Mukesh Ambani says no option but to make businesses green
Asia’s richest man Mukesh Ambani on Monday said there is no option for businesses but to go green and every unit of Reliance Industries would have to pivot as the conglomerate moves towards net-zero. “We have no option as a society, as a business but to really adopt a sustainable business model,” he said speaking at the Qatar Economic Forum. And embracing a model of clean energy is a pre-requisite. Every unit making up the oil-to-telecom conglomerate Reliance would have to pivot as the conglomerate moves toward net-zero, he said. “We at Reliance have adopted this wholeheartedly and transforming each one of our business lines to be sustainable, circular, recyclable and fully transparent environment, social, and governance standards,” he said. When asked if this green push will require dialling back on some of Reliance’s businesses, Ambani said “it means transforming our businesses and integrating that with the future,” without sharing more details. In July last year, Ambani, who is the chairman and managing director of Reliance Industries Ltd, had set a 2035 deadline for his company to turn net carbon zero, echoing views of his global peers in fighting climate change. While RIL will remain a user of crude oil and natural gas, it is committed to embracing new technologies to convert its carbon dioxide emissions into useful products and chemicals. “Achieving a cleaner planet can be done by making CO2 as a recyclable resource, rather than treating it as an emitted waste. We have already made substantial progress on photosynthetic biological pathways to convert our CO2 emissions at Jamnagar into high-value proteins, nutraceuticals, advanced materials and fuels,” he had said. RIL also plans to develop next-gen carbon capture and storage technologies. It is evaluating novel catalytic and electrochemical transformations to use CO2 as a valuable feedstock.
Govt misses out on refining oil cheaply
Bangladesh is missing out on refining imported crude oil cheaply and saving valuable foreign currencies as it uses a plant that is more than half a century old and has failed to set up a new unit in a decade. The economic life of the first plant of state-run Eastern Refinery Ltd (ERL), a subsidiary of Bangladesh Petroleum Corporation (BPC), was estimated at 20-25 years when it was commissioned in 1968. Today, the only unit refines about 1.2 million tonnes of crude oil annually, which is less than a fifth of the total demand of 6.5 million tonnes for finished petroleum products. The rest of the finished products are imported directly. ERL, which has an annual capacity to refine 1.5 million tonnes of crude oil, is the only company that makes finished petroleum products locally. The processing cost of the 53-year-old plant has risen 89 per cent in the last decade, according to the annual report of the company for 2018-19. The cost was Tk 630 per tonne in 2009 and it surged to Tk 1,190 per tonne in 2019. ERL spent Tk 801.60 million to refine 1.271 million tonnes of crude oil in the fiscal year of 2009-10. The cost of refining 116.60 million tonnes was Tk 1388.5 million in FY2018-19. The expenditure rose mainly because of repairing and replacing equipment of the plant, said an ERL official. ERL carries out regular repairs and maintenance to keep the plant up and running. As the economic life of the plant is over, the maintenance cost has risen. There is also a drop in the quality of oil refined, and the current unit is not environment-friendly, said the official, preferring not to be named. Eastern Refinery took the initiative to launch a second plant to refine 3.0 million tonnes crude oil in 2010. But the project has seen little progress. It has revised the development of the project proposal (DPP) of the new plant 11 times. The initial cost of the project has already increased to around Tk 200 billion from Tk 130 billion. The cost may increase further as the project is still in the process of being revised. According to industry people, the new plant would have saved the country $18 to $22 per tonne. This means, had the new plant been commissioned, Bangladesh could have saved $6.6 million annually. “It should never take 11 years to prepare a DPP even if the project is too big,” said M Shamsul Alam, energy adviser of the Consumers Association of Bangladesh. He alleged that officials of ERL and BPC were procrastinating in building the new plant as it was easy to embezzle money on repairing and maintaining an expired one. “The reliance on the 53-year-old plant proves