Total-Adani Gas deal gives boost to natural gas market
French oil major Total is set to buy 37 percent of Adani’s gas distribution business in a $600 million deal. Total will supply LNG to Adani Gas to service 6 million homes, as well as sell it through 1,500 retail service stations that the two conglomerates plan to set up over the next decade. Patrick Pouyanné, chairman and CEO of Total, said in a statement that the natural gas market in India will see “strong growth” and is an “attractive outlet” for Total, which claims to be the second-largest LNG player in the world. The growth that Pouyanné refers to will come from India’s ballooning middle class which will propel energy demand. As also the Indian government’s push to make gas a larger part of the energy mix from 6 percent currently to 15 percent by 2030. Total isn’t the only foreign oil and gas company to eye what is one of the world’s fastest growing energy markets. BP recently extended its long-standing partnership with Mukesh Ambani’s Reliance Industries (RIL) to jointly build a petrol station network and aviation fuels business. Saudi Aramco took a 20 percent stake in RIL’s oil refining unit, at a value of $75 billion, including debt, in August. But can India achieve the 15 percent target it has set and what will it take in addition to investments from foreign majors? “We do not believe this target can be met as gas is uncompetitive in the power sector,” says Nicholas Browne, research director at consultancy Wood Mackenzie. It would require a combination of factors, he explains. “These include discovery of substantial low cost gas resources, subsidies of gas use in the power sector, an accelerated development of gas distribution before 2030, and restrictions on coal generation.”
Cabinet lowers entry barrier for petrol pump business
The cabinet significantly eased entry barriers in the state-dominated petrol pump business to encourage competition from Indian and foreign firms. It also approved a revival package for state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) that aims at the eventual merger of the withering former monopolies. It also raised the minimum support price (MSP) for rabi, or winter sown, crops by 5-7% to increase rural incomes by giving a higher assured price at which state agencies buy crops such as wheat, pulses and oilseeds. The cabinet also approved a bill to regularise unauthorised Delhi colonies on more than 175 sq km, which will give 4 million people better civic amenities and ownership rights. It scrapped the 17-year-old entry condition of investing Rs 2,000 crore in the oil sector to be eligible for setting up petrol pumps. Any company, including those not in the oil sector, with a net worth of Rs 250 crore can retail fuel in the country, which is one of the biggest and fastest-growing oil consumers in the world. 5% Pumps in Remote Areas The new entrants, domestic or foreign, will have to set up 5% of their pumps in remote areas, and each retail outlet must have facilities for at least one alternative fuel such as compressed natural gas, LPG, biofuel or a charging point for electric vehicles. Several foreign companies have shown interest in the lucrative fuel retail market in the past. These include Saudi Aramco, BP Plc, Total and Trafigura, which along with Russia’s Rosneft has acquired Essar Oil’s refinery. BP already has a licence and is joining Reliance in a retail joint venture. The decision also makes the market more competitive for the company that acquires the government’s majority stake in Bharat Petroleum Corp. Ltd (BPCL). The company has 14,803 of India’s 64,625 pumps. Others running pumps are Indian Oil Corp. (27,702), Hindustan Petroleum Corp. Ltd (15,440), Nayara Energy, previously Essar Oil (5,128), Reliance Industries Ltd (1,400) and Shell(145) as of June. Telecom minister Ravi Shankar Prasad said at a briefing that the Rs 29,937 crore BSNL-MTNL revival package will have several components. It will include the raising of Rs 15,000 crore through sovereign bonds and monetising assets worth Rs 38,000 crore in the next four years, besides a voluntary retirement for employees to cut costs, he said. Pending the merger, MTNL will act as a subsidiary of BSNL.
Oil and gas giants spend 250 mn on EU lobbying: Green groups
The five biggest publicly listed oil and gas companies and trade groups representing them spent more than 250 million euros lobbying the European Union to influence climate action since 2010, environmental groups said Thursday. Research showed that BP, Chevron, ExxonMobil, Shell and Total, as well as trade groups acting on their behalf, have held at least 327 high level meetings with European Commission officials since Commission President Jean-Claude Juncker took office in 2014 — an average of more than one a week. The findings came from publicly listed documents and companies who responded to requests for comments said there was no conflict of interest in their executives meeting high-level EU policymakers. But green groups said the money spent on access to officials showed oil and gas firms were seeking to influence decisions in Brussels. “This is part of a long trail of the fossil fuel industry delaying, weakening and torpedoing much-needed climate action,” Pascoe Sabido, a researcher and campaigner with Corporate Europe Observatory, told AFP. The EU is seen as one of the global leaders when it comes to climate action. But there are fears its member states are not phasing out fossil fuels quickly enough to comply with the 2015 Paris climate accord, which commits nations to limit warming to “well below” two degrees Celsius (3.6 Farenheit). The European Commission did not respond to a request to comment from AFP. Last year the International Panel on Climate Change (IPCC) called for a radical drawdown in fossil fuel use in order to hit the safer 1.5C cap laid out in the Paris deal. Yet global emissions are rising year on year, and environmental groups fear major EU gas infrastructure projects in the pipeline could lock the continent into fossil fuels well beyond the IPCC’s deadlines. – ‘Fossil free politics’ – The investigation by Corporate Europe Observatory, Food & Water Europe, Friends of the Earth Europe, and Greenpeace EU looked at companies’ own declarations and the EU’s lobby transparency register and published meetings. It found that the five firms declared spending of 123.3 million on EU lobbying between 2010-2018. Trade associations representing them spent an additional 128 million in that period. In April the watchdog Global Witness calculated that oil and gas majors were planning to spend $5 trillion (4.5 trillion euros) on new exploration by 2030, a figure it said was “poles apart” from the Paris goals. A spokeswomen from Total told AFP that the figures contained in Thursday’s report “in no way reflect” what the group spends on lobbying. Public records show Total spent between 1,750,000-1,999,999 euros on EU lobbying last year, an amount the spokeswoman said had stayed “stable for many years”. “Total is convinced that a collective approach is necessary to respond to the magnitude of the climate issue,” she said. An ExxonMobil spokesman said the giant “complies fully with the requirements of the EU Transparency Register.” “ExxonMobil believes that climate change risks warrant action and it’s going to take all of us — business, governments and consumers — to make meaningful progress,” he told AFP. A spokeswoman for Shell said it “firmly rejected” the report’s premise. “We are crystal clear about our support for the Paris agreement… everything we do is to advocate for good policy outcomes to that end.” BP and Chevron did not respond to requests for comment. – ‘Firewall’ – The green groups called for a “firewall” to protect EU officials from fossil fuel representatives to avoid conflicts of interest. “Tackling the climate emergency means leaving the vast majority of known fossil fuel reserves underground and that is incompatible with the future projections of these firms who are going to massively increase their production over the next 10-20 years,” Sabido said. Myriam Douo, from Friends of the Earth Europe, said citizens could no long afford the “delay tactics” of fossil fuel producers. “We must listen to the millions of young climate protesters on our streets and cut fossil fuels out of our politics now.”