Genel Energy sees significant output boost in 2019
Iraqi Kurdistan-focused Genel Energy is likely to significantly increase its oil production guidance next year, Chief Financial Officer Esa Ikaheimonen said on Tuesday. The output boost is expected to come from 11 wells currently being drilled in three fields in the region, eight of which are expected to begin producing this year. Genel on Tuesday reaffirmed its 2018 production guidance of 32,800 barrels of oil per day. “We maintained that guidance …signalling that even with the existing level we would exceed guidance,” Ikaheimonen told Reuters. “There is a good chance that we enter the new year with a significantly updated level of production,” he added. Justin Pugh Jersey
Pradhan Mantri Ujjawla Yojana: Smokeless kitchens are becoming a reality
Critics of the Pradhan Mantri Ujjwala Yojana (PMUY) have pointed to the poor refill rates of PMUY beneficiaries to question its utility. While refill rates must increase to achieve the vision of a smokeless kitchen, the situation is both more complex and more optimistic than many give credit to. Numerous studies have reported that although the poor people aspired to have liquefied petroleum gas (LPG) connections, the biggest barrier to LPG adoption was the high upfront cost (about Rs 4,000) associated with a new LPG connection. PMUY was specifically designed to make the cost associated with a new LPG connection affordable even for the poorest of the poor. The scheme reduced the upfront cost for a new single bottle connection to Rs 3,300 (by compressing various costs and by negotiating a special price for the LPG stove with the suppliers) and by proposing to bear Rs 1,600 of the reduced cost from the fiscal budget. For the balance amount, in case a prospective beneficiary expressed her inability to pay upfront, the oil marketing companies (OMCs) offered a loan facility. As a result, within 26 months since its launch, more than 4.5 crore poor women now have LPG stoves in their kitchen. Of course, access by itself does not automatically translate into usage, especially for PMUY beneficiaries who are overwhelmingly rural poor. Overall low cash income makes it less enticing for a poor family to move away from free fuel to commercial fuel—LPG is an additional expense in an already tight family budget. The reality is that PMUY beneficiaries have other priorities (for example, saving for emergencies) and different aspirations (for instance, sending children to private, English-medium schools) that can take precedence over their desire for a quick, convenient and smokeless cooking fuel. In addition, seasonality of income (for agricultural workers) and daily/weekly cycles of income/purchase make it a challenge to save enough to buy even a subsidised cylinder. Furthermore, cooking with LPG involves changes in habits for the person concerned, generally a woman in the Indian context. Going from cooking on a mud stove in a squatted position for decades to a standing position as required for LPG is easier said than done. We also need to recognise the cultural challenges where many people don’t like the taste, texture or aroma of food cooked on LPG stoves. When biomass is scarce or is expensive, people are forced to adjust to the new reality—like the transition to LPG in urban and peri-urban areas. However, for the rural poor with relatively easy access to non-monetised biomass, it is an altogether different story. Therefore, there are real barriers to the use of LPG, but the first step to overcoming those barriers is for people to obtain LPG. Further, singling out PMUY customers for low refills is erroneous when we look at the bigger picture. The average LPG consumption was decreasing even in the pre-PMUY period (from 2006 to 2016) for registered customers. During that time, the LPG market was already expanding from the saturated urban markets towards the rural areas. As more and more rural poor became LPG customers, it pulled down that average consumption figure—the average LPG consumption per consumer reduced by 2.6% year-on-year, while in the post-PMUY period the average annual decline is 4.1%. However, the number of new LPG consumers in the pre-PMUY period of 10 years was only double of the two-year post-PMUY period. This decline will likely continue as more rural poor with access to alternative non-monetised fuel and cash crush continue to enrol as LPG consumers but use LPG frugally. Eventually, the trend will reverse, as LPG consumption for new customers starts to grow. Moreover, we estimate that a significant fraction of PMUY beneficiaries use LPG for more than half their cooking needs. The annual ‘useful’ energy (actual energy used for cooking food) consumption by rural Indian households can be estimated using secondary sources such as government data and published research, along with primary data from independent fieldwork. There is a wide range of values—2,450 megajoule (MJ) to 4650 MJ—for a typical family (of five members). This can be attributed to variation in income levels, cooking styles and diet preferences. As PMUY mostly caters to poor households in rural India, we estimate their annual useful cooking energy requirement, on an average, to be 3,000 MJ. We also assume an efficiency of 60% (conservative compared to the minimum 68% efficiency required for LPG stoves sold under PMUY) and roughly 385 MJ per cylinder (accounting for LPG’s energy content and some loss in the cylinder). Under those conditions, a typical PMUY household should