RIL likely to produce natural gas from MJ field starting Q3FY23
Reliance Industries Ltd (RIL) is likely to produce natural gas from the MJ field of the KG D6 block by the third quarter (October-December) of next fiscal. The company, in an investor presentation, said that the first offshore installation campaign has been completed and the second offshore installation campaign will commence in November 2021. Noting that drilling and completion of wells are underway and FPSO and Subsea Production System on track, the presentation said: “First gas expected by 3Q FY23.” Regarding the performance of the oil and gas of the company, the presentation said that significant turnaround in oil & gas business was witnessed with start-up of new production system in KG D6. The Q1FY22 domestic production (RIL share) stood at at 35.83 BCFE, almost at par with FY20 levels and the revenue was at 10-quarter high. It added that three rounds of bidding have been completed for KG D6 gas and 18 MMSCMD of gas have been successfully contracted in domestic market.
India overhauls petroleum reserve policy to boost private interest
India has decided to commercialise half of its current strategic petroleum reserves (SPRs) as the nation looks to enhance private participation in the building of new storage facilities, two government sources told Reuters on Thursday. The shift in policy was approved this month by the federal cabinet, they said. Allowing commercialisation of SPRs mirrors a model adopted by countries such as Japan and South Korea which allow private lesees, mostly oil majors, to re-export crude. India, the world’s third-biggest oil importer and consumer, imports over 80% of its oil needs and has built strategic storage at three locations in southern India to store up to 5 million tonnes of oil to protect against supply disruption. Private entities taking storage on lease will be allowed to re-export 1.5 million tonnes of oil stored in the caverns in the case of Indian companies refusing to buy the crude, they said. Indian Strategic Petroleum Reserves Ltd, a company charged with building of SPRs, will be allowed to sell 1 million tonnes of crude to local buyers, they added. So far Abu Dhabi National Oil Co (ADNOC) has leased 750,000 tonnes of oil storage in the 1.5-million-tonne Mangalore SPR. Last year India allowed ADNOC to export half of its https://www.reuters.com/article/india-oil-adnoc-idUSKBN26Z1KN oil in Mangalore SPRs as the middle eastern oil major found it difficult to sell oil to Indian refiners. India also plans to build strategic storage at Chandikhol in Odisha and Padur in Karnataka for around 6.5 million tonnes of crude to provide an additional cover of 12 days of net oil imports, they said. The cabinet earlier this month also decided to provide up to 80 billion rupees of financial support, equivalent to about 60% of the estimated cost, for building two new SPRs, they said. ISPRL will soon float an initial tender for building the new reserves. “Whoever seek less federal support will be considered for participation in the new caverns,” said one source.
LNG imports dip 17 per cent in June as prices soar, local output rises
Import of liquefied natural gas (LNG) dropped 17% in June over the last year as prices soared and local gas production expanded. LNG prices in the spot market have risen as high as $14 per metric million British thermal units (mmBtu), curbing demand and prompting many consumers to switch back to cheaper fuel oil. The spot prices had dropped to a record low of $2 per mmBtu last year but have been above $10 for the past few months. “Barely any spot cargoes have been imported in the past 2-3 months,” said an executive at GAIL, the country’s largest gas marketer. Spot and short-term cargoes comprise about half of India’s total LNG demand. Currently, prices under long-term contracts are a few dollars lower than the spot market and are being preferred by consumers, industry executives said. However, long-term LNG, too, has become expensive in the past few months as it’s mostly linked to crude oil prices that have climbed above $70 a barrel with a return in global demand amid an artificial supply curb by key producers. Some of the local demand for LNG is also being met by new production from the KG Basin gas fields operated by Reliance and BP. Production from fields operated by private players jumped three-fold to 862 million standard cubic meters (mscm) while the country’s overall output rose by a fifth to 2,777 mscm. The overall gas demand in the country, however, was lower at 5 billion cubic meters (bcm) in June, compared to 5.1 bcm a year earlier and 5.4 bcm of June 2019. “Any quantum jump in the domestic gas demand would come only after some of the under-construction fertiliser plants come onstream,” said the GAIL executive cited earlier.
