Govt to offer six oil & gas blocks in unexplored Vindhyan, Bengal basins
The government is set to offer six blocks in the unexplored Vindhyan and Bengal sedimentary basins for oil and gas exploration. Under a new policy, the Centre will not charge royalties on production from companies operating in these areas. The Directorate General of Hydrocarbons (DGH) will be inviting bids for seven oil and gas blocks during the fourth round of bidding under the Open Acreage Licensing Policy (OALP), likely to open on August 28, sources in the know said. The only block on offer in an already explored area in OALP-IV will be in the Rajasthan basin. Investors will get a window of 60 days to submit their bids. The government sees this as a milestone in the country’s hydrocarbon sector, as investments so far were limited to only seven of the 26 sedimentary basins in the country. According to the latest DGH estimates, the 26 basins have in-place resources of 41.872 billion tonnes of oil-equivalent (BTOE), of which 29.796 billion tonnes is undiscovered hydrocarbons. Bids will be floated after companies submit expressions of interest for these areas, incentivised by a February 19 decision by the Cabinet that waived royalties for unexplored blocks. It also stated that in basins where there was no commercial production, exploration blocks would be bid out exclusively on the basis of exploration work programme, without any revenue or production share to the government. The move is likely to draw more interest from global oil and gas majors, which had not shown much interest in the first three rounds of the OALP. The Vindhyan basin covers areas under the Son valley, Bundelkhand and Rajasthan, while the Bengal basin is in West Bengal and extends into the offshore region of the Bay of Bengal. The seven category-I explored basins in India are Cambay, Mumbai Offshore, Rajasthan, Krishna Godavari, Cauvery, Assam Shelf, and Assam-Arakan Fold Belt. Contracts for 32 blocks under the second and third rounds were awarded on July 16. Those rounds saw participation from private players like Vedanta, BP and Reliance Industries, and state-run majors like ONGC, Oil India and Indian Oil Corporation. The first OALP bid round was launched by the government in January 2018, and received 110 bids for 55 blocks covering 59,282 sq km area. The blocks were awarded in October 2018 and production from the first round blocks is expected by 2023. To achieve the target of reducing crude oil imports by 2022, state-run companies have increased their share of investment in the recent years. Between 2016-17 and 2018-19, ONGC made an investment of about Rs 750 billion, while Oil India Rs 96.89 billion in exploration and production activities. Investments made by private and joint venture companies during the period were $562 million under the production sharing contract regime, which was in place before the OALP.
Frontline buys 10 oil tankers from Trafigura for $675 mln
Frontline will buy 10 Suezmax oil tankers from Trafigura in a cash and share deal worth up to $675 million, and may buy a further four vessels later, the two companies announced on Friday. The deal will allow Frontline, which is controlled by Norwegian-born billionaire John Fredriksen, to boost its dividend in the time to come, the Oslo-listed tanker operator said. “The structure of the transaction creates an immediate impact to our earnings at a time when we expect freight rates to increase significantly,” Frontline Chief Executive Robert Hvide Macleod said in a statement. Trafigura will take an 8.5% stake in Frontline, valued at $128 million, and will receive a cash payment of between $538 million and $547 million. The vessels were all built in 2019 and have been fitted with exhaust gas cleaning systems.
Saplings planted at Goa fuel pump to absorb harmful petroleum fumes
Bamboo palm saplings which absorb benzene and other formaldehyde emitted from petroleum vapour have been planted at an Indian Oil petroleum pump in the heart of Panaji city. Three areca palm and two spider plant saplings were planted by North Goa district collector R Menaka. “These special breeds of plants contribute to an eco-friendly environment as they absorb benzene and other formaldehyde generated from petroleum vapours at pumps,” Siddhartha Swarup, chief divisional retail sales manager, Indian Oil, Goa, told TOI. The bamboo palm is popular in purifying air due to its tropical look and insect-repelling quality, Swarup said. “It packs a big punch when it comes to purifying the air. The bamboo palm can remove not only substances like benzene and formaldehyde but also chloroform, carbon monoxide and xylene,” he added. Under the Swachh Bharat Mission, Menanka also inaugurated a renovated toilet facility at the petrol pump in the vicinity of the Panaji Kadamba bus stand for both male and female customers visiting the pump. The toilet facility, as well as drinking water with a purifier and water cooler, is available at no cost to customers at the petrol pump. Menaka discouraged single-use plastic by distributing jute bags to customers at the petrol pump at the end of the programme.
