Petroleum ministry strengthening its exploration division with another joint secretary
As part of India’s efforts towards energy security, the ministry of petroleum and natural gas is strengthening its exploration division. To boost this initiative and expedite hydrocarbon exploration in the country’s sedimentary basins, the critical ministry, responsible for meeting the economy’s energy needs, has introduced an additional position of a joint secretary (JS) in the exploration division. The division already has a joint secretary-rank official. This comes in the backdrop of India’s stagnant hydrocarbon production. The government has made energy security one of the primary areas of focus in its economic policy in order to achieve fast and sustainable long-term development. According to a government statement on 22 August, the Appointments Committee of the Cabinet has approved the appointment of Ashish Chatterjee, an Indian Administrative Service (IAS) officer of the Tamil Nadu cadre, as the new JS. This was done by “upgrading one vacant post of deputy secretary/director… to JS level for a period of two years”, the statement added. The petroleum ministry will now have six joint secretaries, including the two responsible for exploration. “He (Chatterjee) will be joining as the joint secretary in the exploration division in addition to the existing one,” said a government official requesting anonymity. India has 26 sedimentary basins roughly covering an area of 3.14 million sq. km. Of these, an estimated 75% are yet to be explored. India has total reserves of 763.476 million ton (MT) of crude oil and 1,488.73 billion cubic metre (BCM) of natural gas. Another government official, who also didn’t want to be identified, confirmed the development. The Narendra Modi-led National Democratic Alliance (NDA) government has made energy security one of the cornerstones of its economic policy in order to achieve fast and sustainable long-term development. The government has set up an ambitious target to halve the country’s energy imports by 2030. Given India’s plan to reduce its import dependence, domestic production will have to step up exponentially. India currently has 310 production sharing contracts. Experts think it is a good move. “The exploration division has been historically weak. It will be good to expand it. There are large agendas in place such as hydrocarbon exploration and licensing policy, and the auction of small discovered fields, which need to be implemented within a short time frame or the credibility gets hampered,” said R.S. Sharma, former chairman and managing director of state-run Oil and Natural Gas Corp. Ltd. Crude oil and gas production during 2014-15 was 37 MT and 34 BCM, respectively. India currently imports one-third of its energy needs and bought 202.85 MT of crude oil in financial year 2015-16 for Rs.4.16 trillion. The country is actively looking at new exploration and production opportunities to bridge the energy imbalance. Queries emailed to the spokesperson of the ministry of petroleum and natural gas on 24 August wasn’t immediately answered. The government offices are closed on 25 August. India’s demand for energy has been increasing. As per BP Global data, the country has emerged as the third-largest consumer of crude oil with a consumption of 4.2 million barrels per day (mbpd) for calendar year 2015, after the US (19.39 mbpd) and China (11.96 mbpd). India overtook Japan, which consumed 4.15 mbpd. Kyle Quincey Womens Jersey
OMCs shut biodiesel joint ventures due to lack of commercial viability
Once touted as the fuel of the future, biodiesel, extracted from jatropha seeds, has lost its sheen for oil marketing companies. Due to lack of availability and commercial viability, the three oil marketing companies (OMCs)—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—have shut down the joint ventures companies they had started for jatropha cultivation to manufacture biodiesel. Oil extracted from seeds of the jatropha plant, which can grow on wasteland across the country, is blended with diesel to manufacture biodiesel. Biodiesel is also produced with vegetable oils, the primary feedstock for the fuel, which is scarce. Biodiesel was considered the answer to diesel’s polluting nature and thus was considered an attractive alternative fuel option. IOC, HPCL and BPCL had in 2008-09 planned to take up cultivation of jatropha across more than 180,000 acres in the states of Chhattisgarh, Madhya Pradesh and Uttar Pradesh. IOC and HPCL had formed a joint venture with the Chhattisgarh State Renewable Development Agency (CREDA) to take up large-scale jatropha farming across 74,100 acres and 37,000 acres, respectively. “IndianOil CREDA Bio-Fuels Ltd has not been incorporated in the preparation of consolidated financial statements as the management has decided to exit from these entities and provided for full diminution in the value of investment,” said IOCL in its 2015-16 annual report. The joint venture was incorporated in February 2009 with Indian Oil and CREDA holding 74% and 26% equity, respectively. So far, IOCL has planted jatropha in 8,000 hectares—for biofuel production in the states of Chhattisgarh, Madhya Pradesh and Uttar Pradesh. HPCL in its annual report said, “During 2015-16, in view of non-viability of operations, all business activities of CREDA HPCL Biofuel Ltd (CHBL) including cultivation and maintenance of Jatropha plantations have been suspended.” HPCL holds 74% in CHBL while CREDA holds 26%. BPCL which had formed a company called Bharat Renewable Energy in 2008 for its biofuels needs and has shut down the same. “Due to non-viability, the operations of this company have been closed down from September, 2014,” BPCL said in its 2015-16 annual report. Bharat Renewable Energy was set up in association with Hyderabad-based Nandan Biomatrix—a research and development company—and Shapoorji Pallonji Co., for producing biodiesel from jatropha in Uttar Pradesh across 70,000 acres. The company had plans to invest Rs. 22 billion in the next seven years to produce 1 million tons of biodiesel from jatropha plantations. India, which imports 80% of its oil consumption, envisaged blending of biodiesel with diesel as a measure to cut the import dependence on fossil fuel, enabling it to reduce the oil import bill. The country