Vinod Kumar Mishra assumed charge as PLL Director (Finance)
Vinod Kumar Mishra assumed the charge of Director (Finance) at Petronet LNG Limited (PLL), one of the fastest growing world-class companies in the Indian energy sector, here on Wednesday. Prior to joining PLL, he was Chief General Manager (Finance) at GAIL (India) Limited. Mishra possesses vast experience in financial management, corporate finance and Treasury Management. He also held the position of Director in GAIL Global USA, INC, Houston(USA), a wholly subsidiary company of GAIL(India) Limited. Mishra is Chartered Accountant by profession. Jordan Staal Authentic Jersey
Seadrill’s Bankruptcy Exit Plan Receives US Court Approval
A U.S. judge said April 17 he would approve Seadrill Ltd.’s (NYSE: SDRL) plan to exit its Chapter 11 bankruptcy, in which the global offshore oil and gas drilling company would shed billions of dollars of debt and raise $1 billion in new investment. U.S. Bankruptcy Judge David Jones in Houston overruled two minor objections to the reorganization plan during a 90-minute hearing. The plan extends maturities on more than $5 billion of bank loans and converts about $2.3 billion in bond debt into equity in a reorganized Seadrill. In addition, the plan will raise about $1 billion in new debt and equity through a rights offering led by Seadrill’s largest shareholder, John Fredriksen, and investment firm Centerbridge Credit Partners LP. “The company will have a tremendous competitive advantage with the new balance sheet,” said Spencer Winters, a lawyer for Seadrill with the Kirkland & Ellis, at the April 17 hearing.Seadrill, which competes with Nabors Industries Ltd. (NYSE: NBR) and Ocean Rig UDW Inc., operates a fleet of more than 30 vessels and was once the largest driller by market value. The company’s stock trades on the Oslo and New York stock exchanges and it has corporate offices around the world. Following a deep drop in oil prices beginning in 2014, the offshore service industry suffered from a glut of capacity and low market rates, a problem that lingers today. Mike Williams Authentic Jersey
India’s jet fuel demand to soar to record highs
An Indian push to connect more cities via airports as an expanding middle class increasingly takes to the skies is set to help propel the country’s demand for jet fuel to record highs this year. That rapid growth in appetite for aviation fuel means the country’s refiners are far less likely to send cargoes abroad, tightening markets from Asia to Europe. Years of breakneck economic expansion have helped India become the world’s fastest growing major domestic aviation market, according to the International Air Transport Association. That has been underpinned by ambitious government plans to overhaul the nation’s infrastructure, including a push to build airports and offer airlines incentives to fly to smaller cities. “The country’s air transport sector has huge potential to grow in the long-term given its large geographical expanse and growing consumer affluence,” said Sri Paravaikkarasu, a Singapore-based analyst at energy consultancy FGE. Average monthly demand for jet fuel could break through 700,000 tons this year, up from 2017’s record 623,000 tons and from 566,000 tons in 2016, several industry analysts estimated. That would be an annual growth rate of around 12 percent, comparable to what China achieved during its main boom years in the early 2000s. India used 2.02 million tons of aviation fuel from January-March this year, up 9.4 percent from a year earlier, the latest government data showed. FGE forecasts a 10.5-percent year-on-year increase in Indian demand for jet fuel in 2018, while energy consultancy Trifecta expects growth of 12-15 percent. REACH FOR THE SKIES Under a flagship government scheme, the Airports Authority of India (AAI) is set to invest 175 billion rupees ($2.7 billion) in upgrading airport infrastructure over 2019-20. “Both passenger and freight miles should benefit from the state-led build out in related infrastructure and improving domestic interconnectivity,” said Emma Richards, a senior oil and gas analyst in London at BMI Research. In a round of bidding for air routes concluded earlier this year, the AAI awarded over 400,000 kilometres per week to connect smaller cities, known as ‘Tier 2’ destinations. Top Indian carrier Interglobe Aviation, which operates as IndiGo and won most of the tenders, said new routes would include flying from Bhopal in central India to Nashik in the west. India’s domestic air traffic for the first two months of 2018 jumped nearly 22 percent from the year before to 22.2 