consume eight cylinders of LPG in one year, if they cook with LPG exclusively. While the aim of PMUY is a smokeless home that requires near-exclusive LPG usage, a more realistic but ambitious short-term goal is LPG becoming the primary cooking energy source (providing more than 50% of useful energy requirement). This requires consumption of about four cylinders of LPG within a year and should be viewed as an important milestone in the journey towards smokeless home. Full consumption of four cylinders means the consumer would have purchased at least five cylinders within the first year of becoming a PMUY consumer. Despite the widespread criticism of PMUY’s refill trends, our analysis of national-level consumer cylinder purchase data suggests an encouraging trend on this front. Of the 3.7 crore PMUY connections released in the last two years, as many as 2.1 crore PMUY beneficiaries have been LPG customers for one year or more (as of May 2018). The analysis of their cylinder purchase data indicates 30% of them (63 lakh households) have purchased five or more refills in their first year (including the cylinder provided during installation). These 63 lakh poor rural households have transitioned to LPG as their majority cooking fuel within the first year. Most of them would likely not have become LPG consumers without assistance of PMUY. State wise, Uttar Pradesh, West Bengal and Bihar have the highest numbers of PMUY beneficiaries, where
Vedanta set to bag 40 oil and gas blocks in country’s first open acreage auction
Anil Agarwal-led Vedanta is likely to bag as many as 40 oil and gas exploration blocks in India’s maiden open acreage auction, official sources said today. An Empowered Committee of Secretaries (ECS) has cleared award of blocks offered in OALP-1, bidding for which closed on May 2, they said. The recommendations of the panel will now go to ministers of finance and petroleum for approval, they said. The Union Cabinet had in April delegated its power to ministers of finance and petroleum to award oil and gas blocks to their winners in the Open Acreage Licensing Policy (OALP) auction. At the close of the bidding on May 2, Vedanta’s oil and gas arm, Cairn India had bid for all the 55 blocks on offer while state-owned Oil and Natural Gas Corp (ONGC) had bid for 37 blocks either on its own or in consortium with other state-owned firms. State-owned Oil India Ltd (OIL) bid for 22 blocks in a similar fashion. Sources said while Vedanta is likely to walk away with 40 blocks, ONGC may get two or a maximum of three areas. Hindustan Oil Exploration Co (HOEC) is likely to get one while OIL may get around half a dozen blocks. They said the award of the blocks is awaiting the finance minister’s nod. Piyush Goyal is officiating as the finance minister as Arun Jaitley recuperates from a renal transplant. It is being speculated that Jaitley may be back in office as early as next week and may clear the OALP-1 bids. When the bids closed on May 2, Vedanta was the sole bidder for two blocks and had either ONGC or OIL as a direct competitor in the remaining. Except for the two blocks that received three bids each, all the other 53 had just two bidders. Neither local giants Reliance Industries nor any foreign company participated in the auction, a first since India began offering oil and gas area for exploration and production through bids in 1999. India had in July last year allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km of unexplored area in the country under exploration. Under this policy, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in an area that is presently not under any production or exploration license. The EoIs can be put in any time of the year but they are accumulated twice annually. As many as 55 blocks were sought for prospecting of oil and gas by prospective bidders, mostly by state-owned explorers, ONGC and OIL, and private sector Vedanta by the end of the first EoI cycle on November 15, 2017, they said. The blocks or areas that receive EoIs at the end of a cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage. The 55 blocks have a total area of 59,282 sq km. This compares to about 1,02,000 sq km being under exploration currently, they said. Blocks would be awarded to the company which offers highest share of oil and gas to the government as well as commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells. Increased exploration would lead to more oil and gas production, helping the world’s third largest oil importer to cut import dependence. Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030. Import dependence has increased since 2015 when Modi had set the target. India currently imports 81 per cent of its oil needs. The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue-sharing model where companies offering the maximum share of oil and gas to the government are awarded the block. The government till now has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round. So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospectivity. DeMarcus Ware Womens Jersey
India is planning to set up a LNG import terminal in Myanmar
