Reduce oil imports to achieve $5 trillion GDP goal: Nitin Gadkari
Union road transport minister Nitin Gadkari on Friday said using bio-fuels can reduce crude oil imports which will help save foreign exchange on one hand also achieve the USD 5-trillion GDP goal by 2025. Gadkari said his ministry has taken various steps to promote bio-fuels like ethanol and butanol which are not only feasible but also desirable for the nation as it will also help reduce the emissions. “Every year we spend around Rs 7000 billion on oil imports. In this scenario if we have alternate bio-fuels like ethanol and butanol which can be used in cars and aircraft, why should we not explore those options. They are not just cheap but also pollution-free,” Gadkari said. He said the aviation sector imports Rs 400 billion worth of fuel and if they explore bio-fuels, it opens a Rs 400 billion market for domestic players. “Aviation bio-fuels are widely accepted in the US and Britain. If we also use it, we will save lots of foreign exchange,” Gadkari said, adding steps are being taken to reduce coal imports as well. “We are studying the feasibility of using napier grass which has higher calorific value instead of coal. I strongly feel that if we undertake these measures, we will be able to achieve our USD 5-trillion GDP target,” he said.
Govt Plan to Privatise Fuel Giant BPCL Needs Prior Nod From Parliament
The government is considering a proposal to sell India’s second-largest state refiner and fuel retailer BPCL to foreign and private firms but the privatisation plan will need a prior nod of Parliament, officials said. Keen to get multi-nationals in domestic fuel retailing to boost competition, the government is mulling selling most of its 53.3 per cent stake in Bharat Petroleum Corporation Ltd (BPCL) to a strategic partner, officials aware of the development said. Privatisation of BPCL will not just shake up fuel retailing sector long dominated by state-owned firms but also help meet at least a third of the government’s Rs 1050 billion disinvestment target. BPCL at the close of market on September 27 had a market capitalisation of about Rs 1020 billion and even a 26 per cent stake sale at this valuation would fetch the government Rs 265 billion plus a control-and-fuel-market-entry premium ranging anywhere between Rs 50 billion to Rs 100 billion, officials said. BPCL privatisation, however, will need Parliament’s approval. The Supreme Court had in September 2003 ruled that BPCL, as well as Hindustan Petroleum Corporation Ltd (HPCL), can be privatised only after Parliament amends a law it had previously passed to nationalise the two firms. The ruling had followed a plan of the then BJP-led NDA government headed by Prime Minister Atal Bihari Vajpayee to privatise the two firms. The apex court ruling had stalled the plan to sell 34.1 per cent out of government’s 51.1 per cent stake in HPCL to a strategic partner along with management control. Reliance Industries Ltd, BP plc of UK, Kuwait Petroleum, Petronas of Malaysia, the Shell-Saudi Aramco combine and Essar Oil had expressed their interest in acquiring that stake before the Supreme Court stalled the process. Officials said BPCL in present times will be an attractive buy for companies ranging from Saudi Aramco of Saudi Arabia to French energy giant Total SA which are vying to enter the world’s fastest-growing fuel retail market. BPCL was previously Burmah Shell, which in 1976 was nationalised by an Act of Parliament. Burmah Shell, set up in the 1920s, was an alliance between Royal Dutch Shell and Burmah Oil Co and Asiatic Petroleum (India). HPCL was incorporated in 1974 after the takeover and merger of erstwhile Esso Standard and Lube India Ltd through the ESSO (Acquisition of Undertaking in India) Act passed by Parliament. The company was in January last year taken over by state-owned Oil and Natural Gas Corp (ONGC) for Rs 369.15 billion. At that time, Oil Minister Dharmendra Pradhan had cited the four-decade-old Nationalisation Act to justify exempting ONGC from making an open offer after acquiring the government’s 51.11 per cent stake in HPCL. “We are bound by the Nationalisation Act and character of HPCL could not have changed so no open offer was mandated,” he had said. The Supreme Court had in September 2003 cited the ESSO (Acquisition of Undertaking in India) Act and the Burmah Shell (Acquisition of Undertaking in India) Act, 1976 and Caltex (Acquisition of Shares of Caltex Oil Refining India Ltd and all the Undertakings in India for Caltex India Ltd) Act, 1977 to rule that the government cannot privatise HPCL and BPCL without approaching Parliament for changing the Nationalisation Act. “There is no challenge before this Court (Supreme Court) as to the policy of disinvestment. The only question raised before us whether the method adopted by the Government in exercising its executive powers to disinvest HPCL and BPCL without repealing or amending the law is permissible or not. We find that on the language of the Act such a course is not permissible at all,” Justice S Rajendra Babu and G P Mathur wrote in the September 16, 2003 order “restraining the Central Government from proceeding with disinvestment resulting in HPCL and BPCL ceasing to be Government companies without appropriately amending the statutes concerned suitably.” BPCL operates four refineries at Mumbai, Kochi in Kerala, Bina in Madhya Pradesh and Numaligarh in Assam with a combined capacity to convert 38.3 million tonnes of crude oil into fuel. It has 15,078 petrol pumps and 6,004 LPG distributors. India has a total refining capacity of 249.4 million tonnes of refining capacity and 65,554 petrol pumps and 24,026 LPG distributors.
