Shell’s 2020 carbon emissions fall on the back of fuel sales drop
Royal Dutch Shell, owner of the world’s largest fuel retail network, said on Thursday its total greenhouse gas emissions dropped 16% in 2020 as oil and gas sales fell sharply due to the coronavirus pandemic. Shell said in its annual report that total emissions from its oil wells to forecourt fuel sales fell to 1.38 billion tonnes of carbon dioxide equivalent last year, from 1.65 billion in 2019. “One of the major causes of this larger than expected reduction in 2020 was lower demand for energy, especially for oil and gas,” it said. Energy majors’ climate reporting differs in that some emissions data, for example the data Shell released on Thursday, includes planet-warming gases from the combustion of fuels they produce themselves plus the oil products they sell but are produced by another company. Others, like BP, only cover the former: emissions from the combustion of fuels made from crude oil they produce themselves. Net carbon intensity, the main measure the Anglo-Dutch focuses on in its energy transition strategy, dropped last year to 75 grams of CO2 equivalent per megajoules, a 4% reduction from 2019, Shell said. Carbon energy intensity means a company can increase its fossil fuel output while offsetting its carbon emissions or adding renewable energy to its product mix. Shell has begun a major overhaul to shift away from oil and gas to low-carbon energy, power trading and retail in order to reduce its greenhouse gas emissions to net zero by mid-century, including the use of offsets for residual emissions. Shell runs around 46,000 retail fuel stations. Its executives’ pay is linked to its success in reaching its climate targets. For a Factbox on Big Oil’s targets click
Centre unlikely to extend timeline for execution of norms aimed at cutting CO2 emission from vehicles from 2022
The Centre is unlikely to extend the timeline for the implementation of the second phase of Corporate Average Fuel Efficiency/ Economy (CAFE) norms for vehicle manufacturers, which aims at further reducing the CO2 emission from vehicles from April 2022. Sources said Union road transport minister Nitin Gadkari made this clear to the industry at a meeting held last week where he also flagged how the vehicle manufacturers have not been able to come up with a road map to push the production of flex-fuel engines, which can run on both conventional and clean fuels such as ethanol. Source said the industry body, in October, had assured Gadkari to come up with its roadmap for accelerating the production of flex-fuel engines by January. But they have not yet presented the report. The minister has urged the industry to take necessary steps to promote use of 100% ethanol as fuel in vehicles. The CAFE norms aim at lowering fuel consumption or improving fuel efficiency of vehicles and this is achieved by lowering CO2 emissions. The ‘Corporate Average’ in CAFE means the weighted average of the sales volumes for vehicle manufacturers. CAFE standards are applicable for vehicles running on petrol, diesel, CNG and LPG. The auto industry body, SIAM has been pursuing the government to defer the implementation of CAFE-2 regulations to 2024. The industry has claimed it is still recovering from the impact of Covid-19 and slow consumer demand. The CAFE-1 norm has been applicable since 2017 and the government has set April 1, 2022 for the implementation of the second phase. These CAFE norms call for cars to turn 30% more fuel efficient from 2022 and 10% or more by March 2021. Concurrently with BS VI, the original equipment manufacturers need to find efficient and clean power train options to meet the CAFE targets.
Gas still cheaper than firewood and other traditional fuels: Oil marketing companies
After hiking cooking gas prices by nearly 40% in about three months to record levels, Indian Oil, Hindustan Petroleum, and Bharat Petroleum have said in a joint statement that the gas was still cheaper than firewood and other traditional fuels. “Even at the current rates, liquefied petroleum gas (LPG) is cheaper than firewood/ other traditional fuels in many states, largely on account of its overall heating efficiency,” three state-run oil marketing companies said. “While the upfront per kg cost of firewood is cheaper, LPG is a more economical fuel in the long run when costs such as total volume of fuel consumed and handling costs are factored in.” Oil companies didn’t offer details on the source of their price data or assumptions for such a conclusion. The statement looks like an attempt at addressing the rising concerns that high prices may force poor consumers to switch back to traditional polluting fuels, offsetting the gains made by near-universal access to LPG achieved in recent years. Cooking gas prices are up by Rs 225 per cylinder since November, an unprecedented rise. In Delhi, a refill now costs Rs 819. Cooking gas prices have doubled since March 2014, Oil Minister Dharmendra Pradhan told Parliament on Monday. A sharp rally in international oil prices and near-absent subsidy have driven up cooking gas prices, making it harder for poor families to afford clean fuel. Last month, International Energy Agency highlighted India’s limited gas consumption. “While the government has broadened availability to LPG through different schemes to reach most Indian dwellings, nearly half of all households in 2019 continued to rely on traditional uses of biomass for cooking, mostly in rural areas,” it said. “Access to clean cooking goes beyond technical availability: it also extends to issues of adequacy, reliability, convenience, safety and affordability.” By providing subsidised connections to poor families in recent years, the government has pushed up access but refill rates among poor consumers have been dismal. In their statement, three state oil companies also referred to the health benefits of using LPG. “Research has shown that those exposed to air pollution are more susceptible to COVID-19, therefore doing everything to maintain LPG use among the poor is actually a direct health measure.”
