BP second quarter profit above expectations at $2.8 billion
Higher oil prices and increased output boosted BP’s second-quarter profit to $2.8 billion, four times that of a year ago. The company also confirmed it would increase its quarterly dividend for the first time in nearly four years, offering 10.25 cents a share. BP is turning a corner after the slump in oil prices and as it gradually shakes off a $65 billion bill for penalties and clean up costs of the deadly 2010 Deepwater Horizon spill. Underlying replacement cost profit, the company’s definition of net income, exceeded forecasts of $2.7 billion, according to a company-provided survey of analysts. It earned $0.7 billion a year earlier and $2.6 billion in the first quarter. First-half production rose to 3,662 million barrels of oil equivalent per day, including output at Rosneft, from 3,544 mboe/d a year ago. Benchmark Brent crude futures, currently over $74 a barrel, have risen around 16 percent over the first half of 2018 and around 60 percent since June 30 2017. In its biggest deal in nearly 20 years, BP last week agreed to buy U.S. shale oil and gas assets from global miner BHP Billiton, for $10.5 billion, expanding the British oil major’s footprint in oil-rich onshore basins. BP is also buying back shares to the tune of $200 million in the first half of this year. In the second quarter, it paid off $700 million for the spill on a post-tax basis. Gearing, the ratio between debt and BP’s market value, declined to 27.8 percent at the end of the quarter from 28.1 percent at the end of March. Net debt was $39.3 billion at the end of June compared with $40 billion at the end of March. Brandon McManus Womens Jersey
India’s natural gas production will double in four years: Oil Ministry
India’s natural gas production is expected to double to 72 billion cubic meter (bcm) in four years through 2022, the oil ministry recently told a Parliamentary panel. The government is currently working on a plan to shift the country towards a gas-based economy. The nation produced 35 bcm of natural gas last financial year (2017-18). Of this, state-owned explorer Oil and Natural Gas Corporation (ONGC) accounted for 24.2 bcm or 68 per cent, Oil India Ltd (OIL) produced 2.9 bcm and private firms and their joint ventures accounted for the rest 7.9 bcm. By 2021-22, this mix is expected to undergo a significant change with private JVs accounting for the largest chunk – 40.3 bcm – followed by ONGC’s production at 27.8 bcm and OIL contributing 3.7 bcm of gas. India’s natural gas production will double in four years: Oil Ministry The ministry told the Parliamentary Standing Committee on Petroleum and Natural Gas, the main reason for the shortfall witnessed in natural gas production during the 12thplan period (2012-17) was lower production from NELP deepwater block KG-DWN-98/3 operated by Reliance Industries (RIL) and the delay in production from ONGC-operated KG-DWN-98/2 coupled with the natural decline in ageing fields. The ministry added it has taken multiple policy initiatives to ramp up the country’s oil and gas production including gas pricing reforms, policy framework for early monetization of Coal Bed Methane (CBM), Discovered Small Field (DSF) policy, Hydrocarbon Exploration and Licensing Policy (HELP) and the operationalization of Open Acreage Licensing Policy (OALP). Asked how does ONGC plan to increase production, the company told the panel: “One of the biggest projects which we have undertaken, as on date, is going on schedule. From that discovery alone, we expect to get close to 4 million tonnes of oil which was only a gas discovery and almost 13-14 million cubic metre gas per day. This will take a while. This will come sometime around 2021-22.” RIL chief Mukesh Ambani, during the company’s recent Annual General Meeting, announced the firm plans to start natural gas production with its partner BP from its KG-D6 block by 2020, expecting to reach a peak of 30-35 Million Cubic Meter Per Day (MMSCMD) production by 2022. India’s natural gas production grew for the first time in six years in last financial year ended March 2018, primarily due to natural gas production from onshore blocks offsetting continuous decline from offshore blocks. Ja’Wuan James Authentic Jersey
Heartburn for ONGC: For HPCL, majority owner is still the President of India with 0% stake
