Crude oil futures fall on weak Asian cues
New Delhi, Jul 18 Crude oil futures fell by Rs 36 to Rs 4,633 per barrel today as speculators cut down bets amid weak cues from the Asian markets. At the Multi Commodity Exchange, crude oil for delivery in July was trading lower by Rs 36, or 0.77 per cent, to Rs 4,633 per barrel in 1,245 lots. Similarly, crude for delivery in August fell by Rs 33, or 0.71 per cent, to Rs 4,596 per barrel in a business volume of 167 lots. Analysts said trading sentiment remained weak after oil prices fell further in Asia and profit-taking by participants. Globally, West Texas Intermediate (WTI) crude oil was down 28 cents, or 0.42 per cent to USD 66.88 a barrel, while Brent too shed 36 cents, or 0.50 per cent, to USD 71.80 a barrel on the New York Mercantile Exchange. Darryl Morris Jersey
Surprise! India now has too much electricity — and it has a cost
With the successful push for tapping the renewable energy, India, which once faced electricity shortage now has too much of it. India’s gross electricity capacity is much higher than the demand. “For a change, shortfalls have fallen dramatically and there is talk of “surplus” power,” a report by Brookings India said. However, as every electricity grid operates in a balance between supply and demand, usually with a slight surplus of capacity to meet eventualities and uncertainty—too much surplus becomes expensive, the report warned. One the biggest problems could be having a surplus average energy but now having surplus capacity all the time. “Renewable Energy (RE) creates particularly acute issues for the grid since it is both variables as well as likely available only at specific times,” the report said, adding that the target of 175GW renewable energy production by 2022 is “top-down”, set by the central government, and doesn’t incorporate much (if any) feedback by DisComs on how much power of what type is needed by that year. “…load-shedding is often an economic issue where state utilities (the distribution companies, or DisComs) are not buying sufficient power because they are cash-strapped and bleeding money,” the report added. Moreover, another challenge is that the coal-based capacity has grown at over 12% annually, double the growth rate of power demand. This creates a lot of overhang that impacts grid economics. The challenge is also the targeted 175 GW of RE is disproportionately concentrated in a handful of states. Karnataka today already has almost 5 GW of solar and more of wind, far ahead of its targets. “The entire systems planning has to shift from one of managing scarcity to managing surplus, at least for parts of the day or year,” the report said. The problem of higher supply of power as compared to demand was also highlighted by NITI Aayog CEO Amitabh Kant, who said that unless the demand for power is created, the woes of power companies would not end. Discoms in India, so far, have suffered losses due to corruption, electricity theft and non-repayment of bills. To pull discoms from the abyss, the government launched the ‘UDAY’ bailout scheme. However, the electricity surplus seems to have been posing another risk to these discoms. Damontae Kazee Authentic Jersey
SEBI May Not Give Green Signal To Petrol And Diesel Future Contracts
The Security and Exchange Board of India (SEBI) is unlikely to approve the Multi Commodity Exchange (MCX) and Indian Commodity Exchange’s (ICEX) applications for launching futures contracts in petrol and diesel, sources aware of the development told Moneycontrol. This is because both petrol and diesel are politically sensitive fuels, given their ability to influence retail and wholesale inflation, sources said. In December last year, both the exchanges had filed applications with SEBI. The capital and commodities market regulator had written to the petroleum ministry seeking an in-principle approval for the contracts, which the ministry had given in May. Dan McCullers Jersey
Two PDVSA’s oil upgraders to be halted in coming weeks -sources
Two of Venezuela’s four crude upgraders are scheduled to undergo previously delayed maintenance in the next few weeks, according to three sources close to the facilities, further reducing state-run PDVSA’s exports of upgraded crude. The upgraders, which convert the extra-heavy oil produced in Venezuela’s Orinoco Belt into exportable grades, have a combined 700,000 barrel-per-day (bpd) capacity. The maintenance projects, including one that had been expected to begin in April, have been deferred due to lack of spare parts and outages. The work temporarily will reduce the amount of upgraded oil available, but will help ease tanker congestion at the country’s main port of Jose. The OPEC-member’s oil production fell to 1.34 million bpd in June, according to secondary sources cited by OPEC, the lowest level since the 1950s. Oil is Venezuela’s main export and the decline has deepened an already severe economic crisis. The 150,000-bpd Petromonagas upgrader, operated by state-run PDVSA and Russian joint venture partner Rosneft, is expected to start major maintenance work by early August, according to the sources. Repairs to the 210,000-bpd Petropiar upgrader operated by PDVSA and U.S. company Chevron Corp will also start in coming weeks, the sources said. There was a fire at that facility in June during its restart process. When the upgraders are out of service, extra-heavy oil is blended with imported naphtha