GAIL India says aims to add 5,500-km gas pipeline in three years
Indian gas firm GAIL (India) Ltd aims to add 5,500 km gas pipelines to boost its capacity by about 50 per cent in the next 3 years, its chairman said on Tuesday. India wants to raise share of natural gas in its energy mix to 15 per cent in next few years from about 6.5 per cent as the world’s third-biggest oil importer and consumer wants to cut its massive import bill and reduce its carbon footprint. In a written statement to shareholders, B C Tripathi said GAIL has also booked 1.5 million tonnes a year regassification capacity at Dhamra LNG terminal in eastern Odisha state. The company’s current annual gas marketing portfolio comprises 14 million tonnes, he added. David Bakhtiari Authentic Jersey
BPCL to skip Iran oil purchases in October: Source
India’s state-run Bharat Petroleum Corp will skip purchase of Iranian oil in October due to turnaround at its plants, a source privy to the plan said on Tuesday. The refiner will, however, lift 1 million barrels of Iranian oil this month, said the source, who did not wish to be identified. There was no immediate response from BPCL on Reuters’ email seeking comments. BPCL has changed a crude mix for its 240,000 barrels per day (bpd) Mumbai refinery after shutting down the fire-hit hydrocracker unit last month to optimise its processing and output of refined products, said the source. The hydrocracker unit will remain shut for at least another two months. Kyle Long Authentic Jersey
Venezuela signs oil deals similar to ones rolled back under Chavez
Venezuela has agreed to hand over at least seven oil fields to little-known companies that will be paid to boost output through contracts similar to ones rolled back under late socialist leader Hugo Chavez, according to two sources and an internal document. The effort signals that President Nicolas Maduro, who is struggling under a hyper-inflationary economic meltdown and fast-declining oil output, is willing to reverse the aggressive efforts of his predecessor – who died in 2013 – to expand the state’s role in the energy industry of the OPEC nation. But the plan faces significant hurdles because most companies involved have no known experience operating oilfields, and U.S. sanctions would likely inhibit more experienced firms from getting involved with Venezuela’s state-run PDVSA. The government had already announced a vague plan to boost oil output with the help of seven companies. The plan was described during a televised event on Aug. 28 in which representatives of those companies, during a ceremony including Maduro, signed “joint service agreements” with PDVSA. Details of the deals were not disclosed. But in a draft contract seen by Reuters, PDVSA offers to put companies in charge of the fields for six years on the condition that they boost production, finance the required investment and procure the necessary equipment. The draft was the basis for the contracts announced by Maduro, said two sources familiar with the situation who asked not to be identified because they are not allowed to speak publicly about the issue. Reuters was not able to obtain finalized contracts. The companies involved have not yet announced final agreements with Venezuela. Neither PDVSA nor the companies involved responded to a request for comment. The president of PDVSA, Manuel Quevedo, said during the Aug. 28 event that the overall plan would involve $430 million in investment and a production increase of 641,000 barrels per day (bpd). The terms of the deals were not disclosed. Quevedo said the plan included 14 companies but that only seven were present that night, without mentioning the names of the other companies. The deals involve fields including two that were operated by Italy’s Eni and France’s Total. The companies that signed agreements include five Venezuelan firms: Petrokarina, Enfriadores de Venezuela C.A., Consorcio Rinoca Centauro Karina, Well Services Cavallino, and Consorcio Petrolero Tomoporo. Most of them appear to be involved in oil services but have no evident experience operating fields, which tends to require significantly more capital, human resources and certifications. The companies either did not respond to requests for comment or do not have sufficient publicly available contact information to make such a request. The other two are Helios Petroleum Services, a Panamanian company that describes itself as petroleum marketer, and Shandong Kerui Holding Group, a Chinese oilfield equipment manufacturer. Neither responded to requests for comment. ‘DISGUISED PRIVATIZATION’ The draft says companies would receive a fee in compensation for the value of additional barrels they produce, and be reimbursed for the investments they make. PDVSA would have a six-month grace period, starting at the time the contractor increases output, to begin making payments. Payments would be made to the account of a trust created by the contractor, the draft says, helping ensure the contractor actually receives payment from PDVSA – which is billions of dollars behind in paying partners and providers. The draft contract is similar to a group of 1990s-era contracts known as “operating agreements” under which PDVSA contracted out oil production to companies that were paid a fee for the crude they produced. Chavez, elected in 1998, for years lambasted this arrangement as a bad deal for Venezuela on the grounds that it was a “disguised privatization” of the oil industry that did not leave enough revenue in the hands of the state. Former oil czar Rafael Ramirez, who oversaw Chavez’s push to