how far the energy sector is lagging behind. No country is dependent on a single plant to refine oil considering the high risk involved in the sector,” Prof Alam said. If there were two or three plants, the country would have saved a lot of foreign currency, and the cost of energy would have been lower, he added. Eastern Refinery produces 15 types of petroleum products, including gas oil (diesel), jet fuel, motor gasoline, furnace oil, and marine fuel. WHAT OFFICIALS SAY Md Lokman, managing director of ERL, defended the old plant, saying it was still useful. “We replace important equipment regularly to avoid risk. Even though the plant is 53 years old, it is still working well.” The second plant has been delayed due to uncertainties over funding and the screening of various aspects of the project, according to Lokman. “It is in the final stage of approval. If implemented, it would be possible to refine two-thirds of the fuel consumed,” he added. Md Anisur Rahman, senior secretary of the energy and mineral resources division, attributed the delay to the numerous queries raised by the consultancy firm. “There were more than 500 queries on various issues from the consultancy company. It took time to respond to these questions,” he said. In April 2016, ERL appointed Engineers India Ltd as a consultant to install the second unit. In 2017, the government signed a deal with French company Technip to prepare the engineering design of the plant. The company also built the first plant five decades ago. The project is scheduled to be presented at a regular meeting of the Executive Committee of the National Economic Council this month, said BPC Chairman Abu Bakar Siddique earlier. “Once approved, the work on the project can start quickly.” The new plant will have 10 processing units where liquefied petroleum gas, gasoline, diesel, petrol, kerosene, bitumen, jet fuel, and sulfur will be produced.
India’s mineral production up 37% in April
India’s mineral production rose by 37.1 per cent in April 2021 over the same month a year ago, according to the mines ministry. The index of mineral production of mining and quarrying sector for the month stood at 108.0, which was 37.1 per cent higher from the the level in April 2020, the ministry said in a statement. The production level of important minerals in April 2021 includes, coal 516 lakh tonnes, lignite 31 lakh tonnes, natural gas (utilised) 2,583 million cubic metre, petroleum (crude) 25 lakh tonnes, bauxite 16.61 lakh tonnes, chromite 6.36 lakh tonnes and gold 120 kg. The production of most of the important minerals showing positive growth during April 2021 over the same month a year ago includes, coal, lignite, natural gas (utilised), bauxite, chromite, copper concentrate, gold, iron ore, lead concentrate, manganese ore, zinc concentrate, limestone and phosphorite. The production of petroleum (crude) indicated a negative growth, it said. “For the period under review, it is, however, noted that due to full lockdown in April 2020, the comparison is not indicative,” the mines ministry said.
Draft cabinet note floated for 100% FDI in oil PSUs approved for disinvestment: Sources
The commerce and industry ministry has floated a draft cabinet note seeking inter-ministerial views on a proposal to allow up to 100 per cent foreign investment under automatic route in oil and gas PSUs, which have an ‘in-principle’ approval for disinvestment, sources said. The move, if approved by the union cabinet, would facilitate privatisation of India’s second biggest oil refiner Bharat Petroleum Corp Ltd (BPCL). The government is privatising BPCL and is selling its entire 52.98 per cent stake in the company. Sources said that as per the draft note, a new clause would be added in the FDI policy under the petroleum and natural gas sector. According to the proposal, foreign investment up to 100 per cent under the automatic route would be allowed in cases where an ‘in-principle’ approval for disinvestment of a PSU has been granted by the government. For BPCL privatisation, mining-to-oil conglomerate Vedanta had put in an expression of interest (EoI) for buying the government’s 52.98 per cent stake in the PSU. The other two bidders are said to be global funds, one of them being Apollo Global Management. After collating the views, the commerce and industry ministry would seek approval of the union cabinet on the proposal. At present, only 49 per cent FDI is permitted through automatic route in petroleum refining by the public sector undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs.