Bangladesh shortlists 17 companies for spot LNG
Bangladesh has shortlisted 17 companies for its spot tender process as it plans to buy around 1 million tonnes of liquefied natural gas (LNG) next year to capitalise on lower prices for the super-chilled fuel, two company officials said. Petrobangla, in charge of LNG imports into the South Asian country, plans to sign sales and purchase agreements with the shortlisted companies after it receives cabinet approval, the officials with direct knowledge of the matter said. “We are moving ahead with plans to import LNG through the spot market by shortlisting 17 companies out of a total of 43,” one of the Petrobangla officials said. The companies shortlisted are Mitsui, Marubeni , Osaka Gas, AOT Energy, Diamond Gas, Summit Oil & Shipping, Excelerate Energy, Jera, Gazprom, Vitol, Trafigura, Woodside Petroleum, Eni, Petronas, CNOOC, Cheniere and Chevron, the official said. Asian spot LNG prices are currently at their lowest in years due to new supply entering the market from the United States, and as demand growth slows in major economies. Traders who sign the sales and purchase agreements will then be able to participate in spot tenders Petrobangla will issue when cargoes are needed, said the officials, who declined to be identified because they are not authorised to talk to the media. One of the officials said the state-owned company could buy about 1 million tonnes next year through the spot market. The nation of 160 million people is expected to become a major LNG importer in Asia, alongside Pakistan and India, as domestic gas supplies fall. Bangladesh’s annual imports of liquefied natural gas (LNG) could nearly triple to at least 10 million tonnes over the next three to four years, Tawfiq-e-Elahi Chowdhury, energy adviser to Bangladesh’s prime minister, told Reuters on Thursday. The country currently has two floating storage and regasification units (FSRUs) with a total regasification capacity of 1 billion cubic feet per day – equal to about 7.5 million tonnes a year. It is also building a land-based terminal that can handle 7.5 million mtpa of LNG, expected to be ready in five years. Petrobangla already imports about 300-400 million cubic feet per day of LNG – equivalent to 3.5 million tonnes a year in total – through two long-term contracts with Oman and Qatar. Bangladesh has a 10-year LNG import deal with Oman Trading International. That LNG is priced at 11.9% of the three-month average price of Brent crude oil plus a constant price of 40 cents per million British thermal units (mmBtu). Under its 15-year deal with Qatar, Bangladesh pays 12.65% of the three-month average price of Brent oil plus a constant of 50 cents per mmBtu. Last year, Bangladesh scrapped a deal with Swiss energy trader AOT Energy, which had been close to being finalised.
Shell initiates quarterly outlook, sees higher Q3 LNG output
Royal Dutch Shell on Monday introduced a quarterly outlook, forecasting higher liquefied natural gas output and charges of up to $850 million for the third quarter. Chief Financial Officer Jessica Uhl said that after discussions with investors, the Anglo-Dutch energy company would release outlooks ahead of quarterly results “to enhance disclosures and increase transparency”. The company reports third-quarter results on Oct. 31. Shell in August said its second-quarter profit slumped to a 30-month low on weaker gas prices and refining margins, denting a steady recovery in recent years. For the third quarter, Shell said: * LNG production in the third quarter is expected to be between 930,000 and 960,000 barrels of oil equivalent per day (boed). Prodution in Q3 2018 was 924,000 boed * Oil and gas production is expected to be between 2.600 and 2.65 million boed. Production in Q3 2018 was 2.672 million boed * It sees refinery availability between 90% and 92% * Oil Products sales volumes is expected to be between 6.7 and 7.35 million barrels per day * Corporate earnings excluding identified items are expected to be a net charge between $700 to 850 million, excluding the impact of currency exchange rates.