Indian Oil Corporation to supply oxygen to hospitals in Delhi, Haryana, Punjab
After Reliance Industries Ltd, state-owned Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) have begun diverting oxygen produced at their refineries to supplement the availability of medical oxygen in states worst hit by COVID-19. In a statement, IOC said it has “begun the supply of 150 tonnes of oxygen at no cost to various hospitals in Delhi, Haryana and Punjab.” “The first batch of the lifesaver medical grade oxygen was dispatched today to Maha Durga Charitable Trust Hospital, New Delhi,” it said. “Delhi is already facing an oxygen emergency situation.” In the face of a massive surge in demand for medical oxygen during the second wave of the pandemic, IOC has diverted the high-purity oxygen used in its Mono Ethylene Glycol (MEG) unit to produce medical-grade liquid oxygen at its Panipat refinery and petrochemical complex in Haryana. The throughput of the unit has also been scaled down for a more critical cause. In a separate statement, BPCL said it has started supply of 100 tonnes of oxygen at no cost. “The company will be supplying around 100 tonnes per month,” it said. With average daily cases of COVID-19 rising again since last one month, the demand for oxygen has significantly risen. In fact, in most parts of the country, the cases are hitting new peak, thereby disrupting the demand-supply scenario for medical oxygen. Last week, Reliance’s twin oil refineries in Jamnagar in Gujarat through minor process modification converted industrial oxygen into medical-use oxygen that can be administered to COVID-19 patients low on oxygen. In all, 100 tonnes of oxygen is being supplied from the Jamnagar refineries free of cost. BPCL is also supplying 1.5 tonnes per day of medical oxygen to Kerala from its Kochi Refinery. Last year, BPCL had supplied around 25 tonnes of medical oxygen when the average daily cases had risen in October-November. The Kochi Refinery has a provision to produce and store liquid oxygen of 99.7 per cent purity. Oil refineries can produce limited volumes of industrial oxygen in air-separation plants meant for nitrogen production. Scrubbing out other gases such as carbon dioxide can convert it into medical-use oxygen with 99.9 per cent purity. Reliance operates the world’s largest oil refining complex at Jamnagar in Gujarat. IOC Chairman S M Vaidya reiterated the firm’s unstinted support to the country at this critical hour in every possible way. “All through the pandemic, our prime focus has been to ensure the supply of essential fuels 24X7. We have also stepped up the production of raw material for PPEs, and we are now providing lifesaving medical oxygen to hospitals. “Our expertise and assets, including refineries, pipelines, petrochemical units, bottling plants, terminals and aviation fuel stations, will continue to serve the people despite the stiff challenges”, he added. As the COVID-19 cases in the country continue to rise, the demand for medical-grade oxygen too is growing rapidly. “The current initiative by IOC aims at supporting the states in fighting the battle against COVID-19,” the statement added.
Oil falls amid surging coronavirus infections in India, other countries
Oil prices fell on Monday amid mounting concerns that surging caseloads of coronavirus infections in India and other countries will lead to stronger measures and hit economic activity, along with demand for commodities such as crude. Brent crude was down 43 cents, or 0.6%, at $66.34 a barrel by 0139 GMT, after rising 6% last week. U.S. oil was down 42 cents, or 0.7%, at $62.71 a barrel, having gained 6.4% last week. “With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi. India reported 261,500 new coronavirus infections on Sunday, taking cases to nearly 14.8 million, second only to the United States, which has reported more than 31 million infections. India’s deaths from COVID-19 rose by a record 1,501 to reach a total of 177,150. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said in a statement late on Sunday. Japanese companies believe the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for a further blow to business, a Reuters monthly poll showed. Japan has had far fewer COVID-19 cases than many other major economies, but concerns about a new wave of infections are rising fast, according to their responses in the poll. A slower rollout of vaccinations compared with other Group of Seven advanced countries and the lack of a sense of crisis among the public will trigger a new wave of infections, some companies wrote in the poll.