to produce diluted crude (DCO). But the volumes of DCO exported typically are lower than the upgraders’ capacity. In a meeting this week with some Orinoco Belt partners, Venezuelan officials complained about delayed maintenance affecting the upgraders, which has led to more exports of less-valuable DCO, according to a person that attended the meeting. PDVSA did not reply to a request for comment. Venezuela’s oil exports this year have been limited due to output declines. Asset seizures by ConocoPhillips to enforce an arbitration award have also crimped sales by depriving PDVSA of most of the Caribbean terminals it once used to store and ship oil. As the two upgraders are taken out of service for maintenance, PDVSA aims to restart the 160,000-bpd Petro San Felix upgrader in the coming weeks, after several interruptions in recent months for repairs. The 190,000-bpd Petrocedeno, operated by PDVSA, Total and Equinor, is working at reduced rates due to repairs and spare parts. A major maintenance project there is expected to start in early 2019, the sources said. Fran Tarkenton Authentic Jersey
ONGC board approves exiting Pawan Hans, to sell 49% stake
The board of ONGC has approved exiting helicopter service provider Pawan Hans by selling its entire 49 per cent stake as it looks to cut debt and consolidate resources in core oil and gas business, officials with direct knowledge of the development said. Oil and Natural Gas Corp (ONGC) wants its interest to be clubbed with the 51 per cent government stake that is already on offer for sale, they said. The Department of Disinvestment and Public Asset Management (DIPAM), which floated the offer for sale for government’s 51 per cent stake in Pawan Hans twice in the last 10 months, is likely to issue an amended expression of interest (EoI) shortly. Officials said ONGC of the view that its investment in Pawan Hans is no longer strategic as it charter hires helicopters to ferry staff to its oil and gas locations, mostly in offshore, through competitive bidding. Of the 22 helicopters it currently has on hire, just seven or less than a third are from Pawan Hans. Pawan Hans owns a fleet of 46 helicopters. “The board of directors of ONGC, at the 308th meeting held on June 29, accorded its in-principle approval for exploring options for the restructuring of ONGC group companies including exiting some with a view to consolidating business,” an official said. “The idea being to focus resources on core oil and gas exploration and production business and not scatter bandwidth of management in unrelated businesses,” the official added. Officials said when the government had first floated an offer to sell its 51 per cent stake in October last year, ONGC made an offer to DIPAM that its 49 per cent stake be also sold on same terms. At that time, the company was told to get its board approval. Meanwhile, the government in early April withdrew its offer for sale as only two bidders including Indian helicopter major Global Vectra Helicorp and US-based Continental Helicopters made an offer. A revised offer for sale was floated later that month, which fetched about half a dozen bidders. ONGC, they said, has written to the government that its stake can be sold on the same terms, but DIPAM was of the view that a revised offer for sale would have to be floated as some bidders may have been deterred by 51 per cent stake and would now prefer to bid when 100 per cent is being offered. Sources said the re-floating the offer for sale is likely to delay further the government’s plans to offload its entire 51 per cent holding in the profit-making JV. “ONGC has written to the civil aviation ministry that it does not want to continue in the joint venture and would want to sell its entire holding in it along with the government,” a Pawan Hans source said. Pawan Hans operates seven Dauphin N3 Helicopters for ONGC’s offshore operations. These helicopters, based at Juhu airport, Mumbai and Rajahmundry, undertake passenger crew change service and production trips on a regular basis to meet the offshore requirements of the state-owned oil and gas producer. “ONGC wanted to exit the JV along with the government, but it was told to first get its board approval, which is now in place. The government will now modify the EoI and include ONGC stake sale also along with its own,” an ONGC official said. The government came out with a fresh information memorandum for the strategic sale of Pawan Hans on April 13 wherein bidders need to have a minimum net worth of Rs 500 crore. The memorandum was issued days after the government withdrew the previous note apparently due to a tepid response from investors. The last date for submission of EoIs for Pawan Hans was June 18. On June 20, civil aviation secretary R N Choubey had told reporters that “bids have been received for Pawan Hans stake sale.” Clayton Fejedelem Jersey
Shell hopes to ship LNG for sale in Indonesia, says energy ministry official
* Oil major Shell and its partner are seeking to import liquefied natural gas (LNG) into Indonesia, an energy ministry official said on Tuesday. * “Shell has proposed to the government to import LNG,” Oil and Gas Director General Djoko Siswanto told reporters, adding that the request had not yet been approved and Shell had been asked to present its plans to the government. * Shell and its partner had already found a buyer for the fuel and would build an LNG receiving terminal, Siswanto said without naming the partner or providing further detail on the proposal. * Siswanto also cautioned that any imports by Shell must not prevent domestic LNG producers from finding buyers. Radim Vrbata Jersey
