India to bid for Israel oil-and-gas exploration blocks
Indian state-run Oil and Natural Gas Corp. (ONGC) plans to bid for Israeli offshore oil-and-gas exploration blocks, India’s oil minister told Reuters, the first major deal between the two countries since a groundbreaking trip by Prime Minister Narendra Modi in July. India and Israel have deep defense ties but Modi and his right wing ruling group are pushing to expand the relationship into other sectors such as energy and technology with a country they see as a natural ally against terrorism. A high-ranking delegation from India, the world’s third-biggest oil consumer, visited Israel last month to discuss taking part in the tender for blocks in the Mediterranean Sea and Israeli officials said they were pleased with the visit. “We will definitely bid for Israel’s oil-and-gas blocks,” Indian Oil Minister Dharmendra Pradhan told Reuters. There was no immediate comment from Israel’s Energy Ministry. When Modi visited Israel in July, both sides showed interest to build a broader economic relationship, rather than one based on defense, which had drawn them together because of similar concerns about militant threats they face. They are starting from a relatively low economic base as bilateral trade was just $2 billion in 2016. Many oil majors have been hesitant to enter the Israeli market, fearing a backlash from oil-rich Arab states hostile to the country. Israel put 24 exploration blocks up for auction in November 2016 and the country’s Energy Minister Yuval Steinitz has said he would be happy to choose two or three foreign explorations groups. The auction closes on Nov 15. India is conducting a technical and commercial analysis to participate in Israel’s bidding process, said Sanjay Sudhir, a joint secretary in the federal Oil Ministry, who led the delegation. “We dove into all the relevant details of the tender — geological, technical — and familiarised them with Israel’s oil and gas ecosystem,” an official at Israel’s Energy Ministry said on the Indian team’s visit, declining to be identified in the absence of permission to speak to the media. Israel wants to open up its hydrocarbon sector, which is currently dominated by a partnership of Noble Energy and Delek Group. They control the Tamar and the much larger Leviathan fields. India also wants to participate in the upcoming auction to explore and develop gas fields off the coast of Lebanon, Pradhan said in July. Three of those blocks border waters with Israel, with which Lebanon has a long-standing maritime border dispute. ONGC is India’s biggest energy exploration firm and a source at its overseas investment arm ONGC Videsh said the firm would not bid for any block in areas disputed by Israel and Lebanon. “Israel has said that none of the blocks it has offered are in disputed waters,” said the source. Another state-run explorer, Oil India Ltd, has not yet decided to bid in Israel’s licensing round, the Indian company’s chairman, Utpal Bora, told Reuters. India’s decision to bid for blocks off Israel and Lebanon comes after a setback in getting development rights for a giant gas field in Iran. Indian companies discovered the Farzad B gas field in Iran in 2008 and have bid several times for the development rights, but media reports suggest that Tehran has decided to award the field to Russia’s Gazprom.
India’s Jet Fuel demand surpasses pre-pandemic levels in February amid air travel surge
India’s aviation industry witnessed a remarkable resurgence in February as the demand for jet fuel surged past pre-pandemic levels, driven by increased air travel activity, according to preliminary data from state-owned firms. Aviation turbine fuel sales by three state-owned fuel retailers recorded a notable uptick, rising by 7.1 percent to reach 6,32,600 tonnes in February compared to the same period last year. This surge in demand marked a significant milestone, surpassing consumption levels from the Covid-impacted February 2022 and even slightly outpacing the figures from February 2020, just before the onset of the pandemic. The month-on-month data revealed a 3.5 percent increase in jet fuel sales, reflecting the ongoing recovery trend in India’s aviation sector. Following the stringent lockdown measures in late March 2020, fuel sales plummeted by as much as 60 percent, severely impacting travel and business operations across the country. While petrol consumption rebounded to pre-Covid levels in late 2021 and diesel sales followed suit in mid-2022, jet fuel demand remained subdued due to the slow resumption of international flights. However, with the resurgence of flight departures and rising passenger footfall, monthly jet fuel consumption has now exceeded pre-pandemic levels. In addition to jet fuel, petrol and diesel sales also witnessed robust growth in February. Petrol sales surged by 7.2 percent to 2.75 million tonnes, while diesel demand saw a marginal increase of 0.4 percent to 6.55 million tonnes compared to the previous year. The winter season in northern India contributed to a tapering of air-conditioning demand, further impacting fuel consumption patterns. Both petrol and diesel sales experienced month-on-month growth, with petrol consumption rising by 6.2 percent and diesel demand increasing by 7.2 percent compared to January figures. Diesel remains India’s most consumed fuel, constituting nearly 40 percent of all petroleum product consumption, with the transport sector accounting for 70 percent of diesel sales. The fluctuating trend in fuel consumption over recent months has been evident, with February petrol consumption showing a 20 percent increase over the Covid-affected levels of February 2022 and a 29.3 percent surge compared to pre-pandemic February 2020. Similarly, diesel consumption recorded a 13.6 percent growth over February 2022 and a 7.4 percent increase compared to February 2020. Cooking gas LPG sales also demonstrated a positive trajectory, rising by 6.6 percent year-on-year in February. The month-on-month data showed a 1.4 percent increase in LPG demand, reflecting sustained growth in household energy consumption
Qatar’s Gas Boost Will Bring Energy Dominance — and Lots of Cash
With a two-phase mega-expansion already underway and an enormous new buildout now on the horizon, the small Gulf nation of Qatar is setting itself up to control about a quarter of all liquefied natural gas by the end of the decade — and with it, a growing share of the world’s influence and wealth. Qatar’s energy minister Saad Al-Kaabi unveiled last Sunday plans to boost capacity another 13% on top of its previously announced projects, together lifting the nation’s output of LNG from 77 million metric tons per year today to 142 million tons by 2030. That puts the peninsula with fewer residents than the state of Mississippi on track to produce the equivalent of about 7.25 million barrels of oil per day. Most of that will be exported, essentially matching the oil shipments from the region’s reigning energy giant, Saudi Arabia.
