Ophir Energy to cut 15 per cent jobs amid global oil price glut
Ophir Energy Plc will cut about 15 percent of its global workforce, the UK oil and gas explorer said on Wednesday, as low oil prices force oil producers to trim costs. The company said the job cuts were focused on corporate roles in London and expatriate positions to save an estimated $10 million to $12 million a year. Ophir also lowered its full-year production forecast, saying its Kerendan gas field ramped up at a slower-than-expected pace. The full-year forecast has been lowered to 12,000 barrels of oil equivalent per day (boepd), and said production in the first half ended June 30 averaged at 11,300 boepd. This was 1,200 boepd below target as production at two of its gas fields was lower than expected, the company said. Tim Hardaway Womens Jersey
The future of Oil & Gas may remain uncertain in the short and medium future, the industry at a delicate cross-road: Dharmendra Pradhan
Dharmendra Pradha, Minister for Petroleum and Natural Gas, while chairing the plenary session on supply and demand challenges for Oil, Gas and products at the 22nd World Petroleum Congress (WPC) in Istanbul said the world is at a stage like never before, where the future of oil and gas’s supply and demand may remain uncertain in the short and medium term. He added that India is the only country where demand for oil and gas will be robust for the next decade. While speaking at the plenary session Pradhan highlighted how disruptive innovation will impact the demand of oil and gas in the world and how renewable has the potential to replace conventional energy sources. “Disruptive innovation will impact the demand of oil and gas in the world. Falling cost of renewable in general and falling cost of solar in particular. Most of Asia and Africa are now discovering solar tariffs at less than four cents per kilowatt, significantly cheaper than conventional power,” Pradhan said. “For India which is leading the solar and renewable revolution, we need to realise that the oil industry is at a delicate cross-road, where higher crude prices will give a further push to renewable. We are told that there is going to be a breakthrough in battery technology and renewable source may take over conventional source in the near future,” Dharmendra Pradhan added. Pradhan also emphasised that the growth in e-vehicles may also have a far reaching impact on the world’s oil and gas demand. “The rate at which e-vehicles will be adopted will depend on a lot of factors like the price of power, storage, utility network factors etc… but if estimates are to be believed, it may make considerable impact on the oil and gas sector, ” Pradhan said. Pradhan is representing India at the WPC and has conducted several bi-lateral meetings with ministers and presided over plenary sessions. The Minister will also launch an event on Hydrocarbon Exploration and Licensing Policy (HELP) as a part of the process of promoting the upcoming oil and gas bidding rounds in India. Aaron Rodgers Authentic Jersey
Electricity investment overtakes oil and gas for the first time ever, IEA says
Fossils fuels are no longer the largest recipient of investment in the energy sector, the latest report from the International Energy Agency said Tuesday. Investment in the electricity sector received the largest level of investment for the first time ever, growing its share by 12 percentage points to 43 percent between 2014 and 2016. In comparison, over the same period, investments in upstream (exploration and production) oil and gas fell 44 percent. “The key finding is that (the) global energy industry spent last year 12 percent less than the previous year,” Fatih Birol, executive director of the IEA, told CNBC on Tuesday. “A big decline,” he described. According to the IEA, the global drop in energy investment was mainly caused by falling unit capital costs in upstream oil and gas but also due to reduced drilling and less fossil fuel-based power capacity. Geographically, China continued to be the largest recipient of energy investment, representing 21 percent of the global share. However, according to Birol from the IEA, the surprising story was India, jumping 7 percent from 2015 to 2016 in terms of energy investment. “India is moving to the center stage of global energy affairs,” he said. Despite the current drags on investment, the IEA is confident that global oil and gas upstream investment will come back to growth this year, by about 6 percent. This is due to the current OPEC-led deal to freeze production until March 2018, which should revamp prices and boost investment, as well as a 53 percent upswing in U.S. shale investment. However, the IEA warned that many of the largest oil and gas companies are still implementing a “cautious approach” and as a result have indicated their intentions to revise down their anticipated investment plans in case oil prices do not remain above $50 a barrel. “What we see is no major rebound,” Birol said about market prices in the aftermath of the OPEC deal. “Therefore what worries me a lot is, around 2020s, a major demand-supply gap with serious implications for the markets,” he said. Oil prices fell once again on Tuesday on the back of the IEA’s report and an ongoing fuel supply overhang, which has led several banks to cut their price forecasts. “I cannot talk about prices, but what I can tell you is that when I look at the investments, which are becoming more and more short-term focused, when I look at growing demand and (the decline) of existing oil fields to avoid major supply disruption problems 2020s, we need a miracle,” he said. Adrian Clayborn Jersey
