ONGC signs PML deed with Coal India for Coal Bed Methane Block
India’s Maharatna Oil PSU ONGC has signed the first-ever Petroleum Mining Lease (PML) deed with Coal India for the Jharia Coal Bed Methane (CBM) block on 24 July 2024. he agreement was signed in the presence of Bokaro’s Deputy Commissioner Vijaya Jadhav, IAS, and District Mining Officer Ravi Kumar Singh, this joint venture (JV) marks a significant milestone in energy collaboration. Earlier, in January 2024, ONGC commenced oil production from the Block KG-DWN-98/2 Cluster-2 asset via a floating production, storage, and offloading (FPSO) vessel.
India’s natural gas consumption jumps 7.1% in June 2024: PPAC
India’s total consumption of natural gas, including internal usage, saw a significant increase to 5,594 million metric standard cubic meters (MMSCM) in June 2024, marking a 7.1% rise from the same month last year, according to a report by the Petroleum Planning and Analysis Cell (PPAC). “The increase in natural gas consumption underlines its growing importance as a versatile energy source across various sectors of the economy,” a PPAC official said. This upward trend reflects the expanding application of natural gas from electricity generation and heating to its use as a critical feedstock in industries such as fertilizers and plastics. For the fiscal year up to June 2024, cumulative consumption reached 16,707 MMSCM, a 3.8% increase compared to the same period in the previous year. “This consistent rise in usage showcases natural gas’s pivotal role in supporting India’s energy security and sectoral energy needs,” the spokesperson added. Sector-specific consumption data for April and May 2024 reveals diverse applications of natural gas across the economy. The fertilizer sector led with 26% of the total consumption, followed by city gas distribution at 20%, and power generation at 18%. Refineries and petrochemicals also showed significant usage, accounting for 9% and 3% respectively, while miscellaneous sectors comprised 24% of the consumption in May 2024.
Budget 2024: Govt allocates ₹1190 billion for petroleum and natural gas, focus on strategic reserves and infrastructure
The ministry of petroleum and natural gas has been allocated a total budget of ₹1194.0252 billion for the fiscal year 2024-2025, reflecting a significant financial commitment to bolster India’s energy infrastructure and capabilities. This allocation, comprising both budget support and Internal and Extra Budgetary Resources (IEBR), underscores the government’s focus on securing energy resources and supporting the sector’s growth. The Oil and Natural Gas Corporation (ONGC) has been a major beneficiary, with an allocation of ₹308 billion for 2024-2025. This represents a steady increase from ₹305 billion in the revised budget for 2023-2024 and ₹301.25 billion in the initial 2023-2024 budget. This continuous increase highlights ONGC’s critical role in India’s energy sector and the government’s intention to support its exploration and production activities. In contrast, the Gas Authority of India Limited (GAIL) has seen a significant reduction in its budget allocation. For 2024-2025, GAIL has been allocated ₹48.86 billion, a sharp decrease from ₹68.88 billion in the revised 2023-2024 budget and ₹60.0249 billion in the initial budget for 2023-2024. This reduction might indicate a shift in strategic priorities or a realignment of GAIL’s project pipeline. Bharat Petroleum Corporation Limited (BPCL) is set to receive ₹20 billion for the fiscal year 2024-2025, down from ₹21.50 billion in the revised budget for 2023-2024 and ₹23.60 billion in the initial 2023-2024 budget. This decrease could reflect the completion of key projects or a strategic pivot in BPCL’s operational focus. Indian Oil Corporation Limited (IOCL) has been allocated ₹273.7404 billion for 2024-2025, a slight increase from ₹270.6445 billion in the revised 2023-2024 budget and significantly higher than the ₹257.4131 billion allocated in the initial 2023-2024 budget. This increase suggests continued investment in refining and marketing operations, crucial for maintaining India’s energy supply chain. Oil India Limited has received an increased allocation of ₹68.80 billion for 2024-2025, up from ₹56.48 billion in the revised 2023-2024 budget and ₹48.96 billion in the initial budget for 2023-2024. This significant boost underscores the company’s growing role in exploration and production. Oil and Natural Gas Corporation Videsh Limited(OVL) has also seen a notable increase in its budget, with ₹55.8001 billion allocated for 2024-2025, up from ₹33.1123 billion in the revised 2023-2024 budget. This increase highlights the strategic importance of OVL’s international ventures and the need to secure overseas energy assets. The Refinery and Marketing Sector as a whole has been allocated ₹571.7604 billion for 2024-2025, compared to ₹547.5795 billion in the revised 2023-2024 budget. Within this sector, Hindustan Petroleum Corporation Limited (HPCL) has been allocated ₹107.70 billion, up from ₹102.10 billion in the previous year, reflecting ongoing and new refining projects. Numaligarh Refinery Limited’s budget has increased to ₹89.86 billion from ₹87.6550 billion, highlighting the expansion and modernization efforts.
