Kerala: Collector asks oil firm to expedite city gas project
In a proactive step to expedite the works on city gas project, the district collector has asked Indian Oil-Adani Gas Pvt Ltd (IOAGPL) to come up with a proper schedule to give 40,000 piped natural gas (PNG) connections in the district within five or six months. Meanwhile, IOAGPL has started efforts to get extension for the project, the deadline of which is in October, 2020. TOI had on Monday carried an article regarding the slow pace of the project, which was launched in October 14, 2015. In the past four-and-a-half years, IOAGPL could give less than 2,000 connections whereas it should have given around 40,000 connections as per target. On Tuesday, collector S Suhas summoned IOAGPL officials and sought clarification for inordinate delay on their part in implementing the project. Then, the officials said that there were various reasons for the delay, including shortage of workers due to the lockdown and subsequent restrictions. Even though the lockdown has been eased, labourers who mainly hail from other states are not available, the officials said. In the next three months also, there may not be much progress in the work due to rain and shortage of workers. “The district collector has asked us to prepare a schedule for completing the project. We should give 40,000 PNG connections and set up 50 compressed natural gas (CNG) outlets as part of the city gas project. We will submit a report to the district collector in this regard in consultation with our head office,” an official with IOAGPL said. Efforts for seeking nod from Petroleum and Natural Gas Regulatory Board (PNGRB) for giving extension for completing the project have also been made. According to IOAGPL officials, many man-hours were lost due to various reasons like floods in 2018 and 2019. “We expect that there will be a positive response from PNGRB,” an IOAGPL official said. According to IOAGPL officials, though the agency could give just 1,900 PNG connections so far, it has completed the plumbing works in around 15,000 households in various local bodies in Kochi. “Moreover, we have laid pipeline for supplying PNG. We have also started seven CNG outlets and work on another eight is progressing. So, we will be able to achieve the target without much delay,” an official said.
IGL Q4 results; Net profit up 12 per cent on higher gas sales
Indraprastha Gas Ltd, the largest CNG distribution company of the country, on Wednesday reported a 12 per cent rise in March quarter net profit on the back of higher gas sales. Net profit of Rs 252.63 crore in January-March compared with Rs 224.72 crore in the same period a year back, the company said in a statement. The firm, which retails CNG in Delhi and neighbouring cities of Noida, Greater Noida, Ghaziabad, Muzaffarnagar, Rewari, Gurugram and Karnal, saw overall sales volume rise to 567 million standard cubic metres in Q4 of 2019-20 from 564 mmscm a year back. Turnover was marginally higher at Rs 1,697 crore. The company’s gross turnover rose to Rs 7,131 crore in FY20 from Rs 6,337 crore in FY19, showing an increase of 13 per cent. Net profit in FY20 was up 44 per cent to Rs 1,135 crore from Rs 786 crore in FY19, driven by higher volumes and reduction in corporate tax rates, it said. During 2019-20, total sales volume grew by 9 per cent over the previous year, with CNG recording 7 per cent growth in volumes and piped natural gas posting volume growth of 12 per cent. The average daily gas sale during the year has gone up to 6.44 million standard cubic metres per day from 5.91 mmscmd in the previous year. IGL board recommended a dividend of 140 per cent for consideration of the members in the Annual General Meeting. IGL has well laid out its city gas distribution infrastructure in Delhi, Noida, Greater Noida, Ghaziabad, Rewari, Gurugram, Karnal and Muzaffarnagar which consists of over 13,000 kms of pipeline network. It supplies CNG to over 11 lakh vehicles in NCR through a network of over 550 CNG stations. IGL also supplies piped cooking gas to nearly 14 lakh households in these cities. The pipeline network is being further expanded by IGL to cover Ajmer, Pali and Rajsamand in Rajasthan, Shamli, parts of Meerut, Fatehpur, Hamirpur and parts of Kanpur in Uttar Pradesh and Kaithal in Haryana, the statement added.
Oil prices drop on demand worries as coronavirus cases rise
Oil prices fell more than 1 per cent in early trade on Thursday as a spike in new coronavirus cases in China and the United States renewed fears that people would stay home and stall a recovery in fuel demand even as lockdowns ease. US West Texas Intermediate (WTI) crude futures were down 1.6 per cent, or 60 cents, at $37.36 a barrel at 0035 GMT, adding to a loss of 42 cents on Wednesday. Brent crude futures fell 1.1 per cent, or 45 cents, to $40.26 a barrel. The benchmark contract declined 25 cents on Wednesday. Worries about fuel demand rose after a surge in coronavirus cases led Beijing to cancel flights and shut schools and several US states, including Texas, Florida and California, reported sharp increases in new cases. A rise in US crude stockpiles to a record high for a second week in a row also weighed on sentiment, even though US government data showed inventories of gasoline and distillate, which include diesel and heating oil, fell. “People are concerned about the coronavirus resurging in China and crude stockpiles rising,” said Lachlan Shaw, head of commodity research at National Australia Bank. While prices dipped, they remained in the $35 to $40 band they have been trading in so far in June, with the Organization of the Petroleum Exporting Countries (OPEC) and other major producers mostly sticking to promised supply cuts, US shale producers holding back output, and fuel demand gradually improving. “It’s going to be up and down, rangebound for the next little while on a balance of OPEC and ally cuts against the massive inventory build and demand recovery and potential restarts of production in the United States,” Shaw said.
