Chhattisgarh govt announces reduction of VAT on petrol, diesel
The Chhattisgarh government on Monday decided to reduce Value Added Tax (VAT) on petrol and diesel by 1 per cent and 2 per cent, respectively. This decision was taken during the cabinet meeting chaired by Chief Minister Bhupesh Baghel, a government official said. The move will cause a loss of nearly Rs 1,000 crore to the state exchequer. Providing major relief to the people of the state. Chief Minister Bhupesh Baghel-led cabinet has decided to cut the prices of petrol and diesel. VAT on diesel and petrol has been reduced by 2 per cent and 1 per cent respectively. The state government will bear the loss of about Rs 1,000 cr.. the Chief Minister’s Office (CMO) tweeted.
Centre clarifies on reports of giving away ONGC’s Mumbai High field to private sector
The Oil Ministry added that there is enough scope for several large and small companies to operate in the offshore and onshore basins in the country as substantial area is still available. The Centre on Monday clarified on reports of the Oil Ministry’s proposal to give away public sector behemoth ONGC’s Mumbai High field to private sector, saying that such a step “has to be done by following system and procedures in a transparent manner.” In an official statement, the Ministry of Petroleum and Natural Gas stated, “ONGC had conducted an internal Strategy Meet at Udaipur from 29th to 31st October 2021 for which suggestions including making a 25 years energy perspective plan, 15 years exploration plan by taking more acreages under exploration, and having partnerships for its major fields, with scope of enhancing recovery and technology infusion, were made.” The Centre added that while on one side, area under exploration has to be increased which would subsequently lead to more new discoveries in the country, on the other side, production from existing fields has also to be optimised and increased wherever possible by employing advanced technology, drilling more production wells, wherever technically feasible, and better management. “For this private sector companies can be involved as partners or through various business models so that new techniques and technology can be brought in through such companies which have experience in this. However, all this has to be done by following system and procedures in a transparent manner. ONGC has to prepare its plan and take right decisions in order to increase domestic production,” the ministry further said. It also added that there is enough scope for several large and small companies to operate in the offshore and onshore basins in the country as substantial area is still available. To recall, the government had decided in February 2019 that National Oil Companies (NOCs) would be free to choose field specific models, including farm out and Joint Venture (JV)/ Technical Service Model (TSM) for enhancing production from their mature and ageing fields. Last week, reports stated that Petroleum Secretary Tarun Kapoor had said the government is pushing ONGC to involve private sector companies and service providers wherever possible to help raise oil and gas production. Kapoor’s comments came days after the second-highest ranked official in his ministry asked Oil and Natural Gas Corporation (ONGC) to give away a 60 per cent stake plus operating control in India’s largest oil and gas producing fields of Mumbai High and Bassein to foreign companies. India is 85 per cent dependent on imports to meet its oil needs, and a way to cut the high import bill is to increase domestic production. Mumbai High, which was discovered in 1974, and B&S that was put into production in 1988 are Oil and Natural Gas Corporation’s (ONGC) mainstay assets, contributing two-thirds of its current oil and gas production. Without these assets, the company will be left with only smaller fields.
Shell halves Singapore refining capacity, to change chemical feedstock
Royal Dutch Shell (RDSa.L) has halved its crude processing capacity at its Singapore hub and reduced fuel exports, executives said on Tuesday, as the major transits from fossil fuels to cut emissions and meet global low-carbon energy needs. The refinery on Pulau Bukom will continue to produce naphtha for its ethylene unit, Shirley Yap, senior vice president of chemicals and products at Shell Singapore, told reporters. Shell has also started testing new chemical feedstocks – pyrolysis oil and bionaphtha – at the cracker, she said, as the major aims to supply olefins with lower carbon footprint to customers like Japanese chemical maker Asahi Kasei Corp (3407.T). Shell is a key fuel supplier in Asia and the drop in exports has tightened supplies and propelled margins for refiners in the region back to pre-pandemic levels in recent months. “The reality is that we’ve cut a substantial part of our capacity and there’s demand for fuels today so we have to ensure that we are doing it at a pace that is in step with our customers and in step with the society,” Shell Singapore Chairman Aw Kah Peng said. “But at the same time … it can’t be turned on with just a flick of the switch as infrastructure needs to be build but we want to be there as quickly as we can,” she said. Shell will build its first pyrolysis oil upgrader to produce 50,000 tonnes per year (tpy) of treated pyrolysis oil for its 800,000 tpy cracker on Bukom in 2023. Pyrolysis melts plastic waste into products such as pyrolysis oil, which can be upgraded as raw material for plastics and chemicals, although the process isn’t commercially proven and consumes a lot of energy. Other projects in Shell Singapore’s pipeline include a carbon capture and storage (CCS) hub and a 550,000 tpy biofuels plant to process waste and vegetable oils into sustainable aviation fuel (SAF). Shell aims to make about 2 million tpy of SAF by 2025 globally although SAF accounts for less than 0.1% of today’s global jet fuel demand. The projects form part of Shell Singapore’s plans to cut emissions from its operations by half by 2030, from 2016 levels on a net basis, Shell Downstream Director Huibert Vigeveno said. Shell did not provide investment figures for the projects. Energy companies are face increasing pressure from investors, activists and governments to steer away from fossil fuels and rapidly ramp up investment in renewables. Globally, Shell has pledged to halve emissions from its operations by 2030, as well as reduce its net carbon footprint by 45% by 2035. read more Bukom, together with other Shell chemical plants on Jurong Island, forms one of five Energy and Chemical Parks owned by the major globally and is the only one in Asia. Shell plans to build two chemical conversion units in Asia to convert waste plastics into pyrolysis oil for Singapore, similar to units in the Netherlands with joint venture partner BlueAlp which will be operational in 2023. Shell previously announced it would trial the use of hydrogen fuel cells for ships in Singapore and is exploring developing a solar farm in a landfill near Bukom.