IndianOil to triple gas sales, boost renewable energy to 31 GW by 2030
Indian Oil Corporation plans to increase its natural gas sales threefold and expand its renewable energy capacity to 31 GW by 2030. Additionally, the company aims to establish a 5 GWh lithium-ion battery production capacity by 2031 as part of its strategy to diversify its energy portfolio. As the largest oil refiner and retailer in India, Indian Oil has been focusing on developing its non-oil sectors, including investments in petrochemicals and natural gas. In response to the growing global emphasis on combating climate change, the state-owned enterprise is also incorporating renewable energy and battery technologies into its offerings, the report said. Indian Oil has signed a strategic partnership with Panasonic Energy of Japan to explore the potential for producing lithium-ion battery cells within India. Lithium-ion batteries The company has entered into a strategic agreement with Panasonic Energy Company, Japan, to explore opportunities for advanced cell manufacturing of Lithium-ion batteries in India. In its report titled ‘Integrated Annual Report 2023-24’, Indian Oil said, “With a vision to propel ‘Make in India’ for the world, the JV plans to establish a one GWh capacity factory by 2027, with an ambitious expansion to 5 GWh by 2031. This collaboration aims to position India as a global hub for advanced battery technology, supporting the nation’s transition to sustainable energy and transportation solutions.” Battery swapping stations Indian Oil is also leveraging its broad network of fuel retail locations by investing in battery swapping stations and expanding its electric vehicle charging infrastructure Currently, the company has provided battery swapping services at 99 fuel stations for electric vehicle users. “Battery swapping offers a quick and convenient solution for EV users, eliminating long charging times, extending battery life and reducing electronic waste,” the report said. It plans to develop a renewable energy capacity of 31 GW by 2030, focusing mainly on solar and wind initiatives. “The company aims to enhance our renewable energy capacity to 31 GW by 2030, primarily through solar and wind projects. This expansion aligns with India’s target to achieve 500 GW of installed renewable capacity by the same year,” the report further said
Indian refiner BPCL sees further cuts in oil OSPs as fuel margins drop
Bharat Petroleum Corp, India’s third-biggest refiner, expects Middle Eastern producers to cut the official selling prices (OSPs) of their crude in coming months to reflect lower margins on fuel sales, its head of finance said . Lower fuel cracks – the difference between the cost of crude oil and refined product sales – are hitting the profitability of refiners globally. Complex refining margins in Asia have dropped by half to USD 4.10 per barrel as of July 19 compared with about USD 8.20 per barrel in February. “Compared to April-May the OSPs are moderate and these OSPs will be further moderated because cracks are on lower side,” Vetsa Ramakrishna Gupta told an analysts call. “I don’t think OSP premiums will be on higher side when cracks are on lower side,” he said. BPCL on Friday said its net profit for the three months ended on June 30 fell 71% from a year earlier to 30.15 billion Indian rupees (USD 360 million), partly due to lower margins. Earlier this month, Saudi Aramco cut prices for crude to Asia a second straight month, with its flagship Arab Light crude price for August loadings at its lowest since March. [CRU/OSP]
Oil Ministry announces plans for energy security fund
Oil Minister Hardeep Singh Puri on Saturday said that the ministry will set up an energy security fund, emphasising that it will help domestic oil and gas firms stay relevant in the future. The Ministry of Oil and Natural Gas (MoPNG) held a day-long strategising session in Bangaluru on Saturday, holding deliberations with top ministry and CPSU officials on India’s energy mix for 2040. “Started the day with an engaging discussion with top officials of oil sector PSUs & @PetroleumMin on strategizing India’s energy mix for 2040 and creating an energy security fund which are crucial for keeping our oil companies relevant in the future. These discussions will show the way forward to India’s journey towards energy sufficiency under the leadership of PM @narendramodi Ji & prepare our energy sector for the future,” Puri tweeted on X. According to different global outlooks and PPAC’s transition scenario, India’s CAGR growth from 2022 to 2040 is estimated at 3 per cent, with the share of oil in total Primary Energy at 41 per cent in 2040. The integration of refineries and petrochemicals into an oil-to-chemical model is the way forward for the industry. This will not only enhance efficiency but also create new opportunities, he added. The Minister did not provide any details on the fund or how it will be utilised. However, sources said that the fund could be used to acquire oil and gas assets in foreign countries. Rare earth minerals The CPSUs under the charge of MoPNG will now explore rare earth minerals. The Minister emphasised that oil and gas companies have the prowess to extract and refine natural resources as demand for renewable energy and battery storage intensifies. “We will also assess the need to acquire rare earth minerals. Discussed the sources, value chain, domestic and international reserves and the way forward for our oil companies to engage in mining of rare earth minerals in our brainstorming session today,” he added. Gas-based economy Puri noted that India’s natural gas consumption has risen steadily to 187 million standard cubic meters per day (MSCMD) in FY24 from 137 MSCMD in FY15. “Under the visionary leadership of PM @narendramodi Ji, we are exploring new pathways and initiatives to move towards a cleaner, greener, more affordable fuel, natural gas. In our brainstorming session, we discussed key drivers of global LNG demand, forecasts of LNG shipping, LNG terminals demand assessment and key policy drivers necessary to push the transition,” he added. Many states such as Assam, Andhra Pradesh, Maharashtra and others have taken the progressive and visionary step to reduce VAT on natural gas, the minister said, adding that he hopes that more states will reduce VAT on natural gas as it will help in movement towards a gas-based economy.