India is planning to set up a liquefied natural gas (LNG) import terminal in Myanmar as it looks to expand energy diplomacy in its neighbourhood, oil minister Dharmendra Pradhan said. The terminal to import super-cooled natural gas will be in addition to the similar facilities planned by Indian firms in Bangladesh and Sri Lanka as part of larger plan of energy connectivity in the South Asian neighbourhood, he said. Speaking at a seminar on ‘Assessing India’s Connectivity with Its Neighbourhood’, Pradhan said Numaligarh Refinery Ltd (NRL) in Assam is exploring supply of diesel to Myanmar and is looking at options to build fuel storage and distribution sector in that country. “Indian Oil Corp (IOC) is also working with Myanmar companies in setting up LPG storage facilities and Petronet LNG is working on setting up an LNG terminal there,” he said. He, however, did not give details. “India is working with Bangladesh in interconnecting gas grids and supplying diesel through pipelines,” he said. Currently, Indian firms supply diesel through rail rake from Siliguri in Assam to Parbatipur in Bangladesh and are in the process of constructing a 130-km long product pipeline for uninterrupted supply. “Also, Indian companies are working on connecting India’s gas grid with that of Bangladesh and supply gas for power generation at Khulna Power Plant,” he said. “This will be an exemplary display of regional cooperation.” Bangladesh is setting up an 800-megawatt (MW) power plant in the country’s Khulna region, for which it has signed an agreement with the Asian Development Bank (ADB) for a $500 million funding. Pradhan said Petronet is also looking at building a 7.5 million tonne a year LNG import terminal in Bangladesh to feed that country’s energy needs using imported gas. “In view of providing energy access to the north-eastern part of India, there are plans to import LPG in Bangladesh and transport through road/pipeline to the region while catering to the demand of Bangladesh,” he said. In Sri Lanka, India is jointly developing Trincomalee oil storage tank farm and is also working on setting up an LNG terminal and a 500 MW LNG-fired power plant near Colombo. Also, there is a proposal to develop city gas distribution (CGD) and CNG market and infrastructure in Sri Lanka, he said. IOC Lanka, which is a subsidiary of IOC, has 43.5% of the total fuel market share. “India is working with Sri Lanka on a proposal to set up a solar power plant at Sampur, which would be of 50 MW to begin with,” he said. To Nepal, India presently supplies all of its petroleum product requirements through trucks. A pipeline for supply of petroleum products is under construction, which will ensure uninterrupted supply. “There are also discussions with Nepal on an LPG and Natural gas pipeline,” he said adding Nepal has expressed interest in implementing free cooking gas (LPG) connection scheme for poor women on lines of the Pradhan Mantri Ujjwala Yojna (PMUY) to expand the coverage of LPG. “The Hydrocarbon Vision 2030 for North East India envisages a natural gas pipeline from Numaligarh towards Sittwe (in Myanmar) in different phases. The gas pipeline will open future possibilities of gas exchange and grid connectivity,” he said. India supplies all of petroleum product needs of Bhutan, which too is planning to extend LPG coverage to 100% of the population by sourcing supplies from the refineries in Assam, he said. To Mauritius, India supplies all its energy products. “Our (neighbouring) countries are considering the construction of a bunkering facility along with a jetty,” he said adding Indian firms are working with Vietnam, the UAE and Oman for presence in upstream sector to produce oil and gas. “Regional integration through connectivity across all modes – physical, utilities-based and digital – among our countries in the immediate neighbourhood is one of the top priorities of our government. It is imperative that we, together as a group, address the weak links and overcome challenges,” he said. The BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) region is abundant in energy resources such as hydropower, hydrocarbons, and renewables. “Since the region enjoys high insolation, it is appropriate that we consider the development of a common Solar Grid here,” he said. Also, Bangladesh and Myanmar have large gas reserves which can be explored as alternate sources of gas supply. Similarly, Nepal and Bhutan have immense potential of hydropower, which is untapped due to the absence of a market that can create demand of this magnitude. On the other hand, India and Sri Lanka are net importers of energy like many other developing countries, he said. “The energy demand-supply sectors in Bangladesh, India, Myanmar, SriLanka, Thailand, Nepal and Bhutan offer a potential for regional resource cooperation, which could go beyond export-import trade relations and link the region in a Bay of Bengal Energy Community and thus contribute to the process of regional integration. “The key to developing such a community lies in identifying complementary conditions and the combination of inter related production characteristics among energy supply and demand sectors of these countries,” he said. Pradhan called for reform and restructuring of the energy sector in each of these nations in such a way that the bloc becomes more competitive and efficient. The national energy systems—gas and electricity networks—in the South Asian countries are largely isolated from each other. Currently only India, Bhutan and Nepal trade electricity. In addition, India supplies some amount of power to Bangladesh. Demand for electricity in South Asia and particularly in Bangladesh, Bhutan, India and Nepal is growing rapidly which call for cooperation and trade that should eventually create one of the world’s largest integrated energy market, he added. Jorge De La Rosa Womens Jersey