Over 11,000 displaced by Assam gas-well blowout
The gas well blowout at Baghjan, in Assam’s Tinsukia district, has become a major humanitarian crisis as over 11,000 people have been displaced from the area. Staying in relief camps since the incident, all of them want to go back home as soon as possible. “We have survived floods and erosion for years but have never seen such a man-made disaster,” Rupali Saikia, a mother of two kids who have been staying at a relief camp since May 28, said. “After the gas well exploded, we fled. We could carry only a few clothes. Everything was left behind. We are farmers. We are worried about our future as the oil spill has damaged our crops and fields,” she added. Ranjan Gohain, a resident of Rangagora Natun Gaon, said, “The 500-odd families of our village fled. The people were dependent on crop farming, animal rearing, poultry farming and fish farming. Most of the farms have been damaged by the oil spill. People are worried.” District officials said on Wednesday the blowout triggered an exodus of 2,000 families, or approximately 11,020 individuals, from the area. While 1,510 displaced families (8,540 people) have taken shelter in relief camps, another 450 families (2,480 people) have been shifted to other places, including homes of relatives and acquaintances. The well blowout has also affected 3,160 farmers. According to official data, 1,210 hectares of agricultural crop area and 470 hectares of small tea gardens were affected.
Venezuelan oil production sinks to lowest output in 77 years
Crisis-wracked Venezuela’s relentless fall in oil production sunk to a new low in May, according to OPEC figures, a milestone in a decade of decline for the once proud petroleum powerhouse. Venezuela — heavily dependant on income from oil exports — produced just 570,000 barrels of oil a day, a drop of 54,000 bpd compared to one month earlier in April, according to Organization of the Petroleum Exporting Countries figures out Wednesday. The OPEC number was also 162,000 bpd lower than official Venezuelan statistics. Venezuela’s oil production peaked in 1970 at 3.7 million bpd, and even 12 years ago state oil company PDVSA — once among the world’s top five oil enterprises — was producing 3.2 million bpd. Not counting a December 2002-March 2003 oil workers strike, the current output is the lowest since 1943, when Venezuela had a population of barely four million, compared to 30 million today. Experts blame the production drop on government mismanagement, corruption and a failure over many years to invest in infrastructure upgrades and maintenance. These problems have been amplified by US sanctions aimed at starving President Nicolas Maduro’s regime of a major source of funds in a bid to force him from power. Between 2004 and 2015, Venezuelan oil exports raked in $750 billion, and the country had more than $42 billion in international reserves — now down to just $6.4 billion, according to the Central Bank. Venezuela’s economy has been devastated by six years of recession, and it is experiencing the world’s highest inflation rate — all before the COVID-19 pandemic even struck. On April 24, Venezuelan crude prices plunged to $9.90 a barrel — its lowest in two decades, although it rebounded to $13.45 by May 1. The oil ministry has not published any figures since. According to oil information firm S&P Global Platts, Venezuela was forced to scale back production in recent weeks due to storage limitations and a lack of light oil to process its heavy crude. Yet even if Venezuela were pumping at capacity, oil prices are at their lowest in years due to a huge drop in global demand, a result of worldwide economic crisis unleashed by the COVID-19 pandemic. – ‘Trump’s knee on our neck’ – Up to 2018, Venezuela was sending 500,000 bpd to the United States alone, and received in return 120,000 bpd of light oil, diluents and fuel-producing supplies. Sanctions, however, have forced Venezuela, which used to refine enough oil for its own needs, to turn to allies such as US nemesis Iran to alleviate a desperate gasoline shortage. All this is “sharpening Venezuela’s cycle of recession,” said economist Jose Manuel Puente, from the Public Policy Center at the Institute of Higher Education Administration (IESA). Venezuela is heading for a seventh straight year of recession, during which time its economic growth has halved. Making matters worse, Venezuela is selling the little oil it exports “at a loss” due to the global price drop and the dealings it must operate to work around US sanctions, said Puente. The country “is on the brink of collapse,” he said. Central Bank advisor Carlos Mendoza Potella is critical of the government’s policies, but says US sanctions played a major role in the oil industry’s demise. “They’re strangling us, we’ve got (President Donald) Trump’s knee on our neck,” said Mendoza Potella. Even without sanctions, though, he doesn’t see a future with oil as a “driver of development” due to the high costs in extracting Venezuelan crude. Venezuela has the world’s largest proven crude reserves, but “that serves no purpose” if you can’t extract and sell it at a profit. Puente believes the sector cannot recover without private investment. “Alone we can’t do it. We don’t have the technology, or the financial and human resources,” he said. The latest drop in production coincides with a flare-up of tensions between Maduro and opposition leader Juan Guaido, who declared himself acting president 18 months ago, earning recognition from more than 50 countries. Although the two agreed to cooperate to help fight the novel coronavirus, they have since clashed over upcoming legislative elections, which the opposition plans to boycott. Puente says there is no chance of an economic bailout without a political transition plan that would likely require Maduro to cede power. “We have no alternative, either we do it or we’ll continue in the cycle of disaster,” he said.