A possible Saudi Aramco appointment on Reliance board triggers buzz over $15 billion deal
Saudi Aramco chairman and Governor of the Kingdom’s wealth fund Public Investment Fund, Yasir Al-Rumayyan, may be inducted on the board of Reliance Industries Ltd, a precursor to a $15 billion deal, reports said. An announcement of Al-Rumayyan’s induction on the RIL board or the board of the newly carved oil-to-chemical (O2C) unit may come as early as at the company’s annual shareholder meeting on June 24. “RIL’s Annual General Meeting (AGM) has historically been a keenly watched event (previously attended by 3,000 shareholders when held in physical format and last year saw 300,000 concurrent viewers of the virtual AGM across 42 countries and 468 cities) given that it has been one of the top 3 companies by market capitalisation in India, has a large free float and a large public shareholding (more than 3 million non institutional shareholders),” brokerage HSBC Global Research said in a report. And expectations are already built up for the AGM. “Over the last year, new investors have joined RIL’s digital and retail business at subsidiary level and RIL has formed new partnerships with global players like Google, Facebook, Microsoft, Qualcomm etc. Investors now expect RIL to give direction to these businesses and announce groundbreaking products,” it said, adding reports suggest that it will likely announce a new smartphone partnered with Google and its pricing. “There is also expectation of some update on Saudi Aramco deal and speculation that the Chairman of Saudi Aramco may join RIL’s board,” it said. Both RIL and Saudi Aramco did not reply to emails sent for comments. An email sent to PIF too remained unanswered. PIF has already picked up a minority stake in Reliance Retail and Jio. Billionaire Mukesh Ambani had in August 2019 announced talks for the sale of a 20 per cent stake in the oil-to-chemicals (O2C) business, which comprises its twin oil refineries at Jamnagar in Gujarat and petrochemical assets, to the world’s largest oil exporter. The deal was to conclude by March 2020 but has been delayed for reasons not disclosed by either company. Talks have revived this year and the two are reportedly discussing a cash and share deal – Aramco paying for the stake with its shares initially and then staggered cash payments over several years. In a separate report, BofA Securities said RIL’s AGM each year has turned into a key event where chairman Mukesh Ambani provides more information on the outlook of key business divisions. “Historically we have seen major announcements on phones, tariffs, stake-sales etc,” it said. The deal to sell stake in O2C business to Aramco too was announced at RIL AGM in 2019. “We expect an update on Jio-Google phone features (like 5G), potentially pricing and timeline,” it said. “Clarity on JioMart/other online commerce businesses along with the JioMart-WhatsApp integration” is also expected. Reports suggest “RIL may announce the appointment of Mr. Yasir Al-Rumayyan, chairman of Saudi Aramco and governor of the kingdom’s wealth fund Public Investment Fund, on its board during AGM,” it said. “RIL may introduce a new affordable laptop to tap into the massive demand for work from home machines.” Besides refineries and petrochemical plants, the O2C business also comprises a 51 per cent stake in the fuel retailing business. It, however, does not include the upstream oil and gas producing assets such as the flagging KG-D6 block in the Bay of Bengal. RIL had in 2019 put USD 75 billion as the value of O2C business after signing a non-binding letter of intent with Saudi Aramco. The firm had recently announced carving out the O2C business as a separate subsidiary to support strategic partnerships and new investors in order to accelerate its new energy and material plans. Digital business is already held by a subsidiary Jio Platforms and Reliance Retail holds the offline and online retail business. Aramco buying 20 per cent in O2C business would allow Reliance to build financial muscle as it carves out space for itself in highly competitive omnichannel retail. With a stake, Aramco would not only have a stake in one of the world’s best refineries and largest integrated petrochemical complex. It has access to one of the fastest-growing markets, a ready-made market for 5 lakh barrels per day of its Arabian crude and offering a potentially bigger downstream role in future. RIL refineries are one of the most complex in the world, allowing it to earn a significant premium to the benchmark Singapore gross refining margin. Its petrochemical complexes rank among the biggest in the world, whose dependency on outside raw materials is minimal. It has leadership positions both in the domestic polymer and polyester markets.