million passengers, according to data from the Directorate General of Civil Aviation. The country’s top five busiest airports – Delhi, Mumbai, Bengaluru, Chennai and Kolkata – handled 31.9 million passengers this January and February, up 15.3 percent from the same period last year. LESS FOR THE REST Indian oil refineries such as Reliance Industries and Essar Oil are significant exporters of petroleum products including jet fuel. Thomson Reuters data shows India is one of the top three Asian suppliers of jet fuel. But exports are set to slow as local demand surges. “Domestic demand growth will certainly limit its ability to service other markets in the region,” said Richards at BMI. Already, India’s monthly exports dropped by more than 7 percent year-on-year in 2017. To deal with rising consumption, India’s refineries are expanding. India’s Ratnagiri Refinery & Petrochemicals – a joint venture between Indian Oil, Hindustan Petroleum and Bharat Petroleum – in April signed an initial deal with Saudi Aramco to build a huge refinery in the western state of Maharashtra. Reliance Industries, operator of the world’s largest refinery, plans to expand its oil processing capacity by over 40 percent by 2030. – Reuters Jake Bischoff Jersey
US energy majors want govt to give them larger access to Indian markets
The United States government has praised India for buying LNG, oil and coal from it but has offered little business interests in return, at the end of the First Strategic Energy Partnership between the two countries. US Energy Secretary, Rick Perry offered no signs of having nudged investment by American companies in India’s oil and gas exploration blocks. He did not say if Washington will ease off on the cases it has dragged India into at the WTO dispute resolution forum for alleged favours shown by New Delhi to domestic solar companies and said it will wait for outcomes before signing on to membership of India promoted International Solar Alliance. “There is no mention of any clear investment promises in the joint statement” said a top India government official. Instead the two page statement cheers Indian investment in the United States and lauds US energy exports to India. Perry said those exports were necessary to restore the imbalance in the US-India trade which shows a $22.9 billion surplus for India in 2017. Speaking with the press after about a two hour meeting with Indian petroleum and natural gas minister Dharmendra Pradhan, Perry spent the better part selling the virtues of Westinghouse manufactured nuclear reactors, for India. “We dont care who fabricates the nuclear plant, but there is no doubt Westinghouse with the best reactors in the world should be housed there”, he said. He did not say by when he expects any deal to be signed for the supply of the reactors for the Kovvada plant. Of course there were some positives too from the discussions. Perry said President Trump believes that India is the partner of choice for the USA, especially in energy business. Yet here too while Pradhan mentioned the expected advantage of US oil imports on prices, Perry made no mention of it in his reply. Instead the Energy Secretary said USA would be keen to support India’s strategic petroleum reserve. The reserve located near Vishakhapatnam currently has a small line of support from the UAE, and it could be to India’s advantage if the USA too moves in. But in return it would demand some concessions for dipping into the Indian domestic energy market. One of those is the possible tweaking of India’s energy template to allow for more gas usage. The US has an even larger advantage in gas than oil being the largest producer of it. The mineral is less polluting than coal but India has stayed away from a vigorous exploration of the market for gas since it too is imported. To correct that imbalance, the two countries have agreed to set up a US-India Natural Gas Task Force. Comprising of industry leaders and government officials it will nudge India to include more gas in its energy mix. “The Partnership will create important opportunities for advancing favorable policies and commercial investments in support of these goals, including in natural gas markets”, the statement added. Perry, it would seem had a large shopping basket for India. Pradhan, it would seem, was more keen to be seen as an amiable host. The lopsided results are a reflection of the edge USA has gained in the Indian markets. Alex Cappa Authentic Jersey
India’s ONGC files arbitration claim against Sudan over unpaid oil dues
