Govt hikes ethanol procurement price for fuel blending
The government on Tuesday announced an increase in the price of ethanol procured by public sector oil marketing companies for one year starting December. The decision was taken by the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi. The price of ethanol derived from C heavy molasses has been increased from Rs 43.46 a litre to Rs 43.75 per litre, and for B heavy molasses to Rs 54.27 per litre from Rs 52.43 earlier, an official release said. Also, the price of ethanol from sugarcane juice, sugar, sugar syrup route has been fixed at Rs 59.48 per litre. The increased prices have been approved for the forthcoming sugar season 2019-20 and will be applicable from December 1, 2019 to November 30, 2020.
Total could invest up to $10 bln in North Sea over 5 years -CEO
French energy producer Total could invest up to $10 billion in the North Sea over the next five years but cost discipline must be maintained as a matter of urgency, Chief Executive Officer Patrick Pouyanne said on Tuesday. As part of its efforts to cut costs the company had looked at joint oil and gas infrastructure decommissioning in the region with peers Shell and BP, Pouyanne told an industry conference in Aberdeen, Scotland. He added that Total intended to participate in an upcoming offshore wind bid round in Scotland as the firm continues to expand investments in low carbon and renewable energy. Total was not limited by funds to invest in low carbon power projects, but by the capacity to develop projects, he said.
Chandigarh robbing its states of fuel revenue: Petroleum dealers
The administration of the capital of Punjab and Haryana is responsible for revenue losses to the two states from the sale of fuel — a charge levelled by the Mohali and Panchkula petrol dealers’ associations battling losses owing to difference in the rates in the Tricity. The Chandigarh administration has continuously slashed VAT (value added tax) rates since October 2017, leading to a total shift of petroleum trade from the bordering districts of Punjab to Chandigarh, according to the Petrol Pump Dealers Association, Mohali. The Punjab government had reduced VAT on petrol by Rs 5 and diesel by Rs 1 per litre on February 18, but petrol in Mohali is still expensive by Rs 4.54 per litre and diesel by Rs 2.74 per litre as compared to Chandigarh. Dealers have suggested an increase in the VAT rates in Chandigarh — being the capital of Punjab— to bring them at par with the state, or a dual pricing within Punjab, with VAT rates in neighbouring districts, like Mohali and Rupnagar, being at par with Chandigarh. “In both cases, there will be revenue growth for the Punjab government and the beleaguered petroleum trade will be revived. It will also go a long way in curbing illegal activities like smuggling, pilfering and selling fuel at lesser rates,” said Ashwinder Mongia, president, Mohali Petrol Dealers Association. He claimed a drop of almost 70% in sales at petrol pumps in Mohali since October 2018. Chandigarh dealers have gained 45% from the sale of diesel during this year and 17% from petrol as compared to their counterparts in Mohali and Panchkula, the associations have claimed. Dealers in Mohali alleged they have lost 28% in diesel sale, while there has been no change in the sale of petrol. Petroleum trade in Punjab, more so in the areas adjoining other states, has witnessed a downfall from five years. Mohali and Rupnagar are the worst-affected districts. A huge discrepancy in rates between Mohali and Chandigarh and Rupnagar and Himachal exist. “The rate difference has prompted Chandigarh dealers to resort to unscrupulous means of sales and they are indulging in rampant smuggling of petroleum products from Chandigarh to neighbouring districts of Punjab,” Mongia said.
