Exxon Mobil in talks to buy stake in Indian oil, gas fields: Pradhan
Energy supermajor Exxon Mobil Corp is in talks to buy a stake in producing oil and gas fields in India, Oil Minister Dharmendra Pradhan said on Wednesday showcasing efforts to raise domestic output to cut imports. Exxon Mobil had in October last year signed a memorandum of understanding (MoU) with state-owned Oil and Natural Gas Corporation (ONGC) to offer its expertise and technology for developing resources in offshore blocks. Speaking at a webinar series on ‘The Road To Atmanirbhar Bharat’ organised by Swarajya Magazine, he said India is looking to replicate the Texas model of raising domestic oil and gas production by involving small and mid-sized companies in exploration and production. “Till 2014, the total acreage given for exploration and production (of oil and gas) was about 90,000 square kilometers. In two rounds of auction of small discovered fields (DSF) and five rounds of Open Acreage Licensing Policy (OALP), an additional 1.65 lakh sq km of the area has been offered,” he said. The US shale oil and gas revolution was not brought about by big companies. “Small companies have developed the Texas shale oil and gas sector. We are envisaging a similar scenario in India through progressive policy and involving a lot of small and mid-sized companies,” he said. But large companies would obviously be there, he said adding UK supermajor BP is investing USD 5 billion bringing to production the next wave of gas discoveries in KG basin block KG-D6. Also, Shell and Total are present in India. “Exxon Mobil is in active discussion with some of our companies to participate in some of our producing fields,” he said without giving details. The October 2019 MoU provided for ONGC and ExxonMobil jointly bidding for exploration assets in India. ONGC is currently developing deepwater oil and gas blocks on the east coast, which at a peak is envisaged to produce more than 15 million standard cubic meters per day (mmscmd) of gas. Also in October 2019, Exxon signed another memorandum with the country’s biggest refiner Indian Oil Corporation (IOC) to explore ways to supply liquefied natural gas to meet India’s burgeoning gas demand. While Shell operates a 5 million tonnes a year LNG import facility in Gujarat, Total of France has partnered with Adani Group in city gas projects. Pradhan said the exploration acreage offered speaks volumes about the government’s intent and policies. “If our policy is not investment friendly, if our policy is not open, if our policy is not transparent, how this kind of investment is coming,” he asked.
BPCL receives three preliminary bids, says Oil Minister Dharmendra Pradhan
The government has received three preliminary bids for buying of controlling stake in India’s second-largest fuel retailer Bharat Petroleum Corporation Ltd (BPCL), Oil Minister Dharmendra Pradhan said on Wednesday. Mining-to-oil conglomerate Vedanta had on November 18 confirmed putting in an expression of interest (EoI) for buying the government’s 52.98 per cent stake in BPCL. The other two bidders are said to be global funds, one of them being Apollo Global Management. “Lot of interest is there,” Pradhan said at a webinar series on ‘The Road To Atmanirbhar Bharat’ organised by Swarajya Magazine. “DIPAM has recently informed market… I think three parties have given EoI for the bidding process.” He did not give details. Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), which is handling the strategic sale, had tweeted on November 16 – the last date for bidding – that the transaction advisors (TA) for the sale have reported receiving “multiple expressions of interest.” “The transaction will move to the second stage after scrutiny by TA,” he had said. Pradhan said the government is looking to privatise some of the state-owned companies to bring in professionalism and competition. “As I have earlier said the government is committed to offloading its share from some state-owned companies. That way more professionalism and competition will come. We are committed and keen on that aspect,” he said. A special purpose vehicle floated by the BSE-listed Vedanta Ltd and its London-based parent Vedanta Resources submitted an EoI before the close of the deadline on November 16. The government is selling its entire 52.98 per cent stake in BPCL as part of plans to raise a record Rs 2.1 lakh crore from disinvestment proceeds in 2020-21 (April 2020 to March 2021). But share price of BPCL has plunged by nearly a fourth since the time the strategic sale was approved in November last year. At Wednesday’s trading price of Rs 385 on BSE, the government’s 52.98 per cent stake in BPCL is worth just over Rs 44,200 crore. Also, the acquirer would have to make an open offer for buying another 26 per cent stake from the public, which would cost about Rs 21,600 crore. Vedanta’s interest in BPCL stems from its USD 8.67 billion acquisition of oil producer Cairn India nearly a decade back. The company produces oil from oilfields in Rajasthan which are used in refineries such as those operated by BPCL to turn them into petrol, diesel and other fuels. Sources