ExxonMobil signs 20 year LNG agreement with Zhejiang Energy
ExxonMobil, the largest publicly traded global oil and as firm, today said it has signed a sales and purchase agreement with Zhejiang Provincial Energy Group for Liquefied Natural Gas (LNG) supply. Under the agreement, Zhejiang Energy is expected to receive 1 million metric tons per annum of LNG over 20 years. “This sales and purchase agreement represents an important milestone and provides a solid foundation for our strategic partnership with Zhejiang Provincial Energy Group,” said Peter Clarke, senior vice president of LNG at ExxonMobil. He added that ExxonMobil shares Zhejiang Energy’s vision in developing a major LNG gateway in the Ningbo-Zhoushan region and it looks forward to continuing support for Zhejiang Energy during the construction, commissioning and operation of its Wenzhou LNG receiving terminal. ExxonMobil has been engaged in China’s energy industry since the late 1970s. The company said it expects to help meet China’s energy needs through its products, technologies, partnerships and investments.
Centre grants ONGC Terms of Reference to dig 40 hydrocarbon wells
The ONGC has been granted permission by the Centre to conduct environmental impact studies to dig 40 hydrocarbon wells in the Cauvery Delta. Express earlier reported that the public sector oil major had applied to the Union Environment Ministry, seeking Standard Terms of Reference (ToR) to conduct detailed Environment Impact Assessment. According to the official communication dated April 18, 35 wells will be dug in Cuddalore and five in Nagapattinam. Earlier last year, ONGC was awarded a new block in the Delta covering 731 sq.km in Cuddalore and Nagapattinam — 579 onshore and 152 offshore — for hydrocarbon exploration. ONGC officials confirmed that they were waiting for approval from the Tamil Nadu government. The block falls in the eastern part of Ariyalur-Puducherry sub-basin of Cauvery. Total exploration period for the block is six years, of which three (extendable by one more year) is for initial exploration and three (extendable for one more year) for subsequent exploration. Justifying the location of the proposed wells, officials recalled that hydrocarbon had been discovered in the Bhuvanagiri Formation at Madanam and Pandanallur fields, where they currently have commercial operations. Now, they have also been granted ToR for the extension of the Bhuvanagiri field. The Andimadam Formation, which falls in the area for which permission has been granted, “is a potential prospective play,” say officials. Only recently, environment ministry granted ToR for 27 wells of ONGC in Bhuvanagiri and Periyakudi fields and expansion in Cauvery Basin falling in Cuddalore and Tiruvarur districts. All the wells are onshore, requiring land acquisition. As per official records, approximately 1.82 hectares of land per well is proposed to be acquired on short term lease. Earlier this month, Express reported that Vedanta Limited and ONGC have proposed to drill 341 wells to hunt for hydrocarbon reserves in and around Tamil Nadu. Large tracts of lands in the Cauvery delta region is likely to come under the pump if the proposals are approved. Awaiting TN government approval ONGC officials confirmed that they were waiting for approval from the Tamil Nadu government to conduct the necessary assessments. The block falls in the eastern part of Ariyalur-Puducherry sub-basin of Cauvery. 35 wells will be dug in Cuddalore and five in Nagapattinam. Only recently, ToR was granted for 27 wells in Bhuvanagiri and Periyakudi fields
Lifting of Iran oil sanctions waivers set to push global crude prices higher
Global crude oil prices are set to rise amid curtailment of supplies led by the reduction in Iran’s crude exports by around 1 million barrel per day (mbpd) due to US’ latest decision to end sanction waivers and also an ongoing disruption of 1.1 mbpd of Libyan oil output amid local unrest. However, potential increase in OPEC+ crude supplies may mitigate the impact gradually, although with significantly curtailed global spare capacity. “We expect global oil markets to tighten further in the near term due to full curtailment of Iran’s oil exports post the US decision to end sanction waivers granted to eight importing countries, once the exemptions period expires on May 2 and the possibility of disruptions in crude supplies from Libya given its escalating unrest,” Tarun Lakhotia, Associate Director at research firm Kotak Institutional Equities said. He added that Iran’s crude exports of 1 mbpd may get fully curtailed in the coming months, as countries that currently import oil from Iran may not want to risk an imposition of sanctions by the US. Iran’s crude production is likely to fall to 1.8 mbpd, closer to the level of domestic consumption, from peak volumes of 3.8 mbpd in June 2018 and recent production of 2.7 mbpd in first quarter of 2019. Global oil markets have already tightened in the recent months due to voluntary reduction in supplies by OPEC+ and Canada, and restraints on Venezuelan crude exports by the US. OPEC+ may ease production cuts in the near term, as indicated by the US, to mitigate the loss of Iranian crude. However, it will still reduce the available spare capacity in a tight market. According to K Ravichandran, Senior Vice President at research and ratings agency ICRA, global oil prices could breach the $80 per barrel mark in the immediate aftermath of the US decision to end waivers. “1 mbpd (Iranian exports) is a sizeable reduction in supplies. While it can be offset by additional supply from OPEC+ it is coming at a time when there are ongoing disruptions in Libya and Nigeria,” he said. He also said that India may not have to worry about supplies immediately as additional oil imports can be sourced from other nations including Saudi Arabia and Kuwait. “Some Indian companies are already importing oil from the US. It is possible to ramp up those volumes too,” Ravichandran said. Meanwhile, global oil prices hovered near 2019 peaks in early trading on Tuesday after the US move to abruptly to end waivers by May. Brent crude futures were at $74.33 per barrel at 0051 GMT, up 0.4 percent from their last close and not far off 2019 highs of $74.52 reached on Monday.
India says fully prepared to take on oil imports challenge post lifting of sanctions waiver
India today made it clear it is fully prepared to take on the challenge on oil imports front posed by the latest US decision to end the waiver allowed to importing countries like India from importing Iranian crude oil amid sanctions. “The Government of India has put in place a robust plan to ensure that there is adequate supply of crude oil to Indian oil refineries from May 2019 onwards. There will be additional supplies from other major oil producing countries from different parts of the world,” the oil ministry said in a statement. It added that the Indian refineries are fully prepared without any problem to meet the national demand for petrol, diesel and other petroleum products in the country. US Secretary of State Mike Pompeo had on Monday announced that US will not renew waivers or extend waivers granted to eight nations for importing Iranian crude oil. “Maximum pressure on the Iranian regime means maximum pressure. That’s why the US will not issue any exception to Iranian oil importers,” Pompeo said. The waiver was up for renewal on May 2. The US refusal to extend sanction waiver on Iran oil sales has fuelled concerns in India over the possibility of a fuel price spiral for consumers and a worsening of the government’s fiscal arithmetic. India depends on imports for 82 per cent of its oil needs and Iran is among its top-five suppliers. The nation supplied over 23 million tonne of crude to India in 2018-19. Global benchmark Brent crude jumped by around 3 per cent to $74 per barrel on Monday, the highest since November 2018. The US’ move is likely to drain nearly 1 million barrels a day from the global market and help crude firm up further.