Significance of U.S Crude Oil Entering Indian Market, IOC upbeat about Deal
A type of U.S. crude pumped in the Gulf of Mexico is proving to be more attractive in the fastest-growing oil market compared with Middle East staples that are on offer. Indian Oil Corp., the nation’s largest refiner, has bought Mars Blend crude for arrival in October to the South Asian nation, according to Arun Kumar Sharma, the company’s finance director. That’s the processor’s first purchase of American supply. About 1.6 million barrels of the grade will be loaded with 400,000 barrels of West Canadian Select on a very large crude carrier, he said. The shipment is set for Asia as arbitrage flows of Mars crude to the world’s biggest oil market become viable versus Middle East oil, supplies of which have been reduced by OPEC’s output curbs aimed at easing a glut. The cuts have turned regional benchmark Dubai crude costlier relative to other markers such as Brent and U.S. West Texas Intermediate, luring rival supplies to India as well as other big consumer nations. “Middle Eastern suppliers are waking up to the growing dominance of U.S. crude in the Asian market,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London. “Heavy grades of U.S. crude have become more price competitive compared with those from the Middle East, thanks to OPEC’s oil-output cut, which provided the U.S. an opportunity to boost its own oil production.” Mars crude traded at about 70-90 cents a barrel below WTI on a free-on-board (FOB) shipping basis late last week, according to a Bloomberg survey of four traders. That’s equivalent to a 10 cent discount to 10 cent premium over Dubai crude on a cost and freight (CFR) basis to Japan on a VLCC, according to Bloomberg calculations. The discount of Dubai crude to Brent, the benchmark for more than half the world’s oil, has slumped to about 80 cents a barrel, compared with more than $3.50 a barrel in early July last year, according to data compiled from PVM Oil Associates. Competitive Prices “North American crude has become very competitive to Middle East crude because of narrowing Brent-Dubai differentials and low freight charges,’’ Indian Oil’s Sharma said. The company, which bought the crude via a tender, purchased the U.S. oil at a price “very close to Basrah Light,” he said, referring to Iraq’s flagship grade. U.S. crude prices are competitive relative to OPEC supplies, and the ability of Indian refiners to process different grades is helping the nation take advantage of attractive pricing, Indian Oil Chairman Sanjiv Singh said in an interview in Istanbul. Another state-run Indian refiner, Bharat Petroleum Corp., is also seeking1 million barrels of U.S. crude for delivery in September-October to Kochi on the nation’s west coast, according to a tender document obtained by Bloomberg. Grades including Thunder Horse, Southern Green Canyon, Mars Blend, West Texas Sour and Alaskan North Slope are being sought by the processor. “We are trying to increase our independence from certain crudes,” said R. Ramachandran, the head of refineries at Bharat Petroleum. “Expansion of the Kochi plant gives us the ability to expand our crude basket.” For more, read: Oil From the U.S. and Saudis: Top Buyers Get What They Want India has been considering buying American oil ever since the U.S. reversed a decades-old law that restricted exports of unrefined crude, as the South Asian nation attempts to diversify its supply sources. The country, which imports more than 80 percent of its crude requirements, purchases oil from three primary areas: the Middle East, Latin America and Africa. India’s Oil Minister Dharmendra Pradhan has been haggling with OPEC, which meets about 86 percent of the nation’s oil needs, for a discount by virtue of being a large and loyal customer. “Days of suppliers are gone, consumers are kings now,” Pradhan said at an energy conference in Istanbul. President Donald Trump last month said during a visit by Indian Prime Minister Narendra Modi that the U.S. expects to export more American energy to India, a $2 trillion economy that the International Energy Agency expects will be the fastest-growing oil consumer through 2040. “We will look at sourcing more volumes of U.S. crude going ahead,” Sharma said. Josh Ferguson Womens Jersey
