India’s move to bolster energy ties with Russia has nothing to do with problems with Iran: FS
India’s decision to bolster its energy ties with resource-rich Russia has nothing to do with the issues faced by the country on purchasing oil and LNG from Iran, Foreign Secretary Vijay Gokhale said on Wednesday. His comments came as India’s Ministry of Petroleum and Natural Gas and Russian Ministry of Energy signed an agreement on the expansion of cooperation in oil and gas sector, along with an MoU on the use of natural gas for transportation. The two countries also signed a MoU between Coal India Limited and Far East Investment and Export Agency to cooperate in coking coal mining projects implementation in the Russian Far East. Responding to a question, Gokhale said India’s decision diversify and expand energy ties with Russia had nothing to do with the issues faced by the country on sourcing oil and Liquefied Natural Gas (LNG) from Iran, another major player, now hit by US sanctions. He noted that Iran has been a reliable and major supplier of energy to India. However, India was scouting for more sources because of its growing energy requirements. Gokhale described the signing of agreements with Russia to ensure India’s energy security as “major breakthroughs” during Prime Minister Narendra Modi’s talks with Russian President Vladimir Putin here in the Far Eastern port city. He forecast that energy cooperation is going to be an “emerging pillar” in the India-Russia relationship, which hitherto remained focused mainly on defence and civil nuclear cooperation. He said India, which is in the process of diversifying its sources of energy, finds Russia as an attractive source. A joint statement issued after the 20th India-Russia annual summit between Prime Minister Modi and President Putin said the two sides agreed to explore joint development of oil and gas fields in Russia and India including offshore ones. “With the signing of the roadmap for cooperation in Hydrocarbons for 2019-24 during the Summit, both Sides expect bilateral cooperation in this sector to touch new heights in the next five years,” it said without giving details. The two sides agreed on a five-year road map, which will encompass two-day investments, the Foreign Secretary said. He also said India was eyeing at investing in a new energy block in Russia’s Eastern region.
Jordan receives first Iraqi oil for 5 years
Energy Minister Hala Zawati said the shipments — under a deal struck in February for deliveries by truck of 10,000 barrels of Iraqi crude per day — would cover seven percent of Jordan’s daily needs. Jordan said it received its first shipment Wednesday of Iraqi oil, interrupted for five years by the Islamic State group’s control of swathes of Iraq between 2014 and 2017. The Iraqi crude is being brought in via the Turaibil-Karameh crossing, the sole border post between the two Arab states that was closed for three years until 2017, when the jihadists were defeated in Iraq.
Vedanta may soon get freedom to market gas from Rajasthan block
The oil ministry is planning to let Vedanta freely market natural gas produced at its prolific Rajasthan block, a move that would fetch higher prices while ending any compulsion to sell gas to government nominee GAIL. Vedanta has pricing freedom but not marketing freedom, according to the current interpretation of the production sharing contract for the Rajasthan block. But ministry officials are increasingly of the view that this interpretation may not be the best and so plan to publish a clarification, which would explicitly give Vedanta both marketing and pricing freedom, according to people familiar with the matter. “Pricing freedom has no meaning without marketing freedom. It’s impossible for a seller to extract the best price if faced with just one buyer,” the person said. The production sharing contract offers enough scope for reinterpretation and doesn’t explicitly bar marketing freedom, he added. The proposed decision could widen the universe of possible gas buyers for Vedanta, which would then be expected to pick a buyer in an open, transparent auction conducted at arms’ length. Such auction would throw up higher prices than what a deal with a government nominee can, the person said, adding that higher prices would also translate into increased government revenue from the block. Last year, the government nominated GAIL as a sole buyer for gas produced from Vedanta’s Rajasthan block. Executives at the two firms held several rounds of negotiations since then, but couldn’t strike a deal. This prompted Vedanta to lobby for relief from the current marketing restriction. The government is likely to announce a clarification on this shortly, people aware of the matter said. The Rajasthan block, whose contract was extended last year until 2030, produces nearly a quarter of India’s crude oil and has begun producing natural gas in recent years. Gas production averaged 51 million standard cubic feet a day (mmscfd) in 2018-19. The target is to raise gas output to 150 mmscfd. Pricing of locally-produced natural gas has been a contentious topic in India. Key gas consumers have been demanding change in the way gas price ceiling is calculated, so the official price cap quickly starts reflecting the international slump.
BP expects oil demand to grow by less than 1 mn bpd in 2019
Global oil demand is expected to grow by less than 1 million barrels per day in 2019 as consumption slows, BP Chief Financial Officer Brian Gilvary told Reuters on Wednesday. Mounting trade tensions between the United States and China and increased signs of global economic recession are also set to weigh on oil refining margins, which BP expects will soften in the fourth quarter of the year, Gilvary said. A major change in marine fuel standards starting in 2020 has yet to impact refining margins, he added. “There is a lot of dynamic going on around demand, generally, which started off fairly robust at the start of the year, softened through the mid point. We were seeing a little bit of a pick up around our results … but that seems to have softened off again,” Gilvary said.