City gas distribution companies oppose bid to change network exclusivity
A recent proposal of the Petroleum and Natural Gas Regulatory Board (PNGRB) which could change the rules for exclusivity in a city gas distribution (CGD) network has been opposed by incumbent and new entrants to the sector, including foreign investors. The move, if implemented, could give easy access to third-party companies and derail planned investment in the sector by existing CGD companies. The regulator came out with a public notice a month ago, where it sought the views of stakeholders on the interpretation of network exclusivity, establishment and operation of LNG stations as well as supply of natural gas including LNG by any entity through virtual mode, by cascades or any other mode other than pipeline, in an authorized geographical area. An open house in this regard was held on July 29 where various stakeholders opposed the move, said sources privy to the development. Many CGD companies that have submitted their response to the regulator are of the view that supply of CGD including LNG can only be done by authorized CGD entities according to the PNGRB Act and Regulations.
Chevron, Total in talks with ONGC for upstream projects in India
Chevron and Total Energies are engaged in separate partnership talks with ONGC for upstream projects in India in a sign of growing interest in the country’s exploration sector that has barely received attention from foreign energy firms in recent years. Senior executives of Chevron of the US and ONGC discussed opportunities in the Indian exploration sector last month, while ONGC and France’s Total have formed a technical committee comprising key executives to consider various opportunities, people familiar with the matter said. Conversations with the two energy giants were initiated after ONGC reached out to a dozen international oil companies a few months ago for possible alliances that could range from joint exploration and inducting foreign players as partner-investors in the Indian firm’s discovered and mature fields, to sharing of technology and teaming up in the international arena. Policy reforms of recent years appear to be driving up Chevron’s interest in India, people cited earlier said. The two companies are likely to go in for more rounds of discussion before taking a final call, they said. With a market value of about $190 billion, Chevron is among the top oil and gas producers in the world. It is also part of the shrinking tribe of the oil majors willing to place big bets on oil and gas exploration despite rising pressure from climate activists. Talks between ONGC and Total Energies are also progressing at a fast clip. Executives of the two firms have interacted at least twice in two months and discussed opportunities in joint exploration, development of discovered resources, and international collaboration, the sources said. More discussions will follow before the two companies agree to a deal, they said. Total, with a market value of $110 billion, already has a presence in India in the natural gas sector where it’s building a liquefied natural gas (LNG) terminal and a large city gas distribution network in partnership with the Adani group. ONGC already has a preliminary agreement with US-based ExxonMobil for partnership in the exploration sector. ExxonMobil is currently studying Indian geological data to finalise exploration opportunities. Instead of driving in alone, foreign players appear to be seeking a stable and dominant partner in ONGC that has decades of industry experience, deep knowledge of Indian geology, and a strong talent pool. Three decades after the sector was opened to the private sector, ONGC still accounts for more than 60% of the domestic oil and gas output.
US, Caribbean emerging as new hotspots for crude oil imports by India
The US and Caribbean are emerging as new hotspots for crude oil imports by India as the country looks at newer markets to diversify its energy sourcing basket and insulate itself from pricing and supply shocks. As part of this, the country’s largest public sector oil refiner, IndianOil, has bought its first crude oil cargo from Guyana in July 2021 and has also entered into a term contract with Washington for optional purchase of US grade crude oil. The company has signed a term contract with Rosneft, National Oil Company of Russia, to source Urals grade crude. A look at past years data makes things clearer on how US oil is increasing in India’s oil import basket. Crude oil imports from the US increased to 1.9 mt in 2017-18, 6.2 mt in 2018-19, and 10.3 mt in 2019-20, based on Petroleum Ministry data. It had reached close to 15 mt in FY21. Replying to a question on country’s oil import basket in Lok Sabha on Monday, Petroleum Minister Hardeep Singh Puri also said that to ensure security of crude supplies and to mitigate the risk of dependence on crude from single region, Oil Public Sector Undertakings (PSUs) procure crude from countries located at various geographical locations viz. Middle East, Africa, North America, South America, etc. He also indicated that since the Organization of Petroleum Exporting Countries (OPEC) started with production cuts in May last year, the share of Middle East in the country’s oil import basket has been shrinking. During FY 2019-20, before OPEC imposed a cut, import of crude oil by Oil PSUs from Middle Eastern countries was 69.02 per cent (88.9 mt out of total import of 128.8 mt). But during FY 2020-21, import of crude oil from the Middle East reduced to 63.49 per cent (69.9 mt out of total import of 110.1 mt). This reduction in import of crude from Middle East is mainly on account of crude oil production cut by OPEC since May 2020, as the countries which are members of OPEC, produce and export crude oil to buyer nations as per their agreed modified quota of OPEC plus.