India could review long-term LNG contract prices: Oil minister Pradhan
India will look at reviewing the pricing of its long-term liquefied natural gas (LNG) deals at an “appropriate time” due to a fall in spot prices, oil minister Dharmendra Pradhan said on Monday. “We will look at reviewing long-term LNG contracts,” Pradhan said at a natural gas event in New Delhi. The spot price of imported LNG into Japan, one of world’s biggest importers of the super-cooled fuel, has more than halved in the last year. This has led buyers in Japan and China to request delays in term cargoes, while many other countries are considering lifting lower term volumes, experts have said. “Long-term contracts are supposed to be honoured. We will look at an appropriate time (to review). In the past also we had renegotiated the deals,” Pradhan said. India’s biggest gas importer Petronet LNG Ltd said earlier this month that it would consider renegotiating its long-term LNG supply deals if spot prices remained weak for a prolonged period. “We have to be sensitive to the international market. If spot prices continue to be low for 2-3 years then you don’t have much of a choice, and there would be a case to look at renegotiation,” Prabhat Singh, Petronet’s managing director, told Reuters. Pradhan said India is investing up to 5 trillion rupees ($70 billion) to boost its natural gas sector, including city gas distribution projects, setting up LNG liquefaction facilities and natural gas exploration. Prime Minister Narendra Modi has set a target to raise the share of natural gas in the country’s overall energy mix to 15% by 2030 from the current 6.2%.
Air India owes Rs 4,500 crore in fuel dues; hasn’t paid in 200 days: Oil firms
Air India owes three state-owned oil firms close to Rs 4,500 crore in unpaid fuel bills with payments being delayed by almost seven months, forcing retailers to snap supplies, senior officials said on Friday. Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) on Thursday afternoon stopped jet fuel or ATF supplies to Air India at six airports – Kochi, Pune, Patna, Ranchi, Vizag and Mohali – over payment defaults. “Air India has a 90 day credit period, which means they have to make payment for fuel they buy today by November 21. But Air India had not been making payments and the credit period was now over 200 days,” a senior official at one of the three state-owned oil firms said. Total unpaid dues to three fuel retailers stand at close to Rs 4,500 crore. “They (Air India) offered to pay Rs 60 crore which is a drop in the ocean of what they owe,” another official at one of the fuel retailers said. IOC, BPCL and HPCL more than a week back jointly wrote to Air India seeking expeditious clearance of the dues, failing which they will be constrained to take action. “Air India however failed to provide a clear roadmap to clear dues, forcing us to stop supplies,” the official said. Another official said Air India gets financial support from the government while for oil firms there is no such help. “Aviation Turbine Fuel (ATF) pricing was deregulated in April 2002. And since then we have to run this business without any subsidy support from the government,” he said. At present, the government only provides some subsidy on LPG to help roll out its ambitious Ujjwala scheme of providing free cooking gas connections to poor. There is also a subsidy on kerosene supplied through the public distribution system (PDS). A senior Air India official had on Thursday said that oil firms stopped fuel supplies to the airline at Cochin, Visakhapatnam, Mohali, Ranchi, Pune and Patna around 4 pm. Air India spokesperson had on Thursday stated that “in the absence of equity support, Air India cannot handle the huge debt service liabilities”. “Our financial performance, however, this fiscal is very good and we are moving towards a healthy operating profit. The airline despite its legacy issues is performing very well,” he had added. Air India has debt of over Rs 58,000 crore.