The foreign acquisition unit of India’s Oil and Natural Gas Corp’s (ONGCNSE 1.76 %) has filed an arbitration claim against the government of Sudan in a London court, a company official said, seeking to recover dues pending for years from a project hit by the breakaway of South Sudan in 2011. People familiar with the matter in India and Sudan said ONGC had filed a claim for $98.94 million, in what they said was a first for the South Asian nation’s top oil and gas explorer against any government. They declined to be identified because they weren’t authorised to discuss the matter with media. At the centre of the dispute is ONGC’s 25 percent stake the company acquired in the Greater Nile Oil Project (GNOP) in Sudan in 2003. Other stakeholders include China’s China National Petroleum Corp with a 40 per cent stake and Malaysia’s Petronas with a 30 per cent share. “Yes, we have filed an arbitration as our dues have been pending for years,” said N. K. Verma, managing director of ONGC Videsh Ltd (OVL). “Notwithstanding this arbitration we will continue to work with Sudan going forward,” he said, declining to provide details on the timing and location of any hearings, or the amount being sought. The current arbitration is only for a part of pending dues that add up to about $425 million, sources said, adding ONGC has sued the government as the contracts were backed by sovereign guarantees. ONGC will also file arbitrations for the remaining outstanding amount in due course, said a company official, who declined to be identified. Officials in Sudan said contacts and negotiations with ONGC were being lined up. “We have addressed the company (ONGC) to show our commitment to serious negotiation and we (have) set up a committee to determine the time frame to pay back the sum in installments,” said Bekheet Ahmed Abdullah, under-secretary for Sudan’s Petroleum Ministry. SANCTIONS IMPACT OVL’s stake in the Greater Nile Oil Project (GNOP) comprised Blocks 1, 2 and 4, and the firm also agreed to build a 1,500-kilometre pipeline to Port Sudan on the Red Sea. But in 2011 South Sudan broke away from Sudan, after decades of civil war, and took control of blocks 1A, 1B and a part of block 4. Meanwhile, because of years of trade sanctions imposed on Sudan by the U.S. – only lifted in 2017 – Khartoum found it difficult to secure oil for its refineries, and asked foreign companies including OVL to sell their share of oil from the blocks to the African nation. In 2016, OVL signed a separate agreement with Sudan for the sale of its share of GNOP oil. Sudan has not yet paid $90.81 million to ONGC for purchases of oil in 2016 and 2017, according to people familiar with the matter. ONGC Videsh had expected Sudan to clear the dues after lifting of the U.S. sanctions last year. “We are committed to pay the money but due to the sanctions imposed on Sudan, we are facing problems in making payment,” said Sirajuddin Hamid Yousuf, Sudan’s ambassador to India. “The sanctions were eased on Oct. 12, 2017 but we still cannot have normal banking transactions with India and others,” he said. Reggie White Authentic Jersey
Petronet eyes 26 per cent stake in IOC’s LNG terminal at Ennore
India’s largest importer of liquefied natural gas, Petronet has initiated talks for buying 26 per cent stake in Indian Oil Corp’s under-construction 5 million tonne LNG terminal at Ennore, its Managing Director Prabhat Singh said today. The Board of Petronet LNG Ltd has also approved making a formal proposal to Bangladesh for setting up of a 7.5 million tonne (MT) a year LNG terminal at Kutubdia Island, he said. “We have initiated dialogue with IOC. We would be looking at least 26 per cent in Ennore. IOC is also looking at strategic investor and I think we fit the bill,” he told reporters here. IOC’s Rs 5,151-crore liquefied natural gas (LNG) import terminal with a capacity of 5 MT per annum is expected to be completed by mid-2018. Also on the Petronet radar is taking a stake in Gujarat Petroleum Corp Ltd’s (GSPC) almost complete 5 MT terminal at Mundra in Gujarat. “We are in exploratory talks with GSPC.” Petronet had in April this year signed a set of heads of agreement with Bangladesh Oil, Gas and Mineral Corporation (PetroBangla) for the construction of a 7.5 MT LNG project in Bangladesh. The agreement, signed during the visit of Bangladesh Prime Minister Sheikh Hasina’s to India, followed a memorandum of understanding the two companies have signed in December 2016 for the construction of a USD 950 million LNG terminal at Kutubdia Island. “We now have board approval and will present a formal proposal to PetroBangla this month,” Singh said. Under the plan, Petronet would build the terminal in four