Open Acreage Licensing Programme Bid Round-II Launched
Union Minister of Petroleum and Natural Gas & Skill Development and Entrepreneurship, Dharmendra Pradhan on Monday launched NIO and MRSC for Open Acreage Licensing Programme (OALP) Bid Round-II. Secretary, Ministry of Petroleum and Natural Gas Dr M.M. Kutty and DG, DGH V.P Joy were also present on the occasion. In this bid round, 14 E&P blocks, with an area of approximately 30,000 sq. km., are being offered for bidding to the investor community under the investor friendly HELP regime. 10 blocks are based on Expressions of Interest submitted by the bidders, and 4 blocks have been carved out by the Government based on data received through the National Seismic Programme and the Resource Reassessment Study carried out by the Government. Speaking on the occasion, Pradhan said that the energy requirement of the country is increasing very fast, and we are mainly dependent on imports for fulfilling our fuel and transportation fuel requirements. E&P sector has been a challenge, and the Government has undertaken a large number of reforms to bring in more investment and increase domestic production. Almost 60,000 sq km area was offered under OALP Bid round I and 30,000 sq km more is being offered under the second round, while the third round is almost ready. He said that earlier the decision about exploration was based on the potential Government revenue, but didn’t yield much results. Now, the Government is working to increase production. For this purpose, IOR/EOR has been announced, production enhancement contract model is being worked out. The Minister said that more fiscal incentives will be given for increasing the production, and difficult fields will be given special incentives. Pradhan said that more transparency has been brought about in policy making and stakeholders are being consulted. He said that National oil companies will be encouraged to increase production, but at the same time, they will have to be more accountable and responsible. The minister called for setting up of Indian standards for petroleum with respect to quality, safety and other aspects which should usher in innovations. He expressed the hope that the investors will whole-heartedly participate in the bidding rounds, bringing in more investments, creating jobs and improving self-sufficiency and scientific capacity. India is 3rd largest energy consumer in the world and likely to have one of the fastest growing energy demand of the world in the coming years. As a step to meet this growing demand and in line with Prime Minister’s vision of achieving Energy Security and Sufficiency, the Ministry of Petroleum and Natural Gas (MoPNG) has steered a plethora of reforms in the recent past years. The Hydrocarbon Exploration and Licensing Policy (HELP) replacing the erstwhile New Exploration Licensing Policy (NELP) was approved in March 2016 and the Open Acreage Licensing Programme (OALP) along with the National Data Repository (NDR) were launched in June 2017 as the key drivers to accelerate the Exploration and Production (E&P) activities in India. The programme envisages six monthly periodic bidding rounds starting from July 1, 2017. The first bidding round under OALP (Bid Round I) was launched in January 2018 and closed in May 2018 and 55 blocks covering 59,282 sq. km. area were awarded in October 2018. The Government is also in advanced stages of finalizing the OALP Bid Round III with approximately 32,000 sq. km. of area and the bidding is expected to be launched within next few weeks.
India seeks spot LNG cargoes -traders
India’s state-run Gujarat State Petroleum Corp (GSPC) opened a tender to buy a cargo of liquefied natural gas (LNG) on Jan. 5, two trade sources said. The tender closes on Monday, with validity until Jan. 8 The delivery window is between Jan. 20 and Feb. 10 Indian state refiner Indian Oil Corp (IOC) is also looking for a spot cargo, one of the sources said India is expected to continue regular spot LNG purchases during this winter, but is unlikely to have significant demand spikes, the source added
Gas hub plan on hold
As both a marketer and a pipeline operator, GAIL in its current form has raised serious questions about conflict of interest in the business. The natural gas trading hub, which could help in better price discovery, is unlikely to be set up in the current fiscal as the oil ministry plans to first decide on splitting GAIL India into two separate entities — a gas marketing company and another a pipeline company. As both a marketer and a pipeline operator, GAIL in its current form has raised serious questions about conflict of interest in the business. Oil ministry officials said “for effective transparent functioning of the gas hub, there should be level playing field and equal access to the pipeline infrastructure and no scope of any favour or discrimination by the pipeline operator. So unbundling would ensure a level playing field”. The official, however, said the government is yet to take a final decision. GAIL controls around 70 per cent of the country’s natural gas pipeline network and has gas marketing operations, as well. The PSU owns and operates over 11,000 km of natural gas pipeline network and sells around 60 per cent of natural gas in the country. It has opened its network to private gas marketing companies. Pipelines are crucial to take natural gas to consumers across the country. Currently, the pipelines are concentrated in the western and northern parts of the country only. After initially resisting any split moves, GAIL has said separation could be done only after the gas market develops further. In mature markets, monopoly gas transporting and marketing companies have been unbundled or split after the share of natural gas in the energy mix has reached at least 15 per cent and a well-connected pipeline network built. Also, domestically produced natural gas forms bulk of consumption, Gail said. The share of natural gas in the energy mix of the country is currently about 6.2 per cent, while 40 per cent of gas produced domestically is consumed. The official said the government also needs to decide on who would be the transmission system operator, apart from deciding on how much volume should be traded on the proposed exchange.