Sri Lanka awards energy deal to India after rejecting China
Sri Lanka on Friday awarded the construction of three solar and wind hybrid power generation facilities to an Indian company after scrapping a tender won by a Chinese firm. New Delhi has long been concerned about growing Chinese influence in the island nation, which sits near key global shipping lanes and which India considers to be within its sphere of influence. The project, initially financed by an Asian Development Bank (ADB) loan, was temporarily shelved two years ago after India raised concerns over China’s involvement. Sri Lanka’s energy ministry said Friday that the project had been revived and was now fully funded by an $11 million Indian government grant. It added that renewables firm U-Solar from India’s tech hub of Bengaluru had been awarded the building contract. India’s assistance “underscored the significance New Delhi attached to bilateral energy partnership”, the Indian embassy said in a statement. The three facilities will have a combined 2,230 kilowatts of renewable energy capacity and be located on islets near the northern city of Jaffna, not far from India’s southern coast. China and India have been competing for major infrastructure projects in Sri Lanka, which is currently emerging from its worst economic crisis since independence from Britain in 1948. Beijing is also Sri Lanka’s single largest bilateral creditor, accounting for around 10 percent of the island nation’s $46 billion foreign debt at the time of a government default at the peak of the crisis in 2022.
PM unveils oil and gas projects worth Rs 1.62 lakh cr across India
Prime Minister Narendra Modi on Saturday unveiled a series of oil and gas sector projects worth about Rs 1.62 lakh crore across the country from Bihar’s Begusarai district. The projects are spread across various states like Bihar, Haryana, Andhra Pradesh, Maharashtra, Punjab and Karnataka. The PM also flagged off four trains, including the Danapur-Jogbani Express (via Darbhanga-Sakri). Trains from Jogbani to Saharsa and Siliguri and Sonpur-Vaishali Express were also flagged off. Bihar Governor Rajendra Vishwanath Arlekar, Chief Minister Nitish Kumar and Deputy CMs Samrat Chaudhary and Vijay Kumar Sinha were present on the occasion. The PM dedicated to the nation the ‘First Oil’ from KG Basin and flagged off the first crude oil tanker from the ONGC Krishna Godavari deepwater project.
ONGC Board Approves JV with EverEnviro to Set up CBG Plants
State-run Oil and Natural Gas Corporation (ONGC) will form a joint venture with EverEnviro Resource Management Pvt. Ltd., India’s leading compressed biogas / RNG developer to set up compressed biogas plants (CBG) across the country. The board of ONGC at its meeting held recently considered and accorded in principle, an approval for formation of joint venture companies with EverEnviro and another entity to set up 15 CBG plants. The board also accorded, in principle, approval for formation of 50:50 Joint Ventures separately with both the entities either by ONGC or through its subsidiary (ies) associates. EverEnviro’s aims to establish over 100 CBG plants across India based on diverse feedstock, including municipal solid waste (MSW), agro waste, and agro-industrial waste. The organisation is already executing 20+ CBG projects across Madhya Pradesh, Uttar Pradesh, Delhi, and Punjab with a significant capital investment of nearly Rs 20 billion which will result into a robust output of 320 metric tons per day of CBG. Mr. Deepak Agarwal, Executive Director, EverEnviro Resource Management Pvt. Ltd. said, “We are honoured to partner with ONGC, one of the Navratnas of Government of India for bolstering domestic renewable energy production. Our vision is to attain a daily CBG output of 1000 metric tons on a pan India scale within the next five years. This partnership reflects our joint commitment towards achieving India’s energy transition goals by 2023 and promote our country’s environmental stewardship with reduced carbon emissions.”
