Adulterated diesel selling racket busted, two arrested
Two person were arrested after the state revenue officials busted an adulterated diesel selling racket from Dhudhrej in Surendranagar on Thursday. The officials also seized 40,000 litres of adulterated diesel that was being sold at low rates since last three months by the accused, who have been charged under the Prevention of Black Marketing Act. The accused have been identified as Shailesh Parmar and his assistant, whose identity was not revealed. Revenue officials said that the diesel seized from the accused was manufactured by a Korean company but was smuggled into Gujarat from Columbia in South America. The accused had set up a petrol pump like system with dispensers and underground storage tanks from where they sold adulterated diesel at Rs 70 per litre, which is far lower than the market rate of Rs 79-80 per litre, to truck drivers and other petrol pumps . Surendranagar collector K Rajesh told TOI “When we analysed the fuel that the accused were selling, in terms of density, viscosity we find it was not diesel, but something resembling diesel. The accused used to purchase the adulterated diesel from some South Korean company. But it was brought to Gujarat from Columbia in South America. We suspect that the fuel was smuggled into the country, but we are yet to to ascertain that.” Revenue officials further revealed that the accused also used to pilfer diesel from oil refinery and from ships that came for breaking at Alang shipyard. The accused used to mix solvents smuggled from Columbia into diesel and sell it at cheaper price. “While selling the adulterated fuel, the accused used to issue fake bills without GST numbers,” said Rajesh. The revenue officials have been investigating the duo since last one and half month. The accused have been handed over to the police which is probing which petrol pump owners used to purchase the spurious diesel from them.
Iran’s crude oil customers turn away, more cargoes being stored: Russell
The crude oil market is still uncertain over the likely impact of the renewed U.S. sanctions against Iran, but two things seem to be becoming clearer: Iran is struggling to keep buyers, and much of the crude it is shipping is being stored. While not quite a death knell for Iranian exports, news that China’s two biggest state refiners, Sinopec Group and China National Petroleum Corp (CNPC), have decided not to take any November-loading cargoes from Tehran is a serious blow. China is the biggest buyer of Iranian crude and largely stood with the Islamic republic during the previous round of sanctions against its exports. Sinopec and CNPC, though, are now skipping bookings for November because of uncertainty over whether they can secure U.S. waivers that allow their purchases to continue, Reuters reported on Wednesday. From Nov. 4, the United States will re-impose sanctions against Iranian crude exports as part of President Donald Trump’s efforts to force Tehran to accede to a more restrictive deal on limiting its nuclear and missile programmes. While crude oil market participants don’t expect that U.S. sanctions will shut down Iran’s exports completely, there is still debate over how much oil is likely to be lost, and for how long the situation will persist. What China does is key in this regard, given that it imported about 650,000 barrels per day (bpd) of Iranian crude in the first nine months of the year, according to vessel-tracking and port data compiled by Refinitiv. Iran’s crude exports have been in the region of about 2 million bpd in recent months, and it appears to be on track to record shipments around that level in October. Iranian tankers are routinely turning off their tracking transponders, presumably to disguise their destinations, making it challenging to monitor the true state of the nation’s exports. Even taking that into account, it’s worth noting that of the nine cargoes shown as arriving at their destinations in November, six are heading to China, one each to India and Greece, and one to an as yet undetermined Asian port. Iranian Crude Gets Stored There are also questions over what exactly is happening to the Iranian crude arriving in China. Much of the crude is heading to the northern port of Dalian, where it is likely to end up in bonded storage. That would mean it would be in China, but wouldn’t have cleared customs, and therefore unavailable to domestic refiners. This raises the possibility that some of Iran’s crude exports are in or are headed into storage tanks and are effectively lost to the market. This leads to a couple of points to consider, firstly that the market is adjusting quite well already to the loss of Iranian barrels, and secondly that the oil in storage at some point will come to market, which may depress demand from other suppliers when this happens. Iran’s other key customer is India, which took about 568,000 bpd in the first nine months of the year, according to the Refinitiv vessel-tracking data. This has yet to decline, with October on track for about 558,000 bpd, but there are indications this may be the high-water mark for a while. Reliance Industries, which owns the world’s largest refining complex, said on Oct. 17 that it has halted imports of Iranian crude and would buy from other Middle Eastern producers and the United States instead. Other Indian refiners are still aiming to secure U.S. waivers for Iranian imports, but questions over insurance coverage may also force them to limit those shipments. Overall, it appears both China and India are cutting back on buying crude from Iran, but by how much and for how long still has to be determined. It also appears that much of Iran’s crude is headed into storage and not really available to the market. While this will put pressure on Iranian government revenues, it raises the possibility, too, of a crude glut once the U.S. sanctions are finally eased.