Iran inaugurates major oil pipeline to bypass Hormuz Strait
Outgoing Iranian President Hassan Rouhani has inaugurated a major onshore pipeline that allows the country to bypass the Hormuz Strait for crude oil exports. The pipeline, with some 1,000 km in length, will transfer the pumped oil from facilities in Goureh to the Omani sea port of Jask, reports Xinhua news agency. The inauguration of the Goureh-Jask pipeline “gives a strong and firm response to all plotters particularly to the US,” Rouhani said during the virtual opening ceremony on Thursday, alluding to the American sanctions, which are aimed at hindering Tehran’s oil exports. “The US government waged war on us in two areas, one on oil exports, and the other on the supply of goods.” “They aimed to stop Iran’s oil exports and reduce crude exports to zero,” he said, hinting at the failure of the US anti-Iran maximum pressure policy. The $2- billion project, the construction of which started two years ago, detours the strategic Hormuz Strait which has long been used as a vital passageway for oil exports of the region. “As time goes by, the importance of this project will become more evident for the Iranians,” said Rouhani. The oil pipeline is able to initially export 300,000 barrels per day (bpd) of crude and will reach the capacity of one million bpd once fully ready in October, according to authorities.
Saudi Aramco facing USD 50M cyber extortion over leaked data
Saudi Arabia’s state oil giant acknowledged Wednesday that leaked data from the company – files now apparently being used in a cyber-extortion attempt involving a USD 50 million ransom demand – likely came from one of its contractors. The Saudi Arabian Oil Co., better known as Saudi Aramco, told The Associated Press that it “recently became aware of the indirect release of a limited amount of company data which was held by third-party contractors.” The oil firm did not say which contractor found itself affected nor whether that contractor had been hacked or if the information leaked out another way. “We confirm that the release of data was not due to a breach of our systems, has no impact on our operations and the company continues to maintain a robust cybersecurity posture,” Aramco said. A page accessed by the AP on the darknet – a part of the internet hosted within an encrypted network and accessible only through specialized anonymity-providing tools – claimed the extortionist held 1 terabyte worth of Aramco data. A terabyte is 1,000 gigabytes. The page offered Aramco a chance to have the data deleted for USD 50 million in cryptocurrency, while another timer counted down from USD 5 million, likely in an effort to pressure the company. It remains unclear who is behind the ransom plot. Aramco has been targeted before by a cyberattack. In 2012, the kingdom’s oil giant found itself hit by the so-called Shamoon computer virus, which deleted hard drives and then displayed a picture of a burning American flag on computer screens. The attack forced Aramco to shut down its network and destroy over 30,000 computers. US officials later blamed that attack on Iran, whose nuclear enrichment program had just been targeted by the Stuxnet virus, likely an American and Israeli creation. In 2017, another virus swept across the kingdom and disrupted computers at Sadara, a joint venture between Aramco and Michigan-based Dow Chemical Co. Officials at the time warned it could be another version of Shamoon. The sliver of Aramco that now trades publicly on Riyadh’s Tadawul stock exchange stood at 34.90 riyals a share, or USD 9.30, after trading stopped last week for the Muslim holiday of Eid al-Adha. That puts the company’s valuation at around USD 1.8 trillion, making it one of the world’s most-valued companies.