Gujarat: Ship with 2.3L litre diesel runs aground, no fear of fuel spill
The Indian Coast Guard and other agencies sprung into action after a ship, carrying 2.3 lakh litre diesel, ran aground near Porbandar. Authorities, however, said there was no threat of oil spill, and that they have begun removing the fuel. According to the Coast Guard, the vessel was shifted temporarily to the inner anchorage at Porbandar on Saturday morning to make way for an inbound vessel. The vessel had reportedly drifted aground at 8.30 am on Monday after its anchor cable parted, and ran aground about 400 metre away from the old lighthouse outside Porbandar harbor. “The vessel did not pose any threat to navigational safety, but potent threat of oil pollution loomed over the Gujarat coast as it was carrying about 230 KL high-speed diesel on-board,” Coast Guard said in a release. The agency said that it mobilised its personnel and resources on receiving information about the potential threat. A pre-assessment helicopter sortie was conducted in the morning, and arrangements to remove the fuel were being undertaken by winching down Coast Guard personnel and equipment. “There is no immediate threat, but in order to ensure safety of the coast and marine ecosystem, defueling of diesel from the ship to shore has commenced,” Coast Guard said in a release, adding that it would take approximately 36 to 48 hours. “The prompt actions have averted marine pollution threat in the area as there are no signs of spillage in the immediate vicinity,” the agency said. The Coast Guard said it is also in the process of establishing a Pollution Response Team based at Vadinar to respond to any eventualities. Incidentally, the vessel, MV Hennry, was intercepted and was caught smuggling 1,500 kg heroin worth Rs 3,500 crore, in a joint operation by the Coast Guard and the Narcotics Control Bureau in July last year. This was touted as the single largest drug haul in the country and over a dozen people were arrested. After due judicial processes, the vessel was auctioned to Porbandar’s Khodiyar Trading. Joe Montana Womens Jersey
Wary of high gas prices, Essar to go slow on plan to build LNG terminals
With natural gas prices shooting up globally, Essar Ports is going slow on its plans to build liquefied natural gas terminals at the Hazira port in Gujarat, chief executive officer Rajiv Agarwal told Mint. Last September, the Ruia family-promoted Essar Ports announced its intent to build a cluster of four LNG terminals, with capacities of 2.5-5 million tonnes per annum (mtpa) to cash in on the growing demand for clean fuel. “We are still working on this proposal; we’re getting environment approvals for Hazira and studies are being done,” said Agarwal. “But work will take at least 15 more months to start.” “Look at the price of LNG,” he said. “If the outlook turns positive, we will set up the terminals. Otherwise, we will slow it down. When we first talked about setting up these terminals, LNG prices were at $5-6 per million British thermal unit (mmBtu). Now it’s $10-11 mmBtu; so who’s going to buy? We’re watching what direction crude and LNG prices take.” Asian spot prices of imported LNG rose to their highest levels this summer since mid-2014 because of production cuts in the US, Australia and Malaysia while China ramped up LNG procurement in recent months to offset air pollution levels, making it the world’s second-largest LNG buyer after Japan. While spot prices for July delivery in North Asia reached a high of $11.6 mmBtu, at the same time last year, prices had hovered at the $6 mmBtu mark. India has LNG terminal capacity of 21.25mtpa belonging to Indian Oil Corporation, Petronet LNG and Shell. The three companies are also working on increasing the capacity to 56mtpa by 2020. Essar Ports, which develops and operates ports and terminals to handle liquid, dry bulk, break bulk and general cargo, is also ramping up its dry bulk cargo handling capacity at Hazira. Besides, Essar Ports operates three more terminals, Salaya on the west coast and Visakhapatnam and Paradip on the east coast. The operational capacity of port terminals is 95mtpa, and is expected to increase to 110 mtpa by 2020. Agarwal had recently said Essar Ports would be investing $70 million to increase the capacity at Hazira from its current 30mtpa to 50mtpa by 2020. Last week, Essar Ports commissioned a 24 mtpa iron ore handling complex at Vizag port. Essar Vizag Terminal Ltd will operate the berth on a 30-year concession from the Vizag port trust. Agarwal said Essar Ports reported revenue of $190 million in fiscal 2018. The company’s current debt stands at $600 million. It has a debt-to-equity ratio of 1.6. Patrick Onwuasor Womens Jersey
UK’s Cuadrilla completes second shale well, waits for fracking permit