Russia’s Rosneft to sell southern assets to focus on Vostok Oil, sources say
Rosneft is selling its three southern oil assets and could complete deals for all three by the end of May, sources told Reuters on Wednesday, as Russia’s top oil company shifts focus to the giant northern Vostok Oil project. Vostok Oil, in which global commodities trader Trafigura has a 10% stake, is one of Russia’s biggest oil projects, comparable in size with the exploration of West Siberia in the 1970s or the U.S. Bakken oil province over the past decade. Rosneft was selling its southern Stavropolneftegaz, Ingushneft and Dagneft with combined oil output of about 1 million tonnes per year, a fraction of the 205 million tonnes it pumped in 2020 (4.1 million barrels per day), four industry sources familiar with talks said. Cengeo, a private Russian company which focuses on mature oil fields, has already bought a 51% stake in Ingushneft and was expected to buy Stavropolneftegaz and Dagneft by the end of May, two sources said. Rosneft and Cengeo did not respond to requests for comment from Reuters. Rosneft has previously estimated that Vostok Oil, which will start production later this decade, would require more than 10 trillion roubles ($135 billion) in investments. After a call with Rosneft, several analysts had said last year Rosneft planned to sell some ‘brownfields’, or mature assets, in southern Russia, along with underperforming brownfields elsewhere, to raise capital to develop Vostok Oil. Crude oil from Stavropolneftegaz, Ingushneft and Dagneft is exported via Caspian Pipeline Consortium (CPC) system, in which Rosneft holds a minority stake. CPC pipeline ships Kazakh and Russian oil to the Black Sea. After the sale, Rosneft is expected to keep exports of gas condensate via CPC at least until the end of 2021, sources said. A joint venture between Rosneft and Royal Dutch Shell owns a 7.5% stake in CPC and there are no plans to sell it for now, sources added. CPC declined to comment.
Government policy targets of blending 20% ethanol in petrol by 2030
Government has been promoting use of ethanol as a blend stock with main automotive fuel like petrol in line with the National Policy on Biofuels -2018 under the Ethanol Blended Petrol (EBP) Programme. This policy envisages an indicative target of blending 20% ethanol in petrol by 2030. Department of Food & Public Distribution (DFPD) has informed that the production of ethanol varies from distillery to distillery and depends upon various factors viz. cost of raw material, conversion cost, efficiency of distillery plants etc. Several supply and demand side interventions have been initiated by the Government including enhancing scope of raw material for ethanol production and fixing remunerative prices of ethanol from different feedstocks being utilized for ethanol production. Based on the ethanol supply offers, Public Sector Oil Marketing Companies (OMCs) have allocated 3.255 billion liters for Ethanol Supply Year (ESY) (period from Dec. to Nov.) 2020-21 to be blended with petrol under the EBP Programme. In order to enhance the ethanol production capacity in the country, DFPD has informed that Government has notified a modified scheme on January 14, 2021 for extending financial assistance in the form of interest subvention on loans advanced by Banks/NCDC/IREDA/NBFCs and any other financial institutions to project proponents for different activities viz. setting up of new distilleries, expansion of existing capacity, installation of Zero Liquid Discharge (ZLD) System and Molecular Sieve Dehydration (MSDH) Column, etc. for production of first generation (1G) ethanol from feedstock such as cereals (rice, wheat, barley, corn, sorghum), sugarcane and sugar beet, etc. including granaries and surplus rice with Food Corporation of India (FCI). The Government also fixed remunerative prices of ethanol from such feedstock i.e. Rs 51.55 per litres from damaged food grains and Rs 56.87 per litres from FCI rice. This information was given by the Union Minister for Petroleum and Natural Gas Shri Dharmendra Pradhan in a written reply in the Lok Sabha.