Indranil Mittra takes over as Director Finance of Numaligarh Refinery Limited
Indranil Mittra has joined as Director (Finance) of Numaligarh Refinery Limited (NRL). Prior to his joining, he was holding the position of Chief General Manager ( Finance) of NRL. Mittra – a qualified CA & ICWA and a PG Diploma Holder from S P Jain Institute of Management & Research, Mumbai is a hard core finance man with experience spanning around 30 years in the oil industry in diverse areas of Finance such as Corporate Finance, Indirect Tax, Business Finance, including exposure in upstream, etc. According to the company Mittra has garnered experience in handling Commercial and ERP (Enterprise Resource Planning) roles. Mittra started his professional journey in Price Waterhouse, where he spent a little more than a year before joining Bharat Petroleum Corporation Limited (BPCL) Corporate Finance in December 1989. Thereafter, he has been associated with BPCL and its subsidiaries and has held various key positions. He was also involved in implementation of SAP in Bharat Oman Refineries Limited (BORL).
Adapt to changing times, IEA urges major oil, gas exporters
Your time is running out, the International Energy Agency (IEA) has effectively told major oil and gas exporters, noting that they need to address rising production from new sources such as shale and uncertainties over the growth in the demand for crude, a new report said on Thursday. “Outlook for Producer Economies”, in IEA’s World Energy Outlook series, examines six resource-dependent economies that are pillars of the global energy supply: Iraq, Nigeria, Russia, Saudi Arabia, the United Arab Emirates and Venezuela. It assessed how they might fare to 2040 under a variety of price and policy scenarios. The roller-coaster in oil prices over the last decade has brought into sharp focus the structural weaknesses in many of the major exporters. Since 2014, the net income available from oil and gas has fallen by between 40 per cent (in the case of Iraq) and 70 per cent (in the case of Venezuela), with wide-ranging consequences for economic performance. The volatility of hydrocarbon revenues presents dilemmas for countries whose budgets depend on them, especially if their economies and finances are not resilient. The extent to which producer countries steer through essential economic transformation can have major implications for energy markets, global environmental goals and energy security, according to the report. The report comes at a time of high oil prices, which are a double-edged sword. Higher revenues provide the means to reform, but they can also appear to reduce their urgency. However, as was seen in the past, higher energy prices encourage production elsewhere while accelerating structural changes in demand, which affect the producers’ long-term markets. “More than at any other point in recent history, fundamental changes to the development model of resource-rich countries look unavoidable,” IEA’s Executive Director Fatih Birol said. “Following through with the announced reform initiatives is essential, as failure to take adequate action would compound future risks for producer economies as well as for global markets.” The countries examined are very diverse, and the report considers a wide range of experiences and prospects. Many of them have pushed forward plans to boost investment and growth in the non-oil sectors of their economics. Venezuela, though, provides an example of how badly things can turn out when economic and energy headwinds gather strength. Some of the world’s largest producers face strong pressures from rising numbers of young people entering the workforce. More than 50 per cent of the population living across the Middle East is under the age of 30; the proportion is more than 70 per cent in Nigeria. In many major producers, income from oil and gas will not be large enough to provide for these growing populations, even in scenarios where oil demand continues to grow to 2040 and prices remain relatively robust. The energy sector has an important part to play in the reform agenda. The report focuses on six key responses: capturing more domestic value from hydrocarbons, for example via petrochemicals; using natural gas as a means to support diversified growth; harnessing the large but under-utilised potential for renewable energy, especially solar; phasing out subsidies that encourage wasteful consumption; ensuring sufficient investment in the upstream (the ability to maintain oil and gas revenues at reasonable levels is vital for economic stability); and playing a role in deploying new energy technologies, such as carbon capture, utilisation and storage.
