Saudi’s Falih: OPEC may cancel April meet, but hold steady on oil output
OPEC and its non-OPEC partners need to reconsider if there is a need for a meeting in April, Saudi Arabia’s energy minister said on Monday, adding that there was no pressure from the United States to increase supply. “We are not under pressure except by the market,” Khalid al-Falih told reporters ahead of a meeting of the Joint Ministerial Monitoring Committee (JMMC) in Baku, the capital of Azerbaijan. “As long as the levels of inventories are rising and we are far from normal levels, we will stay the course guiding the market towards balance.” The JMMC includes major oil producers Saudi Arabia and Russia and monitors the oil market and conformity levels with supply cuts. “There is a consensus that has also emerged that no matter what, we should stay the course until the end of June.” Asked whether he was updated on whether the United States administration would extend the waivers it granted to buyers of Iranian crude, which are due to end in May, Falih said: “Until we see it hurting consumers, until we see the impact on inventory, we are not going to change course.” The oil producers are due to meet next in April in Vienna, but Falih said this may not happen. “The consensus we heard … is that April will be premature to make any production decision for the second half,” Falih said. “We may not have a meeting in April,” he said, adding that the JMMC may recommend this later on Monday.
Russia’s Novak says sanctions volatility is a pain for energy markets
Russian Energy Minister Alexander Novak said on Sunday that U.S. sanctions on Venezuela and Iran were having a negative effect on global energy markets, hindering long-term planning and confusing investment decisions. Novak said planning even a few months ahead is tough due to possible sanctions-related volatility, adding that the country imposing sanctions — an apparent reference to the United States — was doing so in order to promote its own goods.
Schlumberger seeks deviations in ONGC oilfield tender for raising output
New York-listed contractor Schlumberger – the sole bidder in state-owned ONGC’s tender for raising oil production from aging fields – has sought several deviations from the bidding norms, including projection of a 26-27 per cent decline in output in next few years. India’s leading national oil company launched its initial tender for Production Enhancement Contracts (PEC) in April 2018 for raising output beyond the business as usual (BAU) scenario from two aging fields. Schlumberger submitted the only application for Geleki, while ONGC received no bids for Kalol oilfield in Gujarat. Sources privy to the development said Schlumberger is projecting a 26-27 per cent decline in base production in next few years and has sought several deviations in tender norms for infusing technology to raise output over this base. The government has been pushing ONGC to hire international oil service companies to raise output from its mature oilfields as it saw the foreign companies as the answer to declining production from ageing fields. Last year, ONGC had shortlisted Schlumberger, Halliburton and GE subsidiary Baker Hughes for raising output from Kalol field in Gujarat and Geleki field in Assam. At the close of bids, only Schlumberger made a financial bid for Geleki field, the sources said. No bid was received for Kalol field. The service providers will be paid a fee for raising output beyond an agreed baseline production. The state-owned form is discussing with Schlumberger the deviations sought by it, according to the sources. ONGC top brass, they said, are keen to conclude a contract with Schlumberger soon to get the project going. Based on experience of the Geleki bidding, the company plans to bring out similar bidding for few other ageing oilfields. ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 per cent by 2022. India currently imports over 83 per cent of its oil needs. Originally, ONGC had on December 7, 2016, signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output. Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them in 2017 on fears of courting controversy for handing fields on nomination basis. Thereafter, the company in June 2017 floated an expression of interest (EoI) from service providers for undertaking production enhancement. Schlumberger Asia Services, Halliburton Offshore Services Inc and Baker Hughes Singapore PTE Ltd were shortlisted as the firms were meeting pre-qualification criteria. Bids were originally sought by May 25, 2018, but saw several extensions and final bids came in a couple of months back. The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to investing in capital expenditure and operating expenditure to increase production from the existing baseline output. A tariff will be paid in USD per barrel of oil and USD per million British thermal units for gas for any incremental hydrocarbon produced and saved over the baseline. The baseline was to be prepared by ONGC and vetted and certified by a third party of international repute but Schlumberger is seeking deviations in it, the sources noted. All the oil and gas produced will belong to ONGC and the service provider arrangement is being entered into to get the best technology available, they added. Besides Schlumberger, Halliburton and Baker Hughes, ONGC was also in talks with Weatherford International. The sources said based on the experience of Kalol and Geleki, the PEC model may be extended to other onshore fields.
Novatek close to deal with Saudi Aramco on Arctic LNG 2 project – CEO
Leonid Mikhelson, chief executive of Russian gas giant Novatek, said on Sunday he had discussed the company’s Arctic LNG 2 project with Saudi oil minister Khalid al-Falih and that a deal could be expected soon. “We are in talks with Saudi Aramco (on the Arctic LNG 2 project). I think we will get something concrete in coming months,” Mikhelson said, adding that he did not expect global liquefied natural gas (LNG) prices to change after the project’s launch. Speaking on the sidelines of a meeting of OPEC members and other major oil exporters in Baku, Mikhelson also said that the so-called ‘gas OPEC’ – a loose organisation of global leading producers of natural gas – would strengthen on the global energy markets.
IOC hopes to restart fire-hit unit at Panipat plant in 2-3 days
Indian Oil Corp hopes to restart a 150,000-barrel-per-day (bpd) crude distillation unit (CDU) at its Panipat refinery in the next 2-3 days, its head of refineries said on Monday, days after the unit caught fire due to a naphtha leak. IOC, the country’s top refiner, had shut the CDU and some other secondary units at the 300,000-bpd refinery in the northern state of Haryana for about a month from mid-February for routine maintenance. “After the maintenance and inspection, the unit (crude distillation unit) was under start-up. There was a naphtha leak from a cooler upstream,” B.V. Rama Gopal, IOC’S head of refineries, told Reuters. The state-controlled company has two equal size CDUs at the refinery. IOC said one worker died due to the fire on Saturday.