Oman grants gas exploration concession to Total and Thailand’s PTTEP: ministry
Oman has signed an exploration and production sharing agreement with France’s Total E&P and Thailand’s PTTEP to explore and develop non-associated gas in Block 12, Oman’s ministry of oil and gas said in a tweet on Wednesday. Total E&P is the operator of the 9,546 square kilometre block located in central Oman, and holds 80% participating interest in the joint venture, while PTTEP has the remainder, the ministry said. Under the agreement, the companies will carry out seismic surveys and geological and geophysical studies, and drill exploratory wells.
Pradhan reviews BS-VI fuel roll out plan from April 1
Oil Minister Dharmendra PradhanNew Delhi: Oil Minister Dharmendra Pradhan on Monday reviewed preparations for roll out of Euro-VI emission compliant fuel from April 1. India will leapfrog to BS-VI, equivalent to Euro-VI grade fuel, from current BS-IV fuel from April 1 in a bid to cut vehicular emissions. “BS-VI, which is comparable with CNG in terms of providing clean energy, is expected to bring down sulphur level by 5 times from the BS-IV levels. This will go a long way in mitigating the problem of air pollution and improving air quality,” an official statement said. Pradhan said this bold step to leapfrog from BS-IV to BS-VI grade fuel is a testimony of Modi government’s efforts towards achieving the commitments made at COP 21 climate summit.
‘Gas Warrior’ seeks to convert
GAIL India Ltd., the nation’s biggest gas utility, is in talks with Indian steel mills to convince them to switch to using the less polluting fuel in an attempt to revive sales growth. The shift to gas will mean a sweeping transition in a country that depends largely on oil and coal for energy. The New Delhi-based company is counting on the global push for factories to seek less polluting fuels to drive that change, Ashutosh Karnatak, director of projects at the state-run utility said in an interview. For GAIL it’s crucial to find new clients as demand from its biggest customers – power plants – wanes. The company has the backing of Prime Minister Narendra Modi, who has set a goal to reduce the emissions intensity of the economy as well as curb the severe air pollution that chokes large swathes of the country’s urban landscape. Modi is pushing for a gas-based economy, where the fuel is seen more than doubling its share in the energy mix to 15 per cent by 2030. “There is a lot of pressure on these industries because of climate change and we are offering them a solution to convert to gas,” Karnatak, who calls GAIL a “gas warrior,” said. “Oil use can’t be wiped out, and neither can be coal. But we want gas and renewables to increasingly replace the dirty fuels.” Reaching the target would require India’s daily gas consumption to increase to 450 million standard cubic meters from about 150 million, Karnatak estimates. That’s a daunting task for a country with inadequate pipeline infrastructure and customers who are sensitive to prices. Still catching up! India’s power utilities are instead using more coal. They bought a record 608 million tons of the fuel in the year ended March, 8.4 per cent more than a year earlier, government data show, while gas use dropped. GAIL’s revenue is poised to drop 19 per cent in the year ending March 31, according to median estimate of seven analysts surveyed by Bloomberg. That’s the most since at least 2005, according to data compiled by Bloomberg. The company’s shares rose as much as 1.1 per cent, heading for the biggest gain in a week, at 11:41 a.m. in Mumbai. Demand from new customers will help reverse the drop. The company is in talks with Steel Authority of India Ltd. and has approached Tata Steel Ltd. to convince them about the benefits of switching to gas, he said. Steel mills alone can consume close to a fourth of the anticipated demand. Steelmakers and sponge iron plants used almost 30 million tons of domestic coal supplies in the year ended March, about 4 per cent of the total shipments, according to the coal ministry. In addition, about 52 million tons of coking coal was imported by the steelmakers. Challenges to gas “There is a lot of scope for replacing coal with natural gas in India’s iron and steel sector, but affordability will be key to that transition,” said A. C. R. Das, a metallurgist and a former adviser to the steel ministry. “If gas becomes available at an affordable price, the plants will be willing to make that switch.” Still, shifting to gas has its challenges. India’s domestic gas production has declined over the years and fails to cater to all users. A slew of taxes across states burden imported gas, blunting the advantage of a 60 per cent fall in a custom index based of Platts regional prices, in the past year amid a glut of supply and a recent slump in Chinese demand because of the virus outbreak. That has left nearly three quarters of India’s gas-fired capacity idle, as they fail to compete with cheaper power from coal plants. Supply of regulated domestic gas, which declined almost 4 per cent from a year earlier to $3.23 per million British thermal units for the half year ending March, is scarce and generators find other sources of the fuel too expensive. The target of raising share of gas is “achievable even by 2025-26, but it needs a concerted effort from all the stakeholders,” Karnatak said. “We have transformed ourselves into gas warriors.”
