Energy firm BP profits soar to five-year high
BP reported on Tuesday that profits had more than doubled in the third quarter, boosted by stronger oil prices that hit a four-year high in the period and as production rose thanks to new fields. BP reported third-quarter underlying replacement cost profit, the company’s definition of net income, of $3.8 billion, far exceeding forecasts of $2.85 billion based on a company-provided survey of analysts. That compared with a profit of $1.86 billion a year earlier and $2.8 billion in the second quarter of 2018. “Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution,” Chief Executive Officer Bob Dudley said in a statement.
BPCL to shut crude unit at Kochi refinery for 3 weeks from December 1
India’s state-run Bharat Petroleum Corp will shut a 120,000 barrels per day (bpd) crude unit and some secondary units at its Kochi refinery for about three weeks from early December for maintenance, its head of refineries said. “It (this shutdown) is mandatory to inspect the new plant after you run it for a year. We will open up some of the critical equipment to see if things are intact,” R. Ramachandran told Reuters on Tuesday. BPCL last year raised the capacity of the Kochi refinery in southern India by about 63 per cent to 310,000 bpd. As part of the expansion BPCL installed a new crude unit and secondary units including a delayed coker, fluid catalytic cracker, vacuum gasoil hydro-treater, diesel hydro-treater, sulfur Recovery Unit, and hydrogen generation unit (HGU). Ramachandran said the three-week shutdown will begin around December 1.
Indonesia does not need to import gas until 2027 at current demand growth rate, says official
Indonesia will not need to import any gas until at least 2027 if its average gas demand growth rate is maintained at just over 1 per cent, the country’s vice minister of energy and mineral resources said on Tuesday. Indonesia’s average gas demand growth over the last five years was about 1.1 per cent, Arcandra Tahar told a panel session at the Singapore International Energy Week (SIEW) conference. The country plans to meet its demand growth from existing fields until then if there is no big uptick in needs. “Up to 2027, we believe our domestic demand can be fulfilled by existing production internally,” the official said. Indonesia has committed to buying liquefied natural gas from the United States, starting from 2018, but has been reselling the cargoes after pushing back the date at which it might need to rely on imported gas. If demand accelerates sharply, the official said that date might be brought forward. “If we assume (demand) growth of 5.5 per cent, in 2024 there is possibility that we are going to import gas in the form of LNG,” he said.
Bengaluru: Gas leaks as metro corridor work damages Gail pipeline
An underground gas pipeline was damaged when metro construction workers were drilling the ITPL main road and this led to panic and disruption of traffic early on Monday morning. The leaking gas made a loud noise and left a bad odour in and around Garudachar Palya and Mahadevapura. As a precautionary measure, the police barred the entry of vehicles between the Hoodi Junction and KR Puram for two hours from 7.30 am. This resulted in heavy traffic congestion. The GAIL pipeline was attended to by its fire safety team even as the fire brigade rushed to the spot. “The underground natural gas steel pipeline of eight-inch diameter got punctured due to metro work. The natural gas pipeline has been laid as per safety standards and prescribed norms. Necessary civic permission is required for undertaking construction work by any agency but no permission was taken by Bengaluru Metro,” said an official statement from GAIL. On a complaint from GAIL, the Mahadevapura police booked the Bangalore Metro Rail Corporation (BMRCL) and its contractor ITD Cementation India under the Petroleum and Natural Gas Regulatory Board Act, Section 49 (Punishment for willful damages to common carrier or contract carrier) and Section 50 (Offences by companies) and IPC section 285 (negligent conduct with respect to fire or combustible material) and 427 (Mischief causing damage). BMRCL’s managing director Ajay Seth admitted that no permission was sought from GAIL as the utility was not aware of the existence of a gas pipeline on the stretch. “We conduct a detection test before starting underground work. The test did not show the gas pipeline,” he said. Seth said that BMRCL would be seeking a map of the gas pipeline network from GAIL and would superimpose it on the metro alignment to ensure that such mistakes do not repeat.
