Vedanta, ONGC, 37 others put in 145 bids in oilfield auction
Vedanta and many little-known private players emerged the dominant bidders in the second round of auction for discovered small fields in which 39 companies bid for 24 oil and gas contract areas. The government received 145 bids, including 103 for onland contract areas and 42 for offshore, according to an official statement. One of the total 25 contract areas on offer received no bid in the auction whose deadline was extended twice to attract more investors. Vedanta, controlled by billionaire Anil Agarwal, has submitted the maximum 21 bids. Vedanta was the highest bidder in the last year’s auction for major fields, in which it placed bids for all 55 blocks on offer and won exploration licenses for 41. With 15 bids, little-known Arch Softwares Pvt Ltd was the second-highest bidder. ONGC and Oil India have also bid for 10 contract areas each. A consortium of Shanti GD Ispat and Power Pvt Ltd, Bagadiya Brothers Pvt Ltd and Shanno Business India Pvt Ltd vying for 10 contract areas. Ganges Geo Resources Pvt Ltd has also placed bids for 10 contract areas. Bids for six contract areas have come each from Invenire Energy Pvt Ltd, Gem Petro E&P Pvt Ltd, and Oilmax Energy Pvt Ltd. A total of 28 domestic private companies, six foreign companies and five state firms participated in the auction. “This bid round saw more than anticipated participation from new entrants from India and foreign countries like USA, UK, Australia, Singapore and UAE,” said the official statement. Goodview Trading, HBA Offshore, Keerthi Industries, Dravida Petroleum DMCC, and Nippon Power were among other bidders. “The government endeavours to award the contract areas by end of February 2019, so as to expedite the monetization of the hydrocarbon production from these fields,” said the statement.
Iraq Indian Oil looking for annual deal to buy US oil
Indian Oil (IOC), the country’s top refiner, is looking for an annual deal to buy U.S. crude as it seeks to broaden its oil purchasing options, its chairman said on Wednesday, amid uncertainties over imports from Iran. Washington in November granted a six-month waiver to New Delhi from sanctions against Tehran and restricted India’s monthly intake of Iranian oil to 1.25 million tonnes or 300,000 barrels per day. Sanjiv Singh told reporters IOC has not yet finalised from which company it would buy U.S. oil. “When we go for term, it should have price advantage for us and strategic advantage for us apart from supply sureties. So considering these three we will work out volumes also,” he said. India Oil had previously purchased U.S. oil from spot markets and signed a mini-term deal in August to buy 6 million barrels of U.S. oil between November to January. IOC is the top Indian buyer of Iranian oil with an annual contract for 180,000 bpd in the fiscal year ending March 2019. Singh said his firm buys Iranian oil because of competitive prices and attractive terms and conditions. Iran offers extended credit periods and almost free shipping on oil sales to India. He said IOC was in talks to renew an annual oil contract with Iran but a new any deal would depend on conditions attached to a subsequent waiver from the U.S. sanctions. “The earlier waiver was for the existing contract, (for a new contract) we will have to work it out,” he said. Meanwhile, the refiner has signed a deal with Iraq to buy 360,000 bpd of oil, including up to 500,000 bpd of Basra Heavy, in 2019 compared with 356,000 bpd last year.
Shell’s 2018 profits soar to four-year high
Royal Dutch Shell reported a 36 per cent rise in 2018 profits on Thursday to $21.4 billion, the highest since 2014, beating forecasts as cost savings kicked in. For the fourth quarter of 2018, the Anglo-Dutch company’s net income attributable to shareholders, based on a current cost of supplies (CCS) and excluding identified items, rose 32 per cent on the year to $5.688 billion as deep cost cuts introduced after the 2014 market downturn filtered through. That compared with a company-provided forecast of $5.28 billion for the quarter and $20.98 billion for the full year.
US natural gas demand to hit record high during freeze
US homes and businesses will likely use record amounts of natural gas for heating on Wednesday as an Arctic-like freeze blankets the eastern half of the country, according to energy analysts. Harsh winds brought record-low temperatures across much of the Midwest, unnerving even residents accustomed to brutal winters and keeping them huddled indoors as offices closed and mail carriers halted their rounds. That brutal cold could also temporarily reduce gas production by causing freeze-offs in the Marcellus and Utica shale, the nation’s biggest gas producing region, in Pennsylvania, Ohio and West Virginia, the analysts warned. Freeze-offs occur when water and other liquids in gathering lines freeze, blocking the flow of gas. Overnight lows on Wednesday-Friday will drop to -20 Fahrenheit (-29 Celsius) in Chicago and the single digits along the East Coast from New York to Boston, according to AccuWeather, a weather forecaster. The cold, however, will be short lived with high temperatures in New York and Chicago expected to rise into the 40s F this weekend. The normal high at this time of year is 32 in Chicago and 39 in New York. Financial data provider Refinitiv predicted gas demand in the Lower 48 U.S. states would hit a daily record of 145.2 billion cubic feet per day (bcfd) on Wednesday as consumers crank up their heaters to escape the bitter cold. That would top the current all-time high of 144.6 bcfd set on Jan. 1, 2018. One billion cubic feet is enough gas to supply about five million U.S. homes for a day. In early estimates, gas production in the Lower 48 states will slip about 0.9 bcfd to 85.8 bcfd on Wednesday, according to Refinitiv. That is the lowest daily output since Enbridge Inc started to restore flows through some gas pipes in Ohio following a pipeline explosion there on Jan. 21. “Based on our analysis of historical freeze-offs, temperature conditions forecasted for Jan. 30-31 pose a risk of a freeze-off occurring in the Marcellus/Utica…in the ballpark of 1 bcfd,” said Rishi Iyengar, senior analyst natural gas markets at IHS Markit’s OPIS PointLogic. In early estimates, Marcellus/Utica production was down about 0.7 bcfd to 29.6 bcfd on Wednesday, according to Refinitiv. Iyengar said current forecasts were not cold enough to impact production in the Bakken shale in North Dakota because drillers there have invested in equipment needed to handle extremely low temperatures. In the spot market, next-day prices for Wednesday for power at PJM West in western Pennsylvania and gas in Chicago both rose to their highest in a year as demand for heating spiked. PJM, the electric grid operator for all or parts of 13 states from New Jersey to Illinois, forecast power demand would reach about 142,000 megawatts (MW) on Thursday, approaching the region’s all-time winter peak of 143,295 MW on Feb. 20, 2015. PJM said it has “robust reserves and does not expect to have any capacity issues” in meeting demand. One megawatt can power about 1,000 homes.