Rs 40,000 cr investment expected in OALP-II bid round
The government is expecting about Rs 40,000 crore of investment in the 14 blocks it put up on auction for prospecting of oil and gas in the second round of open acreage licensing policy (OALP), Oil Minister Dharmendra Pradhan said Monday. In the first round of OALP last year, as much as Rs 60,000 crore was committed in the exploration of oil and gas in 55 blocks or areas, he said adding a third round of OALP with 12 oil and gas blocks and five coal-bed methane (CBM) blocks would be launched within this month. The 14 blocks being offered in OALP-II bid rounds cover an area of 29,333 square kilometers and bids close on March 12, he said at the launch event. Since the BJP-led NDA came to power in 2014, the government has held two auctions of discovered small fields and a similar number under OALP and the cumulative investment committed is Rs 1,20,000 crore, he said. “In the first OALP bid round, we got an investment commitment of Rs 60,000 crore. In OALP-II we are expecting another Rs 40,000 crore,” he said. India had in July 2017 allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km of unexplored area in the country under exploration. Under OALP, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in an area that is presently not under any production or exploration licence. EoIs can be put in at any time of the year but they are accumulated twice annually. The blocks or areas that receive EoIs at the end of a cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage. The two window of accumulating EoIs end on May 15 and November 15 every year. EoIs accumulated till May 15 are supposed to be put on auction by June 30 and those in the second window by December 31. The first OALP round was launched in 2017 and bids came in by May 2018. EoIs for second round closed on May 15, 2018 and the blocks were supposed to be put for auction by June but the round was delayed. In the meanwhile, EoIs in the third window also closed on November 15, 2018 with as many as 18 blocks and five CBM blocks, measuring 31,722 sq km, being sought for. “About 90,000 sq km of India’s sedimentary basin was under exploration prior to these bid rounds. In two OALP rounds and two discovered small field (DSF) rounds, the area under exploration has more than doubled,” Pradhan said. The world’s third largest energy consumer is looking at boosting out as its economy expands. State-owned Oil and Natural Gas Corp (ONGC) and a consortium of Reliance Industries-BP of the UK have committed USD 20 billion in exploring and producing oil and natural gas from their Krishna Godavari basin blocks. The blocks on offer in OALP-II include one in deep waters of Krishna Godavari basin and five shallow water blocks – two each in Andaman and Kutch basin and one in Mahanadi basin. Eight onland blocks – four in Mahanadi basin, two in Cambay and one each in Rajasthan and Cauvery are on offer. The 14 blocks are estimated to hold in-place resource of 12,609 million tonne of oil and oil equivalent gas. In OALP-1, mining mogul Anil Agarwal-led Vedanta walked away with 41 out of 55 blocks bid out. State-owned Oil India won nine blocks while ONGC managed to win just two. State gas utility GAIL, upstream arm of Bharat Petroleum Corp Ltd (BPCL) and Hindustan Oil Exploration Co (HOEC) won one block each. The 55 blocks have a total area of 59,282 sq km. Blocks are awarded to the company which offers the highest share of oil and gas to the government as well as commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells. Increased exploration will lead to more oil and gas production, helping the world’s third largest oil importer to cut import dependence. Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030. Import dependence has increased since 2015 when Modi had set the target. India imports 81 per cent of its oil needs. The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue-sharing model, where companies offering the maximum share of oil and gas to the government are awarded the block. The government prior to this had been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round. Under this, 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospect.