Oil to hit $40 by 2030 if climate goals are met -consultancy
Global oil prices could drop to around $40 a barrel by 2030 if governments push to reduce fuel consumption in step with U.N.-backed plans to limit global warming, a leading energy consultancy said on Thursday. In a report outlining a scenario where the world acts decisively to tackle greenhouse gas emissions by electrifying transport and industry, Edinburgh-based Wood Mackenzie said oil consumption would begin a steep drop as early as in 2023. The decline in demand would accelerate to a rate of 2 million barrels of oil per day (bpd) to reach 35 million bpd by 2050, accounting for a 60 per cent drop in carbon emissions from oil use from today’s levels. Oil consumption hit a record of around 100 million bpd in 2019 and is expected to recover strongly this year after cratering last year due to the coronavirus epidemic. As a result, oil prices would begin to slip later this decade, WoodMac said in its report. Under its Accelerated Energy Transition scenario, it expects Brent crude prices to average $40 per barrel by 2030, compared with current prices of around $65 a barrel. By 2050, Brent may slide to $10 to $18 a barrel. “If we move to keep global warming to the 2 degrees Celsius limit set by the (U.N.-backed) Paris Agreement, the energy matrix will change – and change profoundly,” said WoodMac’s Ann-Louise Hittle. The world’s current policies are nevertheless far from aligned with the Paris agreement, with temperatures currently on course to rise by 3 degrees Celsius from pre-industrial levels by 2100, WoodMac stressed. A rapid decline in demand also means that existing sources of oil supplies would be sufficient to meet all future demand, with only limited need for new oifield developments, WoodMac said. A sharp fall in oil demand and prices in the coming decades would have a profound impact on major oil producers such as members of the Organization of the Petroleum Exporting Countries, WoodMac said. “The steep fall in demand prevents those key oil producers from managing the market and supporting prices in the way it does today. Despite losing their price-setting ability, however, low-cost Middle East OPEC producers remain core providers of oil.” Natural gas, the least polluting fossil fuel, would, however, fare better than oil by replacing coal for power generation, particularly in fast-growing Asian economies, the report added. As oil prices declined, gas would eventually trade at a premium to oil under WoodMac’s scenario. Benchmark U.S. Henry Hub prices are forecast to trade at $3 to $4 per thousand cubic feet (mcf) under WoodMac’s scenario. Gas demand in Asia would increase on average by 1.5 per cent a year through to 2050, offsetting declines in more mature markets, which would be switching to renewables from gas.
Transporters’ body terms 16 paise cut in petrol, diesel rates ‘ostentatious’, seeks more reduction
Transporters’ body AIMTC on Friday termed the recent 14-16 paise per litre cut in petrol and diesel prices across major cities as “ostentatious”, and said there is still a room to reduction their prices by up to Rs 40 per litre. In a statement, the All India Motor Transport Congress (AIMTC), which claims representing over 95 lakh truckers and entities, said it is an open fact that this small cut in the petrol and diesel prices has a bearing on the election in four states – West Bengal, Tamil Nadu, Kerala and Assam. All India Motor Transport Congress Chairman (Core Committee) Bal Milkit Singh said, “We welcome the miniscule decrease in prices of petrol and diesel prices by about 14-16 paise per litre across major cities, which is on account of a correction in the price of Brent crude to about USD 62 per barrel in early April 2021 from a peak of USD 70 a barrel in early-March 2021. Currently, the prices of petrol and diesel in the national capital stand at Rs 90.40 and Rs 80.73, respectively, he said. “This suggests that there is still a room for reduction of over Rs 40 in each case.” Singh said the reduction in prices is “cosmetic in nature and too little to make any tangible difference in the current scenario”. Bringing them down further by over Rs 40 “is the need of the hour and the people of the country need relief from the adverse fall-out of second wave of the coronavirus pandemic”, he added. AIMTC also said that in May 2014 when the international crude oil was USD 105 per barrel, the petrol price was Rs 71.41 and diesel price was Rs 56.71. “In December 2020, when crude oil was at USD 47.58 a barrel, petrol in India increased to Rs 90.34 and dielsel Rs 80.51,” he said. The current crude prices is of July 2009 level when crude oil was around USD 64.82 per barrel and the petrol prices in the country was Rs 40.62 and diesel price was Rs 30.86, Singh said in the statement.