Green energy will drive new capacity at IOC: Shrikant Madhav Vaidya, Chairman
IOC chairman Shrikant Madhav Vaidya shared with his vision for transforming India’s largest state-run oil refiner and fuel retailer into a new age energy major. Excerpts: Net-zero is the buzzword. What are your plans? We have to be in sync with the government saying that, by 2050, we all should be net-zero, which can be broken into categories: One, what energy we use. Suppose we become net zero in that. The second is grid power. If that is green, then stage two is also cleared. Third is what we produce and is being used, such as petrol and diesel, which becomes net-zero. That is a tall order. So, one way is to reduce the energy we use, bring more energy efficiency. That itself will reduce emissions in a big way. Second, whatever electricity we get from the grid, we will ensure it is green. We are investing in solar and wind energy in a big way. We have a 75MW operational wind energy project in Rajasthan. We are bidding for 250MW solar capacity. We can use the grid to transmit that power to our plants. We have several expansion projects down the line. The intention is to run all expanded capacity on green power. They will not have captive power plants. What about new age mobility solutions? Fossil fuels will be there but gas will play a big role because the government has rightly chosen it as the transition fuel. We are committed to CNG and CBG (compressed biogas). We have issued 2,000-plus LoIs for CBG plants. That will be a game-changer for us. Our R&D is working on generating hydrogen through different pathways. We are introducing 15 hydrogen buses in the NCR region. We are also investing in producing hydrogen with 99.999 purity at Gujarat refinery for hydrogen fuel cell buses. We intend to operate these on the iconic Baroda-Sabarmati and Baroda-Statue of Unity (Kevadia) routes in Gujarat soon. We intend to utilise wind power from our Rajasthan project to produce green hydrogen through electrolysis at Mathura refinery, as is in the Taj Trapezium Zone. All these will contribute towards net-zero. How will competition after BPCL privatisation and energy transition impact your retail character? Today, we have about 32,000 retail outlets. All of them are automated. We know the units of fuel dispensed in each delivery or which outlet is closed. Automation ensures quality and quantity to our customers. We are on a par with anyone who comes in the market, be it private or public. The second part is alternate fuels. We are adding charging points for electric mobility, CNG and CBG at our outlets, wherever possible. CBG will be one big fuel for the future. We are the only oil company to offer CBG from 23 outlets. Hydrogen is still far and it will be few locations where we dispense it. We have set the ball rolling. Eventually, we will make sure it also scales up. LNG is also coming. We have been tasked with setting up 20 of the 50 outlets being planned along the Golden Quadrilateral. When do you expect fuel demand to reach pre-Covid levels? Petrol is already there. Diesel I expect in a quarter max; by Diwali. ATF (jet fuel) will take time, maybe six months or next year. Does such expansion make sense in view of thrust on electric mobility? We have one-third of the global average in terms of per capita energy consumption. We are the only growing economy, apart from China, where energy consumption is growing in leaps and bounds. Please understand that 250 million tonnes (refining) capacity is likely to rise to 400 so that additional fuel is there. Demand is picking up, we are not stagnant. What you are saying is okay if the fuel demand becomes stagnant then the number of outlets will cut into each other’s business. But the whole pie is increasing.
NCLAT stays Vedanta’s take over of Videocon
The National Company Law Appellate Tribunal (NCLAT) has stayed Vedanta Group’s winning bid for debt laden Videocon Industries after an appeal by dissenting creditors who were unhappy with the value realised through the resolution. A two judge bench headed by officiating NCLAT chairman Ashok Iqbal Singh Cheema has stayed the implementation of the resolution plan and adjourned the matter to September 7 till which date the company will be continued to be managed by the resolution professional. Bank of Maharashtra and IFCI had filed a plea opposing the existing plan arguing that the value ascribed to the company was very close to the liquidation value and even a part of the payment to dissenting creditors was through non convertible debentures (NCDs) which is in contrast to the Supreme Court order in the Jaypee Infratech case which had set a precedent by directing that dissenting creditors should only be paid by cash. “This stay now means that the deal could be stuck for months as it will be caught up in the legal whirlwind of replies and counter replies. This NCLAT order is a result of the unease on the large haircut that the creditors had agreed to though it is fact that the best offer was chosen from what was available,” said a person involved in the process. In December over 94% of the creditors by value voted for Vendanta arm Twin Star Technologies as the preferred bidder. Vedanta’s offer of a little over Rs 3,000 crore was a haircut of more than 95% on admitted claims of Rs 61,770 crore. NCLT had approved the plan in June but had commented that Vedanta had paid “almost nothing” to take over the company, noting the huge haircut the lenders had taken. Vedanta’s offer includes NCDs of Rs 2700 cr and cash unfront of Rs 551 crore. It also includes some equity to financial creditors in the company. Videocon has 54 financial creditors with about 33 of them in the committee of creditors. State Bank of India with 19.15% vote is the largest financial creditor, followed by IDBI (16.63%) and Central Bank of India (8.69%). All these large financial creditors have voted for Twin Star. “We can only vote for offers in front of us. We decided on the bid based on the information available. We cannot help it in case the court has taken a different view,” said a banker involved in the process. Vedanta had also sweetened its offer by giving a corporate guarantee indicating its seriousness in completing the plan. The assets include Ravva Oil and Gas Fields in the Krishna Godavari Basin in which Vedanta can now become the single largest shareholder by consolidating its holding and taking over Videocon’s 25%. Vendanta arm Cairn already owns 22.5% in the field, while state-owned ONGC has 40%. “The fear now is that this resolution which was one of the few sucesses in a Covid year will be delayed beyond repair. One hopes that Vedanta is patient to complete this plan because if this offer is not completed getting a new one looks very difficult and banks stand to lose whatever little they have got,” said the first person cited above. Videocon’s 15 companies were taken to the National Company Law Tribunal (NCLT) one by one between June and September 2018. In August 2019, SBI took lead and petitioned the NCLT, which gave permission to consolidate 13 companies. Vedanta’s plan is for these 13 companies. Two other companies, its kitchen appliances division, KIAL Ltd and Trend Electornics are undergoing separate bankruptcy processes.