OVL seeks 2-year extension for exploring Vietnamese oil block
ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corp (ONGC), has sought yet another two-year extension to explore a Vietnamese oil block in the contested waters of the South China Sea. Officials said OVL has applied for a sixth extension to explore Block-128, the licence for which was valid till June 15, 2019. While India wants to maintain its strategic interest in the South China Sea, Vietnam wants an Indian firm to counter China’s interventions in the contested waters. The officials said OVL had in May applied to the Vietnamese authorities for the sixth extension of the exploration licence for the deep sea block and is likely to get it. “We have a commitment to drill one well on the block and to fulfill that we have sought an extension,” one of the officials said. Another official said the company had a couple of years ago drilled a well on the block but it could not reach the target depth and so it now has to drill the well all over again. “If we don’t drill, we are liable to pay penalties,” he said. OVL had signed production sharing contract (PSC) for the 7,058 sq km Block 128 in offshore Phu Khanh Basin, Vietnam, on May 24, 2006. The Ministry of Planning and Investment (MPI), Vietnam, issued an investment licence for the block on June 16, 2006, being effective date of the PSC. The company has not found any hydrocarbon in the block but is continuing to stay invested to maintain India’s strategic interest. OVL first took a two-year extension of the exploration period till June 2014 and then another one year. A third extension was granted on May 28, 2015, and a fourth in 2016. It got the fifth extension for two years in 2017. The company has so far invested USD 50.88 million in the block. The block lies in the part of the South China Sea over which China claims sovereignty. In 2011, Beijing had warned OVL that its exploration activities off the Vietnam coast were illegal and violated China’s sovereignty, but the company continued exploring for oil and gas. OVL made a foray into Vietnam as early as 1988, when it bagged the exploration licence for Block 6.1. Last month, China sent its coast guard ships into Block 6.01. “Their (Chinese) vessel came 5 nautical miles near the oil rig on the block on August 13. They withdrew after a couple of days,” the official said adding that operations in the block were not affected. This, he said, was the third instance of Chinese vessel intruding into the block, where Russia’s Rosneft is the operator. OVL owns 45 per cent stake in Block 6.01 and its share of production was 2.023 billion cubic metres of gas and 0.036 million tonnes of condensate. The 955 sq km Block 06.1 located in Nam Con Son basin has two producing fields — Lan Tay and Lan Rosneft — and has 35 per cent stake while the remaining 20 per cent is with PetroVietnam. The firm had in 2006 got two exploration blocks – Block 127 and Block 128. While Block 127 was relinquished due to poor prospects, the other block was retained. The first extension for Block 128 followed China putting the area under Block 128 for global bidding. China claims sovereignty over most of the South China Sea where the two blocks are located and had warned the Indian arm from drilling in the region.
ONGC to spend $400 million over four years to develop blocks awarded under OALP
Oil and Natural Gas Corporation (ONGC) will be investing close to $400 million in the next four years to develop the blocks it has won under the Open Acreage License Programme (OALP) bid rounds. ONGC has been awarded five blocks including operatorship in two blocks, under OALP Round-1. In the second and third rounds, ONGC has been awarded eight blocks. “We have started the seismic survey on the blocks acquired under OALP I,II and III. This will be costing around 3 to 4 per cent of the total exploration spend of these blocks. This will be followed by exploratory drilling. In all, we intend to spend close to $400 million to develop these blocks,” an ONGC official told BusinessLine. “The spends on OALP blocks will reflect in the financial year 2020-2021,” he added. On the capital expenditure (capex) plans for the year, an ONGC presentation stated that capex target for financial year 2019-2020 has been set at ₹329.21 billion, capex in fiscal 2018-2019 stood at ₹294.49 billion and ₹284.27 billion in fiscal 2017-2018. The spends are part of ONGC’s efforts to boost domestic oil and gas production. According to an investor presentation, the company is investing around ₹860 billion in 27 major projects to boost oil and gas production, which has plateaued over the last few years. This is largely because most of ONGC’s blocks are ageing and not producing as much hydrocarbons as they once did. To incentivise exploration and production, the centre formulated and approved a new exploration and licensing policy titled Hydrocarbon Exploration and Licensing Policy (HELP) on March 30, 2016. In order to operationalize the HELP framework, the OALP bid rounds were launched. This allowed upstream operators to put in offers for blocks of their choice for contracting based on the data available in the National Data Repository.
BPCL stake sale likely
From the govt planning to offload its Rs 400 billion stakes in BPCL to four- and two-wheeler sales falling by almost half in Aug from the equivalent month last year. Govt may sell entire stake in BPCL worth Rs 400 billion, IOCL likely suitor The Centre is planning to offload its entire stake worth a little more than Rs 400 billion in Bharat Petroleum Corporation (BPCL), most likely to fellow state-owned oil-marketing company Indian Oil Corporation (IOCL), a deal that will go a long way in the Narendra Modi government meeting its highest-ever disinvestment target of Rs 1.05 trillion. If it goes through, an IOCL-BPCL merger will be the third mammoth amalgamation of state-owned companies, excluding banks, in three years — after Oil and Natural Gas Corporation (ONGC)-Hindustan Petroleum Corporation (HPCL) in 2017-18 and REC (formerly Rural Electrification Corporation)-Power Finance Corporation (PFC) in 2018-19. Both deals had a major role in helping the Centre garner record divestment proceeds.