Petrol, diesel price revision on hold again a day after cut in rates
Fuel prices in the country remained unchanged on Friday a day after oil marketing companies decided to cut the retail price to pass the benefit of softer global oil prices to the consumers. Accordingly, pump price of petrol and diesel remained at Thursday’s level of Rs 90.40 a litre and Rs 80.73 a litre respectively in Delhi. The price of the two auto fuels had fallen by 16 paise and 14 paise per litre respectively on Thursday after a 15 day break when OMCs kept its prices static. Across the country as well the petrol and diesel prices remained unchanged on Friday but its retail levels varied depending on the level of local levies on respective states. Premium petrol, however, continues to remain over Rs 100 a litre in Mumbai and several other cities across the country. The OMCs went on a price cut for the first time this year on two consecutive days — March 24 and 25 after keeping oil prices steady for the past 24 days. It again reduced the price on March 30. Thereafter, fuel prices have remained unchanged for the past 15 days before falling again on April 15. Earlier, petrol and diesel prices increased 26 times in 2021 with the two auto fuels increasing by Rs 7.46 and Rs 7.60 per litre respectively so far this year. With global crude rising again and crossing $ 67 a barrel mark, OMCs may have to revise fuel prices upwards again. OMCs benchmark retail fuel prices to a 15-day rolling average of global refined products’ prices and dollar exchange rate.
Oil falls amid surging coronavirus infections in India, other countries
Oil prices fell on Monday amid mounting concerns that surging caseloads of coronavirus infections in India and other countries will lead to stronger measures and hit economic activity, along with demand for commodities such as crude. Brent crude was down 43 cents, or 0.6%, at $66.34 a barrel by 0139 GMT, after rising 6% last week. U.S. oil was down 42 cents, or 0.7%, at $62.71 a barrel, having gained 6.4% last week. “With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi. India reported 261,500 new coronavirus infections on Sunday, taking cases to nearly 14.8 million, second only to the United States, which has reported more than 31 million infections. India’s deaths from COVID-19 rose by a record 1,501 to reach a total of 177,150. Hong Kong will suspend flights from India, Pakistan and the Philippines from April 20 due to imported coronavirus infections, authorities said in a statement late on Sunday. Japanese companies believe the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for a further blow to business, a Reuters monthly poll showed. Japan has had far fewer COVID-19 cases than many other major economies, but concerns about a new wave of infections are rising fast, according to their responses in the poll. A slower rollout of vaccinations compared with other Group of Seven advanced countries and the lack of a sense of crisis among the public will trigger a new wave of infections, some companies wrote in the poll.
Natural gas leading source of EU’s power emissions: analysis
Gas power plants overtook lignite coal plants in 2020 to become the European Union’s largest single source of emissions from electricity, an analysis of the bloc’s Emissions Trading Scheme showed Friday. Gas plants produced 231 million tonnes of carbon dioxide across the continent in 2020 according to the analysis conducted by energy think tank Ember. Emissions from coal plants meanwhile plunged, with lignite emissions falling 23 percent in 2020 compared with 2019. Charles Moore, Ember’s European programme lead, said gas was now the biggest emitter thanks to cheaper renewables and carbon pricing squeezing coal out of the market. But he warned that nations investing heavily in gas infrastructure risked losing out as the price of renewables such as wind and solar continues to fall over time. “Nations making short-term decisions to switch coal for gas have ignored the mega-trend from fossil fuels to renewables,” Moore told AFP. “Investments in new large gas plants now, with normal lifetimes of 25 years, will already become stranded assets in the 2030s.” If emissions from hard coal power plants are factored in, total coal power emissions in the EU are now 58 percent below levels registered in 2013. The analysis showed that overall emissions from the power sector were responsible for just over 50 percent of the total emissions covered by the Emissions Trading Scheme, down one percent from 2019. In absolute terms, power sector emissions fell 140 million tonnes, or 17 percent, year-on-year in 2020. – ‘Pace of change’ – Natural gas produces roughly half the carbon pollution as lignite coal per unit of energy produced. While emissions from lignite and hard coal combined were higher than natural gas, they were considered as separate fuels in the analysis given the divergence on cost and emissions intensity. Low gas prices last year and robust carbon pricing meant that gas was cheaper even than the historically inexpensive lignite last year. In 2020 gas plants accounted for 33 percent of power sector emissions in the ETS, up from 16 percent in 2013. Gas in 2020 was the largest emitting fuel used in 11 EU countries, the analysis found, including in Britain, France, Spain, Belgium, Austria, the Netherlands, Italy, Malta, Latvia and Ireland for the first time. The EU is expected next week to finalise its criteria for what constitutes sustainable investments, with some states, particularly from the east of the bloc, pushing for natural gas to be included. Moore said these countries had “not yet understood the pace of change” in renewable energy prices. “As the deployment of renewables accelerates to deliver Europe’s climate targets, gas will follow coal into Europe’s history,” he said.
