HPCL digs in heels, says acting as per statute in not recognising ONGC as promoter
Virtually rejecting ONGC’s demand, Hindustan Petroleum Corp Ltd (HPCL) has said it is acting as per its understanding of the statute in not recognising the new majority shareholder as its promoter. “Whatever we are doing, whatever we have done and whatever we will be doing will be as per our understanding of the statute and the guidelines and Companies Act and the SEBI guidelines… “Beyond that who is interpreting whatever, it is his understanding of the situation. We need not subscribe to that,” HPCL Chairman and Managing Director Mukesh Kumar Surana told reporters here. He was asked about ONGC seeking recognition as the promoter of the company post-acquisition of majority stake in HPCL. Oil and Natural Gas Corp (ONGC) had in January this year bought the government’s entire 51.11 per cent stake in HPCL for Rs 36,915 crore. Post that, HPCL had become a subsidiary of ONGC. But HPCL in its regulatory filing to the stock exchanges, the latest being on July 12, still lists ‘President of India’ as the promoter with ‘zero’ per cent shareholding. ONGC, on the other hand, is listed under ‘Public Shareholder’. ONGC has written to HPCL management asking it to take steps to rectify the filings to reflect the true promoter of the company. Asked about ONGC’s request, Surana said, “Everybody is free to express their views… Our actions will be guided by what we think is right.” Since ONGC takeover in January, HPCL has made two stock exchange filings about the shareholding pattern of the company — the first on April 20 and then on July 12. In both, ONGC is shown as the public shareholder and President of India listed as the promoter. Sources said ONGC feels the HPCL management is bound to take corrective action to reflect the true picture. According to the Securities and Exchange Board of India’s rules, the entity that owns the controlling stake should be listed as promoter even if it was not the original promoter of the company. When Indian Oil Corporation (IOC) had bought government’s stake in fuel retailer IBP Co Ltd, it was listed as the latter’s promoter in every instance after the deal. The same was the case when IOC acquired a majority stake in Chennai Petroleum Corp Ltd (CPCL). Surana has retained the title of Chairman and Managing Director despite corporate governance structure require a group having just one chairman and subsidiaries being run by managing directors and CEOs. ONGC’s overseas subsidiary, ONGC Videsh Ltd, is headed by a Managing Director and CEO. Its refinery subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL), which is listed on BSE, too is led by a Managing Director and CEO. ONGC Chairman is the head of boards of both the companies. Since acquiring a majority stake in HPCL, ONGC has only been able to appoint one director to that firm’s board. ONGC has appointed its Director (Finance) Subhash Kumar to HPCL board. He has replaced Sushma Taishete Rath, Joint Secretary in the Ministry of Petroleum and Natural Gas. Prior to this, HPCL had two government nominee directors — Rath and Sandeep Poundrik, Joint Secretary (Refineries) of the Oil Ministry. After the appointment of Kumar, there remains only one government nominee director on HPCL board. Kyle Anderson Jersey
Essar signs 15-year gas sale agreement with GAIL, expects jump in top-line
Essar Oil and Gas Exploration and Production (EOGEPL), an arm of Ruia-owned Essar Group, today announced it has signed a 15-year Gas Sale and Purchase Agreement (GSPA) with state-owned natural gas-utility GAIL (India). “The GSPA entails a 15-year gas supply contract whereby the company will be able to monetise its entire Coal bed Methane (CBM) production of 2.3 mmscmd from the Raniganj East block at a globally competitive price,” the company said in a statement on its website today. It added the discovered price for the gas under the agreement will lead to a substantial increase in the Company’s top-line. “We were able to generate more than Rs 210 crore as revenue from our oil and gas business last financial year and expect to generate over Rs 400 crore in the current fiscal, EOGPL Chief Executive Officer (CEO) Vilas Tawde had told ETEnergyWorld in an interview in June. According to the company, of the 500 wells to be dug at the Raniganj East CBM block, EOGEPL has already completed drilling of 346 CBM wells and is looking at ramping up production to 2.3 Million Cubic Meter per Day (mmscmd) from more than 1 mmscmd currently. EOGPL