World’s highest capacity featured oil and gas rig handed over to ONGC
Megha Engineering and Infrastructure Ltd, which had secured an order to supply 47 oil rigs from Oil and Natural Gas Corporation (ONGC) worth Rs 6000 crores, has handed over one more rig to ONGC in Bhimavaram, Andhra Pradesh. This is a state-of-the-art indigenous oil rig with the latest and best in class features in the world. This 2,000-HP rig can give a performance equal to a 3,000-HP traditional rig. This indigenous rig is being operated successfully, and it can drill up to 6,000 metres (6 km) deep into the earth. Business Today TV visited the oil rig in Bhimavaram, Andhra Pradesh. These rigs are built with full automation in order to reduce the down time on account of safety & maintenance. These rigs are of the first of their kind to induct into the ONGC drilling fleet. MEIL will be manufacturing and supplying all the rigs to the ONGC assets in Assam (Sibsagar, Jorahat), Andhra Pradesh (Rajahmundry), Gujarat (Ahmedabad, Ankaleshwar, Mehasana and Cambay), Tripura (Agartala) and Tamil Nadu (Karaikal). K. Satya Narayana, Technical Head, Rigs Project, MEIL, said, “As the Covid-19 is in endemic stage, we have expedited the manufacturing of rigs and their deliveries as promised. The company is playing a vital role in the energy sector, both upstream and downstream. These state-of-the-art oil rigs will have the world’s best and most advanced hydraulic technology features. As the energy prices soar, the advanced rigs are very crucial for Indian energy sector to drill the oil and gas wells faster and increase the oil and gas production for domestic use. MEIL is the first private player in India in manufacturing highly efficient oil drilling rigs with indigenous technology under the “Make in India” and “Atmanirbhar Bharat” initiatives.”
Saudi Arabia Reaffirms Commitment To Russia Despite War In Ukraine
Saudi Arabia’s Crown Prince Mohammed bin Salman (MbS) reiterated last week his country’s “commitment to the ‘OPEC+’ agreement” – working alongside the agreement’s other key partner, Russia – despite the ongoing Russian invasion of Ukraine. MbS sought to couch this extraordinary re-assertion of his country’s alliance with Russia in terms of the “the kingdom’s keenness on the stability and balance of oil markets”. However, this idea was quickly undermined by the announcement of that the ongoing modest rise of 400,000 barrels per day (bpd) in collective output seen over the past few months will continue, despite the economic damage being done to many developed economies by current high oil and gas prices. In reality, what MbS’s comment underlined was the broad-based strategic political and economic shift seen by Saudi Arabia since the end of the 2014-2016 Oil Price War, away from the U.S.’s sphere of influence and towards that of China and Russia. The catalyst for this seismic shift in geopolitical alliances was the failure of the 2014-2016 Oil Price War, which was launched with the specific intention by Saudi Arabia to destroy – or at least severely disable for as many years as possible – the U.S.’s then-nascent shale oil sector, as analysed in depth in my new book on the global oil markets. It was obvious to the Saudis at that point – and indeed to the U.S. – that the unchecked build-out of lower fixed cost oil in increasingly large volumes would mean the gradual but extreme diminution of Saudi Arabia’s power in the world and as a key player in the Middle East, given that its only true basis of power is its oil supplies. It would also mean that the U.S. would be less inclined to support Saudi on any and all matters, regardless of how broadly unpalatable they might be. In short, the Saudis had no real choice but to try to take on the US’s shale sector, and it did, and it lost and it – and every one of its OPEC brothers – paid a terrible economic price, exacerbated by the 2020 Oil Price War. The immediate aftermath of the 2014-2016 Oil Price War was not only that Saudi had devastated its own economy and those of other OPEC member states for years to come but, more importantly from a geopolitical perspective, that it had lost its credibility as the de facto leader of OPEC and that OPEC had lost its credibility as the indomitable force in global oil markets. This meant that OPEC’s pronouncements on future oil supply and demand levels – and therefore, on pricing – had lost much of their potency to move markets in and of themselves, and that their joint production deals were diminished in effectiveness. At the end of 2016, then, and fully cognisant of the enormous economic and geopolitical possibilities that were available to it by becoming a core participant in the crude oil supply/demand/pricing matrix, Russia agreed to support the OPEC production cut deal in what was to be called from then-on ‘OPEC+’, albeit in its own uniquely self-serving and ruthless fashion, as has subsequently transpired, and as is also examined in full in my new book on the global oil markets. Since then, Russia has used its position as the most important player in the OPEC+ alliance to do what it does best: cause pockets of chaos into which it can project its own solutions and thus extend its power. In the case of the Middle East more broadly, this cornerstone strategy has been employed in virtually all of the Shia crescent countries – albeit most obviously recently in Iran, Iraq, and Syria – but it has also been systematically whittling away at the foundation stones of the longstanding U.S.