11 thermal plants in NCR accounted for 7% of Delhi air pollution in Oct-Jan: Study
The 11 coal-fired power plants in the National Capital Region contributed just 7 per cent to Delhi’s PM2.5 pollution on an average between October 2020 and January 2021, while vehicles contributed 14 per cent, according to a new study. The findings are significant considering that the Delhi government had recently moved to the Supreme Court, seeking closure of the coal-fired power plants in the vicinity of the city using outdated polluting technology. On April 1, the Union Environment Ministry had issued a notification with amended rules allowing thermal power plants within 10 kilometres of the National Capital Region (NCR) and in cities with more than 10 lakh population to comply with new emission norms by the end of 2022. In its latest analysis, the Council on Energy, Environment and Water (CEEW), a Delhi-based not-for-profit policy research institution, said, “Given the EPCA (Environment Pollution (Prevention and Control) Authority) directives on account of GRAP (Graded Response Action Plan) implementation and presumably low demand due to lockdown, the power plants also operated at much lower levels in October and November 2020.” “We observe that energy generation from NCR coal-fired plants was 25 and 70 per cent lower in October and November, respectively, compared to the corresponding months in 2019, implying a lower contribution in these months,” the report read. The research team of L S Kurinji, Adeel Khan, and Tanushree Ganguly found that the average contribution of emissions from the 11 power plants in Delhi-NCR was 7 per cent between October 2020 and January 2021. “However, once the ‘fuss’ about air quality dissipated and demand picked up, the daily energy generation levels scaled up to 2019 levels in December 2020 and January 2021,” it said. The share of vehicular emissions to Delhi’s PM 2.5 pollution was 14 per cent on an average between October 2020 and January 2021. According to the study, a relatively longer stubble-burning period and unfavourable meteorological conditions were primarily responsible for Delhi’s worsening air quality in winters last year. Household heating and cooking were responsible for 40 per cent of the pollution burden in December 2020 and January 2021. The analysis showed the contribution of stubble burning to Delhi’s PM2.5 levels exceeded 30 per cent for seven days (between October 10 and November 25) in 2020 as against three days in 2019. “This season was longer compared to 2019 or 2018 as fires started early in late September and a significant increase in the number of fires was observed,” it said. The stubble burning phase (October 15 to November 15) in 2020 experienced 172 hours of calm and light winds (speed less than 5 km/h) compared to 101 hours in 2019. In the winter of 2020, Delhi recorded only six rainy days as against 10 in the winter of 2019. The months of October and November in 2020 were cooler, with the air temperatures being 1-1.5 degrees Celsius lower than the corresponding months in 2019, according to the study. “We find that air quality in the winter of 2020 was worse than in the winter of 2019. Lower vehicular congestion and power generation levels in October and November 2020 are indicative of reduced emissions from these two activities,” the report read. “A relatively longer stubble burning period, colder and drier winter conditions, and calmer winds in October and November 2020 were primarily responsible for the worsening Delhi’s air quality that year. As the winter season progressed, most anthropogenic activities such as power generation and vehicular levels bounced back to previous year’s levels,” it said. The interplay of meteorological conditions on Delhi’s air quality cannot be discounted, but there is a need for steeper cuts in emissions across sectors. The GRAP presents the state government with an opportunity to constitute an air quality forecasting cell that can advise the government to take necessary measures to prevent severe air quality episodes in the capital city, the CEEW said. “We recommend that in addition to supporting source identification studies, the government should also encourage air quality modelling and forecasting efforts. Augmenting the existing monitoring infrastructure would help air quality modellers validate their forecasts,” it said.
ONGC seeks Tamil Nadu nod to drill 10 oil exploration wells
Days after chief minister M K Stalin wrote to Prime Minister Narendra Modi urging the Union government not to allow oil and gas exploration in Cauvery delta districts, ONGC has approached the state environmental impact assessment authority (SEIAA) seeking clearance to drill 10 exploration wells in Ariyalur district. The ONGC letter circulated widely on Wednesday attracted sharp criticisms from political parties and farmers who have been up against oil exploration in the agrarian region which had been designated a protected special agriculture zone by the previous government. According to the application dated June 15 submitted to the state government, the oil major plans to drill 10 exploratory wells in Ariyalur district where there is the likelihood of hydrocarbon reserve. ONGC sources said an environmental clearance application and pre-feasibility report have been submitted for Cauvery Basin. If any oil or gas reserve is found, plans will be afoot to establish development wells by the Cauvery asset section of ONGC in Karaikal that oversees exploration in the delta districts. “Only with the exploration wells can we identify natural oil and gas reserve. Perhaps the application was submitted because the proposed area falls outside the protected zone,” an official source in ONGC said under the condition of anonymity. The development comes close on the heels of a similar oil exploration proposal at Vadatheru in Pudukottai district sparking protests. “Already Ariyalur district is facing the bad consequences of excessive limestone quarrying and cement industries. Our groundwater level is depleting and oil exploration will make our livelihood worse,” Varanavasi K Rajendran, state secretary, Consortium of Indian Farmers Association, told TOI. Last year, the AIADMK government had declared Cauvery delta districts a protected zone for agriculture covering a part of Ariyalur and banned oil exploration activities. Farmers said the state government should not allow such exploration. “We will convey the concern of farmers to the chief minister. We will not allow any project that harms farmers,” K Chinnappa, Ariyalur MLA, said. Meanwhile, PMK leader Anbumani Ramadoss and Tamil Maanila Congress leader G K Vasan have appealed to the state government not to allow the proposed exploration.
