Australia’s Invictus says it has not found oil and gas deposits in Zimbabwe
Australian-listed Invictus Energy said on Friday it had not found oil and gas deposits in northern Zimbabwe but there were indications of a “working petroleum system” which could only be confirmed by a planned exploration well. President Emmerson Mnangagwa told reporters on Thursday that Invictus had found oil and gas deposits in the Muzarabani area and had agreed to enter a production sharing arrangement with Zimbabwe once the project reached commercial production. But in a statement to the Australian Stock Exchange, Invictus tampered Zimbabwe’s expectations of an oil bonanza saying “an oil or gas discovery has not been made.” “The prospective resource estimate for the Muzarabani prospect relates to undiscovered accumulations which have both a risk of discovery and a risk of development,” said Invictus. “Although the Cabora Bassa Basin possess all the elements for a working petroleum system, a discovery can only be confirmed through drilling of an exploration well.” Zimbabwean-born Invictus Managing Director Scott MacMillan attended Mnangagwa’s news conference on Thursday. Mines Minister Winston Chitando said the well would be sunk in 2020 at a cost of $20 million and said the Muzarabani project was the largest undrilled onshore resource in Africa. Invictus, which is an independent oil and gas exploration firm whose only asset is in Zimbabwe, is using data first generated by Mobil Oil during its studies in the 1990s. Chitando said Invictus had made more progress than Mobil because it had a better knowledge of the Muzarabani basin which had a similar geological structure to Uganda and Kenya, where oil has been discovered. The southern African nation is suffering from a dollar crunch that has seen shortages of fuel and a spike in prices of basic goods in recent weeks.
Indian Oil Corp second quarter net profit down 12.5 per cent at Rs 3,326 crore
Indian Oil Corporation (IOC), the nation’s largest fuel retailer, today posted a 12.5 per cent dip in net profit for the quarter ended September at Rs 3,326 crore. The company had posted a net profit of Rs 3,805 crore in the same quarter last financial year. Total income of the company, however, rose 38 per cent to Rs 155,687 crore during the September 2018 quarter from 112,887 crore posted in the corresponding quarter last fiscal. IOC said its average Gross Refining Margin (GRM) during the six months ended September 2018 stood at $8.45 per barrel as compared to GRM of $6.08 per barrel in the same period last fiscal.
Gas allocation mechanism for power generation units in the works
In a big relief to private power companies, the government is working out a gas allocation mechanism for electricity generating units by pooling ONGC deep sea gas with LNG and subsidising the tariffs to revive about 25,000 mw projects. India has currently nearly 25,000 mw of operational gas-based capacity, all of which is stressed because of gas unavailability. The scheme, being discussed at the level of cabinet secretary-led high-level empowered committee, is proposed to be operated for next two financial years. The committee to address stress in the power sector due to fuel unavailability and regulatory issues is slated to meet on November 6. “The proposal entails price pooling of 5.45 mmscmd of ONGC deep water gas, currently with GAIL, with imported LNG and supplying it to power plants. There are two options of allocation being mulled at this stage, which could be auction of the gas or allocation by rotation to the power projects,” a senior government official said. Calculated at a cost of the present RLNG price of $9 per mmBtu, electricity tariff at the pooled price might drop to around Rs 5.90 per unit, industry experts said. “If the government subsidises electricity tariffs by Rs 1.50-2 per unit to make it affordable, the subsidy outgo would be over Rs 15,000 crore,” an expert said on condition of anonymity. ET on Wednesday reported that the oil ministry has floated a cabinet note proposing new price discovery mechanism and has removed power plants from the priority list for allocation of APM gas. Association of Power Producers director-general Ashok Kumar Khurana said pooling of gas is a positive step. “This will help stressed gas-based assets to operate and meet peak demand. With improvement in gas availability, these assets can form an important component of ancillary services,” he said. The government had launched an e-RLNG scheme in March 2015 for two years. The scheme was discontinued after two rounds of bidding after the power ministry received aggressive bids from companies. Against total requirement of 117 mmscmd, total gas supply in 2017 was 30 mmscmd. Data available with the Central Electricity Authority showed the 24,812-mw gas based power stations in the country generated higher than the target in September and in the financial year so far. The projects operated at a capacity of 23.3% between April and September. Power companies have been asking the government to restart the scheme as about 7,500-mw capacity is completely stranded while the rest is stressed.
France’s Engie rebuilds global LNG trade team in Singapore post-divestment
French energy group Engie said it is in the process of building a new liquefied natural gas (LNG) team after it completed the sale of its LNG assets to Total in July * The global LNG trading team will be headed by Gordon Water in Singapore to service both internal and external clients, Engie said in a statement * The team will help “manage the company strategic repositioning towards a leaner LNG business”, it added * Engie is close to completing a two-year plan to sell off some 15 billion euros ($17.09 billion) of non-core assets and re-invest those proceeds away from coal and into areas such as renewable energy, power grids and energy services
Bursting natural gas storage chokes off North Asian LNG demand
Rising gas storage levels in North Asia are denting demand for liquefied natural gas (LNG) ahead of a warmer than expected winter, driving at least one utility in Japan to resell winter cargoes it does not need, regional trade sources told Reuters. Storage levels in Japan and South Korea are estimated to be at their highest since at least 2015, according to data from Refinitiv Eikon. Gas tanks are brimming in China as well, according to trade sources. North Asia’s gas inventory typically peaks in October before it starts getting drawn down, but this year there are no signs yet of stocks falling, according to the data. “Due to warmer weather than usual, Japanese buyers’ demands are low and tank inventories are high,” a trader familiar with the Japanese LNG market said on Friday. At least one utility is trying to sell winter cargoes that it does not need due to high inventory, he added. Japan is likely to experience warmer-than-average weather between November and January, the country’s official forecaster said last week, implying low demand for heating. Nuclear power plant restarts at the world’s top LNG importer are also denting demand for the super-chilled fuel. Electricity generation using solar power has been growing in some parts of Japan, which is eating into LNG demand, a second source familiar with the Japanese market said. Chinese buyers are also expected to slow down spot purchases due to full storage capacity, a source familiar with the Chinese gas market said. “I think we are quite balanced and don’t have too much requirement at this stage,” the source added. TANKERS LNG is still being stored in vessels off Singapore and Malaysia waters for up to three weeks, unable to find buyers, in an unusual and expensive move. At least half a dozen LNG tankers have been floating LNG off Singapore and Malaysian waters, according to Refinitiv Eikon shiptracking data. Traders are betting that demand will increase when it starts getting colder. “Prices are very low. If they sell and demand starts to appear, the prices will rise again and it will be a big loss,” a Singapore-based trader said, adding that the companies are likely waiting for winter demand to set in.