Asian spot LNG prices rise as China replenishes inventories
Asian spot prices for liquefied natural gas (LNG) rose this week as China, Japan and South Korea sought supply in an early move to stock up for winter, industry sources said. The average LNG price for June delivery into Northeast Asia was estimated at about $7.60 per million British thermal units (mmBtu), traders said. Last week, cargoes for May delivery were about $7.30 per mmBtu. “Companies are stocking up earlier for the next winter, after all the supply disruptions from the past months,” a London-based trader said. A colder than average winter in the northern hemisphere and a ship congestion at the Suez canal, the fastest route between Asia and Europe, have boosted prices since December. Japan Petroleum Exploration Co Ltd was seeking a cargo for delivery between May 22 and June 13 to the Soma terminal. Distributor ENN Energy Holdings Ltd. bought at least 12 cargoes for delivery between July and February in China, traders said. Pavilion Energy said on Thursday it had imported Singapore’s first carbon-neutral LNG cargo. Europe is also storing up gas as a cold spell sustained heating demand and slowed stock replenishment, which are below historical levels for this time of the year, traders said. The amount of gas flowing to U.S. LNG export plants averaged 11.0 bcfd so far in April. The volume would top March’s monthly record of 10.8 bcfd, as low internal prices compensate for the cost of liquefying and transporting the super-chilled fuel to Asia, traders said Analysts, however, said they do not expect LNG feedgas to break March’s record in April because flows were expected to decline this month due to planned work on a couple of facilities and the pipelines serving them, including Cheniere Energy Inc’s Corpus Christi facility in Texas and Cameron LNG’s plant in Louisiana.
A $12.5 billion deal shows Saudi oil still eclipses all else
Saudi Arabia is celebrating one of the biggest foreign-investment windfalls in its history after netting more than $12 billion by selling off a stake in the oil pipelines that traverse the desert kingdom. But the country may also be facing an uncomfortable reality as a result. As carefully cultivated relationships with firms such as BlackRock Inc. and SoftBank Group Corp. have yet to draw in the desired investment, it’s turning to the jewels of its energy industry to attract new money. Last week’s sale of the stake to EIG Global Energy Partners LLC shows how reliant Saudi Arabia is on its traditional mainstay and the challenges Crown Prince Mohammed bin Salman faces in diversifying the country away from oil and gas to achieve his Vision 2030 goal. The likes of BlackRock and SoftBank haven’t invested back into the country as much as the government might have hoped, while foreigners favor revenue-rich energy assets over tourism and entertainment. “Entertainment and tourism might have had a better year of foreign direct investment in 2020 if Covid had not happened,” Karen Young, resident scholar at the American Enterprise Institute in Washington, said via e-mail. “But all the same, the core investors who see value in Saudi will be interested in the largest and most profitable sector, and that is still very much oil and energy.” A $12.5 billion deal shows Saudi oil still eclipses all elseThough EIG, the Washington-based private equity firm led by Chief Executive Blair Thomas, is a prominent investor in North America and Europe, it barely resonates in Saudi circles. It hasn’t made a single equity purchase in the Middle East until now, let alone the kingdom itself, and its management team has never showed at Saudi Arabia’s marquee “Davos in the Desert” conference, an event attended routinely by investment leaders from The Blackstone Group Inc.’s Stephen Schwarzman to Ray Dalio of BridgeWater Associates LP and the Carlyle Group’s David Rubenstein. Saudi Arabia attracted $5.5 billion in net FDI flows in 2020, equivalent to about 1% of its economic output, according to data compiled by Bloomberg, which means the EIG deal brings more than twice last year’s total. The government’s goal is 5.7% by 2030, hence the temptation to offer up prized energy assets such as parts of Saudi Aramco, the state-owned energy giant. “This is the latest milestone in an ongoing shift,” said Jim Krane, a fellow at Rice University’s Baker Institute for Public Policy in Houston. “Mohammed bin Salman and his advisers keep finding novel ways to coax cash out of Aramco without disrupting its operational capability. Right now it’s cash that the kingdom needs and Aramco controls the spigot.” EIG beat out rivals including Apollo Global Management Inc. and Brookfield Asset Management Inc. to buy the stake. It’s