UAE says Qatar’s decision to leave OPEC admission of decline of Doha’s role
The United Arab Emirates said on Monday Doha’s decision to leave OPEC was a reflection of the decline of its influence. “The political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in light of its political isolation,” Anwar Gargash, UAE minister of state for foreign affairs, said in a tweet. Doha, one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter, said earlier on Monday it was quitting OPEC from January to focus on its gas ambitions.
GEECL to invest $2bn in Raniganj (South) CBM block in India
India-based coal bed methane (CBM) production firm Great Eastern Energy (GEECL) has announced plans to invest $2bn in its Raniganj (South) block in the state of West Bengal over the next ten years for exploitation of shale reserves. Press Trust of India (PTI) cited GEECL chief executive Prashant Modi as saying that the CBM block is estimated to contain as much as 6.63 trillion cubic feet (tcf) of shale resources, of which about 1.7tcf can be recovered. In addition, the block holds 2.62tcf of coal seam gas or CBM resources, which are claimed to have an undiscounted value of $13.78bn and a discounted value of $4.31bn. GEECL is planning to commence initial shale gas exploration work of drilling core wells at the block in the first half of next year, before undertaking drilling of pilot production wells. Modi was quoted by the news agency as saying: “Depending on the results obtained and analysed from the core wells, we thereafter intend to drill an optimum number of pilot production wells. “Based on further results obtained and analysed from the pilot production wells, the total investment envisaged for the full development of shale resources in our block could be in the region of $2bn.” The investment plan comes after the company upgraded resources at the Raniganj (South) block earlier this month. At that time, GEECL said it found prospective shale resources with potential future net revenues of $2.78bn. According to Modi, the company decided to embark on the exploration of shale reserves in its blocks after the Indian government recently allowed exploration and exploitation of all types of hydrocarbons including shale resources under the existing CBM contracts. He added that GEECL has reached an initial understanding with state-owned oil and gas firm GAIL (India) for signing either a gas offtake deal or a transmission agreement through GAIL’s Jagdishpur-Haldia & Bokaro-Dhamra pipeline. This pipeline is expected to become operational by 2020 and will potentially enable GEECL to have greater market access. India aims to increase the share of gas in its energy mix from the current 6.5% to 15% by 2022.
City gas distribution to see big investments
City gas distribution (CGD) network is turning out to be the next big downstream expansion in India, after fuel retailing, with investments of as much as ?1.1 trillion expected over the next decade, said company executives. CGD refers to transportation or distribution of natural gas to consumers in domestic, commercial or industrial and transport sectors through a network of pipelines. This business has, over the last decade, attracted several companies to lay a network of gas pipelines. “CGD is the next big expansion in the downstream segment with nearly 40 companies operating in the segment. This, against fuel retailing, which is dominated by a few players, including state-run oil marketing companies,” said Rajendra P. Natekar, director, Bharat Gas Resources Ltd (BGRL). “Though in terms of pure numbers, fuel retail stations gain, in terms of coverage of distribution and customers, the impact of CGD will be felt more. Besides, CGD will gain more traction over time.” BGRL will invest Rs.40 billion to build a CGD network in Ahmednagar, Aurangabad, Sangli and Satara districts in Maharashtra. The company won bids for the areas in the ninth edition of the CGD auction. At present, 31 companies are developing CGD networks across 81 geographical locations in 21 states and Union territories, supplying clean cooking fuel in the form of piped natural gas (PNG) to about four million households. The government, which plans to provide 10 million PNG connections, has introduced stringent emission levels for vehicles and plans to develop green corridors to reduce India’s carbon footprint. There are about 60,000 fuel retail stations and around 1,500 CNG stations across India, but it is the sheer reach and loyalty of customers that the CGD companies are banking on. “Once you enrol a customer, he seldom leaves you. So, we see our customer base expanding rapidly. What also works in favour of PNG is that in comparison with LPG, it is a safer fuel and cheaper,” said a senior official at a CGD company operating in Maharashtra. What is also helping the expansion of CGD network across India are various policy initiatives for its expeditious development. CGD has been accorded the highest priority in gas allocation while allocating 100% domestic gas for the domestic PNG and CNG segments. On the regulatory front, recently, the Petroleum and Natural Gas Regulatory Board (PNGRB) has reformed to a large extent the CGD authorization regulations to address the impediments faced in previous bid rounds. Also, some state governments have introduced sector-specific policies/guidelines enabling overall growth of CGD network in India. The only challenge, however, could be the availability of skilled manpower to undertake expansion at this large scale. “In terms of opportunities, there will be a lot for the ecosystem. Demand for engineering and procurement companies, gas mechanics, the labour force will multiply and the industry also has to train resources as trained manpower is a scarcity in this business,” said K Ravichandran, group head for corporate sector ratings at rating agency ICRA Ltd. To tap the growing market, the industry has to tie-up with industrial training institutes or ITIs to develop skilled manpower, said Ravichandran.