years from the date of all approval and operate it as a toll service provider. PetroBangla will bring in its LNG and pay Petronet a tolling fee. Petronet reported a 16 per cent rise in April-June net profit to Rs 438 crore on highest ever gas being processed at its two terminals. It processed 192 trillion British thermal units (TBtus) of imported LNG – 184 TBtus at Dahej terminal in Gujarat and 8 TBtus in Kochi, he said. This compared with 178 TBtus processed in the preceding quarter of January-March and 165 TBtus in first quarter of the previous fiscal. Dahej operated at 97 per cent of its expanded 15 MT capacity while Kochi saw highest ever LNG processing and operated at 12 per cent of its 5 million tons a year capacity. Kochi does not have pipelines to take the gas to key consumption areas. Only 2 million standard cubic meters per day of gas offtake is done by Kochi refinery of BPCL and the neighbouring fertiliser plant of FACT. Singh said Petronet is looking at operating LNG fuelled buses. To start with 2 buses each at its Dahej and Kochi terminals would be operated to ferry employees. “These will be on pilot basins,” he said adding the company is looking at operating 10-20 buses in Gujarat and is talking to the state road transport corporation and also GSPC for using their fuel stations. In Kerala, it wants to operated 10 LNG-fuelled buses and is taking to BPCL to use its terminal space for storing LNG and refuelling them, he added. Dante Fabbro Authentic Jersey
Biggest Indian explorer ONGC is said to plan first ever borrowings
Oil and Natural Gas Corp. plans to tap the debt market for the first time, an opportunity that may be hard to pass up for bond bulls. India’s largest state-run energy producer may sell bonds and take out loans of as much as $4 billion to pay for the purchase of the government’s $5.2 billion stake in Hindustan Petroleum Corp. and bankroll $4.5 billion of projects, according to company executives with knowledge of the matter. Given the company’s credit metrics — it has 130 billion rupees ($2 billion) of cash on its books and a long-term rating that’s a notch above the government — the issuance will be bought by investors drawn to one of the world’s fastest growth rates and Prime Minister Narendra Modi’s economic policies. “The sentiment is positive toward India and because the supply from Indian corporates is limited, there will be demand,” Rishabh Tiwari, a Zurich-based fund manager for emerging market credit at Swiss Life Asset Managers, said in an interview. “ONGC has strong credit fundamentals and the acquisition of HPCL will help it diversify into downstream refining.” The appetite for India’s corporate debt is so strong that Hindustan Petroleum’s $500 million offering in July attracted bids for six times the amount. Billionaire Anil Agarwal’s Vedanta Resources Plc last week sold seven-year dollar notes in its second $1 billion sale this year. Even so, the planned fundraising could weaken ONGC’s credit profile at a time when earnings have been hit by the slump in global energy prices. Estimated cash flows of about 400 billion rupees this fiscal won’t be enough to pay for the planned investments, the executives said, asking not to be identified as they are not authorized to speak publicly. Risk Premium To Swiss Life Asset and Frankfurt-based Union Investment Privatfonds, it boils down to how attractively the issuance is priced. “If ONGC is willing to reflect the increased credit risk premium in light of the transaction, there’ll be interested investors,” said Hyun Kim, who manages $2 billion under four funds at Union Investment. “ONGC was one of the strongest quasi-sovereign credits before the HPCL transaction was announced. Leverage will likely increase with this, but the company should be able to handle it.” The company hasn’t borrowed since at least 1993 when it was converted into a corporation, the executives said. Its overseas investment unit, ONGC Videsh Ltd., has tapped the market to fund purchases of oil and gas blocks. Moody’s Investors Service has a Baa2 score on ONGC’s debt, making it the nation’s highest rated state-run company, said Vikas Halan, vice president and senior credit officer at rating company. That should provide the company with a “very strong access” to funding. Le’Raven Clark Womens Jersey
Top oil buyers go on light crude oil hunt to meet diesel demand