Rajasthan CM Gehlot goes ahead with refinery plan but wants it by 2022
Addressing a review meeting of the Pachpadra refinery here on Monday, chief minister Ashok Gehlot said that the aim of the state government is to give momentum to the construction of the project and complete it by 2022. The work that could not be done in the past five years should be done in record time and the officials should accomplish this with a determination, said Gehlot in the meeting. The meeting was attended by top officials of HPCL including its chairman M K Surana and officials of HPCL Rajasthan Refinery Ltd (HRRL) and state petroleum department. Gehlot said because of refinery, not only Pachpadra but the whole region will be benefitted and that why the region should be developed in a futuristic way keeping in mind the huge economic and industrial possibilities. Gehlot said because of refinery, a lot of industrial activities will happen in and around the area that will generate lot of jobs. There will be scope for lot of supporting industries and to facilitate them, RIICO will develop new industrial areas. Dedicated skill development centres will be developed for local youths who can take advantage of the job opportunities. He said due to refinery, there will be lot of heavy vehicles plying on the road and the government will ensure that they do not affect the local population.
Gail India seeks LNG cargo for Jan-Feb delivery: Sources
Gail (India) is seeking a liquefied natural gas (LNG) cargo for delivery in late January to February, two industry sources said. The cargo is for delivery over Jan. 20 to Feb. 5 on a delivered ex-ship (DES) Dabhoj/Dahej basis, one of them said. Offers are due by January 8, the source added. India’s state-run Gujarat State Petroleum Corp (GSPC) and Indian Oil Corp (IOC) are also seeking LNG cargoes for delivery in the spot market, sources have said.
Leg-up to LPG infra: OMCs receive nod for pipeline between Kandla & Gorakhpur
The LPG infrastructure of the country is set to get a major leg-up as the oil marketing companies (OMCs) will soon have 60 new bottling plants to be set up and operated by private players. At present, there are a total of 189 bottling plants in the country. A joint venture of the state-owned firms has recently got authorisation to lay the Rs 100 billion Kandla-Gorakhpur LPG pipeline. The OMCs are in the process of evaluating tenders for 60 small-capacity bottling plants, said Sanjiv Singh, chairman of Indian Oil Corp. Of the 60, 21 will be operating for Indian Oil, 20 for BPCL and 19 for HPCL. Private firms-operated plants will pay tolling charges to the OMCs. While a bottling plant operated by OMCs of larger capacity typically has production capacity of 120,000 ton a year, new bottling plants will have a maximum capacity of 30,000 ton each. The total investment envisaged across these plants is Rs 4 billion. While some of the plants will produce 7,000 LPG cylinders a day, a few will have capacity of 3,000 cylinders a day. There are a few private bottling plants already in the country which operate on a tolling basis, but are insignificant in terms of contributing to the total LPG demand. The bottling capacity addition is in line with the increase in the number of households using the cleaner fuel because of the Pradhan MantriUjjwalaYojana (PMUY). From around 62% in May 2016 when the flagship scheme was launched, households having access to LPG at present is 90% with 59 million PMUY beneficiaries apart from general consumers. The government earlier this week expanded the scope of the PMUY to include “all poor households” under the scheme. With this move, the government expects the LPG coverage to be near 100% soon. “There is a lot of work going on behind the scene in terms of improving LPG distribution infrastructure,” said Singh, adding that the OMCs are also increasing production from the existing plants. While most of the bottling plants utilise 100% capacity, OMCs have increased the number of hours the plants operate including night shifts and enhancing capacity of existing carousels. In what will help to feed LPG to bottling plants, the OMCs after much delay have got authorisation to lay the LPG pipeline from Kandla to Gorakhpur. “It will be laid by a JV between IOC, HPCL and BPCL. The pipeline will link 22 bottling plants apart from Gujarat refinery and Bina refinery,” said Singh. The plan to lay the 2,000-km pipeline from the coast in Gujarat to Uttar Pradesh was floated in 2016 by Indian Oil. The pipeline will cross Ahmedabad (Gujarat), Ujjain, Bhopal (Madhya Pradesh), Kanpur, Allahabad, Varanasi and Lucknow (Uttar Pradesh). “We are moving towards safer and faster transportation of LPG,” said Singh. Indian Oil has already commissioned an LPG pipeline from Paradip (Odisha) to Haldia (West Bengal) and extended up to Durgapur (West Bengal). This will also be extended up to Gorakhpur. Singh said not only will this pipeline transport LPG from Paradip and Haldia refineries, it will also carry imported LPG from Haldia to the interiors of the country. India imports 50% of its LPG requirement, and Singh expects the overall consumption in the country to grow by 6-8% every year. Total LPG consumption recorded a negative growth of 7.8% in November 2018 and a cumulative growth of 4.9% for the period of April-November 2018, according to the Petroleum Planning and Analysis Cell.