Petrol sales top pre-virus level for first time in 17 months, diesel 11% short
India’s petrol consumption topped the pre-virus level for the first time in 17 months and diesel sales, a key indicator for economic activities, stood just 11 per cent short of the pandemic year in July as the country got back to business after a second Covid wave. Market data for the month shows state-run fuel retailers, who control 90 per cent of the market, sold 3.5 per cent more petrol than the same period of 2019. Diesel consumption also rose to 89 per cent of the pre-pandemic level. Compared to last year, petrol sales were 17 per cent higher and diesel consumption 12 per cent. On a monthly basis, July petrol sales was nearly 9 per cent higher than June, while diesel sales fell less than 1 per cent short. IndianOil chairman Shrikant Madhav Vaidya expects diesel sales to reach the pre-pandemic level by Diwali but says jet fuel sales will take more time to recover fully. Jet fuel consumption did show signs of recovery in July, climbing to 53 per cent of the same period of 2019. Sequentially too, July sales were 21 per cent higher than June as more people took to flying. Compared to last year, the sales were 29.5 per cent higher. Consumption of LPG, or cooking gas supplied in cylinders, too was back on the usual growth track, clocking 7.5 per cent more sales than July 2019. Sequentially too, July sales rose 4 per cent over June and 7.5 per cent from the pre-pandemic year. The robust recovery in fuel demand in the India, the world’s third-largest oil consumer, will support bullish sentiment in the international crude market.
Chevron, Total in talks with ONGC for upstream projects in India
Chevron and Total Energies are engaged in separate partnership talks with ONGC for upstream projects in India in a sign of growing interest in the country’s exploration sector that has barely received attention from foreign energy firms in recent years. Senior executives of Chevron of the US and ONGC discussed opportunities in the Indian exploration sector last month, while ONGC and France’s Total have formed a technical committee comprising key executives to consider various opportunities, people familiar with the matter said. Conversations with the two energy giants were initiated after ONGC reached out to a dozen international oil companies a few months ago for possible alliances that could range from joint exploration and inducting foreign players as partner-investors in the Indian firm’s discovered and mature fields, to sharing of technology and teaming up in the international arena. Chevron, Total in talks with ONGC for upstream projects in India Policy reforms of recent years appear to be driving up Chevron’s interest in India, people cited earlier said. The two companies are likely to go in for more rounds of discussion before taking a final call, they said. With a market value of about $190 billion, Chevron is among the top oil and gas producers in the world. It is also part of the shrinking tribe of the oil majors willing to place big bets on oil and gas exploration despite rising pressure from climate activists. Talks between ONGC and Total Energies are also progressing at a fast clip. Executives of the two firms have interacted at least twice in two months and discussed opportunities in joint exploration, development of discovered resources, and international collaboration, the sources said. More discussions will follow before the two companies agree to a deal, they said. Total, with a market value of $110 billion, already has a presence in India in the natural gas sector where it’s building a liquefied natural gas (LNG) terminal and a large city gas distribution network in partnership with the Adani group. ONGC already has a preliminary agreement with US-based ExxonMobil for partnership in the exploration sector. ExxonMobil is currently studying Indian geological data to finalise exploration opportunities. Instead of driving in alone, foreign players appear to be seeking a stable and dominant partner in ONGC that has decades of industry experience, deep knowledge of Indian geology, and a strong talent pool. Three decades after the sector was opened to the private sector, ONGC still accounts for more than 60% of the domestic oil and gas output.