Captain Tsitrelis Ioannis and the 26-strong crew of the Malibu arrived at Ulsan in early August after sailing almost 9,000 nautical miles to deliver a million barrels of Kazakh CPC crude from the Black Sea to South Korea, one of the key buyers in the world’s biggest oil market. Another cargo of light oil, which is less sulfurous than heavier grades, is set to arrive in a couple of months at Ulsan from even farther away — the U.S. — to be processed by SK Innovation Co., South Korea’s top refiner. The two shipments are part of a stream of similar varieties flowing to Asia as companies look to process the kind of crude that yields more diesel to capitalize on surging demand for the fuel. Last month, profit margins from making diesel in Asia touched the highest since November 2015, contrary to expectations for a typical seasonal drop in demand during this time of the year due to monsoon rains. The unusual gains have been driven by higher imports of cleaner diesel by India after the government imposed new quality standards and as China uses more to feed the expansion of its construction and industrial sectors. “There’s no reason not to buy more,” Kim Wookyung, a spokeswoman at SK Innovation, said by phone from Seoul. “The margins of these fuels are pretty high.” Profits in Asia from turning benchmark Dubai crude into diesel jumped to $14.38 a barrel on July 31, a gain of 57 percent since touching a nine-month low on May 4. The crack spread, as it’s known, was at $12.64 a barrel at 12:05 p.m. in Singapore on Wednesday. The surge helped lift overall crude refining margins to $7.82 a barrel on Aug. 7, up more than 200 percent from a year earlier, according to data compiled by Bloomberg. “Diesel demand has been strong in emerging economies, including the Philippines, Indonesia and India as they focus on increasing infrastructure spending,” said Peter Lee, an analyst at BMI Research. “China’s diesel demand has returned to growth in the second quarter as construction and industrial consumption picked up.” That’s led South Korean refiners SK Innovation and GS Caltex Corp., among the top regional exporters of distillate fuels, to scour countries from Algeria to the U.S. in search of light crude. Typically, lighter varieties with a lower sulfur content will yield about 85 percent of lucrative products such as gasoil and gasoline, and about 15 percent of residue. Heavier varieties, which are usually cheaper, would yield only 55 percent of valuable fuels, according to SK Innovation. Still, the company — and most refiners — don’t process purely light or heavier crude at any given time. It blends about 15 different grades of oil before a crude distillation unit cracks it into products including diesel and gasoline. The proportion of varieties changes depending on market factors, according to an official at SK Innovation’s plant in Ulsan. While low-cost drilling methods have unlocked vast deposits in places like Texas, supplies from U.S. shale fields are primarily light, low-sulfur oil, which many of the refineries along the American Gulf Coast aren’t designed to process. As a result, exports surged and America now ships more than some members of the Organization of Petroleum Exporting Countries. More Attractive Meanwhile, supplies of heavier crudes — which are more prevalent in the Middle East — have shrunk as OPEC nations including Saudi Arabia curb output as part of a deal aimed at propping up prices. That’s made regional benchmark Dubai crude stronger relative to other markers such as Brent and U.S. West Texas Intermediate, making them more attractive to Asian buyers. “If you can get your hands on light crude now, it’s the time,” said Victor Shum, a Singapore-based vice president at industry consultant IHS Energy. “Given the current strong diesel cracks, refiners indeed should find light, sweet crude to be attractive.” SK Innovation, which is diversifying away from its long-term crude suppliers in the Middle East, will load one million barrels of WTI Midland crude in late August from Freeport, Texas, and the same amount of Mexican Isthmus crude, with both expected to arrive in Ulsan in mid-October. The increased appetite for light crude in new locations mean Captain Ioannis will be tasting new seas as he readies to embark on his next journey. While he’s still waiting to hear the destination, he doesn’t rule any country out. “I travel everywhere,” he said on board the Malibu, which was floating 3 miles off Ulsan. Nazem Kadri Jersey
India: Billionaire Dilip Shanghvi’s Sun Oil may buy GSPC’s Hazira field