-Saudi alliance. As also highlighted in my latest book, the basis for this relationship had been agreed at a meeting on 14 February 1945 between the then-U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz. The deal was this: the U.S. would receive all of the oil supplies it needed for as long as Saudi had oil in place, in return for which the U.S. would guarantee the security both of the ruling House of Saud and, by extension, of Saudi Arabia. By the end of the 2014-2016 Oil Price War, though, the agreement had been changed to reflect the growing U.S. impatience with Saudi’s attempts to hamper the development of its shale oil sector. The U.S. said that it would still safeguard the security of Saudi Arabia and its ruling family but added that caveat that this would only continue provided that Saudi Arabia did not attempt to interfere with the growth and prosperity of the U.S. shale oil sector. For Saudi Arabia, given the U.S.’s burgeoning shale oil sector, this was the equivalent of someone being glued on a track in a train tunnel and being forced to watch as the train relentlessly speeds towards them. Following the disastrous 2014-2016 Oil Price War, then, October 2017 saw Russia’s President, Vladimir Putin, invited Saudi Arabia’s King, Salman bin Abdulaziz al-Saud, to Moscow – the first ever visit to Russia’s capital city made by a sitting Saudi monarch. It was also the largest ever foreign delegation to Moscow, and King Salman’s presence – given that he does not usually do such visits – showed how significantly Saudi viewed its relationship with Russia from that point. At this meeting, and the many meetings on the sidelines between officials of the two countries in which the real business is done, US$3 billion or so of specific deals were agreed across a wide range of areas, not just in the oil sector. Russia’s Energy Minister, Alexander Novak, flagged at the time that Russian gas producer Novatek was in talks for Saudi investors to take part in its Arctic LNG-2 project, a follow-up to its US$27 billion plant in the Yamal peninsula. It was also agreed that Saudi Arabia’s sovereign wealth fund, the
IndianOil to build more crude oil tanks at Adani’s Mundra port
Adani Ports and Special Economic Zone Ltd on Tuesday signed an agreement with Indian Oil Corp Ltd (IOCL) towards augmentation of IOC’s crude oil volumes at Mundra. Indian Oil will expand its existing crude oil tank farm at APSEZ’s Mundra Port, thus enabling it to handle and blend additional 10 mmtpa crude oil at Mundra. This will support IOCL’s expansion of its Panipat Refinery (Haryana). IOCL is raising the capacity at its Panipat Refinery by 66% to 25 MMPTA to meet India’s rapidly growing energy requirements, Adani Ports said in a statement. “Mundra Port is a major economic gateway that serves the northern hinterland of India by providing multimodal connectivity. It gives us immense pride to strengthen our partnership further and support IOCL, which plays a vital role in ensuring the energy security of the nation. As IOCL’s trusted long-term partner, APSEZ is well equipped to handle the additional 10 MMTPA crude oil at our existing single buoy mooring (SBM) at Mundra.” said Karan Adani, CEO and Whole Time Director of APSEZ. Indian Oil, which accounts for nearly half of India’s petroleum products’ market share, has a refining capacity of 80.55 MMTPA and over 15,000 KM of pipeline network. Part of IOCL’s current crude oil requirement of 15 MMTPA for its Panipat Refinery is handled at the SBM at Mundra Port. The Mundra SBM is located 3-4 km off the coast where Very Large Crude Carriers (VLCCs) unload crude oil. An undersea pipeline then transports this crude oil from SBM to the Crude Oil Tank Farm and thereafter to the refinery at Panipat via the Mundra Panipat Pipeline (MPPL). Indian Oil is currently operating a crude oil tank farm in an exclusive area in Adani’s Mundra Special Economic Zone, consisting of 12 tanks with a total capacity of 720,000 KL. The addition of 9 new tanks will augment the storage capacity to 1,260,000 KL, thus making Mundra Port by far the largest port based crude oil storage facility for IOCL. This will be accompanied by augmentation of the MPPL pipeline capacity by IOCL to 17.5 mmtpa. IOCL Board had approved a capital expenditure of INR 9000 crore for the crude oil tanks and MPPL augmentation in December 2021, Adani Ports said. This expansion project at Mundra Port underlines the trust of state-run IOCL in APSEZ, earned through its strategic approach of modernizing its ports, improving turnaround time, and thus creating value for its customers, the company said.