ONGC to drill 46 wells in Mehsana Asset at the cost of Rs 500 crore
Oil and Natural Gas Corporation (ONGC), the country’s largest producer of oil and gas is planning to drill 46 exploratory wells in 12 onshore Mining Lease (ML) blocks in Mehsana district in Gujarat at the cost of Rs 500 crore. “ONGC has identified 46 wells for Exploratory drilling in 12 onshore ML blocks in Mehsana district, Gujarat covering Linch, Shobhasan, Kadi and Mansa oil fields,” the company said in an application seeking environmental clearance from the Ministry of Environment, Forest and Climate Change (MoEFCC). ONGC said hydrocarbon reserve data obtained from various oil fields drilled in the region have shown very encouraging results and a lot of scopes still exists in exploring new sub-surface structures in the area for hydrocarbons. The company has so far drilled more than 500 wells in Mehsana asset, including exploratory wells. Oil minister Dharmendra Pradhan on Thursday laid the foundation stone for ONGC’s North Kadi Polymer project, the second heavy oil polymer flooding project being developed by the company in Mehsana asset. According to the company’s 2018-2019 annual report, ONGC had initiated a pilot heavy oil polymer flooding project in Bechraji oil field. The company’s crude oil production from onshore fields in the state of Gujarat has been on a steady rise in the last few years, data provided by the oil ministry showed. ONGC’s crude oil production from onshore fields in Gujarat in the first four months (April-July) of the current financial year (2019-2020) increased 2.19 percent to 1,537 Thousand Tonne, as compared to the corresponding period a year ago. The company had earlier in April also applied for environment clearance for drilling 145 development wells across 30 mining leases in the Cambay basin at the cost of Rs 2,393 crore. The company plans to spend close to Rs 32,920 crore in the current financial year (2019-2020).
Britain’s Cuadrilla pauses gas fracking after earth tremor
British shale gas company Cuadrilla has paused fracking at its Preston New Road site in Lancashire, northwest England, due to an earth tremor late on Wednesday. Cuadrilla, which restarted fracking at the site last week, repeatedly had to stop operations last year under Britain’s traffic light regulation system, which immediately suspends work if seismic activity of magnitude 0.5 or above is detected. “We can confirm that a micro seismic event measuring 1.55 ML (local magnitude) on the Richter scale occurred after we had completed the hydraulic fracturing programme for the day at our Preston New Road site,” Cuadrilla said in a statement. It said the well’s integrity had been checked and operations would be paused for 18 hours, as per the rules. Fracking, or hydraulically fracturing, involves extracting gas from rocks by breaking them up with water and chemicals at high pressure. Following last year’s stop-start operations Cuadrilla said it is using a thicker fracking liquid this time round, which it hoped would lead to fewer seismic events. The government last week signalled support for the industry and is keen to cut the country’s reliance on imports of natural gas, which is used to heat around 80% of Britain’s homes. However, it is fiercely opposed by environmentalists who say extracting more fossil fuel is at odds with Britain’s commitment to reduce greenhouse gas emissions. “Fracking just isn’t part of the future if the government is serious about avoiding climate breakdown,” said Jamie Peters, campaigner at Friends of the Earth. Britain in June became the first G7 country to enshrine in law a target to reach net zero greenhouse gas emissions by 2050, which will require less use of natural gas. Cuadrilla is 47.4% owned by Australia’s AJ Lucas, while a fund managed by Riverstone holds a 45.2% stake.
India’s July petrol imports hit highest in at least eight years
India’s July crude oil imports declined from a year earlier, while petrol imports climbed to their highest since at least April 2011, data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC) showed on Wednesday. Crude oil imports into the world’s third-largest consumer declined 1.2% from a year earlier to 19.34 million tonnes, but increased 14.6% from the previous month. Petrol imports rose to 230,000 tonnes in July, the highest since PPAC data going back to 2011. Government data published earlier this month showed sales of gasoline, or petrol, were 8.8% higher from a year earlier at 2.52 million tonnes. LNG imports, meanwhile, fell to their lowest since February 2018 at 850,000 tonnes. India’s imports of crude oil have stalled in recent months, with both coal and liquefied natural gas (LNG) also soft. This could be attributed to Indian refiners adjusting to the loss of cargoes from Iran after the United States did not extend waivers to buyers of Iranian crude beyond the beginning of May. Meanwhile, imports of oil products rose by about 9% from a year earlier to 2.81 million tonnes. Year-on-year exports fell 5% last month to 5.07 million tonnes, the data showed. Exports in Naphtha fell to their lowest since October 2015 at 400,000 tonnes.