India supasses United States to have 15 per cent blended fuel as base fuel last month: Hardeep Singh Puri
Under PM Narendra Modi’s leadership, India has even surpassed United States to have a 15% blended fuel as base fuel, last month, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri said on Saturday. Union Minister engaged in discussion with top officials of oil sector PSUs & Petroleum Ministry on strategizing India’s energy mix for 2040 and creating an energy security fund which are crucial for keeping our oil companies relevant in the future. He had an in-depth discussion to examine and track the availability of feedstock, the roadmap beyond E20, biodiesel production process, and significance of promoting both ethanol and biodiesel blending. He said, “Over the past decade, India has made remarkable strides in ethanol blending. We achieved 10% ethanol blending 5 months in advance in June 2022 & also advanced availability of E20 blend by 5 years to 2025. 20% ethanol blended fuel is now available at more than 12,000 retail outlets. While before 2014 India managed only 1.4% ethanol blending.” “Since May this year, OMCs have begun dispensing E15 as a base fuel. Expanding our ethanol blending program and promoting biodiesel blending are crucial steps towards achieving a greener and more sustainable energy sector.” Puri further added. According to the Petroleum Planning & Analysis Cell (PPAC) Monthly Ready Reckoner report, Ethanol blending with Petrol was achieved at 15.90 per cent during June 2024 and cumulative ethanol blending during November 2023-June 2024 was 13.0 per cent.
Cost escalation of Mozambique LNG project likely around $3.5-4 billion: BPCL
State-run Bharat Petroleum Corporation (BPCL) said on Saturday that it expects cost escalation of $3.5-4 billion in the Total Energies-led liquefied natural gas (LNG) project in Cabo Delgado province in Mozambique.
Rajasthan govt begins process to explore coal bed
The process to find the possibilities of Coal Bed Methane and underground coal gasification has started in Rajasthan, said officials here adding that the CBM makes a significant source of energy in countries like America, Canada and Australia. The possible sites for exploration are in Bikaner, Barmer and Nagaur. Oil India Limited officials have been requested to take forward the process to explore the possibilities of Coal Bed Methane (CBM) and underground coal gasification (UCG) in the state, said officials. A high-level meeting was called in the Secretariat on Tuesday with Indian Oil officials chaired by Anandi, secretary of petroleum and mines, Rajasthan government. Mines Secretary Anandi said that a gas-based economy can be promoted by exploring the possibilities of CBM and UCG from the lignite reserves available in the state. This will develop additional sources of energy in the state. Coal bed methane has become an important source of energy in countries like America, Canada, Australia, etc., she said in the meeting and asked the officials of Oil India to explore the possibility of CBM along with the discovery and exploitation of crude oil and gas in the state so that the natural resources can be used more in the field of energy.
Four Unexplored Indian Basins May Hold More Oil Than The Permian
Four largely unexplored sedimentary basins in India could hold up to 22 billion barrels of oil, S&P Global Commodity Insights has reported. In effect, lesser-known Category II and III basins, namely Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan contain more oil than the Permian Basin, which has already produced 14 billion barrels of its 34 billion recoverable oil reserves. Rahul Chauhan, an upstream analyst at Commodity Insights, has emphasized the potential of India’s unexplored Oil & Gas sector, “ONGC and Oil India hold acreages in the Andaman waters under the Open Acreage Licensing Program (OALP) and have planned a few significant projects. However, India still awaits the entry of an international oil company with deepwater and ultra-deepwater exploration expertise to participate in current and upcoming OALP bidding rounds and explore these frontier regions,” he has declared. Currently, only 10% of India’s 3.36 million sq km wide sedimentary basin is under exploration. India boasts significant discoveries in the Krishna-Godavari, Barmer, and Assam basins, but exploration in other areas have been slower to develop. Of India’s 3.14 million square kilometers of sedimentary basins, 1.3 million sq km are in deep waters. India had its first foray into deepwater exploration in the Bay of Bengal earlier this year in the Krishna-Godavari Basin, courtesy of India’s state run Oil and Natural Gas Corporation (ONGC). ONGC said it was planning to spend over $10 billion developing multiple deepwater projects in its KG-DWN-98/2 block in that basin. Petroleum Minister Hardeep Singh Puri says that this 10% figure will jump to 16% in 2024 following the award of blocks under the Open Acreage Licensing Policy (OALP) rounds. So far, OALP has resulted in the award of 144 blocks covering about 244,007 sq km. Under OALP, India allows upstream exploration companies to carve out areas for oil and gas exploration and put in an expression of interest for any area throughout the year. The interests are accumulated thrice a year following which they are put on auction. According to Puri, India’s Exploration and Production (E&P) activities in the oil and gas sector offer investment opportunities worth $100 billion by 2030.