Demand for diesel, cooking gas shrinks in November
The demand for diesel fell 5 per cent and that for cooking gas shrank 8 per cent, contracting India’s total oil demand in November. A combination of higher prices, drop in vehicle sales and decreasing use of polluting industrial fuels is said to have contracted oil demand by 0.87 per cent. Demand for diesel, cooking gas shrinks in November The consumption of cooking gas, or liquefied petroleum gas (LPG), fell in November after rising for 62 months in a row mainly due to higher prices, an executive at a state oil company said. The price of subsidised cooking gas varies just a few rupees in a month but that of nonsubsidised cylinders varies sharply. The rate of the nonsubsidised cylinder, used by about 20 million customers, had risen by ₹63.5 in November to ₹942.5 in Delhi. Price of the non-subsidised cylinder went up by ₹201 between January and November. The rate is now down to ₹809.5. The sale of diesel, the key transportation fuel that makes up 40 per cent of the country’s oil demand, dropped 5 per cent in November from the previous year. Petrol sales, however, were up 8.72 per cent. Petrol accounts for 13 per cent of total oil sales in the country. Domestic fuel prices follow international trends with a lag since state oil companies take the average of the trailing fortnight to determine local prices daily. A dramatic decline in international rates was slowly showing up in local prices, which were still high, deterring higher consumption in November. Petrol pump dealers may have cut their inventory, hoping to replenish stock later when prices fall further, resulting in lower sales by oil companies in November, an executive said. A drop in vehicle sales also contributed to lower diesel sales, the executive said. Passenger vehicle sales fell 3.4 per cent in November while the sale of medium and heavy trucks, the key consumers of diesel, dropped 11 per cent. A cyclone in Tamil Nadu, which disrupted transportation for some time, and severe pollution levels in Delhi also weighed on the demand for diesel. Pollution in the National Capital Region had stalled the entry of trucks into Delhi for a few days. The availability of grid power as well as the level of farm activity also influences diesel demand in the country. The consumption of polluting fuel oil and pet coke fell in November due to official efforts at cutting its use by industries. Increased air traffic, however, pushed up the use of aviation turbine fuel by 5 per cent.
Russia’s Novatek launches airport, staff recruitment tenders for Arctic LNG 2
Russia’s top liquefied natural gas (LNG) producer Novatek has launched tenders for the construction of an airport and recruitment of personnel for its second large-scale project, Arctic LNG 2, the company said on Monday. Novatek plans to start producing sea-borne LNG at the Arctic Gydan Peninsula that juts into the Kara Sea in 2022-2023, with production volumes reaching 19.8 million tonnes per year. It is near the existing Yamal LNG which launched a year, producing 16.5 million tonnes annually. According to tender documentation published on Novatek’s web site and on the trading platform of Gazprombank, the company is searching for a recruiting firm and a firm to build an airport for Arctic LNG 2. Last month it also declared a tender for construction of a housing complex for Arctic LNG 2, which would accommodate 1,500 people at the Utrenneye gas field, the main source of gas for the project. It said there is no drinking water and cellular communication service at the gas field, located well north of the Arctic circle where temperatures fall to almost minus 60 degrees Celsius (minus 76 Fahrenheit). LNG is a strategically important business for Russia which aims to capture a fifth of the global market for the fuel next decade. French energy major Total holds a 10 percent stake in Arctic LNG 2. Russia also offered a role in the project to Saudi Aramco.
ONGC, OIL spend Rs 13,000 cr on 115 discoveries govt took away from them: Pradhan
State-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) spent over Rs 13,000 crore on 115 oil and gas discoveries which were taken away from them by the government for auctioning to private companies, Oil Minister Dharmendra Pradhan said Monday. The present BJP-led NDA government took away so-called idle small and marginal discoveries of ONGC and OIL and auctioned them to private firms under Discovered Small Field (DSF) bid rounds. Under DSF bid round-1, 67 discoveries, mostly of ONGC, were auctioned, while in the second round, bids for which are due next month, another 48 finds are being auctioned, he said in a written reply to a question in the Lok Sabha. “As informed by ONGC, an amount of Rs 12,826 crore has been spent by ONGC on the discoveries/fields identified in the first and second round of Discovered Small Field Policy. An amount of Rs 224.27 crore has been spent by OIL in this regard,” he said. ONGC and OIL are not compensated for the amount they had spent on discoveries of these oil and gas reserves. Unlike state-owned firms, the private players are allowed pricing and marketing freedom to make these discoveries viable. ONGC and OIL have stated that they could not produce from the discoveries as they are uneconomically at current cap prices. “With a view to increasing domestic production of oil and gas, the government in May 2016 launched Discovered Small Field Bid Round-I under which 67 discoveries of ONGC and OIL, which had not been put into production, were offered for auction through international competitive bidding,” Pradhan said. “The policy has now been extended to its second round to include 48 un-monetised discoveries of ONGC and OIL under DSF Bid Round-II.” Under DSF-I, 47 companies participated in the bidding process, he said. ONGC and OIL were also allowed to participate in the auction to get back their own discoveries. “The 67 discoveries under DSF Bid Round-1 are estimated to have in place reserves of 86 million tonne of oil and gas equivalent. In DSF-II, 48 discoveries of ONGC/OIL offered for bid are estimated to have in place reserves of 163.08 million tonne of oil and gas equivalent,” he said. Pradhan said the government has notified the Hydrocarbon Exploration and Licensing Policy (HELP) on March 30, 2016, which is based on revenue sharing model wherein explorers offering a higher share of oil and gas to the government are awarded blocks. The salient feature of HELP include single license for exploration and production of conventional and unconventional hydrocarbons like shale oil, he said adding also included in HELP is an Open Acreage Licensing Policy (OALP) wherein investors can carve out the area of their interest for exploration and production of oil and gas and submit expression of interest throughout the year. HELP has easy to administer revenue sharing model and marketing and pricing freedom for crude oil and natural gas has been guaranteed for operators, he said. Also, it provides for zero royalty rates for deepwater and ultra-deepwater blocks for first seven years, he added.