Iran’s Petropars to develop Farzad B gas field, Oil minister says
Iran has signed a $1.78 billion contract with Petropars Group to develop the country’s Farzad B gas field, Oil Ministry website SHANA said on Monday, after the failure of talks with Indian companies to develop the offshore site. Under the deal, the subsidiary of state-run National Iranian Oil Co (NIOC) will produce 1 billion cubic feet of gas per day within five years from the field, which is estimated to hold 22 trillion cubic feet (tcf) of reserves, of which 16 tcf are deemed recoverable. “Today is an important day … The contract to develop Farzad B gas field was signed between the National Iranian Oil Co. as the employer and Petropars Group as the contractor,” SHANA quoted Iranian Oil Minister Bijan Zanganeh as saying. Indian companies led by ONGC Videsh, the foreign investment arm of Oil and Natural Gas Corp, discovered the field in 2008, but talks on development rights came to nothing after former U.S. President Donald Trump withdrew from the 2015 international nuclear pact with Iran three years ago and reimposed U.S. sanctions against Tehran. “The Indians were not willing to take part in the project. We negotiated with them twice … but they refused to develop the field due to sanctions,” Zanganeh said. Foreign businesses of all types have stopped doing business with Iran for fear of U.S. penalties. U.S. President Joe Biden’s administration and Iran have been involved in indirect talks to revive the pact under which Tehran curbed its nuclear activities in exchange for a lifting of sanctions.
Fuel demand in COVID-hit India plunges in May
Domestic sales of gasoline and diesel by Indian state refiners plunged by a fifth in the first half of May from a month earlier as lockdowns to curb coronavirus infections hit industrial activities and consumption, preliminary data showed on Monday. Gasoline and diesel sales over May 1-15 fell by about 20 per cent, while jet fuel consumption slumped by nearly 38 per cent, versus April 1-15 levels, the data compiled by the state refiners showed. “Trucking activity is almost half of what it used to be in normal times,” SP Singh, senior fellow at Indian Foundation of Transport Research & Training, said. “Most of the business that they were getting from small and medium business has been hit due to lockdowns,” Singh said, adding only a fraction of 5.5 million trucks is currently running on roads due to lockdowns. Indian fuel demand had recovered to near pre-COVID levels in March but has been declining since April given restrictions amid a staggering spike in infections to record highs. India on Monday reported 281,386 new coronavirus infections over the last 24 hours, while deaths rose by 4,106. The South Asian nation’s total case load is 24.97 million with the death toll at 274,390, health ministry data showed. Federal health officials have warned against any complacency over a “plateauing” in the rise of infections and urged states to strengthen their medical insfrastructure and workforce. India’s demand for transportation fuels are expected to witness a sharper slump in May due to more impending restrictions, analysts say. Due to a decline in local fuel sales, Indian refiners have started cutting crude processing and imports. State companies – Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp Ltd – own about 90 per cent of India’s retail fuel outlets. Domestic fuel sales by state retailers over May 1-15, however, were higher versus a year earlier when there was a nation-wide lockdown. Below is a table of India’ preliminary fuel sales data with volumes in thousand tonnes. Product H1 May H1 Apr per centChg H1 May per cent Chg H1 May per cent Chg 2021 2021 2020 2019 Gasoline 799.3 998.2 -19.9 576.3 38.7 1100.2 -27.4 Gasoil 2209.1 2777.9 -20.5 1934.6 14.2 3098.4 -28.7 Jet Fuel 125.3 202.7 -38.2 42.4 195.3 309.4 -59.5 LPG 1116.6 1035.9 7.8 1199.2 -6.9 965.6 15.6
Govt to ‘defend’ its case legally if Cairn’s seizure plan proceeds
Amid reports of identification of Indian assets overseas worth $70 billion by UK’s Cairn for potential seizure, informed sources in the government said that the Centre is well aware of its legal rights and will defend its case in courts if such proceedings materialise. The assets identified by the energy major range from Air India’s planes to vessels belonging to the Shipping Corporation of India, according to reports. Sources also said that the government is yet to receive formal notice of any such claims and hence these reports are purely in the realm of speculation. “It is equally confident of winning its appeal in The Hague,” said an informed source. Sources further pointed out that Cairn did not pay a single rupee tax anywhere in the world in respect of the impugned transactions. Cairn had also lost its appeal before the income-tax tribunal. As per the reports, Cairn plans to move courts in the US to Singapore for seizure of the assets in absence of Indian government’s refusal to honour an international arbitration award.
Are OMCs shifting to alternate day fuel price revision mechanism?
Oil marketing companies seem to be moving towards a revised fuel price revision mechanism, shifting to the practice of changing petrol and fuel rates every alternate day rather than undertaking changes on a daily basis. In the last few days, pump prices of petrol and diesel have been revised every alternate day but the practice had not helped consumers as even under this system prices have only moved up making the fuel dearer. On Monday, OMCs kept retail price of petrol and diesel unchanged. So petrol still costs Rs 92.58 per litre and diesel Rs 83.22 per litre in Delhi, the same as previous day. Across the country as well, the petrol and diesel price prices remained static on Monday but its actual retail prices varied depending on the level of local levies in respective states. The price pause on Monday came after petrol and diesel prices were raised by 24 and 27 paise per litre, respectively, on Sunday. Prior to Sunday, there was no price revision on Saturday. Similarly, while fuel prices were raised on Friday, it remained unchanged in the previous day. “It seems oil companies are giving a sense of relief to consumers as fuel prices are not being raised on a daily basis. But still prices are not actually falling but being raised on very alternate day too this month,” said an oil sector expert not willing to be named. He said that the practice of daily price revision, started after deregulation of petrol and diesel prices few years had been done away by OMCs for past several months giving clear indication that administrative price regime is still working for the sector. Under daily price revision, OMCs revised petrol and diesel prices every morning benchmarking retail fuel prices to a 15-day rolling average of global refined products’ prices and dollar exchange rate. However, in a market where fuel prices need to be increased successively, alternate day price revision seems to be the flavour. It is worth noting that with 9 price increase in May, the retail price of regular petrol has already reached closer to Rs 99 a litre in Mumbai. Petrol prices are already over Rs 100 per litre in several cities in Madhya Pradesh, Rajasthan and Maharashtra. Premium petrol has been hovering above that level for some time now. Petrol prices have increased by Rs 2.03 a litre Delhi in May in the nine increases so far. Similarly, diesel prices have risen by Rs 2.49 per litre in capital this month. IANS had reported earlier that OMCs may begin increasing the retail price of petrol and diesel post state elections as they were incurring losses to the tune of Rs 2-3 per litre by holding the price line despite higher global crude and product prices. With global crude prices at around $ 69 a barrel mark, OMCs may have revise fuel prices upwards again if there is any further firming up.