Trafigura denied licence to operate fuel pumps in India
The government has rejected for now global commodity trader Trafigura’s request for a licence to operate petrol pumps in the country, according to people aware of the development. Geneva-headquartered Trafigura, which along with Russian fund UCP and Russian oil firm Rosneft had purchased Essar Oil’s refinery and petrol pumps last year for $13 billion, had sought a separate licence to retail transportation fuels in the country but the government said the trader didn’t qualify for one just yet. Trafigura is the latest in a series of global players expressing interest in entering the rapidly expanding Indian fuel retail market. UK’s BP has obtained a licence and plans to launch filling stations soon. Saudi Aramco and French firm Total too have announced intentions to operate pumps here while Shell already operates more than 100 pumps in the country. Trafigura’s licence bid was not accepted on the grounds that it had not invested enough to be eligible for a licence, said one of the persons cited earlier. To qualify for a fuel retail licence, a company must have invested Rs 2,000 crore in the Indian oil and gas sector or proposed to invest the amount in the next 10 years, according to the official guidelines. Trafigura said its application was still pending. “A licence has been applied for on behalf of Puma Energy. The application is still pending. No decision has been taken to enter the retail market should a licence be granted,” Trafigura said in a response to ET’s emailed query. Puma Energy is a unit of Trafigura and operates fuel retail network in other countries. Trafigura said its investment in Essar Oil made it eligible for a separate retail licence but the government rejected the argument saying the rules allowed just one licence for one set of investment and since Essar Oil already owned a retail licence, an additional licence for its new shareholder could not be issued, the person said. “Every eligible company would get only one authorization i.e. the company that has invested or proposes to invest in the eligible activities either in its name or in the name of the company in which investment has been made or is proposed to be made,” says a provision in the 2002 rule on grant of authorisation. The government’s rejection, however, does not mean that it has shut the doors permanently for Trafigura. The company can approach the government again with a fresh request by proposing to invest Rs 2,000 crore in the hydrocarbon sector in the next 10 years, according to people with knowledge of the matter. Any new investment by Trafigura in expanding its Indian refinery or marketing infrastructure would count as the trader’s investment and contribute towards making it eligible for a licence, they said. Trafigura, which made $136 billion in group revenue last year, operates fuel retail network through its unit Puma Energy in several countries. India lifted price control on diesel in 2014 and petrol in 2010, encouraging private players in fuel retailing.
China’s total natural gas supply will increase by 25 bcm in 2018 versus last year-NEA
China’s total natural gas supply will increase by 25 billion cubic metres (bcm) in 2018 from a year ago, the National Energy Administration (NEA) said on Tuesday Gas supplies will be up at least 10 percent from total consumption of 237.3 bcm in 2017, according to a Reuters calculation based on historical data China will make it a priority to deliver gas to a key pollution control zone including the Beijing-Tianjin-Hebei area, and the Fenwei Plain which is comprised of the provinces of Shanxi and Shaanxi, the NEA said
India’s BPCL Q2 profit almost halved by refinery fire, misses estimates
Bharat Petroleum Corp Ltd’s profit nearly halved in the second quarter, well below analysts’ expectations, after a unit at its Mumbai refinery was closed by a fire. Profit in Bharat Petroleum’s fiscal second quarter ended Sept. 30 was 12.18 billion Indian rupees ($166 million), down from 23.57 billion rupees a year earlier, the Indian refiner said in a statement on Monday. Eighteen analysts on average had expected a profit of 18.42 billion rupees, according to Refinitiv data. Average gross refining margin, the difference between the cost of crude oil processed and the prices of refined products, fell to $5.57 per barrel from $7.97 per barrel a year earlier. Revenue from operations jumped 29.3 percent to 828.8 billion rupees at BPCL
Alphageo (India) bags contract worth Rs 338.9 million from ONGC
Alphageo (India) has received Notification of Award (NOA) of Contract from Oil and Natural Gas Corporation (ONGC), Western Offshore Basin for NSP Project, Mumbai for provision of2D Seismic Data Acquisition services in un-appraised on land areas of Sedimentary Basins of Ganga-Punjab Area for estimated Contract Value of Rs. 338.9 million (incl of taxes).
GAIL Offers Short-Tenure Contracts, Eases Rules For Domestic Customers
Natural gas sales contracts are becoming relatively easier for buyers as state-run GAIL, the key gas supplier in the country, is now offering shorter-tenure contracts and easier terms. Gas supply contracts are usually long term and contain take-or-pay provision that mandates a buyer to off take pre-agreed quantity or pay for a minimum quantity even if it lifts less in a year. GAIL, the biggest gas marketer in the country, sources a significant share of its gas portfolio from overseas. For years, it entered into long-term, take-orpay liquefied natural gas (LNG) contracts with suppliers overseas and covered itself back-to-back by signing similar contracts with domestic gas users. But the nature of its domestic contracts is now altering. It is now offering contract for less than five years and has eased take-orpay obligations for customers, a GAIL executive said. In the past, a buyer had to pay for 90% of the contracted volume even if it lifted less in a year but now this is down to 80%, the executive said, adding that the new contracts offered more flexibility. But new terms also mean increased risk for GAIL. GAIL is offering customers the choice to have their gas prices half-linked to Henry-Hub and half to crude oil. It also offers to hedge prices so that customers escape volatility. “Nobody wants a long-term deal. We are also not insisting. We understand that it’s difficult for smaller customers to take a bet on price or even their own long-term business prospects,” the executive said. “If they default five years later, then it will be a problem for us as well.” Some of the GAIL’s smaller customers have in the past complained that the take-or-pay provision tilted the scale in favour of supplier. Last year, the Competition Commission of India began an investigation into seven cases where small industrial customers had alleged abuse of dominance by GAIL especially with respect to the way the company imposed take-or-pay liability on them in 2015.