Privatisation may not cause big layoffs at BPCL: Top exec
State-run BPCL’s management does not expect major layoffs after the proposed privatisation of the oil marketing company as it has been working on having a lean structure for almost a decade now, a top executive of the company told ET. The workers’ union at BPCL, which is opposing the planned privatisation, has called a two-day nationwide strike on April 20 and 21, when it will be joined by unions of other public sector oil companies. The union has already called two nationwide strikes so far. To bolster support, these workers have been conducting sensitisation programmes and awareness programmes on social media. “We have some of the best workforce in the country. Most of them will not be impacted by privatisation,” N Vijayagopal, director (finance), BPCL, said. “In fact, their salaries could probably go up. The fear of change is there, but we don’t think there will be any problems for most of our employees. There could be problems for some people who are not adequately qualified and are in a certain age group.” He said the guidelines set by the Department of Investment and Public Asset Management (Dipam) will define the contours of the deal and address employee-related issues. “Redundancies will not be encouraged by private sector management. But in BPCL, the number of redundancies is very small because as we are a very lean organisation,” Vijayagopal said. “Despite the massive expansion, we have reduced our employee strength by 2,000 people from the year 2011 to today.” Employees protesting against the privatisation accuse the government of not involving them in its discussions and have alleged that they are being penalised for speaking against it after the company allegedly cut salary for the four days when they were on strike. “We are being penalised for protesting. We have been agitating for 160 days now, but there is no discussion from the management or the government. We will go on strike again on April 20-21, as it is not just about employees losing their jobs, but also about the country losing a valuable asset to a private company,” Praveen Kumar, general secretary of Cochin Refineries Employees Association, which is a part of the umbrella association Indian National Trade Union Congress, told ET over phone. The government is in the process of finalising the bid process for the privatisation of BPCL, after a preparatory road show where it sought feedback from potential buyers. The Economic Survey 2019-2020 had said that the approval of the strategic disinvestment in the company had led to an increase in the value of shareholders’ equity in the company by Rs 33,000 crore as compared with its peer Hindustan Petroleum (HPCL).
Torrent Chennai city gas licence valid, says SC
The Supreme Court has upheld award of city gas licence for Chennai to Torrent Gas, rejecting Adani Gas’ plea that the winner’s “unreasonably high bid” should have been rejected by the regulator. Torrent had won the licence to lay city gas distribution infrastructure in the Districts of Chennai and Tiruvallur in Tamil Nadu following a competitive bid organised in 2019 by Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator. “This authorisation by PNGRB was challenged by Adani Gas Limited on the ground that the bid of Torrent Gas was unreasonably high and PNGRB ought to have rejected the bid,” Torrent said in statement. The court has rejected all contentions of Adani Gas and dismissed its appeal against the PNGRB’s award, as per the statement. Adani group declined comment for the story. In its judgement on February 17, the Supreme Court “has held that the power to determine the reasonability of the bids resides solely with the PNGRB by virtue of Clause 14.2 of the Bid Document and that PNGRB’s determination on reasonability was neither arbitrary nor violating the principles of natural justice,” as per the statement. The judgement will help begin work on laying city gas infrastructure in Chennai and Tiruvallur, Torrent said.