US replaces Iran in India’s crude basket in 2020-21
In a major shift in India’s crude basket and bilateral trade, the country’s crude oil imports from Iran dropped to zero during the current financial year from a historic high of 27.2 million tonne (MT) in 2016-17. The majority of Iran crude was replaced by imports from the United States that increased from zero in 2016-17 to 10.8 MT during the April to January period of the current financial year. India started cutting Iran imports after the Donald Trump administration tightened the sanctions on the oil major and withdrew unilaterally from the nuclear deal. In 2015, Iran, the US, China, Germany, Russia, France, and the UK had signed the deal that led to the lifting of sanctions on Iran. However, the Trump administration withdrew the US from the deal in 2018 and re-imposed sanctions on Iran. The other countries that replaced Iran crude in India include Saudi Arabia, Iraq, and Nigeria. In 2017-18, the imports from Iran were seen at 22.6 MT, while it dipped to 23.9 MT and 1.7 MT respectively in 2018-19 and 2019-20. During the same period, crude oil imports from the US increased to 1.9 MT in 2017-18, 6.2 MT in 2018-19, and 10.3 MT in 2019-20, based on petroleum ministry data. During the April to January period, crude oil imports from the US stood at Rs 166.14 billion in value terms from zero in 2016-17. After Joe Biden took charge, there were speculations that the US may revisit sanctions on Iran. According to the media reports, Iran officials have already approached the Indian national oil companies to restart imports from that country. China on the other hand did not stop Iran imports despite the US sanctions. India is importing crude oil and gas from the US through a combination of term contracts and on a spot basis. During the same period, India’s crude oil and petroleum products import bill increased by 56 percent. The country’s import bill stood at Rs 5420 billion in 2016-17 and increased to Rs 8430 billion in 2019-20. Last week, Biden had decided to continue the national emergency declared with respect to Iran and to extend sanctions against that country. He added that ‘Iran continues to pose an unusual and extraordinary threat to the national security, foreign policy, and economy of the US.’
Centre collected Rs 6.58L cr in taxes on fuel
The Centre has collected Rs 6.85 lakh crore from the motorists among others towards taxes levied on petrol and diesel in the last three financial years from 2018-19 to 2020-21, said Union petroleum and natural gas minister Dharmendra Pradhan on Monday. In a written reply to the questions asked by Congress MP A Revanth Reddy among other members in Lok Sabha, he said the tax collection from petrol and diesel in 2013 was about Rs 52,537 crore. It was Rs 2,13 lakh crore in 2019-19, Rs 1.78 lakh crore in 2019-20 and Rs 2.94 lakh in 2020-21. The price of the domestic cooking gas cylinder refill increased from Rs 410.5 on March 1, 2014, to Rs 819 as of March 1, 2021. The price of petrol which was Rs 73.16 per litre on March 1, 2014, increased to Rs 91.17 (in Delhi) on March 1, 2021. The price of diesel went from Rs 55.48 per litre on March 1, 2014 to Rs 81.47 on the corresponding date in 2021. The school dropout rate at secondary level stood at 13.5 per cent, upper primary 2.9 per cent and 1.9 per cent at primary level in Telangana in 2018-19, the minister stated in his written reply The minister also explained that the prices of petrol and diesel have been made market determined by the government with effect from 26.06.2010 and 19.10.2014, respectively. Since then, the public sector Oil Marketing Companies (OMCs) take appropriate decision on the pricing of petrol and diesel in line with their international product prices, exchange rate, tax structure, inland freight and other cost elements. The prices of petroleum products in the country are linked to the price of the respective products in the international market. The taxes on petrol and other fuels imposed in various countries keep changing from time to time as per the policy of their respective governments, and in some countries, the percentage of taxes on petrol is higher than the current percentage of tax on petrol in India, the Union minister stated. The taxes are imposed for meeting the budgetary requirement of the government at the centre and state government in order to generate resources for infrastructure and other developmental items of expenditure keeping in view the present fiscal position. Taxes are increased or decreased depending on several factors like the requirement of the government, market situation etc, he said.