AG&P investing heavily in India’s gas infra
Philippine global engineering firm AG&P (Atlantic, Gulf and Pacific Co. of Manila) has secured rights to put up facilities in India to make natural gas available to residents and businesses in two areas of the southern state of Tamil Nadu. The grant to AG&P—along with 22 other entities—was part of New Delhi’s ninth bidding round for city gas distribution projects (CGD) that covers 63 geographical areas across India, including seven areas in Tamil Nadu. The Petroleum & Natural Gas Regulatory Board awarded to the homegrown multinational’s unit AG&P LNG Marketing Pte. Ltd. rights to build LNG facilities in the districts of Kanchipuram and Ramanathapuram in Tamil Nadu. Karthik Sathyamoorthy, president of AG&P LNG Marketing, said in a statement this added to AG&P’s portfolio in India. AG&P is also building an LNG terminal in Karaikal, in the union territory of Puducherry. He said AG&P was investing heavily in gas infrastructure to support India’s drive to switch to natural gas as a clean and affordable source of fuel. In Tamil Nadu, AG&P’s CGD networks will deliver natural gas “directly, safely and conveniently” to houses, gas stations, industrial and commercial establishments.” CGD concessions are intended to make natural gas available for use as compressed gas for use as automotive fuel as well as piped gas for households, commercial establishments and industrial businesses. “This landmark CGD project for these two districts [of Tamil Nadu] and others across the region will reduce energy costs, create jobs, trigger economic and social development, and lead to much needed cleaner air, improving the quality of life for the people of Tamil Nadu,” the company president said. So far, India has awarded CGD rights covering 178 districts across the country that together represent about 46 percent of the population and 35 percent of its land area.
Yamal LNG ships one-hundredth cargo
Yamal LNG, a joint venture-owned integrated Liquefied Natural Gas (LNG) project in northern Russia, today announced has offloaded its one-hundredth cargo of LNG, less than a year since the project’s first shipment in December 2017. “The hundredth cargo was loaded onto the Arc7 ice-class LNG carrier “Fedor Litke”, making the Project’s cumulative to-date delivery 7.4 million tons,” PAO Novatek, that owns 50 per cent stake in the project, said in a statement. It added Yamal LNG is constructing a 17.4 million tonne per annum (mtpa) natural gas liquefaction plant comprised three LNG trains of 5.5 mtpa each and one LNG train of 900 thousand tons per annum, utilizing the hydrocarbon resources of the South-Tambeyskoye field in the Russian Arctic. The first LNG train began production in fourth quarter of 2017 and trains 2 and 3 began in July and November 2018, respectively. Apart from PAO Novatek, Yamal LNG shareholders include Total, which holds 20 per cent, CNPC holding 20 per cent and the Silk Road Fund holding 9.9 per cent stake.
Qatar to withdraw from OPEC as of January 2019, says minister
Qatar is withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) as of January 2019, Saad al-Kaabi, the country’s energy minister said on Monday. The decision to withdraw from OPEC came after Qatar reviewed ways to enhance its role internationally and plan its long-term strategy, al-Kaabi told a news conference.
NDA government earned Rs 11000 billion oil tax revenue in last 4.5 years
Claiming that the NDA government earned oil tax revenue of Rs 11,000 billion in the last four and a half years, the leader of the Congress in the Lok SabhaMallikarjun Kharge Friday alleged that the money had not been used for development and sought to know where it had gone. “They are getting (revenue) from crude oil, diesel and petrol…they got Rs 11,000 billion in these four and half years. They have collected that much of money. Where is that money?,” he asked. Speaking to reporters here, he alleged that the NDA only helped “big corporate friends” with the money. “Have they given it to farmers to empower them? Have they helped the irrigation projects? They did not do anything. Simply they are collecting, they are helping their big corporate friends… companies. That’s why the NPA is growing day by day,” Kharge said. The NDA government is taking money from Reserve Bank of India to give to corporates, he alleged. Almost half of the fuel price is made up of taxes. The Centre levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel.
Fuel price: Soon, tanking up in Delhi to be cheaper than in UP
Petrol and diesel will become cheaper in Delhi than UP in a few days, restoring an advantage the capital’s motorists lost on October 5 when UP chief minister Yogi Adityanath matched the Centre’s move to offer relief from high oil prices by reducing tax on fuel while his Delhi counterpart Arvind Kejriwal did not budge. The continuous decline in pump prices for the last one-and-a-half months has shrunk the difference between fuel prices in the two states by 67 per cent for petrol and over 42 per cent for diesel in the last 30 days alone. Ajay Bansal of All India Petroleum Dealers’ Association, an umbrella body of petrol pump operators, said the current trend of price reductions by state-run fuel retailing companies indicate price of petrol will fall by Rs 1.10 a litre and diesel by Rs 1.32 in the next six to seven days. This is good news for the capital’s petrol pump operators who had seen sales drop, especially at outlets in areas bordering UP, as motorists preferred to tank up in the neighbouring state where fuel had become cheaper by Rs 3 a litre after the October tax relief. The sharp price movement is because of the way the two states tax fuel. UP has a fixed rate, while Delhi has an ad-valorem system. In UP, the tax amount does not rise or fall when the retailers change the price. But since Delhi charges VAT as a certain per cent of the fuel price, VAT swings sharply with any price change. The ad valorem system amplifies the impact of any price change. So it is good when price goes down but pinches harder than in a fixed rate regime when rates head north. According to IndianOil, the country’s largest fuel retailer, petrol price has cumulatively declined by Rs 9.59 per litre and diesel by Rs 7.56 per litre in Delhi since October 17 as oil companies have passed on the benefit of sliding crude prices and stable rupee-dollar exchange rate.