Billionaire Dilip Shanghvi’s Sun Oil and Natural Gas is close to acquiring state-run Gujarat State Petroleum Corp.’s (GSPC) 66.67% stake in the Hazira gas field located in the Cambay basin in Gujarat, two people aware of the development said. The deal is expected to close by September, the people said on condition of anonymity, without disclosing the deal value. The purchase would give Sun Oil and Natural Gas full control of the gas field, in which it bought a 33.3% stake from Canada’s Niko Resources Ltd in December for an undisclosed sum. Also in December, state-owned explorer Oil and Natural Gas Corp. Ltd (ONGC) said it had decided to purchase an 80% stake and development rights in GSPC’s Deen Dayal West field in the Krishna -Godavari offshore block OSN-2001/3 for $995.26 million. The Hazira field is part of 16 hydrocarbon assets in Gujarat’s Cambay basin in which GSPC holds stakes. Niko has operated the field for the past 22 years. Sun Oil and Natural Gas is a unit of Shanghvi’s Sun Petrochemicals Pvt. Ltd. GSPC is 87% owned by the Gujarat government. “With the Deen Dayal deal with Oil and Natural Gas Corp. done, GSPC is looking at monetizing other assets. GSPC is in talks with Sun Oil and Natural Gas to sell its entire stake in the field,” said one of the two persons cited earlier. Sun Oil and Natural Gas declined to comment. GSPC did not reply to an email sent on Monday. Currently, the Hazira field produces 1,300-1,400 barrels of oil per day (bopd) and 7-9 million standard cubic feet of gas per day. Gas production began from the field in 1996 and oil production commenced in March 2006. “The field has neared the end of its life and post September, GSPC may have to abandon the block. However, selling it to Sun Oil and Natural Gas would be a better way to monetize the field than abandoning it as abandoning a field costs nearly $30 million (to adhere to the safety norms of abandonment like dismantling the offshore platforms, maintenance of the pipelines etc),” added the first official mentioned above. A banker aware of the deal said it would be a good purchase for Sun Oil and Natural Gas, which has studied the field and wants to explore it further unlike Niko and GSPC, which have other financial commitments. “Sun Oil and Natural Gas’s technical advisers are confident of rich hydrocarbon deposits in the field, which Niko and GSPC do not wish to commit financially to. Thus Sun Oil and Natural Gas would be getting the field at almost scrap value,” said the banker, the second person cited above.
ONGC Videsh to pump $150 million in Colombia, Kazakhstan & Bangladesh
ONGC Videsh, the overseas arm of the state-run Oil and Natural Gas Corp, plans to invest $150 million in exploration this fiscal year to drill more wells in Colombia, where it just made a commercial discovery, as well as in Kazakhstan and Bangladesh. ONGC Videsh, which operates the CPO-5 block of Colombia, has made a commercial discovery in its exploration well Mariposa-1, managing director Narendra Verma has said. The company is now drawing up plans for the development of the Mariposa-1well that has begun a test production of 4,500 barrels per day, he said. The success has also opened opportunity for further exploration in the block. “To chase this lead, we plan to drill two more wells,” Verma said. ONGC has 70% participating interest in CPO-5 block in which the remaing 30% stake in held by Amerisur Resources of UK. ONGC has participating interest in a total of six blocks in Colombia. This includes a producing block whose current output is 35,000 barrels per day. ONGC has also accelerated its exploratory efforts in Kazakhstan and Bangladesh. Drilling has begun in the Kazakhstan block in the Caspian Sea while preparations are on to drill the first well in Bangladesh. “We are hopeful Kazakhstan drilling will end up in success,” Verma said. In all, the exploratory effort would require $150 million of investment this year, Verma said. ONGC Videsh plans to make a total capital spending of $1 billion in 2017-18 in exploration, development and production across all its projects. ONGC Videsh’s production jumped 40% in 2016-17 mainly on 26% stake acquisition in Russia’s prolific Vankor fields. The output is expected to rise further 15% in the current fiscal year to 14.35 million tonnes of oil equivalent (mtoe). “We are actively working towards meeting our target of 20 mtoe by 2020,” said Verma. The company has also entered Namibia’s oil and gas sector with a purchase of 30% interest from Tullow Oil in the African country’s three oil blocks. ONGC Videsh’s investment in the Imperial fields of Russia will likely get some production boost after an associated gas processing plant comes up. The tender for the plant has been awarded and it would be ready in about 18 months, Verma said. This would help push up oil production from the field by 4000 barrels/day from the current 7000 barrels/day. Gerald Green Jersey