said in the statement it had invited bids from prospective buyers of CBM gas and GAIL submitted the winning bid, offering to pay a price linked to the three month’s daily average price of Brent crude. The company said that post the cabinet decision on allowing simultaneous exploitation of unconventional hydrocarbons, EOGEPL has appointed international consultants to study the company’s assets and is upbeat about the shale potential in the Raniganj East CBM block. “On an upside, shale development would benefit greatly due to the synergy with CBM operations, like water requirement, and the gas evacuation and handling facilities. Initial estimates indicate that we would need to invest close to Rs 7,000 crore for developing the shale gas potential in the block to recover about 1.6 tcf from the field,” Tawde added. The company plans to invest around Rs 900 crore in the coming 18 months and the plan includes investing Rs 300 crore in the current fiscal ending March 2019 to monetize the Raniganj block, Tawde had said in June. EOGPL’s CBM portfolio includes five blocks. Only one of them, Raniganj East, is currently operational. Other blocks include Rajmahal in Jharkhand, Talcher and Ib Valley in Odisha and Sohagpur in Madhya Pradesh. Tawde had said the five blocks possess estimated 10 Trillion Cubic Feet of CBM reserves and the initial work on the Rajmahal and Sohagpur is expected to start post monsoon. William Perry Jersey
HPCL winds down Iran oil supply as US-led sanctions inch closer
Hindustan Petroleum Corporation Ltd (HPCL) does not have any more oil purchases from Iran at least till November as the trigger date for the US-led sanctions inches closer. Responding to the queries on the steps being taken to mitigate the impact of the US sanctions on Iran on Indian oil importers, HPCL Chairman and Managing Director MK Surana said: “The issues are being discussed at the diplomatic level with Iran. It is a developing situation right now. The date is November 4, but in the meantime, everything keeps changing in diplomacy.” The US has imposed the sanctions from November 4, threatening companies to fully wind down activities with Iran or risk exclusion from the American financial system. This has led to insurers refusing to extend their services to crude oil tankers directed from Iran. HPCL had to cancel a consignment last month. On the current position of insurers with regard to Iranian crude sourced by HPCL, Surana said, “There was nothing to sort out with the insurers…our contracts do have the provision for doing that. It is an interpretation of the policies during the wind down period.” “Whether the contracts will be seen as new contracts or as old ones is to be seen too. We can review our position when we are nominating our next cargo. Right now we don’t have any nominations for September – October,” he said. “Total imports earmarked for Iran was 1 million tonne this year (out of 18.5 million tonne of total imports)…Of this, we have already bought 0.2 million tonne,” Surana added. HPCL meanwhile reported a net profit of ?1,719 crore profit after tax for Q1 of FY19. This is 86 per cent higher than the ?925 crore net profit reported by the company during the same period in the previous fiscal. Revenue for the quarter stood at ? 72,923 crore (?59,891 crore). Anthony Mason Jersey
China keen to join TAPI gas pipeline project: Pak official
China is exploring building a spur from Pakistan’s territory once the multi-country TAPI natural gas pipeline project begins operating, a Pakistani official said, with the financial close of the project’s first phase expected next month. Originating at the giant Galkynysh gas field in Turkmenistan, the $9.6 billion TAPI (Turkmenistan, Afghanistan, Pakistan and India) pipeline involves the four countries’ own energy companies, and would carry 33 billion cubic metres (bcm) of gas a year. Turkmenistan is building the TAPI pipeline to diversify its gas exports, which have mostly gone to China. But the project has suffered delays due to difficulties obtaining financing and the security risks of building a pipeline through war-torn Afghanistan. Mobin Saulat, the chief executive officer of Pakistan’s state-owned Inter State Gas Systems, said Chinese officials have shown interest in building a spur from Pakistan and the line could act as an alternative to Beijing’s plans to build a fourth Chinato-Turkmenistan pipeline. “With this channel, there is a possibility they don’t have to do another line and they can off-take from this