India to boost ethanol production as people facing problems due to high fuel rates: Gadkari
Union minister Nitin Gadkari on Wednesday said India is going to increase the production of alternative fuel ethanol as people are facing problems due to a rise in the prices of petrol and diesel. Addressing a conference organised by BRICS Network University virtually, Gadkari mentioned that automobile makers are producing flex-fuel engines in Brazil, Canada and the US providing an alternative to customers to use 100 per cent petrol or 100 per cent bio-ethanol. “Now Indian production (of ethanol) we are going to increase because of the rise in petrol price, people are facing a lot of problems,” Gadkari said while explaining that the use of ethanol is cost effective. Petrol prices in some parts of the country, including metro cities Mumbai and Hyderabad, have crossed Rs 100 per litre mark due to multiple fuel price hikes in past six weeks. Petrol retails at over Rs 100 per litre mark in seven states and union territories — Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka and Ladakh. Gadkari pointed out that the ethanol price will be Rs 60-62 per litre and petrol price is more than Rs 100 per litre. “As far as caloric value of ethanol is concerned, the 750 ml of petrol or 800 ml is equal to 1 litre of ethanol, still there is Rs 20 saving per litre,” the road transport and highways minister said. “And it is an import substitute and cost effective, pollution free and indigenous,” he added. The minister pointed out that for all the racing cars, all over the world ethanol is used as fuel. Last week, Prime Minister Narendra Modi said the target date for achieving 20 per cent ethanol-blending with petrol has been advanced by five years to 2025 to cut pollution and reduce import dependence. The government last year had set a target of reaching 10 per cent ethanol blending in petrol by 2022 and 20 per cent doping by 2030. Currently, about 8.5 per cent ethanol is mixed with petrol as against 1-1.5 per cent in 2014, Gadkari said adding ethanol procurement has risen from 38 crore litres to 320 crore litres. Highlighting the need for a policy for import substitution, the minister said India imports Rs 8 lakh crores of crude oil, and this will rise two-folds in the next 4-5 years which would have a huge impact on the economy. Gadkari said India’s minimum support price (MSP) for some crops are higher than international prices that is why the government allowing ethanol production from sugarcane, foodgrains and corn. “We will make ethanol economy of Rs 2 lakh crore in the next five years,” he said. Ethanol extracted from sugarcane as well as damaged food grains such as wheat and broken rice and agriculture waste is less polluting and its use also provides farmers with an alternate source of income. The minister also mentioned that the government is working to support electric vehicle (EV) industry, and American electric car major Tesla is going to enter the Indian market soon. The government has facilitated sale of 2-3 wheeler EVs, he said, adding that the “government is giving permissions to start petrol pumps, which will also have EV charging infrastructure”. He also said that the indigenous battery technology will make electric vehicle (EV) most efficient means of transportation and the country aims to shift public transport on electricity. He also said that the Delhi-Mumbai Expressway is 60 per cent complete.