boost the state’s role in the oil industry, in a 2005 speech to Congress said the arrangements were illegal because they handed over oilfields to private companies in violation of the 1970s oil industry nationalization. The legal status of the contracts signed in August was not immediately evident. Venezuela in 2005 ordered that operating agreements be converted to joint ventures in which PDVSA held a majority. Despite a 10-year oil boom that left PDVSA flush with cash, output at those fields steadily declined as the company diverted necessary investments into social programs that kept Chavez popular. The 2014 collapse of oil prices ushered in an economic crisis that left millions unable to eat, leaving oil engineers and oilfield workers alike rushing to leave the country. Maduro says the country is victim of an “economic war” led by opposition politicians with the support of Washington, which has slapped several rounds of sanctions on his government. Brandon Marshall Authentic Jersey
Russia’s Novatek signs LNG agreement with Japan’s JOGMEC
Russia’s Novatek said on Monday it had signed a framework agreement with Japan Oil, Gas and Metals National Corp (JOGMEC) to cooperate on Novatek’s liquefied natural gas (LNG) projects in the north of Russia. “The parties agreed to explore opportunities to cooperate on Novatek’s projects in the Yamal and Gydan peninsulas, including the Arctic LNG 2 project, on developing a regular transport link via the Northern Sea Route for LNG deliveries to the Japanese and Asia-Pacific markets,” the statement said. Novatek controls the Yamal LNG project, in which France’s Total along with China’s CNPC and the Silk Road Fund are minority shareholders. Russian and Japanese companies signed a portfolio of agreements on the sidelines of a forum in Russia’s far eastern city of Vladivostok on Monday. Travis Hamonic Womens Jersey
Iraq replaces Saudi as top oil supplier to India in August: data
Iraq replaced Saudi Arabia in August as the top oil supplier to India, data from industry and shipping sources showed, as refiners turned to Iraqi barrels to compensate for a lower intake of Iranian oil ahead of U.S. sanctions in November. The United States is reimposing sanctions on Iran following Washington’s decision in May to withdraw from a 2015 international deal aimed at curbing Tehran’s nuclear programme. While some sanctions were implemented from Aug. 6, those affecting Iran’s petroleum sector take effect only from Nov. 4. Imports of Iranian oil by India, Tehran’s top oil client after China, fell by about a third to about 523,000 bpd in August from July as state-refiners slowed purchases due to a delay in securing government approval to use Iranian ships. Despite the lower purchases, Iran remained the third biggest oil supplier to India in August, the data showed. Washington will consider waivers for Iranian oil buyers such as India but they must eventually halt imports as sanctions are imposed on Tehran, U.S. Secretary of State Mike Pompeo said last Thursday. Iraq and Saudi Arabia continued to be the two biggest oil suppliers to India last month, the tanker arrival data obtained from sources showed. The sources declined to be identified. India refiners shipped in 1.02 million barrels per day (bpd) of Iraqi Basra oil in August, an increase of about 46 percent from the previous month, while imports from Saudi Arabia declined 5 percent to about 747,000 bpd during the period, the data showed. India imported less Nigerian oil in August as the west African nation’s output was hit by outages in a couple of major streams such as Bonny Light and Tornados. Also, Asian buyers opted to take light sweet U.S. oil rather than Nigerian. India’s imports of U.S. oil in August rose to a record 275,000 bpd, accounting for about 6 percent of its overall purchases, the data showed. India refiners had booked U.S. oil cargoes in June when discounts between U.S. crude future and Brent was wide enough to make arbitrage economics feasible for India. India’s monthly oil imports from Nigeria declined by about 34 percent to about 279,000 bpd, the data showed. Overall India’s monthly oil imports in August rose 3.1 percent to about 4.7 million barrels, while they were up 15.8 percent from a year earlier, the data showed. Erik Swoope Womens Jersey
Policy tweak in works to allow companies to sell oil & gas to affiliates
The oil ministry is considering redefining ‘arm’s length sale’ for oil and gas contracts to include sale to an affiliate, which would allow a producer to sell its output to a related party, people familiar with the matter said. All oil and gas contracts in the country mandate parties to follow arm’s length principle — whereby the buyer and the seller are unrelated and act independently to achieve a fair market value of the product or service being transacted — so that the government gets its fair share of revenue for the oil and gas produced in the country. The directorate general of hydrocarbons (DGH), the oil and gas industry regulator, has recently written to the ministry of petroleum and natural gas that the arm’s length sale must be redefined to end a contradiction in the model revenue sharing contract under the latest exploration licensing policy, sources said. The definition of arm’s length sale explicitly excludes sale to an affiliate. But, the new contract introduces a provision allowing sale to an affiliate. It is this contradiction DGH wants resolved, they said. The development has triggered a debate in the oil ministry on whether it is possible to redefine the universally-recognised principle of arm’s length transaction in the narrow context of oil and gas contracts. All contracts related to oil, natural gas and coal bed methane (CBM) have the provision of arm’s length sale, which prevents producers from doing related-party sale. In cases where blocks were awarded without an auction to state firms, the government, not companies, allocates oil and gas to customers. Sidney Jones Jersey