Govt forms 6-member panel to look at selling 149 fields of ONGC, OIL to pvt firms
The government has constituted a six-member committee to look at selling as many as 149 small and marginal oil and gas fields of state-owned ONGC and OIL to private and foreign companies to boost domestic output, sources said. The panel is headed by NITI Aayog Vice Chairman Rajiv Kumar and includes Cabinet Secretary P K Sinha, Economic Affairs Secretary Subhash Chandra Garg, Oil Secretary M M Kutty, NITI Aayog CEO Amitabh Kant and ONGC Chairman and Managing Director Shashi Shanker. Sources said the committee is a follow up of the October 12 meeting called by Prime Minister Narendra Modi to review domestic production profile of oil and gas and the roadmap for cutting import dependence by 10 per cent by 2022. At the meeting, the Oil Ministry made a presentation showing that 149 smaller fields of Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and other explorers accounted for just 5 per cent of the domestic crude oil production. It was suggested at the meeting that these smaller fields could be given out to private and foreign firms and ONGC could concentrate on the big ones where it could rope in technology partners through production enhancement contracts (PEC) or technical service arrangements. Sources said the ministry was of the view that ONGC should concentrate on the large fields as they contribute to 95 per cent of its production and leave out the rest for private firms. On the anvil is some kind of extended version of the Discovered Small Field (DSF) bid round where discovered and producing fields of ONGC are auctioned to firms offering the maximum share of output to the government, sources said. The six-member panel has begun consultations with the stakeholders on the possible options, they said. This is the second attempt of by the Oil Ministry to take away some of the fields of state-owned ONGC for giving to private and foreign companies. In October last year, the Directorate General of Hydrocarbons (DGH) had identified 15 producing fields with collective reserve of 791.2 million tonnes of crude oil and 333.46 billion cubic metres of gas of national oil companies for handing over to private firms in the hope they would improve upon the baseline estimate and their extraction. The plan, however, could not go through as ONGC strongly countered the DGH proposal with its own proposal that it be allowed to outsource operations on the same terms as the government plan. Sources said ONGC is of the view that it should be allowed the same terms that the government extends to private and foreign firms in DSF. The government gave out 34 fields to private firms by offering them pricing and marketing freedom for oil and gas they produced from the fields in the first round of DSF. The second round of DSF with 25 fields on offer is currently under bidding. The fields offered in DSF were taken away from ONGC and Oil India Ltd on the pretext that they were lying idle and unexploited. But under the present proposal, the government plans to take away discovered and producing fields. Sources said ONGC feels it too should be allowed to seek revenue sharing partnership for its fields. Field operations could be outsourced to foreign or private firms that offered the highest revenue or production share over and above a baseline production. The ministry is reasoning that the areas where the fields were discovered by ONGC were given to the state-owned firm on nomination basis. In the proposal that was mooted in October last year, the plan was to give out 60 per cent stake in 15 fields — 11 of ONGC and four of Oil India. These included Kalok, Ankleshwar, Gandhar and Santhal — the big four oil fields of ONGC in Gujarat. The DGH too had identified 44 fields of ONGC and OIL which could take on partners for production enhancement work where bidders would get the ‘tariff’ that they bid as a return for increasing the output ‘over the baseline production’ for an initial period of 10 years. The Oil Ministry is unhappy with the near stagnant oil and gas production and believes giving out the discovered fields to private firms would help raise output as they can bring in technology and capital, sources said. It has been tasked by the Prime Minister to cut dependence on oil imports by 10 per cent by 2022 from the over 77 per cent dependence in 2014-15. But the dependence has only increased and is now over 83 per cent. The privatisation is repeat of the infamous round in 1992-93 when medium-sized discovered fields like Panna/Mukta and Tapti oil and gas field in western offshore were given to the now defunct Enron Corp of the US and Reliance Industries Ltd (RIL). As many as 28 fields were then awarded. Under this regime, ONGC was made licensee and given an option to farm in 40 per cent of stake. The controversial privatisation under the then oil minister Satish Sharma had resulted in an inquiry by the Central Bureau of Investigation (CBI).
Oil firms chosen to expand Qatar’s north field gas reservoir to be named mid-2019: Minister
The oil companies that Qatar selects to expand its north field natural gas reservoir will be announced in mid-2019, the country’s energy minister Saad al-Kaabi said on Monday. Qatar plans to build four additional liquefied national gas trains in mid-2019, al-Kaabi said at a news conference. Qatar will announce the selected partners to build the largest ethane cracker in the world in the first quarter of 2019, he said.