HPCL to invest Rs 74,000 crore in five years
ONGC-owned Hindustan Petroleum Corporation(HPCL) is planning to invest around Rs 74,000 crore over the next five years to expand capacity. The Navaratna company plans to invest around Rs 14,900 crore in the current fiscal, chairman Mukesh Kumar Surana told shareholders after the annual general meeting here Wednesday evening. “We are focused on strengthening refining and marketing through expansion of our refining capacity, supply chain capabilities and customer reach. “In addition, the thrust is on creating new levers of growth by establishing a strong presence in petrochemicals, scaling up footprints in natural gas and expanding marketing overseas,” he said. The company, which owns and operates three refineries, has undertaken capacity expansion at refineries at Visakhapatnam and Mumbai. The modernization of the Visakhapatnam refinery will enhance capacity from 8.33 million tonnes to 15 mt. The capacity of the Mumbai refinery is also being enhanced from 7.5 mt to 9.5 mt. “On completion, these projects will enhance our profitability. We will have the capability to produce BS-VI fuels,” he added. Surana further said the 9 mt greenfield refinery-cum- petrochemical project coming up at Pachpadra in the Barmer district of Rajasthan has achieved significant progress. “Engineering activity is in progress and construction has commenced. Financial closure has also been achieved for this project. The project is being implemented at a cost of Rs 43,129 crore,” Surana said. The company is, he said, laying thrust on pipeline network expansion. “Ongoing pipeline projects with a total estimated investment of Rs 5,555 crore are in various stages of completion,” he added. The company also plans to build second-generation ethanol production facilities and market compressed bio-gas. Its net profit for fiscal 2019 stood at Rs 6,029 crore and gross refining margins (GRM) averaged at USD5.01 a barrel.
Humbled Noble Group seeks to rebuild LNG, energy businesses
Noble Group Holdings (Noble Holdings) plans to rebuild its liquefied natural gas (LNG) and core energy businesses and develop rare earths as it seeks new life as a niche, Asia-focused commodity trader, sources aware of the matter said. “We have enough credit lines to expand the LNG business. In our restructuring, we made sure we had ample credit facilities, so we could build the business that we lost,” said one senior executive with the company, which took over assets of the under-liquidation Noble Group Ltd. Noble Holdings has now set up a Singapore desk for LNG by hiring a former trader from Australia’s Origin Energy, expanding its four-person LNG team in London, industry sources told Reuters. “The company has always had an LNG team but activities were wound down for a while and are now starting back up,” one of the sources said, declining to be named as the person was not authorised to speak with the media. Three LNG traders including two co-heads of the team had left Noble in 2016 to join rival Glencore. It also sold its U.S. gas and power business to another rival, Mercuria. The new Singapore LNG desk will focus on trading, the source said. The restart of the desk has not been previously reported. “We’ve been in a process to prove to the market that Noble is a viable enterprise and can continue to fulfil contracts,” the company executive said, using a 3-year trade finance facility of $700 million secured as part of its restructure. Noble, once Asia’s biggest commodity trader, saw its market value all but wiped out from $6 billion in February 2015 after Iceberg Research issued reports accusing it of inflating its assets. To rescue itself, Noble sold billions of dollars of assets, took hefty writedowns and cut hundreds of jobs over the last few years, although it defended its accounting practices. As Noble faced insolvency protection, shareholders approved a $3.5 billion debt restructuring deal that completed in December and left them owning just 20 percent, with creditors taking majority control. Noble Holdings, whose portfolio comprises a trading division dealing in energy coal, LNG, base metals and other products, declined comment. Another division houses its investments in alumina company Jamalco and U.S. based oil and gas producer Harbour Energy and other businesses. The company is also recruiting for roles including analysts for base metals and coke, and a sales trader to market energy products in Japan, sources said. Technology metals or rare earths are expected to be a focus area for Noble Holdings, which through its subsidiary took a small stake in ambitious Australian rare earths developer Arafura Resources this year. The executive said Noble Holdings is eyeing other opportunities in the sector. In the first half of 2019, Noble Holdings reported a net profit of $46.4 million. Employing about 280 staff, it has been gradually building up its trading teams by hiring in Singapore and Hong Kong. In December, Singapore authorities blocked the listing of the restructured company amid a regulatory probe.