OMCs again resort to alternate day fuel price revision
Oil marketing companies seem to have moved once again towards a revised fuel price mechanism, shifting to the practice of changing petrol and diesel rates after every couple of days rather than undertaking changes on a daily basis. In the last few days, pump prices of petrol and diesel have been revised every two days but the practice had not helped consumers as even under this system prices have only moved up making the fuel dearer. On Thursday, OMCs kept retail price of petrol and diesel unchanged. So petrol still costs Rs 96.66 per litre and diesel Rs 87.41 per litre in Delhi. In Mumbai, where petrol prices crossed Rs 100 mark for the first time ever on May 29, the prices continued to be at new high of Rs 102.58 per litre on Thursday. Diesel prices also remained unchanged at Rs 94.70 a litre, the highest among metros. Across the country as well, the petrol and diesel price prices remained static on Thursday but its actual retail prices varied depending on the level of local levies in respective states. The price pause on Thursday came after petrol and diesel prices were raised by 25 and 13 paisa per litre respectively in Delhi on Wednesday. Prior to Wednesday, there was no price revision on Tuesday. Similarly, while fuel prices were raised on Monday, it remained unchanged in the previous day. “It seems oil companies are giving a sense of relief to consumers as fuel prices are not being raised on a daily basis. But still prices are not actually falling but being raised on every alternate day too this month,” said an oil sector expert not willing to be named. He said that the practice of daily price revision, started after deregulation of petrol and diesel prices. Under daily price revision, OMCs revised petrol and diesel prices every morning benchmarking retail fuel prices to a 15-day rolling average of global refined products’ prices and dollar exchange rate. However, in a market where fuel prices need to be increased successively, alternate day price revision seems to be the flavour. With Thursday’s price pause, fuel prices have now increased on 25 days and remained unchanged on 23 days since May 1. The 25 increases have taken up petrol prices by Rs 6.26 per litre in Delhi. Similarly, diesel have increased by Rs 6.68 per litre in the national capital. With global crude prices also rising on a pick up demand and depleting inventories of world’s largest fuel guzzler — the US, retail prices of fuel in India is expected to firm up further in coming days. The benchmark Brent crude is currently over $74 a barrel on ICE or Intercontinental Exchange.
Petroleum Min proposes changes in law to include hydrogen in mineral oil
The petroleum ministry has proposed amendments to existing law to include cleaner sources of energy like hydrogen within the definition of ‘mineral oils’ for which the government gives out licence to explore and produce. Seeking stakeholder comments, the ministry said the Oilfields (Regulation and Development) Amendment Bill 2021 proposes to amend the present Act to “create opportunities for exploration, development and production of next-generation cleaner fuels and mitigate regulatory challenges and risks.” It also proposes a new definition of ‘mineral oils’ by including within its ambit modern and cleaner sources of energy like hydrogen. Conventionally, mineral oil is understood to mean hydrocarbons in various forms including natural gas and petroleum oil. In the aftermath of the COVID-19 pandemic and the Paris Climate Change Agreement, the global community is committed to developing and using clean energy sources. Hydrogen gas is one such clean source of energy, which can be produced, distributed and regulated in conjunction with natural gas, it said. “Presently, the Oilfields (Regulation & Development) Act, 1948 deals with ‘mineral oils’ as understood in the conventional sense. In order to facilitate the development and production of alternative/derivative clean energy sources that are being or may be developed in future, this Bill seeks to redefine ‘mineral oil’,” the draft said. The term as defined in the Bill includes not merely hydrocarbons but also the next-gen fuels viz. ‘other gases which are capable of being used as fuels occurring in association with mineral oils or can be produced from mineral oils such as hydrogen’. The Bill also seeks to foster investment in the exploration and production of oil and gas by offering a lease on stable terms and enabling the government to prescribe a compensation mechanism to protect the investment. The compensation shall be payable in case of suspension, revocation or cancellation of the lease or in case of restriction of access to the leased area. The Bill also seeks to explicitly enumerate the power of the government to prescribe rules for the extension of the period of the lease, the maximum or minimum area of the lease, a mechanism for determination of the economic life of the oilfield, terms for merger or combination of leases and resolution of disputes. It provides for the imposition of fines of up to Rs 1 crore for the first contravention of provisions of any rules. Subsequent contraventions will attract a fine of up to Rs 10 lakh per day. The Bill also seeks to empower the government to recover royalty, cess, lease or licence fee, penalty payment under the law, the draft said.