Petrol, diesel price hike on cards? Here’s what govt said
With crude oil prices jumping to 14-year high amid the ongoing Russia-Ukraine war, speculations are high that oil marketing companies (OMCs) in India may also start raising fuel prices gradually. Union minister for petroleum and natural gas Hardeep Singh Puri on Tuesday said oil companies will determine the fuel prices and assured that there will be no shortage of crude oil in the country. “I assure you all that there will be no shortage of crude oil. We will make sure that our energy requirements are met, even though 85 per cent of our requirements are dependent on imports for crude oil and 50-55 per cent on gas,” Puri said at a press conference. There have been speculations that petrol and diesel prices may start to rise after the release of state elections results later this week. However, Puri refuted allegation that the fuel prices were reduced by the Centre earlier due to elections and the rates will be hiked again after the polls. Puri said the Centre had reduced Rs 5 per litre on petrol and Rs 10 per litre on diesel last year, but “young leaders” said it was done because of the Assembly elections in five states, the results of which will be announced on March 10. He said people should take note of other conditions such as the Ukraine-Russia crisis to understand why the rates were hiked globally. “Oil prices are determined by global prices and there is a war-like situation in one part of the world and the oil companies will factor that in. The oil companies will themselves determine the prices. We will take decisions in the best interest of the citizens,” Puri said. Fuel price at present Prices of petrol and diesel have remained stable since November, even though Brent crude prices fell to $70 per barrel in December. Before November 2021, soaring pump prices were a major cause of concern for the consumers as it scaled to record highs. However, prices eased after the government cut excise duty on petrol and diesel by Rs 5 and Rs 10 per litre, respectively. Most of the states followed suit by reducing the value added tax (VAT) in addition to excise duty, bringing the much-needed cheer to consumers. At present, petrol costs Rs 95.41 a litre in Delhi and Rs 109.98 in Mumbai. Diesel is priced at Rs 86.67 a litre in Delhi and Rs 94.14 in Mumbai. CNG prices hiked Earlier in the day, CNG price in the national capital and adjoining cities was hiked by Rs 0.50 per kg. CNG price in NCT of Delhi has been increased to Rs 57.51 per kg from Rs 56.51, according to the information posted on the website of Indraprastha Gas Ltd – the firm which retails CNG and piped cooking gas in the national capital. Following the firming up of international gas rates, IGL has been raising CNG rates by up to 50 paise (Rs 0.50) per kg periodically. Prices have gone up by about Rs 4 per kg this year alone. Crude oil prices rose by Rs 37 to Rs 9,321 per barrel on Tuesday as participants widened their positions on a firm spot demand. On the Multi Commodity Exchange, crude oil for March delivery traded higher by Rs 37 or 0.4 per cent at Rs 9,321 per barrel in 9,660 lots. FM expresses concern Finance minister Nirmala Sitharaman also expressed concern over rising crude prices and indicated that the central government is looking to tap alternative sources. “It will certainly have an impact on Indian economy”, the minister said. “How much we are going to be prepared to take it as a challenge and mitigate the impact is something which we will have see as we go (along)”. Noting that India imports more than 85 per cent of its crude oil requirements, she said when oil prices go up, it is a matter of concern and “now we will have to see how it pans out”. The government is watching to see if there are alternative sources from where it can get crude, she said but hastened to add: “Obviously global markets are all equally unthinkable at various sources”.