said transaction advisors have begun evaluating the EoIs to ascertain if the bidders meet the qualifying criteria and have the financial muscle to do the acquisition. This process may take two-three weeks, thereafter a request for proposal (RFP) will be issued and financial bids sought. BPCL will give the buyer ownership to 15.33 per cent of India’s oil refining capacity and 22 per cent of the fuel marketing share. BPCL operates four refineries in Mumbai (Maharashtra), Kochi (Kerala), Bina (Madhya Pradesh), and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum, which is 15.3 per cent of India’s total refining capacity of 249.8 million tonnes. While the Numaligarh refinery will be carved out of BPCL and sold to a PSU, the new buyer of the company will get 35.3 million tonnes of refining capacity — 12 million tonnes Mumbai unit, 15.5 million tonnes Kochi refinery and 7.8 million tonnes Bina unit. It also owns 17,355 petrol pumps, 6,156 LPG distributor agencies and 61 out of 256 aviation fuel stations in the country. BPCL is India’s second-largest oil marketing company with a standalone domestic sales volume of over 43.10 million tonnes and a market share of 22 per cent during FY20. It is India’s sixth-largest company by turnover. Its petrol pumps sell more fuel than the industry average — BPCL pumps sell 124 kilolitres per month as compared to the industry average of 116, according to the company website. The firm also has an upstream presence with 26 assets in nine countries such as Russia, Brazil, Mozambique, the UAE, Indonesia, Australia, East Timor, Israel and India. It is also making a foray into city gas distribution and has licences for 37 geographical areas (GAs).
India to see $66 billion investment in gas infrastructure
India will see a massive $66 billion investment in the building of gas infrastructure as the government pushes for greater use of the cleaner fuel with a view to cutting down carbon emissions, oil minister Dharmendra Pradhan said on Wednesday. The government is targeting raising the share of natural gas in its energy basket to 15 per cent by 2030 from the current 6.3 per cent. This will entail gas consumption rising manifolds from current 160-170 million standard cubic meters per day. To cater to this, liquefied natural gas (LNG) import capacity is being raised, new pipelines laid to transport the fuel, and city gas infrastructure expanded to take the fuel to users, he said at KPMG India’s annual energy conclave ENRich 2020 here. “An estimated investment of $66 billion is lined up in developing gas infrastructure, which includes pipelines, city gas distribution, and LNG regasification terminals,” he said adding 14,700-km gas pipelines are being added to the existing network of 16,800-km to form a national gas grid. He, however, did not give breakup or timelines of the investment. Elaborating on India’s energy strategy going forward, he said apart from achieving the renewable energy target of 450 gigawatts (GW) by 2030, India will focus on developing in an integrated manner a gas-based economy, cleaner use of fossil fuels, greater reliance on domestic fuels to drive biofuels and moving into emerging fuels, like hydrogen. LNG import terminals and capacity additions are planned on both east and west coast. Also, the city gas network of retailing CNG to automobiles and piped natural gas to households and kitchens has been extended to 407 districts. Besides CNG, the government is also promoting the use of LNG as fuel on long-haul trucks and buses. “Recently, we have laid the foundation stone for the first 50 LNG fueling stations across the golden quadrilateral and major National Highways. Our goal is to set up 1000 LNG stations within 3 years which is likely to add about 20-25 mmscmd of new gas demand by 2035,” he said. Besides, the National Biofuel Policy (NBP) is targeting blending of 20 per cent ethanol in petrol and 5 per cent of bio-diesel by 2030. “Biofuel is not just science but also a Mantra that will provide new energy to not only India but also the entire world. It has the power to create a balance between our environment and economic development,” he said. India joined the elite group of nations in August 2018 by successfully operating a flight running on biofuel. “We are keen to expand the use of biofuels in the aviation sector to meet the new ICAO standards,” he said. Pradhan said the government is also pushing for generating gas from municipal and agri waste and 5,000 compressed biogas plants are planned. “There is also an increased push to adopt hydrogen fuel mix. Last month, we launched the Hydrogen enriched- Compressed Natural Gas (HCNG) plant and dispensing station in Delhi and also rolled out the first set of buses with HCNG,” he said. Pradhan said historically, global economic growth and the need for energy resources have been synchronous. However, with increasing awareness of environmental threats, such as global warming and climate change there is a paradigm shift in the way this relationship is envisioned. The global GDP is projected to double by 2040 but the associated global energy demand is estimated to increase only by 30 per cent, he