Cairn Energy shifts to onshore Egypt from N. Sea in deal flurry
Oil and gas producer Cairn Energy is shifting its focus to a growth portfolio onshore Egypt from declining offshore fields in the British North Sea in a flurry of deals worth around $1.5 billion which it announced on Tuesday. Cairn, in partnership with Ceiron, agreed to buy onshore fields in Egypt’s Western Desert from Royal Dutch Shell for up to $926 million and sell its stakes in British fields Catcher and Kraken to private firm Waldorf Production for $460 million. “We’re transitioning from that portfolio in decline into one where we see that we can build greater cashflow generation into the future,” Cairn Chief Simon Thomson told a conference call. Cairn, which produced around 21,000 barrels per day (bpd) last year, can boost its net share from the Shell assets to 50,000 bpd from 35,000 bpd within a couple of years, Thomson added. The deal would triple Cairn’s reserves. Cairn is also in talks with no set deadline with the Indian government about an arbitration award worth around $1.7 billion, but Cairn is actively pursuing alternatives, such as selling the consideration or enforcement, Thomson said.
Centre collected Rs 6.58L cr in taxes on fuel
The Centre has collected Rs 6.85 lakh crore from the motorists among others towards taxes levied on petrol and diesel in the last three financial years from 2018-19 to 2020-21, said Union petroleum and natural gas minister Dharmendra Pradhan on Monday. In a written reply to the questions asked by Congress MP A Revanth Reddy among other members in Lok Sabha, he said the tax collection from petrol and diesel in 2013 was about Rs 52,537 crore. It was Rs 2,13 lakh crore in 2019-19, Rs 1.78 lakh crore in 2019-20 and Rs 2.94 lakh in 2020-21. The price of the domestic cooking gas cylinder refill increased from Rs 410.5 on March 1, 2014, to Rs 819 as of March 1, 2021. The price of petrol which was Rs 73.16 per litre on March 1, 2014, increased to Rs 91.17 (in Delhi) on March 1, 2021. The price of diesel went from Rs 55.48 per litre on March 1, 2014 to Rs 81.47 on the corresponding date in 2021. The school dropout rate at secondary level stood at 13.5 per cent, upper primary 2.9 per cent and 1.9 per cent at primary level in Telangana in 2018-19, the minister stated in his written reply The minister also explained that the prices of petrol and diesel have been made market determined by the government with effect from 26.06.2010 and 19.10.2014, respectively. Since then, the public sector Oil Marketing Companies (OMCs) take appropriate decision on the pricing of petrol and diesel in line with their international product prices, exchange rate, tax structure, inland freight and other cost elements. The prices of petroleum products in the country are linked to the price of the respective products in the international market. The taxes on petrol and other fuels imposed in various countries keep changing from time to time as per the policy of their respective governments, and in some countries, the percentage of taxes on petrol is higher than the current percentage of tax on petrol in India, the Union minister stated. The taxes are imposed for meeting the budgetary requirement of the government at the centre and state government in order to generate resources for infrastructure and other developmental items of expenditure keeping in view the present fiscal position. Taxes are increased or decreased depending on several factors like the requirement of the government, market situation etc, he said.
Japan-backed AG&P says gets approval to develop Philippines LNG terminal
Atlantic Gulf & Pacific Company (AG&P) said on Monday its Philippines subsidiary has received the green light to develop a liquefied natural gas (LNG) import and regasification terminal in Batangas Bay, south of Manila. The firm, part owned by Osaka Gas and the Japan Bank for International Cooperation, said the Philippines’ energy department has issued it a notice to proceed to develop the terminal, known as Philippines LNG, which will provide the fuel to power plant, industrial and commercial customers and other consumers. Philippines LNG will be the fifth planned LNG import terminal in the Southeast Asian nation, which is seeking the fuel as the Malampaya gas field in western Philippine waters is expected to run dry this decade. Four other terminals worth about 65 billion pesos ($1.34 billion) are at various stages of approval or financial closure. Philippines LNG will have an initial capacity to deliver up to three million tonnes per annum (mtpa) of regasified LNG, with additional capacity for liquid distribution, AG&P said in a statement. It will also have scalable onshore regasification capacity of 420 million standard cubic feet per day (mmscfd) and almost 200,000 cubic metres (cbm) of storage, AG&P said. The statement did not disclose financial details of the project.