Though oil refiner-retailer Hindustan Petroleum Corporation (HPCL) was taken over by Oil and Natural Gas Corporation (ONGC) in January this year, the former is yet to recognise the upstream major as its promoter in the mandatory quarterly filings with the stock exchanges. In the filings for Q4FY18 and Q1FY19 on both the BSE and NSE, HPCL clubbed ONGC which owns its 51.11% share among “public shareholders” while still mentioning the President of India (read the Union government) as its promoter with 0% stake. The “deviation” has caused much heartburn in ONGC and it has already approached the government for a resolution of the issue, sources said. The explorer had to fork out `36,915 crore to acquire a majority stake in the oil marketing company on being prodded by the government, which wanted to boost its non-debt capital receipts. An ostensible purpose of the deal was to further the government’s policy of creating an integrated oil major to compete with global and domestic private players. According to the sources, minority shareholders of ONGC could also raise the matter with the oil explorer’s board. “The matter is creating a lot of confusion,” an official said. HPCL’s move has no immediate precedent. After Indian Oil Corporation (IOC) bought a majority stake (51.89%) )in Chennai Petroleum Corporation in 2000-01, CPCL showed IOC as the promoter. Emails sent by FE to ONGC and HPCL remained unanswered till the time of going to press. Having acquired a controlling stake in HPCL, ONGC should be classified as promoter of the oil retailer according to Securities and Exchange Board of India rules, said Prithvi Haldea, chairman, PRIME Database. Though ONGC was not the original promoter, after it acquired a controlling stake in HPCL, it is deemed as promoter, he added. According to government sources, HPCL’s reluctance to identify ONGC as a promoter could be the outcome of a battle of egos at the helms of the two state-run entities. Prior to acquisition, HPCL was on the Fortune Global 500 list ranked 384 (2016) while ONGC was not on the list. Thanks to its majority stake in HPCL, ONGC is now ranked 197 (2017) on the list. The Fortune Global 500 is an annual ranking of the top 500 corporations worldwide as measured by revenue and the list is compiled and published annually by Fortune magazine. Dominique Easley Jersey
OMCs make provisions for PMUY losses
State-run oil marketing companies (OMCs) classified a section of loans provided to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) in FY18 as ‘doubtful’ as recipients did not ask for LPG refill for a year. While Indian Oil has made a provision of Rs 162 crore for inactive beneficiaries at the end of FY18, HPCL and BPCL have also made provisions of almost half that amount each. Indian Oil is the leader in providing almost 50% of around 4.95 crore liquefied petroleum gas (LPG) connections released till date under the government’s flagship scheme. “Companies have already made provision in the accounts of (FY18) for those beneficiaries who have not taken refills for at least a year. If these beneficiaries continue the trend and do not come back for refills, these provisions will be classified as bad debt,” said a source, adding that this provision has been made on auditors’ insistence. Under the scheme, of an LPG connection cost of around `3,200 — including stove, refilled cylinder and safety hose — the government pays `1,600 as one-time assistance. The rest is to be borne by beneficiaries. The beneficiary can pay her share upfront, or opt for a loan, wherein the amount is realised by not repaying the beneficiary the amount of subsidy — transferred as a direct benefit to bank account — on subsequent refills till the loan amount is recovered. While the scheme was launched in May 2016 with an initial target of providing clean cooking fuel to 5 crore women beneficiaries belonging to the below-poverty-line category as per the Socio Economic Caste Census (SECC) 2011 list, the target has been increased to 8 crore. The initial allocation towards the scheme was `8,000 crore, but `4,800 crore was later added and the scope of the scheme has also been extended beyond the SECC. Data show that Indian Oil released around 62 lakh LPG connections under the PMUY in FY17. Of this, close to 9.5 lakh did not come back for refill by March 31, 2018. In FY18, Indian Oil released 48 lakh connections, of which around 27 lakh did not return for refill by the end of the year. Similarly, BPCL released close to 29 lakh LPG connections under the PMUY in FY17, of which 4.7 lakh beneficiaries were still using the installation refill by March 31, 2018. In FY18, BPCL issued around 30 lakh connections, of which 17 lakh did not return for a single refill by March 31, 2018. As per government figures, a PMUY beneficiary on an average takes four refills a year, compared with the national average of 7.2. The government claims that the dropout from the scheme is 20%, and that the rest 80% beneficiaries have at least come back for one refill. To promote more refills, OMCs stopped collection of payment from beneficiaries for six months starting end-March 2018. “The companies will have to decide whether to extend the scheme (non-collection of loan repayment) or not, once trends after six months are clear. The loan amount will be recovered once people start refilling,” the source said. Jeff Locke Authentic Jersey