said adding the situation of developed and developing countries however are not similar. “As economic development catches up, energy needs of countries, like India will be higher and must be adequately met while being responsive to environmental and climate concerns,” he said. India uses only 6 per cent of the world’s primary energy and the per capita consumption of energy is still one-third of the global average. “This, however, is rapidly changing. India’s developmental state triggers the rapid expansion of energy consumption and a need for robust energy security.” According to different global agencies, the world total primary energy demand would increase at less than 1 per cent per annum till 2040 and this growth would be mainly supported by India and other Asian countries. India is the third-largest energy consumer after the US and China. Its energy demand increased to 882 million tonnes of oil equivalent (Mtoe) in 2017. According to BP Energy outlook 2020, India’s energy demand would grow at about 3 per cent per annum till 2040. “Our estimated per capita energy consumption would be half of the world average by 2040.” India has committed to reducing the emissions intensity of its GDP by 33-35 per cent from 2005 levels. “Our energy agenda is inclusive, market-based and climate-sensitive. We have adopted multiple pathways for the energy transition,” he said. India is targeting 175 GW of renewable energy capacity by 2022 and 450 GW by 2030. The solar installed capacity in India has increased by more than 13 times from 2.63 GW in March 2014 to 34.81 GW in April 2020. Pradhan said India is an attractive investment destination for the energy sector as several policy reforms have enhanced ease of doing business. “A testament to the same is the projected investment of $143 billion in the Indian oil and gas sector.” “We are keen to partner with global companies and investors for further strengthening of energy infrastructure in the country,” he said. Saudi Aramco and UAE’s ADNOC are partnering in the marquee 60 million tonnes a year integrated refinery petrochemical project in Maharashtra. “India also recognizes the importance of global collaboration on the energy sector,” he said. “India and Russia are targeting tripling bilateral trade to $30 billion in the next four years in areas such as LNG, shipping and so forth.” Similarly, under the ambitious Strategic Energy Partnership, India and the US energy trade is growing exponentially over the past few years.
H-Energy to commission Maharashtra LNG terminal in March
India’s H-Energy will commission its Jaigarh liquefied natural gas terminal (LNG) at Jaigarh port in Western Maharashatra state in March 2021, the company said in a statement on Wednesday H-Energy will deploy Hoegh LNG Holding’s floating storage and regassification unit (FSRU) for 10 years The FSRU, built in 2017, has storage capacity of 170,000 cubic meters and has a peak regasification capacity of about 6 million tonnes per annum, the statement said The FSRU will deliver regasified LNG to the 56 km Jaigarh-Dabhol pipeline connecting to the National Gas grid The FSRU is also capable of reloading LNG onto other LNG vessel’s for providing bunkering services
Petrol, diesel become dearer after OMCs raise retail prices
Oil marketing companies on Thursday increased the prices of petrol and diesel after keeping the retail prices unchanged for the past couple of days. The pump price of petrol increased by 17 paisa per litre on Thursday to Rs 82.66 a litre in Delhi from a level of Rs 82.49 a litre a day earlier. Similarly, the diesel price increased by 19 a litre to Rs 72.84 a litre in the national capital as compared to Rs 72.66 per litre on the previous day. The prices of auto fuel have also increased across the country but the level of rise has been different depending on the taxation structure in each state. In the past 14 days, due prices have risen 11 days with petrol prices rising by Rs 1.60 per litre and diesel by Rs 2.38 a litre. The increase has been primarily on account of firming up of global oil and product prices following news of successful coronavirus vaccine. Petrol prices had been static since September 22, and diesel rates hadn’t changed since October 2. Though retail pricing of petrol and diesel has been deregulated and oil marketing companies were following a daily price revision formula, the same was suspend ended for almost two months to prevent volatility in international oil markets from impacting fuel prices regularly during the pandemic. But with crude on the boil again on news of a successful coronavirus vaccine launch soon, the patience was lost by OMCs who finally resorted to price increase to cover for their under recovery on the sale of two petroleum products. The benchmark Brent crude has crossed $48 a barrel on Intercontinental Exchange (ICE) lately. It has remained an over $44 a barrel for most part of November. OMCs need almost 40 paise per litre increase in retail price of petrol and diesel to cover for $ 1 increase in crude. Going by this yardstick, product prices would have to be increased by upto Rs 2 per litre to cover under recovery on its sale.