India to boost gas share to 20% in energy mix by 2030
India will increase the share of natural gas to 20 percent in its energy mix by 2030, the Indian petroleum minister said Tuesday in Istanbul. Speaking at a ministerial session of the 22nd World Petroleum Congress in Istanbul, of which Anadolu Agency is the global communication partner, India’s Minister of Petroleum Dharmendra Pradhan said India is supporting investments to increase the share of natural gas in its energy mix. “We will increase the share of natural gas in our energy mix to 20 percent. We will also raise our natural gas pipelines from 15,000 kilometers to 30,000 kilometers for this aim,” the minister said. The world’s second-most populous country will have new liquefied natural gas (LNG) liquefaction facilities to enhance natural gas supply and expand natural gas consumption via LNG-fuelled buses and trains, Pradhan said. “Our demand for refinery products will rise 5-7 percent in several years. The three biggest Indian energy companies will build an oil refinery to generate 60 million metric tons of oil to meet the country’s demand,” he said. India ranks number four in refinery capacity after the U.S., Russia and China. Marshon Lattimore Womens Jersey
GST adds to engine woes, almost half of IndiGo A-320 Neo fleet grounded
Almost half the fleet of IndiGo’s Airbus A-320 new engine option (Neo) is grounded due to trouble with the Pratt & Whitney (PW) engines used on these planes. The low-cost carrier (LCC) currently has 22 A-320 Neos and nine of them are reportedly grounded due to engine issues. The implementation of GST from July 1 led to some confusion over the import of replacement engines which further added to the problem. In India, IndiGo and GoAir use the combination of PW engines on A-320 Neos. Due to constant trouble with these engines, the US engine manufacturer was replacing and/or rectifying them. “PW is facing this issue on the A-320 Neos globally. Due to this, it is unable to supply replacement engines at the required pace. Also, there are some changes in the modifications that were being carried out on the replacement engines.So, the result is that the airlines using the A-320 Neo with PW engines are suffering,” said a source. IndiGo spokesman Ajay Jasra said: “…we continue to face operational issues with the Neo engine…. While this has caused operational disruptions, both PW and Airbus are working to address the issues. In the meantime, we continue to receive the necessary operational and technical support including the provision of spare engines to help mitigate the operational impact on us.” “We also faced some issues this month in getting some engines cleared at the customs post the implementation of GST. However, the government has cleared the confusion and has come out with a notification stating that leased aircraft and engines are exempt from custom duty so we are hopeful that this problem is behind us now,” Jasra added. IndiGo has a total fleet of close to 140 A-320s, of which 22 are Neos. The engine trouble is being faced by the PW-powered Neos. A unit of United Technologies Corp, P&W’s A-320 Neo engines have been plagued with issues like slow engine startup times and erroneous engine software messages in the new engine. Globally till February 24, 2017, 42 PW 1100G engines (fitted on A-320 Neos) have been prematurely removed from aircraft due to different technical reasons. A statement by PW said: “PW, with the support of Airbus, is actively working with our customers in India and we are supporting them in their daily operations…. The PW PurePower GTF engine employs advanced technology and has been in operation for more than one year. It has more than 200,000 hours of passenger service and is utilized by 13 operators flying 250 flights per day to over 100 destinations on four continents.” Christian Dvorak Authentic Jersey
Air India’s most unusual baggage puts a spanner on Modi government’s big selloff plan
Indian Prime Minister Narendra Modi’s cabinet has signed off on a plan to sell all or part of Air India Ltd., a debt-ridden, state-run carrier with the most unusual baggage. The airline’s balance sheet includes commercial space near London Heathrow, land in Tokyo, Hong Kong and Nairobi, all bought during the heydays when the airline commissioned paintings by Indian modern artists and hired surrealist painter Salvador Dali in the 1960s to design ashtrays. Then there’s about $8 billion in debt, a money-losing airline operation, five subsidiary companies and a joint venture, a combined workforce of 27,000 and unions with a history of grounding the airline over work demands. Not surprisingly, selling even a minority stake in the loss-making, 85-year-old company isn’t going to be a cakewalk. At least one attempt almost two decades ago failed amid fierce political opposition. Modi’s government has yet to decide how the sale will take place, how much of the airline is for sale and, more importantly, what to do with the airline’s accumulated debt. Undercut by budget carriers like IndiGo and SpiceJet Ltd., Air India’s local market share has shrunk to about 13 percent from 35 percent just a decade ago. “To find someone who will buy Air India in full, with all its assets, subsidiaries and artifacts, and who will also take on the accumulated debt, is going to be very difficult,” said Kanu Gohain, a former chief of India’s Directorate General of Civil Aviation.