Russia’s Gazprom Neft says its plans are resistant to low oil prices
Russian oil producer Gazprom Neft’s strategic plans are sustainable even at low oil prices, the company’s chief executive officer Alexander Dyukov said on Thursday. In an interview with Rossiya-24 TV, Dyukov also said that Gazprom Neft’s has used an oil price of $50 per barrel in its plans for 2019 and company’s new strategy sees production rising faster than the market average.
Leg-up to LPG infra: OMCs receive nod for pipeline between Kandla & Gorakhpur
The LPG infrastructure of the country is set to get a major leg-up as the oil marketing companies (OMCs) will soon have 60 new bottling plants to be set up and operated by private players. At present, there are a total of 189 bottling plants in the country. A joint venture of the state-owned firms has recently got authorisation to lay the Rs 100 billion Kandla-Gorakhpur LPG pipeline. The OMCs are in the process of evaluating tenders for 60 small-capacity bottling plants, said Sanjiv Singh, chairman of Indian Oil Corp. Of the 60, 21 will be operating for Indian Oil, 20 for BPCL and 19 for HPCL. Private firms-operated plants will pay tolling charges to the OMCs. While a bottling plant operated by OMCs of larger capacity typically has production capacity of 120,000 ton a year, new bottling plants will have a maximum capacity of 30,000 ton each. The total investment envisaged across these plants is Rs 4 billion. While some of the plants will produce 7,000 LPG cylinders a day, a few will have capacity of 3,000 cylinders a day. There are a few private bottling plants already in the country which operate on a tolling basis, but are insignificant in terms of contributing to the total LPG demand. The bottling capacity addition is in line with the increase in the number of households using the cleaner fuel because of the Pradhan MantriUjjwalaYojana (PMUY). From around 62% in May 2016 when the flagship scheme was launched, households having access to LPG at present is 90% with 59 million PMUY beneficiaries apart from general consumers. The government earlier this week expanded the scope of the PMUY to include “all poor households” under the scheme. With this move, the government expects the LPG coverage to be near 100% soon. “There is a lot of work going on behind the scene in terms of improving LPG distribution infrastructure,” said Singh, adding that the OMCs are also increasing production from the existing plants. While most of the bottling plants utilise 100% capacity, OMCs have increased the number of hours the plants operate including night shifts and enhancing capacity of existing carousels. In what will help to feed LPG to bottling plants, the OMCs after much delay have got authorisation to lay the LPG pipeline from Kandla to Gorakhpur. “It will be laid by a JV between IOC, HPCL and BPCL. The pipeline will link 22 bottling plants apart from Gujarat refinery and Bina refinery,” said Singh. The plan to lay the 2,000-km pipeline from the coast in Gujarat to Uttar Pradesh was floated in 2016 by Indian Oil. The pipeline will cross Ahmedabad (Gujarat), Ujjain, Bhopal (Madhya Pradesh), Kanpur, Allahabad, Varanasi and Lucknow (Uttar Pradesh). “We are moving towards safer and faster transportation of LPG,” said Singh. Indian Oil has already commissioned an LPG pipeline from Paradip (Odisha) to Haldia (West Bengal) and extended up to Durgapur (West Bengal). This will also be extended up to Gorakhpur. Singh said not only will this pipeline transport LPG from Paradip and Haldia refineries, it will also carry imported LPG from Haldia to the interiors of the country. India imports 50% of its LPG requirement, and Singh expects the overall consumption in the country to grow by 6-8% every year. Total LPG consumption recorded a negative growth of 7.8% in November 2018 and a cumulative growth of 4.9% for the period of April-November 2018, according to the Petroleum Planning and Analysis Cell.
Shell completes sale of New Zealand entities to OMV for $578 million
British-Dutch multinational oil and gas giant Royal Dutch Shell plc today announced it has completed the sale of its shares in Shell entities in New Zealand, to OMV for $578 million. This includes the Māui, Pohokura, and Tank Farm assets, and the sale of Shell’s interest in (and operatorship of) the Great South Basin venture, which was subject to a separate agreement. The company said in a statement the sale is consistent with Shell’s global drive to simplify the upstream portfolio and re-shape the company into a world-class investment. “We are proud of having worked in New Zealand for more than 100 years and completion of the sale to OMV marks an important milestone in the company’s history. Shell staff in New Zealand, past and present, have been key to building a successful New Zealand business. I wish our colleagues all the very best as OMV takes the business forward,” said Zoe Yujnovich EVP, Australia and New Zealand. Employees of Shell Taranaki Limited and Shell NZ 2011 Limited are now part of OMV New Zealand.