Japan may ban sale of new gasoline-powered vehicles in mid-2030s
Japan’s government is considering abolishing sales of new gasoline-engine cars by the mid-2030s in favour of hybrid or electric vehicles in line with a global shift from traditionally powered cars, public broadcaster NHK reported on Thursday. The move would follow Prime Minister Yoshihide Suga’s pledge earlier this year for Japan to slash carbon emissions to zero on a net basis by 2050 to realise a greener society. Under the vehicle sales plan, the trade ministry is considering requiring all new vehicles to be electric cars including hybrid vehicles, NHK reported, adding the ministry would finalise a formal target following expert-panel debates as early as year-end. (Reporting by Chris Gallagher and Tetsushi Kajimoto; Editing by Leslie Adler and Christopher Cushing)
IGX gets PNGRB nod to operate as Gas Exchange for 25 years
The Indian Energy Exchange on Thursday said its arm, Indian Gas Exchange (IGX), has secured authorization from the Petroleum and Natural Gas Regulatory Board (PNGRB) to operate as a Gas Exchange. IGX is India’s first automated delivery-based gas trading platform. IGX has secured the necessary authorization to operate as a Gas Exchange as per the provisions of the PNGRB (Gas Exchange) Regulations, 2020 for a period of 25 years, an Indian Energy Exchange (IEX) statement said. According to the statement, the regulations were notified by the PNGRB on September 28, 2020. IGX had submitted its application for authorization on October 8, 2020. “With this development, IGX has become the first regulated gas exchange in the country. The Exchange will play an instrumental role in transparent discovery of gas prices, accelerate investments in the value chain, aid in capacity utilization of pipelines as well as boost consumer confidence and in turn increasing gas demand in the country,” PNGRB Chairperson D K Sarraf said. India is eying to increase the share of gas in its overall energy mix from 6 per cent to 15 per cent by 2030. “This is a landmark development not just for IGX but for the overall gas sector and economy at large. The market mechanism will create competitive markets to benefit the end consumers with competitively priced gas and cost-effective price signals, will facilitate demand growth thereby leading to development and investments in upstream and downstream parts of the value chain,” S N Goel, Chairman IEX and Director, IGX said in the statement. Goel added that as a regulated entity, the IGX is poised to further establish and reinforce greater trust and credibility among market participants. The IGX is incorporated as a wholly owned subsidiary of the IEX. The IGX currently offers trade in five contracts namely: Daily, Weekly,Weekday, Fortnightly and Monthly at three physical hubs at Hazira and Dahej in Gujarat and KG Basin in Andhra Pradesh. The IGX has since received encouraging response from all stakeholders and will shortly commence trading with over 500 registered clients and 14 members. Since its launch on June 15, 2020, the platform has cumulatively traded 74,600 MMBTU (Metric Million British Thermal Unit).
It’s time oil producers listened to consumers, says Pradhan as prices rebound
Amid a rebound in global crude prices and OPEC considering extending production cuts, petroleum minister Dharmendra Pradhan on Wednesday called for “reasonable and responsive” oil pricing, saying it is time the producers also listened to the consumers as the days of monopoly are over. For heft and to underline India’s position in the global energy architecture, Pradhan said the country’s share of total global primary energy demand will nearly double to 11% by 2040 on the back of strong economic growth and its energy consumption will rise at 3% annually till then — the fastest among major economies. India currently accounts for only 6% of the world’s primary energy consumption and the per capita consumption of energy is still a third of the global average. “But all that is changing rapidly,” he said, adding that despite the transition to renewables and other alternate energy sources, India’s oil demand would double and gas demand would treble by 2040. OPEC is currently debating whether to roll over the historic production cut of nearly 8% of daily global demand into 2021. Oil prices have over the past fortnight risen to their highest since March on hopes of OPEC extending the production cut deal and an early return of demand because of the success of Covid-19 vaccine candidates. Pradhan said India is in the midst of a major transformative shift in its energy sector to end energy poverty in India. “While doing so, our twin objectives are to enhance availability and affordability of clean fossil and green fuels and to reduce the carbon footprint through a healthy mix of all commercially viable energy sources,” he said. “Our Government is also committed to reducing the emissions’ intensity of the GDP by 33% to 35% from 2005 levels. We are consistently taking energy policy initiatives. We are developing next-generation infrastructure based on five guiding enablers of energy availability, accessibility, affordability, efficiency and sustainability to fight climate change and mitigate global uncertainties,” he said.