is targeting a more than seven fold expansion in its biofuels market over the next six years, oil minister Dharmendra Pradhan had said on 10 August. Blending 5% of biodiesel with regular diesel and 10% ethanol with petrol could boost the market to Rs. 500 billion by 2022, from about Rs.65 billion currently. To expand its biofuels market in six years, India would need 6.75 billion liters of biodiesel and 4.5 billion liters of ethanol, Pradhan had said. An industry analyst who offers solutions to bioethanol and biodiesel manufacturing plants, said claims by scientists that jatropha could be planted without water on barren land misled many entities. “A jatropha tree takes seven-eight years to grow. Thus the gestation period is long. Besides, there were assumptions that jatropha should be grown on barren land. Though jatropha survived without water, it did not yield oil. The assumption that it would give oil even without irrigation was misleading. No wonder the ventures of these companies has gone kaput,” he said. Brian Westbrook Authentic Jersey
IOC finds a short cut through Bangladesh to send fuel tankers to Tripura
Indian Oil Corporation will invest around Rs 6.50 billion in expanding its storage and bottling capacity in Tripura over the next three years as it looks to prevent fuel crisis in the state. Indian Oil-AOD, the company’s North East division, will also start moving a convoy of 20 tankers by the end of this month to the North Eastern state for the first time via Bangladesh to avoid the dilapidated NH-44 in Assam. “Apart from exploring new routes to supply fuel for ending the crisis in Tripura, we are looking to increase the storage capacity in the state. We are working on both the possibilities so that common people do not suffer there,” Indian Oil Corporation Executive Director (Indian Oil-AOD) Dipankar Ray told PTI. For this purpose, the company will set up one Petroleum, Oil and Lubricant (POL) depot and a new bottling plant in Agartala, he added. “The POL depot will incur an investment of around Rs 5 billion, while Rs 1.43 billion have been estimated for setting up the bottling plant over the next 2-3 years. The investment includes land cost as well and the land parcels have already been identified for both the units,” Ray said. In Tripura, the company has a POL depot at Dharmanagar with a capacity of around 6,000 kilo litre (kl) and an LPG bottling plant at Bishalgarh with a capacity of 30,000 million tons per annum in double shifts. “The existing two facilities are not enough to cater to the growing demand of fuel in Tripura. So we have decided to expand our capacities by setting up new units. “The new POL depot will have an installed capacity of 32,000 kl, while that for the bottling plant will be 60,000 million tons a year, expandable up to 1,20,000 million tons,” he added. During monsoon in May-June this year, Tripura faced unprecedented fuel crisis as supply was badly hit due to pathetic road condition of NH-44 at Barak Valley in Assam and thousands of tankers were stranded on roads for weeks. The situation forced IOCBSE 0.95 % and Tripura government to scout for alternate ways to supply fuel in addition to augment the storage capacity. “One of the options that we already started is roll-on roll-off, where tankers are transported by open rail wagons from Bhanga in Assam to Churaibari in Tripura. However, this system is not economical for us as transporting 24 tankers one way cost us Rs 3,90,000,” Ray said. Jonathan Allen Jersey
KG Basin cost GSPC 12 times estimate
The Public Enterprise Committee of the Gujarat assembly chaired by former minister, BJP MLA Narottam Patel, has criticised the Gujarat State Petroleum Corporation (GSPC) for showing undue haste in acquiring the KG basin through aggressive bidding which had caused the state government loss of millions of rupees. The committee has noted in its report that against the estimated expenditure of US $109.70 million, the GSPC had actually incurred an expenditure of US $1,404.86 million for three phases of gas exploration. This was 12.81 times higher than what was estimated while placing the bids. The committee did not accepted the company’s excuse that when exploration was planned, the price of crude oil was $22 to $24 a barrel but it had shot up to US $140 by the time the actual work started. The committee’s report states: “The company did not evaluate the technical consultant’s advice and jumped in with a very high bid.” The latest report of the committee tabled on Tuesday is based on the Comptroller and Auditor General’s (CAG) observations about the GSPC for the year 2010-11. The committee has accepted the CAG observation that massive financial irregularities had taken place in the GSPC. Prior to deciding the bid, the technical and financial risks were not assessed properly and a very high bidding price was quoted. “As a result, during the 2006 to 2011 period alone, the company’s unsecured debt had increased to Rs. 21.4053 billion,” the report says. The estimated total loss to the state due to GSPC’s gas exploration misadventures in the past one decasde is around Rs. 300 billion. The committee scrutinises observations of the CAG on PSUs and suggests recommendations to the state government. For last several years, the state’s BJP government had tried to shirk responsibility by claiming that CAG’s observations were not certified by the assembly’s committee but this year the state government is left with no excuse. The report also accepts the CAG’s observation that the GSPC had partnered with the controversial company, GeoGlobal Resource, in an arrangement that posed no risk to the latter. “The committee is amused how the GSPC could partner with GGR only in profit but not in loss. It’s a totally unacceptable commercial decision,” the committee’s report says. Further, due to the faulty advice of GeoGlobal, the projected Rs. 5.3194 billion cost had increased to a massive Rs. 62.6568 billion, the report says. The committee has also asked the government to explain whether it knew of such a faulty deal. The committee, which monitors state-run public sector undertakings (PSUs), is yet to assess the CAG reports on GSPC from 2011 to 2015. It is expected that the committee will find more and bigger skeletons in the GSPC cupboard in the coming days. Ryan O’Reilly Jersey