BPCL management hopes NRL disinvestment happens concurrently
Bharat Petroleum Corporation (BPCL), the country’s second-largest fuel retailer, hopes the disinvestment of Government of India’s share in BPCL and Numaligarh Refinery (NRL) happen concurrently, senior company executives told analysts during a call. They said the company has already extended the opportunity of right of first refusal to the Assam government for the proposed stake sale of BPCL’s 61.65 per cent stake in NRL and expects the Expression of Interest (EoI) for BPCL’s stake sale to be floated before the end of the current month. “The board has decided to give an opportunity to the government of Assam first as they have the right of first refusal. The letter has already gone and depending on the response we will take action to ensure that the sale is made to a government company in the oil sector as per the CCEA decision,” an executive said. \ He added the same advisors appointed for BPCL stake sale will be conducting the evaluation including both the asset valuer and the transaction advisor and the process followed will be as guided by DIPAM guidelines. The executives also said disinvestment of BPCL’s share in NRL will be a relatively simple process as compared to BPCL stake sale. The company had last Thursday reportedly written to Assam Chief Secretary requesting the state government to express its interest in buying NRL within two weeks. “This will be a much simpler job as compared to BPCL and in any case we are very confident that this can be done concurrently with BPCL if not earlier. We are confident that NRL transaction is not going to upset government’s time schedule for BPCL disinvestment,” a BPCL said. He said the company’s plan to invest in NRL’s refinery expansion will have to be put on hold and BPCL will now not be involved in the plan. BPCL management had earlier cleared a plan to expand refining capacity of NRL to 9 million tonne per annum (MMTPA) from 3 MMTPA currently at a cost of Rs 22,594 crore. “BPCL will not be participating in capex plan of NRL because NRL will become a different company by then. The expansion will now depend entirely on the new owner and his business requirements. If it continued with BPCL it made tremendous sense in terms of synergy and we would ensure that the expansion happens on the timelines which we had decided,” a BPCL executive said. Responding to a question on the use of proceeds from NRL stake sale, an executive said the government will have to take a call on it and the sale will not have any bearing on the company. “If the deals are going to held concurrently, the realization of sale proceeds will result in incremental value creation for BPCL and that will reflect in the bids which will be invited. Whether it is going to be taken out as dividend is a question which the government of India has to decide,” an executive said. The executives also informed that BPCL disinvestment will have no bearing on the company’s capex plan. An inter-ministerial group (IMG) has approved sale bid documents for privatisation of BPCL and a notice seeking bids will be issued after a small group of ministers approves it. The IMG comprising representatives from the ministries of finance, petroleum, law, corporate affairs and department of disinvestment has approved expression of interest (EoI) and preliminary information memorandum for the company. BPCL has a market capitalisation of around Rs 1.03 lakh crore and the government stake at current prices is worth about Rs 54,000 crore. The successful bidder will also have to make an open offer to other shareholders for acquiring another 26 per cent at the same price.
PNG facility in more areas soon in Patna
In the backdrop of rising LPG cylinder prices, piped natural gas (PNG) supply is gaining grounds with over 785 households in the city are getting piped cooking fuel supply. The Gas Authority of India Limited (GAIL) has claimed that it has already laid around 200km of pipeline in Patna. At an estimated cost of Rs2,500 crore, the Pradhan Mantri Urja Ganga Yojana scheme launched in February last year, targets to connect all households in the city. The network has covered 11,500 households in the city so far. Rajnish Singh, DGM of GAIL-Patna branch said localities between Saguna Mor and Income Tax roundabout will be covered by March-end. “Since work on laying pipelines is only done during the night, we hardly get four to five hours for it. But we have still covered several areas in the city,” Singh added. Jagdeo Path, BIT-Mesra and Building Construction Department (BCD) quarters at Rajvanshi Nagar were the first to get the PNG supply. The pipelines have now been laid at Gola Road, Ashiana-Digha Road, Raja Bazar, Jalalpur City Nageshwar Colony, Anandpuri and Pataliputra colony. “We recently covered several locations, including Ved Nagar, DRM colony in Khagaul, RPS colony, electricity board quarters, Vikas Nagar, and parts of Rukkanpura,” Singh said, adding, “As of now, households in Ved Nagar, AIIMS colony, BIT-Mesra, Jagdeo Path, BCD quarters at Rajvanshi Nagar have started using PNG.” The lower prices of PNG are a big draw. “As many as 24 staff quarters and four hostels of BIT-Mesra have PNG connection. The rates are comparatively much lower than LPG. Also, with the PNG connection, we don’t worry about the safety,” A BIT-Mesra official said. Sarita Sinha, a resident of Boring Road, is eagerly waiting for PNG. “With LPG price rising, it has become difficult to manage my monthly budget. PNG will not just save money, but will also reduce hassles of handling cylinders,” she said. Several CNG stations are also being opened in the city. “Two new stations, one each at Bailey Road and Digha will be opened by March this year,” Singh said.