OPEC+ Agrees to Extend Output Cuts Until Mid-Year
Anonymous sources within OPEC revealed on Sunday that certain OPEC members and allies, spearheaded by Russia, have reached an agreement to prolong voluntary oil output reductions from the first quarter into the second quarter of 2024. These cuts, initially totaling approximately 2.2 million barrels per day (bpd), were endorsed by OPEC+ in November, with Saudi Arabia leading by example by extending its own voluntary reduction. OPEC+ has been implementing successive output reductions since late 2022 to stabilize the market amidst heightened production from non-member producers like the United States, coupled with concerns regarding demand due to elevated interest rates in major economies. Oil analysts, for the most part, had expected the extension. While some pundits argued that some OPEC+ members would seek to increase supply with Brent prices above $80, it appears that OPEC+ remains cautious about bringing back additional supply amid ongoing uncertainty surrounding demand in China. Looking ahead, the next OPEC meeting in June will provide insight into how OPEC perceives demand growth in Asia developing in late 2024 and 2025. Thus far, the group of producers has managed to align its interests, but maintaining this unity may become more challenging if the anticipated surge in demand materializes later this year.
Wood Mac Shaves 1 Million BPD off Global Oil Demand Forecast
Wood Mackenzie has revised its global oil demand forecast downward by 1 million barrels per day to 1.9 million bpd for 2024, with the biggest increases in demand coming from China and India. Citing a Wood Mac briefing during an Energy Institute conference in London, Reuters reported on Thursday that Wood Mac’s VP of oils research, Alan Gelder, was largely in line with OPEC own estimates for this year. In January, Wood Mac said it expected global oil demand growth to continue to set records this year, up nearly 2 million bpd compared to 2023, with China expected to account for 25% of that growth. At that time, Wood Mac said it expected total global oil demand to average 103.5 million bpd for 2024, with much of that growth coming in the second half of the year. OPEC is expecting demand growth of 2.25 million bpd. The International Energy Agency (IEA) is expected growth of only 1.22 million bpd, with a peak by 2030. On Wednesday, Vitol Group, the largest independent trader in the world, told the same London energy conference that oil demand “had a good few number of years still to climb … before it plateaus” because the energy transition is proceeding at a slower pace than initially anticipated. Oil prices were holding steady on Thursday, with supply trumping geopolitical risk in the Middle East as January inflation data for the United States suggested that there was still room for an interest rate cut by the Federal Reserve in June. The U.S. Personal Consumption Expenditures (excluding energy and food) price index rose 0.3% in January, while the core inflation (including energy and food) rose 0.4%. The numbers potentially signal an end to cooling prices, which in turn could prompt the Fed to cut interest rates quicker. On Thursday at 11:48 a.m. ET, Brent crude was inching up a slight 0.06%, trading at $83.73, while West Texas Intermediate (WTI) was up 0.47%, trading at $78.91.
IndianOil cancels tenders for 10 KTA green hydrogen unit
The Indian Oil Corporation (IOCL) has cancelled its tender to set up the first green hydrogen plant in the company’s Panipat Refinery and Petrochemical Complex in Haryana, amid a lacklustre response and allegations that the tender norms favoured a joint venture that included the state-run oil marketing company. The Independent Green Hydrogen Producers Association, which represents private sector players from the industry, moved court against the tender. Following this, last week, IOC issued a corrigendum stating that the tender for the green hydrogen project of capacity 10-kilo tonne per annum stands cancelled. In December, IOCL received only one bid for the tender from GH4India Pvt Ltd, which is a joint venture the company has formed with infrastructure and engineering major Larsen & Toubro (L&T) and renewable energy company ReNew.
Govt hikes windfall tax on petroleum crude
The government hiked its windfall tax on petroleum crude to Rs 4,600 a metric ton from Rs 3,300 with effect from March 1, according to a government order released on Thursday. India also cut the windfall tax on diesel to zero from Rs 1.50 per litre effective March 1, the order showed. The tax on petrol and aviation turbine fuel will continue to be nil. On February 16, the government raised the windfall tax on petroleum crude to Rs 3,300 a metric ton from Rs 3,200 and hiked the tax on diesel to Rs 1.5 rupees a litre from zero. India imposed a windfall tax on crude oil producers from July 2022 and extended the levy on exports of gasoline, diesel and aviation fuel, as private refiners wanted to sell fuel overseas to gain from robust refining margins instead of selling locally. The government revises the tax fortnightly.