pipeline which is passing through Pakistan,” he said. A China-to-Turkmenistan line has to cross several central Asian mountain ranges and Saulat said it would be cheaper and easier for China to built a line from inside Pakistan’s territory to cross the Karakoram range to its western border. China’s ties to Islamabad have deepened in recent years as Beijing has pledged to fund $57 billion in infrastructure as part of its Belt and Road initiative, including power stations and transport links. Facing more delays, TAPI countries have changed tack to attract financing and make progress in the past two years. The project is now due to be done in two phases, with the pipeline built without compressors in the first phase, which would cut gas volume but would reduce prohibitive project costs. Once gas starts flowing, and the pipeline begins generating cash flow, financing would be raised for the second phase that would see 11 compressors installed along the 1,814km project. “With this introduction of the phased approach, it has gained momentum with the Chinese,” said Saulat. The financial close for the first phase is due by the end of September. Doug Middleton Womens Jersey
Lessons from soggy oil & gas auctions
The response to India’s first open acreage auction for hydrocarbon exploration and development has not quite set the Yamuna on fire. No foreign oil major responded. Reliance kept away. Vedanta-Cairn has been recommended by an empowered committee of secretaries for award of 41of the 55 blocks on offer, and state-owned ONGC for two blocks. Open acreage, not distinguishing between oil and natural gas, revenue-sharing instead of the profit-sharing after cost-recovery model, ill-suited for India’s trust deficient political economy — these are all sound features of the auction. Yet, the response has been tepid. The government needs to introspect why. The way Cairn has been treated is an obvious deterrent for foreign majors. It is one company that can claim to have actually dented India’s oil import bill by discovering hydrocarbons in places that others had failed to. It undertook a consolidation exercise for assorted companies operating in India’s oil and gas sector, with prior official intimation and no change of beneficial ownership. Yet, a retrospective tax was slapped on the company for imputed capital gains. The tax dispute has dragged on, the government has frozen its assets and the uncertainty has hurt its global market valuation. Why should foreign oil majors rush to invest in India’s minefield of arbitrariness? It is also worth asking what the nation has gained from the emaciation of ONGC. It was made to take over GSPC, Gujarat’s costly misadventure into deepwater exploration, its coffers were raided for the make-believe disinvestment in HPCL, the government’s stake in the company being sold to ONGC, which had to borrow heavily to finance the acquisition, and it was also persuaded to make a huge dividend payment to the government, besides investing in Russia’s Rosneft. ONGC today lacks the financial muscle to play a muscular role in developing India’s hydrocarbon reserves. If the government is serious about slashing import dependence for oil, ONGC must be allowed to play its intended role, not serve as a cash cow for the government. Nick Shore Womens Jersey
CNOOC expands Hainan LNG terminal to boost gas sales to trailers
* China’s CNOOC is expanding its liquefied natural gas receiving terminal in southern province of Hainan to boost sales of gas carried by trucks or smaller tankers, ahead a demand surge in winter, the state oil firm said on Wednesday * The expansion, expected to completed by end of October, will lift the terminal’s annual handling capacity of 1.32 million tonnes, it said, without giving a comparison of its current capacity * Last winter China, the world’s second-largest LNG importer, experienced a rare boom of gas hauled by trailers as these trucks filled a logistics gap Curtis McKenzie Womens Jersey
Malaysia LNG exports hit 4-year low on pipeline issues: Sources