Rosneft believes Indian market has long-term potential
Russian oil company Rosneft promotes a framework of integrated cooperation with Indian partners across the entire value chain, from the extraction of oil to the refining and distribution of oil products. Since 2016, Indian companies (ONGC Videsh Ltd., Oil India Limited, Indian Oil Corporation, and Bharat Petroresources) own 49.9 per cent of the JSC Vankorneft subsidiary. This Krasnoyarsk Territory-based enterprise is developing the Vankor oil and gas condensate field — the largest field discovered and brought online in Russia in the last 25 years (extracted AB1+B2 reserves amount to 286 million tonnes of oil and condensate and 103 billion cubic metres of gas). Furthermore, a consortium of Indian companies (Oil India Limited, Indian Oil Corporation and Bharat Petroresources) owns 29.9 per cent in Taas Yuryakh Neftegazodobycha (other shareholders are Rosneft and BP), which holds licences to areas in the Central Block of the Srednebotuobinskoye field and the Kurungsky licence block (AB1C1+B2C2 reserves total 168 million tonnes of oil and condensate and 198 billion cubic metres of gas). Since 2001, an Indian company ONGC Videsh Ltd. has been a member of the Sakhalin-1 project (with Rosneft, ExxonMobil, and Japanese consortium SODECO among other shareholders). In 2020, the project produced 12.4 million tonnes of oil and condensate and supplied more than 2.4 billion cubic metres of gas to consumers. Cumulative payments to Indian partners and the dividends from joint projects amounted to $4.6 billion over the past five years. “Rosneft believes that the Indian market has a long-term potential, which is why the Company acquired a 49.13 per cent stake in Nayara Energy in 2017,” a spokesperson of Rosneft said. The deal remains the largest foreign direct investment in India’s oil and gas sector. Nayara Energy is comprises top-quality assets, including the Vadinar refinery with a throughput of 20 mtpa. The refinery is the second largest facility of its kind in India and one of the most technologically advanced in the world. “Rosneft is expanding its investment in the Indian economy: a major petrochemicals development programme is underway, with an investment of about $750 million at the current stage. In particular, there are plans to build polypropylene production units with a capacity of up to 450,000 tonnes per year,” added Rosneft’s spokesperson. Nayara Energy’s business also includes a deep-water port that can accommodate very large crude carriers (VLCC) and one of India’s largest retail network. Nayara Energy looks to further expand its network of petrol stations in India to 8,000 over the next three years. Rosneft has extensive experience in long-term contracts. The development of vertically integrated cooperation with Indian partners along the entire value chain from new upstream projects in Russia with joint flow control would strengthen India’s energy security. “We hope that our new cooperation proposals will be welcomed by our Indian partners,” Rosneft’s spokesperson said. “One of the promising areas of cooperation may be the Vostok Oil project, which is the largest greenfield oil and gas project in the world,” said Rosneft. It is comprised of 52 licence areas with 13 oil and gas fields, including the Vankor field developed with the Indian partners, the Suzunskoye, Tagulskoye and Lodochnoye fields, as well as the new and promising Payakhskoye and Zapadno-Irkinskoye fields, unique in their reserves. The project’s resource base exceeds 6 billion tonnes (44 billion barrels) of oil with a uniquely low sulphur content of 0.01-0.04 per cent. The resource base is comparable to the largest oil provinces in the Middle East or the US shale formations. The high quality of the feedstock eliminates the need for separate units at refineries and significantly reduces the project’s greenhouse gas emissions. Vostok Oil is a project with low production costs per unit of output, with a carbon footprint 75 per cent lower than that of other major greenfield oil projects in the world. From drilling to pipeline and tanker design in the oil export chain, Vostok Oil already includes highly environmentally friendly technology in its design phase. The project plans to use, among other things, associated petroleum gas for power supply. It will also be supported by local wind power. The project is expected to produce up to 100 million tonnes of oil in 2030. Vostok Oil’s logistical advantage lies in its ability to deliver oil from the fields in two directions at once — to European and Asian markets, including India. Rosneft launched the full-scale development of the project’s fields in 2020. In June 2021, during the XXIV St. Petersburg International Economic Forum, Rosneft entered into more than 50 contracts related to the project for a total amount of $7.8 billion. In October, Rosneft completed a series of Vostok Oil roadshows for suppliers and contractors. The Company held 16 meetings with major works and services suppliers and engineering companies from 15 countries in Europe, Asia and the Middle East. Following the meetings, the Company received some 60 offers of cooperation. Leading international experts’ opinions on resource base, development technologies, and the project’s economic model along with the legal experts’ reports conclude that the project implementation is not subject to any sanctions restrictions. To implement the project of an unprecedented scale, the Russian Federation provided Vostok Oil with a set of investment incentives to advance the project’s infrastructure development. These made it possible to form a sustainable economic model for the project and make it attractive for large global investors. Analysts at Goldman Sachs called Vostok Oil a “magnet for investors”. Leading global investment banks estimate that “the project’s net present value could be in the range of $75 billion to $120 billion.” The project’s outstanding potential is confirmed by the interest exhibited by international investors: at the end of 2020, the major international trader Trafigura bought a 10 per cent stake in the project; in November 2021, a consortium led by Vitol acquired a 5 per cent stake in the project. “Rosneft is currently negotiating entry into the project with a number of potential partners, including a consortium of Indian companies,” added the spokesperson.