Qatar to boost LNG production capacity to 110 million mt/year by 2024-minister
Qatar, the world’s largest LNG producer, is on track to expand its LNG production capacity by around 43% to 110 million mt/year, Mohammad Bin Saleh Al-Sada, Minister of Energy and Industry, said at the LNG Producer-Consumer Conference in Nagoya. This is the latest update to Qatar’s LNG expansion plans and its largest production forecast till date compared to its current production capacity of 77 million tons/year. It had initially stated plans to reach 100 million mt/year by 2020, following the lifting of a 12-year moratorium on the development of its offshore North Field in 2017. The rapid pace of Qatar’s expansion will allow it to maintain its position as the world’s top LNG exporter despite competition from Australia that expects to have 88 million mt/year of nameplate LNG export capacity if all its 10 projects reach full capacity. Qatar’s plans to increase its LNG production to 110 million mt/year will help meet the forecasted shortage in global LNG supply starting from, or even earlier than, the mid-2020s due to emerging market demand growth, Al-Sada said. “This production is planned to commence by 2024,” he added. The International Energy Agency said in its Gas 2018 report that global LNG export capacity is ramping up by the end of 2020, but this oversupply could be short-lived due to the pace of LNG demand growth in Asian markets. “Without new investment, the continuous growth of the LNG trade could result in a tight market by 2023. Owing to the long lead time of such projects, investment decisions need to be taken in the next few years to ensure adequate supply through the 2020s,” according to the Paris-based energy think tank. Al-Sada said Asian economies will be the main contributor to LNG demand growth, and traditional LNG consuming markets like Japan, Korea and Taiwan will be supplemented by new LNG demand from China and India. “In 2017, China and India have increased their LNG imports by a combined 14 million tons per annum to reach 38 and 22 million tons/year respectively,” Al-Sada said, adding that China is expected to raise the share of natural gas in its energy mix to 15% by 2030. Demand growth for LNG in India and China is underpinned by environmental considerations and internal market reforms, and by 2040, LNG volumes are expected to exceed natural gas delivered by pipeline to make up the bulk of gas trades for the first time, Al-Sada said. He said, with regard to market fundamentals, the challenge for the LNG industry is to find a balance between buyers’ need for competitive prices and supply flexibility, and a healthy cash flow for producers.
India’s crude oil production declines 4.19%, pushes import dependence to 83.7% in Sept
India’s domestic crude oil production fell 4.19 per cent to 2,797.84 thousand metric tonne (TMT) in September as compared to the corresponding month a year ago, according to the recent oil ministry data. The decrease in domestic crude oil production pushed India’s crude oil import dependence to 83.7 per cent in the month of September, as compared to 83.3 per cent recorded in the corresponding month a year ago. India’s cumulative crude oil production in the first six months (April-September) of the current financial year fell by 3.42 per cent to 17,409.44 TMT as compared to 18,025 TMT produced in the year-ago period. ONGC Country’s largest oil and natural gas producer, Oil and Natural Gas Corporation’s (ONGC’s) crude oil production fell by 7.21 per cent to 1,711.27 TMT in the month of September, as compared to 1,844.25 TMT produced in the corresponding month a year ago. ONGC’s share in the country’s total crude oil production fell to 61.16 per cent in the month of September, as compared to a share of 63.15 per cent in the corresponding month a year ago. The government-owned upstream player’s cumulative crude oil production in the first six months (April-September) of the present financial year 2018-2019 fell by 5.54 per cent to 10,676.15, on the back of declining production of the company’s western offshore fields. The decline in crude oil production is attributed to problems in the electric submersible pump in the wells of N B Prasad-D1 field situated in the western offshore basin along with less than planned production from WO-16 and B-127 offshore fields, due to the absence of Mobile Offshore Production Units Sagar Samrat and Sagar Laxmi and sub-sea leakage in some well fluid lines of Mumbai High and Neelam Heera Asset, oil ministry said. ONGC’s total share in the country’s crude oil production fell to 61.32 per cent in the first six months of the present financial year, from a share of 62.70 per cent recorded in the corresponding period a year ago. Oil India Oil India, country’s second-largest government-owned oil and gas producer’s crude oil production in the month of September fell marginally by 0.91 per cent to 274.28 TMT, as compared to 276.79 TMT produced in the corresponding month a year ago. Oil India’s share in the country’s total crude oil production increased marginally to 9.80 per cent in the month of September, as compared to a share of 9.47 per cent in the corresponding month a year ago. The company’s total crude oil production in the first six months of the present financial year fell marginally by 0.49 per cent to 1,685.69 TMT, due to less than planned contribution from work over wells and drilling wells. Also, Oil India’s share in the country’s total crude oil production in the first six months of the present financial year increased marginally to 9.68 per cent, as compared to share of 9.39 per cent recorded in the corresponding period a year ago. PSC fields Crude oil production from fields operated by private players and joint ventures increased 1.65 per cent to 812.30 TMT in September, as compared to 799.09 TMT produced in the same period last year. Share of Production Sharing Contract (PSC) fields in the country’s total crude oil production increased to 29.03 per cent in September, as compared to a share of 27.36 per cent recorded in the corresponding month a year ago. Cumulative crude oil production from PSC fields in the first six months of the present financial year increased marginally to 5,047.61 TMT, as compared to 5,029.13 produced last year in the same period. Share of PSC fields in the country’s total crude oil production increased to 28.99 per cent in the first six months of the present financial year, as compared to a share of 27.90 per cent in the year-ago period.