“Taxpayer money has been going to this organization to feed inefficiency and incompetency. That’s the biggest liability.” An Air India spokesman declined to comment. Civil Aviation Minister Ashok Gajapathi Raju’s office didn’t respond to a request for an interview. In May, a month before announcing the sale decision, Finance Minister Arun Jaitley told the state broadcaster that money spent on Air India could have been used for education. What does Air India have to offer? Buyers may be attracted to the carrier’s overseas routes and landing rights at most global airports as well as its in-house engineering and ground handling services. The government is almost certain to dangle financial incentives to lure investors, said Jitender Bhargava, a former executive director at Air India. “You’re not in the market to turn away people,” he said. “You’re coming into the market to attract people.” One buyer has already stepped forward. On June 28, IndiGo, India’s biggest commercial airline, said it was willing to buy out Air India’s international operations, or even the entire airline business, the day the government approved the sale. IndiGo investors weren’t thrilled: The company’s stock tanked 8 percent in two days, wiping out half a billion dollars from the company’s market value. To allay concerns, the billionaire owners of IndiGo — Rahul Bhatia and Rakesh Gangwal — held a conference call on July 6, saying the budget carrier soon wants to start low-cost, long-haul flights, and the international operations of Air India would speed up its plans. An acquisition would give IndiGo immediate overseas routes and workers with experience, which otherwise would take a long time to replicate, they said. “We see Air India’s international operations as a canvas, a new sheet of paper,” Gangwal said. “The biggest asset sitting in there is these negotiated route structures.” Despite India’s lure as a potential future market, Air India has been “a bureaucratically-enforced mess,” and any serious bidder for the airline will demand a free hand in restructuring, which will involve job cuts and complete control over the carrier’s finances, said Robert Mann, head of aviation consultancy R.W. Mann & Co. in New York. “This would mean ‘hands off’ by a government that has never previously been able to control its burdensome interference in its airline industry,” Mann said in an email. “Nothing leads me to believe that this time would be any different.” Air India has been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd. The company made an operating profit of about 1 billion rupees ($15 million) in the year through March 2016, primarily due to a slump in oil prices. It still posted a net loss of 38.4 billion rupees, according to the government. The national auditor said the company understated losses by 64.2 billion rupees in the three years through March 2015, an observation refuted by the carrier. Air India and IndiGo are facing fresh competition after the Indian ventures of AirAsia Bhd. and Singapore Airlines Ltd. started operations, jumping into a market where profit has proven elusive. While provincial taxes in the country make jet fuel the costliest in Asia, intense competition often forces carriers to sell tickets below cost. Mail Delivery Air India started as Tata Airlines in 1932 and later became state-owned. Founded by Jehangir Ratanji Dadabhoy Tata, it took off flying mail between Karachi in then-undivided, British-ruled India and Bombay. Once it turned commercial, the airline quickly became popular with its advertisements featuring Bollywood actresses, high-end champagne and Dali-designed porcelain ashtrays. As India liberalized the economy in 1991, private competition started coming in. An eroding market share coupled with the merger with Indian Airlines fueled the decline in Air India’s fortunes. In 2012, the government bailed out the ailing carrier with 300 billion rupees in funds, guaranteeing the carrier’s loans and promising interest payment on some debt. But its need for working capital exceeded the dole. Short-term loans spiraled on missed revenue targets amid a failure to monetize assets, an auditor said in a report this year. “Given Air India’s current mess and inefficient state, there’s hardly a queue of folks bashing down the door to squander good money after bad,” said Saj Ahmad, an analyst at London-based StrategicAero Research, “Whoever lands in bed with Air India will be lumbered with a debt-ridden partner that has no propensity to alter its course.” Jaromir Jagr Jersey