new COVID-19 cases
Federal Foreign Office: Germany supports efforts for peaceful solution of Karabakh conflict
Turkmen farmers hope for rich potato harvest in current season
Oil edges higher as traders eye producer talks on extending supply cuts
Thailand reports one new coronavirus cases, no new deaths
France, Germany back European cloud computing 'moonshot'
Oman to establish investment body to manage sovereign wealth funds
Portugese PM announces plan to ease economic blow from COVID-19
Sweden to lift domestic travel restrictions, but remain cautious
New York's Cuomo, concerned about COVID-19 spread, asks protesters to get tested
Germany will require all petrol stations to provide electric car charging
Somalia set to resume domestic flights
Around 5.2 pct of Spanish population infected by coronavirus: study
Albanian parliament OKs 650-mln-euro Eurobond
Jordan to open most economic sectors, further ease movement restrictions
Vaccines group raises $8.8 billion for immunisation plans for poor countries
OPEC+ has encouraging signs of rising conformity, says Barkindo
Eni creates two new business groups
Barkindo: 2020 oil demand to return to levels before 2014-2016 market downturn
IFC co-ops with Uzbekistan on planning of future projects
20-odd airlines to resume flights to and from Cyprus
India pledges 15 million USD to international vaccine alliance
Baku expected to hold European Championships in Men's and Women’s Artistic Gymnastics in late 2020
UN Office on Drugs and Crime, Turkmenistan discuss joint projects
Demand from banks at foreign exchange auction decreases in Azerbaijan
Georgia takes steps to foster development of local businesses
Turkey plans to resume flights with Azerbaijan soon
WHO mission to visit Turkmenistan
Cashless transactions in Azerbaijan on rise from Mar. through Apr. 2020
GNERC reveals market share of Georgian mobile operators
Representatives of diplomatic corps in Azerbaijan may work on weekends
GNERC reveals number of mobile subscribers in Georgia
Online payments grow in Kazakhstan
Global expenditures of oil & gas exploration to decline
COVID-related economic consequences to test Kazakhstan insurers' resilience
TABIB: Decision, rules related to international flights to be announced soon in Azerbaijan
Turkey's export of electrical goods from Jan. through May 2020 drops
11 insurers increase payment of insurance claims in Azerbaijan
Azerbaijani Operational Headquarters: Domestic flights may be renewed in coming days
Android OS ranks first in Azerbaijani market albeit with lower percentage
Uzbekistan's Ministry of Energy, EBRD developing low carbon energy strategy
All news