Gujarat Natural Resources subsidiary buys additional 70% in oil fields
GNRL Oil & Gas Limited (GOGL), a Subsidiary of Gujarat Natural Resources Limited, had acquired an additional 70% participating interest in fields which put together made the total participating interest to 100%. “We hereby state that signed amended Production Sharing Agreement (PSC) has been received by us. The PSC for Allora, Dholasan, North Kathana oil fields was between the President of India acting through the Additional Secretary, Ministry of Petroleum & Natural Gas, Government of India, Gujarat State Petroleum Corporation, and GNRL Oil & Gas limited,” company said in a filing. Considering the above the consolidated revenue/profitability of the Company is expected to increase, it added.
FM Nirmala Sitharaman downplays oil price hike, inflation concerns, says economy on recovery path
Finance Minister Nirmala Sitharaman on Monday downplayed the high petroleum prices fuelling inflation and reiterated that fundamentals of economy are strong and India will continue to attract investment. “The weight of fuels like petrol, diesel and other fuels in the total CPI-Combined is only 2.52%,” Sitharaman said, adding that the CPI- combined inflation in June 2021 was 6.26%, as against the average CPI-combined inflation of 6.16% during 2020-21. The prices of petrol increased 63 times and diesel 61 times between January 1, 2021, and July 9, 2021 and the price of liquefied petroleum gas (LPG) increased five times during this period, the government informed the Lok Sabha on first day of the monsoon session, as many leaders raised the issue of high price of petroleum products. According to the Minister of State for Finance Pankaj Chaudhary, excise duty collections in April-June 2021 was Rs 1010 billion. Excise duty collection from petrol and diesel by the Indian government has increased by 88% to Rs 3350 billion between April 2020 and March 2021, the government told Lok Sabha on Monday, adding that this was up from Rs 1780 billion registered in the FY20. This number includes ATF, natural gas and crude oil as well, along with petrol and diesel. But the fact that petrol remaining above Rs 100 in many major cities is fuelling inflation in other products also, putting pressure on retail inflation. In the last financial year also petrol price was increased on 76 occasions and reduced 10 times. Diesel on the other hand was increased 73 times and reduced 24 times. Quoting the FDI inflows, the Finance Minister said FDI inflows into India rose by 25.4% to reach $64 billion in 2020, from $51 billion in 2019, making the country the fifth largest recipient in the world in 2020, up from eighth position it held in the previous year. “As has been witnessed in overall FDI inflows, India’s strong fundamentals and market size will continue to attract market-seeking greenfield investments,” she said. Excise duty collection doubled in FY21 Excise duty collection from petrol and diesel by the Indian government has increased by 88% to Rs. 3350 billion between April 2020 and March 2021.
Adani offers discount for LNG-fuelled vessels at Mundra port
The Adani Group will offer a 50% discount on charges to liquefied natural gas (LNG)-fuelled ships at Mundra, India’s largest commercial port, according to a notice seen by Reuters, as the country seeks to cut emissions under its green ports plan. Using LNG to fuel ships allows a significant reduction in CO2 as well as of other forms of pollution compared with conventional shipping fuel. “Port will offer 50% discount on Port Dues, Pilotage and Berth hire charges,” the notice to shippers, issued by Adani Ports and SEZ Ltd (APSE.NS), said. The company, controlled by billionaire Gautam Adani, said the waiver scheme will apply to vessels with dual fuel engines that use LNG as a primary fuel. The scheme will be valid for six months from Aug. 1. However, the waiver on port charges would not apply for vessels carrying LNG cargo and using LNG fuel, it said. Adani Ports and SEZ Ltd were not immediately available for comment.