* Cuadrilla said it has completed drilling Britain’s second horizontal shale gas well at its Lancashire shale gas licence and will apply for consent to hydraulically fracture it “in due course”. * It says it expects to hydraulically fracture first well in the latter end of the third quarter of this year, subject to government consent. * The privately-owned company applied for consent to fracture the first well in May. * “Following hydraulic fracturing of the first two horizontal wells, Cuadrilla will run an initial flow test of both wells for approximately six months with plans to then eventually connect those wells to the local gas grid network in 2019.” * Shale gas production is a contentious issue in Britain due to environmental groups’ concerns over potential water contamination, increased industrial activity and because it means investing in fossil fuels rather than renewable energy. * Cuadrilla has sought and gained injunctions to prevent trespass at its exploration site, fearing protestors would disturb work. * In Scotland, there has been an effective moratorium on shale drilling although a Scottish court recently ruled the devolved government’s policies did not amount to an outright ban. Josh LeRibeus Womens Jersey
Russia and Ukraine in EU-backed talks to avoid fresh ‘gas wars’
Officials from Moscow and Kiev were set to gather in Berlin on Tuesday for EU-backed talks on the future of the transit of Russian gas through Ukraine in a bid to minimise disputes when the current contract expires next year. Russian gas giant Gazprom has already dramatically reduced the volume of gas transiting via the country, as Moscow and Kiev remain at loggerheads over the annexation of Crimea and simmering conflict in the east of Ukraine. Kiev fears the loss of revenue from transit taxes, on top of being bypassed politically as well as physically by new gas pipes. The meeting will bring together delegations from Gazprom and its Ukrainian counterpart Naftogaz, which have been locked in legal battles for years. Russian Energy Minister Alexander Novak and Ukrainian Foreign Minister Pavlo Klimkin will also be present. “It is clear that time is of the essence. The negotiations that lie ahead of us are complex,” said European Commission Vice President Maros Sefcovic ahead of the talks. The meeting will focus on Gazprom’s plan to construct and put into operation by the end of next year the Nord Stream 2 gas pipeline, which would bring gas to Germany via the Baltic Sea, bypassing Ukraine. The pipeline will follow the track of the existing Nord Stream 1 and will double the amount of Russian gas arriving in the European Union’s most powerful economy via this route. Germany has long insisted this is a purely “commercial” project and in March lifted the final obstacles to its construction. But the following month German Chancellor Angela Merkel delivered an unexpected blow to Moscow’s strategic initiative, insisting Ukraine should continue to play a key role in the transit of gas to Europe. “There are also political factors to take into consideration,” Merkel said at a joint press conference in Berlin with Ukrainian President Petro Poroshenko at the time. “(Nord Stream 2) is not possible without clarity regarding the transit role of Ukraine,” she said. For his part, the Ukrainian president said the project was “absolutely political”. “Why spend tens of billions of dollars to make the European economy less efficient, less competitive and the energy politics of the EU more dependent on Russia?” The project has also been criticised by US President Donald Trump. The United States has an interest in selling shipped liquified natural gas (LNG) to Europe, but for the moment this is much less economically viable than Russian gas. “So we will be selling LNG and competing with the pipeline. I think we’ll compete successfully. Although there is a little advantage location-wise,” Trump said after meeting with Russian President Vladimir Putin in Helsinki today. Another project, the Turkish Stream pipeline, is further set to reduce the role of Ukraine in gas transit. But Putin was conciliatory, saying Russia was ready to keep up transit via Ukraine after Nord Stream 2 becomes operational and extend the transit agreement. Putin said this was possible if Ukraine’s national gas company Naftogaz and Gazprom resolve their gas dispute at a Stockholm arbitration court. European demand for gas has been rising since 2015, largely because of a drop in production in the Netherlands. Last winter Gazprom raised exports to the continent to a record high thanks to the cold weather. On the record day of March 2, gas pipelines delivering Russian gas to Europe were working at up to 99 per cent of their capacity, said researcher Jack Sharples in a recent publication by the Oxford Institute for Energy Studies. “Gas transit via Ukraine will continue to be necessary in substantial volumes throughout the year until Nord Stream 2 and Turkish Stream are launched,” he said. But after that the role of Ukraine would depend on an agreement reached with the European Commission or the demands of clients, he added. Thierry Bros, a researcher at the Oxford Institute for Energy Studies, said the sides must not only reach an agreement about what happens after 2019, but also what happens now — given that Gazprom is turning to the courts to demand the annulation of its current contracts with Ukraine. “Now a global contract must be reviewed with two unknowns — the Nord Stream 2 project and the transit tariff, since we do not know what Ukraine will propose,” he told AFP. “If this were just a commercial question, Ukraine would be able to make Nord Stream 2 uncompetitive by lowering its own transit tariffs,” he said, though in fact Kiev is asking in courts for the rate to be increased to make up for the decline in volume. Ronde Barber Jersey