India to have 10,000 CNG stations in next 10 years, on track to adapt cleaner fuels: Dharmendra Pradhan
Oil Minister Dharmendra Pradhan on Thursday said the country was on its way to construct more than 10,000 compressed natural gas (CNG) stations in the coming decade. He was speaking at an event held by the Society of Indian Automobile Manufacturers. “CNG vehicles are cheaper and less polluting and for this reason, according to the road map created by the government, India will get 10,000 CNG stations in the coming 10 years from around 1,400 today. These numbers are not part of any announcement; the numbers are based on the commitments made by winning bidders under the 9th City Gas Distribution (CGD) round,” Pradhan said. He added that the government had initiated the process to launch the 10th CGD bidding round as well. Pradhan said that after the 9th CGD round government’s access to the CGD networks would increase to more than 300 districts, which will entail an investment of more than Rs 70,000 crore. Earlier, in 2014 only 73 districts in the country had accessibility to the CDG networks. Speaking on the country’s energy imports, Pradhan said, “India imports around 3,500 million tonne (mt) of crude oil, coal, LPG, LNG and if we calculate the waste and unused carbon available in the country in the form of agri-waste, forest waste, etc, it comes to around 4,500 mt.” He added that the country’s oil-marketing companies (OMCs) were building 12 second-generation ethanol plants, which would produce ethanol from agriculture and urban waste. On country’s biofuel foray in powering aircrafts, the oil minister said, “India uses around 6 mt of aviation turbine fuel (ATF), India’s forests hold around 7 mt of non-edible oil producing plants, which can be used to produce bio-ATF. Technology is not a challenge anymore.” Pradhan added that even though the use of biogas had been around for some time, the country needs to further convert it into bio-CNG to utilise it in the transportation sector. “In order to give stimulus to the sector, government-owned OMCs have decided to provide complete off-take guarantee of bio-CNG at a good price. Also, bio-CNG and biofuel can become viable alternative for the transportation sector,” Pradhan said. He added that the country is moving towards adapting cleaner fuels such as biofuel, bio-CNG, coal to gas, and coal to methanol projects, and would be able to meet Prime Minister’s target of decreasing the country’s energy imports. Adam Wainwright Womens Jersey
Fuel tax cut unlikely as Centre projects Rs 30,000 crore revenue hit
As Andhra Pradesh joined Rajasthan in reducing VAT on petrol and diesel , the Centre on Monday seemed to be holding out against a cut in taxes amid rising pressure, with officials indicating that the government did not want its welfare schemes to suffer for want of revenue. While opposition parties supported the Congress-called Bharat bandh , BJP blamed global factors for the rise in pump prices of petrol and diesel. “We are standing with people in their problem. We are trying to redress the issue and will do that,” law and IT minister Ravi Shankar Prasad told a press conference. Government officials, however, suggested that the Centre may not lower duties as a Rs 2 per litre reduction would impact revenue by Rs 28,000 crore to 30,000 crore. Instead, more states are expected to reduce VAT, which will lower prices without impacting the Centre’s tax collection. “We pass on over 40% of the taxes that we collect to the states. So, any reduction by us will impact everyone,” said the official, after the Andhra government announced a reduction of Rs 2 in the prices of auto fuel. Besides, officials argued, states follow a system of ad valorem levies, which pushes up the revenue, whenever prices go up. Fuel tax cut unlikely as Centre projects Rs 30,000 crore revenue hit Fuel prices have been hitting record highs due to the falling rupee and high global crude prices. Prices in Delhi, where rates are cheapest among all metros and most state capitals, saw petrol touch an all-time high of Rs 80.73 a litre on Monday, while diesel was at a record Rs 72.83 a litre. Petroleum minister Dharmendra Pradhan is understood to have met BJP chief Amit Shah on the situation. The government is of the view that a weak rupee along with high international crude oil prices can impact fiscal deficit as well as current account deficit. In its assessment, a cut in duties will hit the rupee as well as interest rates due to the fallout on the bond market and leave a far deeper dent than a revenue loss of Rs 28,000-30,000 crore. “Then, you have to make budget cuts in developmental expenditure. This is the real consequence of oil tax cut,” said a source. Suggesting that it is not possible to significantly reduce tax burden on oil, an official said, “Even when UPA was in power or in any state where UPA and others are in power today, oil is a source of revenue for the state government. The rational approach has to be that we increase the taxation base of direct taxes flowing from income-tax and GST, and improve GDP to nonoil tax ratio so that burden of taxation on oil can be reduced.” said an official. Jake Rudock Authentic Jersey