Equinor’s power and gas trading unit expands to the United States
Danske Commodities, a power and gas trading firm owned by oil major Equinor, has expanded its operations to the United States, completing its first trade on the PJM wholesale power market, it said on Thursday. The trade, which Danske Commodities called a milestone, extended the company’s reach to 39 countries and was part of a strategy to expand globally, adding to the European and Australian markets that the firm is currently active in. “The price drivers are very similar to those in our current core markets, and that also applies to risk and return characteristics, so there is a good fit with our business model and capabilities,” Danske’s Chief Executive Helle Oestergaard Kristiansen said. The firm did not disclose the size of the initial trade. Danske has taken over Equinor’s third-party gas trading, downstream gas storage positions and power trading activities including certificates trading as well as balancing and optimization of Equinor’s growing portfolio of renewable assets. PJM is the largest wholesale power market in the United States and is covering 13 states in the Eastern Interconnection, Danske added.
Japan’s Tohoku Electric seeks LNG cargo for Aug-Sept
Japan’s Tohoku Electric Power is seeking a liquefied natural gas (LNG) cargo for delivery over late August to September, two industry sources said on Thursday. The tender closed on Aug 7 but it was not immediately clear if the tender had been awarded, the sources added.
ONGC spending Rs 83,000 cr to execute 25 projects: Shashi Shanker, Chairman
Oil and Natural Gas Corporation (ONGC), the country’s largest oil and gas producer, is currently executing 25 exploration and production (E&P) projects worth Rs 83,000 crore to monetize about 180 million tonne of oil equivalent (MMToe), said ONGC’s Chairman Shashi Shanker, in their Annual Report 2018-19. The company plans to spend close to Rs 32,920 crore in the financial year 2019-20 (FY20), a 12 percent jump in spending as compared to Rs 29,449 crore spent in the previous financial year. “As many as 25 projects, with an estimated outlay of around Rs 830,000 million, are currently under execution, of which 15 would directly contribute to hydrocarbon production. Envisaged cumulative oil and gas gains from these projects through their lifecycle stand at over 180 MMtoe,” said Shanker. According to Shanker, the company completed 10 E&P projects in 2018-19 at the cost of Rs 11,258 crore and besides focussing on ramping up production through the development of greenfield projects, the company also plans to focus on ramping up production from the existing portfolio of mature fields. The upstream giant expects 190 million tonne of incremental oil production from 29 enhanced oil recovery (EOR) projects. Moreover, one-third of the company’s standalone crude oil production in the current financial year came from EOR projects. “There is significant scope to increase production through EOR technologies in the mature fields. ONGC has been a pioneer in the implementation of EOR technologies in India both in onshore and offshore fields. Presently, EOR projects contribute 9 percent of total onshore production,” Shanker said. The company is currently implementing various EOR projects in the company’s oil and gas assets in Gujarat, Assam, and Mumbai. The company drilled 516 wells in the last financial year, consisting of 105 exploratory wells and 411 development wells. According to Shanker, the company is following a roadmap to strategically brand itself as an ‘energy’ company and not just an oil and gas producer. “The ONGC Board recently approved the business roadmap for the company and its other group entities – ‘ONGC Energy Strategy 2040’. It envisions ONGC as ‘A diversified energy company with a strong contribution from non E&P businesses; 3x revenues and ~5x to 6x market capitalization’. It aims to transform ONGC into a future-ready energy entity, one that positions itself well to respond to the challenges and opportunities of tomorrow’s energy scene,” Shanker said. ONGC had earlier in June this year invited partners to help the company enhance production from 64 marginal fields. The announcement came on the back of increased pressure by the government on the company to increase production profile from nomination blocks. The government had shelved proposals to farm out or privatize ONGC fields twice in the past five years, according to a recent report by news agency PTI. The proposal was a result of the continued drop in production. ONGC’s crude oil production in FY19 from its nomination fields fell to its lowest level in 16 years; from a high of 26,485 thousand metric tonne (TMT) recorded in 2004-05 to 21,042 in 2018-19. The worrisome trend is mainly attributed to drop in output from nearly all the offshore and onshore blocks in ageing fields.
India’s HPCL plans to shut secondary some units at refineries in 2019-20
India’s state-run Hindustan Petroleum Corp plans to shut some secondary units at its Mumbai and Vizag refineries in the current fiscal year in order to be able sell Euro-VI compliant fuel from April, its chairman M. K. Surana said on Wednesday. The refiner plans to shut units that improve gasoline specs and a diesel hydro desulphuriser at its 166,000 barrels per day (bpd) Vizag refinery in southern India from early September to the end of October for upgrades, he said. HPCL also plans to shut a gasoline deslphuriser at its 150,000 bpd Mumbai refinery in the western state of Maharashtra for 15-20 days in December, he added. The refiner had shut a 70,000 bpd crude unit at the Mumbai refinery in April for 23 days, he said, adding the company has no further plans to shut crude units at its two refineries in 2019/20.
India to relax rules for entry into fuel retail sector: Source
India is set to relax rules for setting up fuel stations after almost two decades, in a move expected to allow companies like Saudi Aramco, Total and Trafigura to gain a foothold in a sector dominated by state-run entities. The new rules – suggested by an expert panel – mirror those in developed nations like the United States and Britain, and would allow convenience stores, shopping malls and hypermarkets to sell fuels if they are eligible, said an oil ministry source. The government panel has recommended allowing marketing rights for sale of gasoil, gasoline and aviation fuel to companies with a net worth of 2.5 billion rupees. India, where fuel demand is expected to rise in the coming years, has turned into a lucrative market after the government removed controls on retail pricing of gasoline and gasoil. Global players, however, faced difficulties in getting a foothold as they need to commit investment of 20 billion rupees ($272 million) in India’s oil and gas sector to get fuel marketing rights. The cabinet is expected to approve the proposal in four to six weeks, said the source, who declined to be named because they are not authorised to speak to media. India’s oil ministry did not respond to an email seeking comment. DIFFICULT TO SURVIVE India has emerged as a key driver of global oil demand. The International Energy Agency expects the South Asian nation to account for a quarter of global energy use by 2040. Companies including Reliance Industries, RoyalDutch Shell and Nayara Energy, part-owned by Russian oil major Rosneft account for about 10% of the 64,625 fuel stations in the country, according to data posted on the Petroleum Planning and Analysis Cell. “For a new player, it is very difficult to survive as most of the ROs (retail outlets) are owned by state-run companies. We want to provide enabling the environment to have greater competition,” said the source. The new rules will help trader Trafigura’s downstream arm Puma Energy, which had applied for a license last year to sell auto fuels in India. Subsidiaries and joint ventures of companies with existing fuel retailing licenses need to apply again for the marketing rights, according to the panel’s suggestions. This would mean the joint venture of Reliance Industries and BP announced on Tuesday will need a license from the government to start fuel retailing in the country. The new rules would also allow companies to directly sell fuel to industries without setting up retail fuel stations. Companies must set up 5% of proposed retails outlets in rural areas within seven months of winning authorization, the panel recommends.