BP expects to start exploration in Libya with Eni in Q1
BP expects to begin exploration with Italian oil major Eni in Libya in the first quarter of next year, CEO Bob Dudley told Reuters on Thursday. “I’m not sure about this year since it takes time to set up offshore rigs but Q1 for sure,” Dudley said on the sidelines of the Eurasian Economic Forum in Verona. Eni agreed in October to buy half of BP’s 85 per cent stake in a Libyan oil and gas licence and become the operator of the exploration and production sharing agreement in the country. Dudley said the agreement with Eni did not mean BP was thinking of pulling out of Libya. “We remain committed and have plans to expand,” he said. BP does not produce any oil or gas in Libya. It signed the EPSA agreement in 2007 to explore onshore in the Ghadames basin and offshore in the Sirte basin. Its exploration programme was interrupted in 2011 when civil war broke out and remains under force majeure. Dudley said he was very pleased with the deal with Eni, adding the two groups could soon be working on other projects. “We are looking at a couple of other things with Eni around the world,” he said, but declined to say where. Dudley said BP was also looking to grow in Egypt where it is developing the West Nile Delta project. He said the expansion plans for the project were expected to be completed at the end of the year with more expansion further down the road. BP bought a 10 per cent stake in the giant Zohr gas field that Eni discovered in Egypt and had an option to raise that stake. “The option expired… We won’t be raising our stake for capital employment reasons,” he said.
Government to rank oil and gas fields to boost output, promote Competition
The Directorate General of Hydrocarbons (DGH) has begun ranking the country’s oil and gas fields in a bid to induce competition among its managers and help boost domestic output stagnant for years now. The ranking is based on a field’s performance on 10 key parameters such as output, infusion of new technology, energy efficiency, reduction in flaring, safety standards and financial audit, an official said. Each parameter has been assigned a different weight. DGH is the technical arm of the oil ministry. State firms have already joined the DGH’s ranking programme and have begun sharing all data needed for the purpose, the official said, adding that private companies too will likely join the exercise in about a month. “This is just benchmarking. People should know where they stand vis-à-vis others. This would help them improve,” the official said. “This is to bring in a positive competition, not to show anyone in bad light or act against anyone who is a laggard.” The ranking would initially be shared only with producers but once the process stabilizes, it could also be made public. Ranking oilfields is just one of the many measures the government has initiated in recent years to raise local output that has contracted this year. A combination of ageing oilfields, inadequate field management and policy issues has ensured a steady decline in crude output since 2011-12, pushing up India’s dependence on import to 83.2% of its requirement. DGH has also recently undertaken measures to beef up its manpower. It is filling up positions vacant for some time, and reshuffled responsibilities among its people. Some of its executives, who are mostly drawn from ONGC and Oil India, are being sent back to their parent companies while others are being brought on deputation to fill those places. “Work has expanded at DGH as it has auctioned so many blocks. So, we can’t leave positions vacant anymore,” an official said, adding that transfers are just routine. DGH monitors all exploration and production activity in the country, receiving and analysing data from producers, answering their queries and resolving their issues. Its executives study and approve field development plans of companies and sit in the management committee meetings that approves work programmes and annual budgets for every field.