Malaysia’s exports of liquefied natural gas (LNG) fell to a four-year low in July as domestic gas pipeline issues plaguing the country since January took their toll, according to industry sources and Thomson Reuters data. Natural gas supply from the Sabah Oil and Gas terminal to the Petronas LNG Complex in Bintulu was cut in January following a gas leak in the 500 kilometre pipeline which transports gas from Kimanis in Sabah to the Bintulu plant in Sarawak for processing. While the pipeline has been repaired, Petronas is still awaiting the necessary approval from authorities to resume operations at the pipeline, a source familiar with the matter told Reuters. Petronas did not comment on the pipeline issue but a spokeswoman said that there is no disruption to cargo deliveries from the Petronas LNG complex in Bintulu and that operations at the complex are being carried out as scheduled. The Petronas LNG Complex, which has a capacity of 24 million tonnes per annum (mtpa), comprises three LNG plants owned and operated by Petronas and joint venture companies. It is supplied with gas from several facilities off Sarawak, according to the company website. LNG EXPORTS FALL Malaysia’s LNG exports fell to about 1.5 million tonnes in July, the data showed, the lowest since July 2014 when it was about 1.43 million tonnes. Petronas has purchased replacement cargoes to meet some of its contractual obligations to term customers, one source said, which would reduce spot exports as a result. The drop in export volumes comes at a time when demand from Japan, the world’s biggest importer of LNG, has been robust amid sweltering heat. “Overall, the market is quite tight in terms of supply but new supply from Australia should help going forward,” a Singapore-based trader said. Revenue from LNG, which accounted for 3.5 percent of Malaysia’s total exports, decreased to 2.7 billion ringgit ($663 million) in June, down 1.2 billion ringgit or about 31 percent from a year ago as export volumes fell, official statistics show. Petronas also operates the 1.2 mtpa Petronas floating LNG facility off the coast of Sarawak. Mark Melancon Womens Jersey
India to launch second discovered oil, gas fields auction on Thursday
India to offer 26 areas under its second licensing round for discovered oil and gas fields – government statement * The area on offer have hydrocarbon resource base of 190 million tonnes: Government * In the first round India awarded contracts for 30 areas * First oil/gas from the previously awarded block expected in 2019/12: Government Yasiel Puig Womens Jersey
Amritsar: CNG set to help reduce pollution level in holy city
Compressed Natural Gas (CNG), the clean burning fuel, is all set to fix air pollution problem in the holy city with as many as four retail outlets of CNG likely to supply the fuel in next couple of months even as the CNG-kit installation facility is yet to begin. Gujarat Gas Limited would open four retail outlets in the city, out of which permission to three outlets had been granted, said deputy commissioner Kamaldeep Singh Sangah while talking to TOI on Wednesday. He said the administration had always been encouraging to use clean fuel to bring down the pollution levels in the city. Company sources said that the dispensers and compressors would be installed at the existing Indian Oil Limited petrol pumps. “We have already installed a dispenser on a petrol pump near The Mall of Amritsar which will begin supplying CNG in about a months time,” said sources. The company had also laid pipes for supplying Piped Natural Gas (PNG) to households, small businessmen and industry etc. which is likely to replace the Liquid Petroleum Gas (LPG) cylinders. Sangha said that CNG was not only economical, but was one of the preferred alternative fuel sources for vehicles. The administration had earlier taken several measures to bring down the air pollution level from the city but to no avail. Diesel-driven auto-rickshaws contribute maximum to the air pollution especially in the vicinity of the Golden Temple. Company source say that with the supply of CNG, the CNG kit manufacturers were all set to establish their renters for installation of CNG kits in petrol drive vehicles. “CNG is more than 55 per cent cheaper than petrol and around 40 per cent cheaper than diesel in running cost per kilometre,” he said. Jarret Stoll Authentic Jersey
South Korea’s KOGAS in talks to buy LNG cargoes for winter: Sources
State-run Korea Gas Corp (KOGAS) is in talks to buy 12 liquefied natural gas (LNG) cargoes for delivery in the winter months, two industry sources said on Wednesday. The company is still in discussion with sellers and is yet to award the contract, one of the sources familiar with the matter told Reuters. The cargo delivery period is from October to February, a second source said, though this could not immediately be confirmed. Both sources didn’t want to be named as they were not authorised to speak to media. Marcus Cooper Authentic Jersey