now putting together a consortium of other investors to join the deal. While several global investors have forged closer ties with Saudi Arabia in recent years, most of them see it more as a source of capital than an investment destination. The kingdom’s flagship Public Investment Fund, or PIF, is the largest investor in Softbank’s $100 billion technology vehicle, with an allocation of $45 billion. The PIF has also pledged as much as $20 billion to help Blackstone Group LP build the world’s largest infrastructure fund. The reasons are manifold, ranging from the inconsistency of the Saudi legal system to an economic slump as the country adjusts to lower oil prices. The 2017 arrest and incarceration of scores of Saudi businessmen at Riyadh’s Ritz Carlton hotel and the murder of dissident writer Jamal Khashoggi the following year have hardly helped. FDI into Saudi Arabia peaked between 2008 and 2012, averaging more than $26 billion. During those years, it was mostly driven by large refinery and petrochemical projects developed with foreign partners at a time when oil averaged over $90 a barrel. The subsequent slide in oil has seen average FDI into Saudi drop to about $6 billion a year. “Despite the measures to liberalize and open the economy for investment into new industries, FDI has not come in the way originally planned,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. FDI may be set to pick up further this year. The kingdom signed agreements with developers including Electricite de France SA and Marubeni Corpo. to build solar power plants last week, and later this year it is likely to complete the sale of the world’s largest desalination plant. In 2020, FDI rose 20%, in part driven by deals with Alphabet Inc. and Alibaba Group Holding Ltd. to develop cloud-computing hubs that Saudi Arabia said were worth a combined $1.5 billion. In selling assets of its main state-owned energy explorer, Saudi Arabia is following a model successfully implemented by neighboring Abu Dhabi. Instead of pursuing an initial public offering of its state-owned energy firm Adnoc, the emirate has raised more than $20 billion in recent years by bringing international investors into some of its key assets. EIG studied some of the Adnoc assets that were on offer but couldn’t reach an agreement. Hence, it didn’t want to lose out on the Aramco transaction, a person familiar with the matter said. Saudi Aramco is encouraged by the valuation and the interest generated for the pipelines deal, meaning the oil giant may pursue more disposals in the coming years, people familiar with the matter said. It has already entrusted boutique investment bank Moelis & Co with formulating a strategy for selling stakes in some subsidiaries, people familiar with the matter said in December. “It’s a great deal for Aramco, but also a new kind of investment strategy, in that it is “giving up” much more in terms of investor access to information, control over operations than an IPO does,” said Young of the American Enterprise Institute. “It is a real partnership, a long-term effort with outsiders, which is an entirely new level of trust outside of the firm and the government.” Founded in 1982, EIG has committed more than
Shell flags likely fall in first-quarter fuel sales
Royal Dutch Shell expects its fuel sales to fall or at best be broadly steady for the first quarter, the world’s biggest fuel retailer said on Wednesday, indicating fuel demand recovery has remained slow amid coronavirus restrictions. In a trading update, Shell said it saw refined oil product sales at 3.7-4.7 million barrels per day (bpd) for the first quarter compared with just under 4.8 million bpd in the last quarter of 2020. It had previously forecast sales of 4-5 million bpd. Refinery utilisation rates in the quarter stood at 71%-75%, compared with a forecast of 73%-81%. Shell’s refining margins have improved to around $2.6 per barrel in the quarter from $1.6 in the previous quarter. In gas, Shell said it expected trading results to be “significantly below average”. Shell sees its first-quarter liquefied natural gas (LNG) production at 7.8-8.4 million tonnes, compared with 8.2 million in the previous quarter and a forecast of 8-8.6 million tonnes. Total upstream production was expected to rise to 2.4-2.48 million barrel of oil equivalent, at the lower end of the forecasted range, from 2.37 million in the fourth quarter of 2020. An extreme cold snap in Texas is expected to have shrunk its output by 10,000-20,000 bpd and to shave up to $200 million from its adjusted first-quarter earnings, due to be reported on April 29. Benchmark crude prices in the first quarter rose around 24% and were trading near $63 a barrel on Wednesday.