Energy Information Administration cuts U.S. oil production growth forecast for 2018
The U.S. Energy Information Administration said on Tuesday it expects U.S. crude oil production in 2018 to rise by less than previously expected. The agency forecast that 2018 crude oil output will rise by 560,000 barrels per day to 9.91 million bpd. Last month, it expected a 570,000 bpd year-over-year increase to 9.9 million bpd. For 2017, it forecast a rise of 500,000 bpd to 9.35 million bpd. Last month, it expected a 460,000 bpd increase to 9.33 million bpd, according to the EIA’s monthly short-term energy outlook. Meanwhile, the agency forecast that U.S. oil demand for 2017 is set to grow by 340,000 bpd compared with a 310,000 bpd previously. For 2018, oil demand is expected to rise by 330,000 bpd vs 360,000 bpd previously. Mike Gartner Authentic Jersey
OPEC expects laggards to comply more fully with oil cut pact
OPEC expects greater adherence to its pact with non-OPEC producers to cut oil output after two days of meetings in Abu Dhabi aimed at boosting compliance with the accord. The Organization of the Petroleum Exporting Countries, Russia and other producers are cutting output by about 1.8 million barrels per day (bpd) until March 2018 to get rid of a glut and support prices. OPEC producers Iraq and the UAE have shown relatively low compliance with the deal based on figures from secondary sources OPEC uses to monitor its supply. Meanwhile, non-OPEC Kazakhstan and Malaysia have been boosting output in the last few months, according to the International Energy Agency. In Abu Dhabi, a panel comprising Russia, Kuwait and Saudi Arabia, plus officials from OPEC’s Vienna headquarters, met individually with officials from Iraq, the United Arab Emirates, Kazakhstan and Malaysia. “Discussions were conducted in a constructive atmosphere and proved fruitful,” OPEC said in a statement. “The conclusions reached with the countries at the meeting will help facilitate full conformity,” it added, although it did not give details on how compliance would be increased. The meeting was a special session of the JTC, or Joint Technical Committee, which is monitoring adherence to the deal. A ministerial panel, known as the JMMC, met last month and instructed that the Abu Dhabi meeting be held. “The UAE, Iraq, Kazakhstan, and Malaysia all expressed their full support for the existing monitoring mechanism and their willingness to fully cooperate with the JTC and JMMC in the months ahead in order to achieve the goal of reaching full conformity,” OPEC said. Another OPEC source said the officials discussed crude exports and some countries’ disagreement with the level of their production as assessed by the secondary sources. At a meeting held in Russia last month, the UAE and Iraq confirmed their commitment to the pact but offered no concrete plan on how to meet their production targets, sources said. Iraq and the UAE say the assessment of their production by secondary sources – figures from government agencies, consultants and industry media that OPEC uses to monitor its output – before the pact took effect in January was too low. They argue that as a result, the two countries have the unpalatable task of making an even bigger cut to comply fully. Sheldon Rankins Jersey
India setting up energy cooperation network with neighbours: Dharmendra Pradhan
India is setting up an energy cooperation network with neighbouring countries Myanmar, Bangladesh and Nepal and huge pipelines would be laid as part of the ambitious project, Union Minister Dharmendra Pradhan said here on Monday. “Through diplomatic channels, India already tied up to set up an energy cooperation network with Myanmar, Bangladesh and Nepal. All the countries have already agreed to this ambitious mission,” said the Minister of State (independent charge) for Petroleum and Natural Gas. Through the proposed pipelines, diesel, liquefied petroleum gas (LPG) and other petroleum products would be ferried, he told the media. As the mountainous northeastern states are landslide prone and carrying of petroleum products in the region is a big problem, the proposed pipelines would be a great help for the area. The Minister accompanied by Tripura Food, Civil Supplies and Consumer Affairs Minister Bhanulal Saha on Monday launched the Pradhan Mantri Ujjwala Yojana (PMUY) scheme in the Left-ruled state by distributing PMUY connections to 20 women beneficiaries belonging to below poverty line. According to a senior official of the Oil and Natural Gas Corporation, as part of the “Hydrocarbon Vision 2030” for the northeastern region, 6,900 km of pipelines would be laid connecting Sitwe (Myanmar), Chittagong (Bangladesh), most northeastern states and West Bengal’s Siliguri and Durgapur. Currently, large quantities of gas is flared (burned) in the northeastern region because it can’t be piped to the consumers, the official added. Pradhan had launched the “North East Hydrocarbon Vision 2030” in February last year, proposing to invest Rs 1,30,000 crore over 15 years to ramp up hydrocarbon production in northeast India. Pradhan also laid the foundation stone for a 60 metric tonne per annum capacity LPG (cooking gas) bottling plant at Bodhjungnagar industrial park (20 km north of here) on Monday. A sum of Rs 143 crore would be spent for the plant, which would be commissioned by June 2019. “The proposed bottling plant at Bodhjungnagar would be able to cater to the rising demand of cooking gas in Tripura. Existing Silchar (in southern Assam) bottling plant’s capacity would also be augmented by 60 metric tonne per annum ensuring smooth supply of LPG in the northeastern states.” He said that after the launch of PMUY by Prime Minister Narendra Modi on May 1, 2016, so far over 2.7 crore beneficiaries have been given LPG connections. Pradhan said that the scheme aims to provide clean cooking fuel to women belonging to the five crore below poverty line households across the country by 2019. This is a part of a larger programme of adding 10 crore new LPG connections by 2019 to achieve full coverage of connections among Indian households. Breeland Speaks Authentic Jersey
GSPC won’t fully exit Rs 50 billion Mundra LNG project
Gujarat State Petroleum Corporation (GSPC) has clarified that it is not fully exiting the Rs 50 billion Mundra LNG terminal project in which Indian Oil Corp’s (IOC) is eyeing up to 50% stake. At present, GSPC holds 75% stake in the 5-million-tonne-per-annum project, while Adani Group holds 25%. GSPC had originally planned to sell the remaining 25% stake to a strategic partner and had even shortlisted some companies for the same but the plan could not go through for 3-4 years. However, IOC Board on Friday approved the proposal to acquire up to 50% stake in the project for an estimated Rs 7.50 billion. GSPC officials said that IOC is being roped in as a strategic partner. Of late, there have been speculations that GSPC was looking to sell its entire 75% stake and exit the Mundra LNG project and the latest development has further fuelled such speculations. State’s chief secretary and GSPC chairman J N Singh, however, told DNA Money that while a final decision regarding GSPC’s shareholding is still to be taken, “we are not going out for sure”. Asked if GSPC would remain a minority partner in the project by retaining just 25% stake, Singh said that it could be 25% or more. “The IOC Board has approved acquisition of up to 50% stake in the project. It is their offer, we are still to take a call,” Singh said. Another senior official also confirmed that the quantum of stake sale in the Mundra LNG project has not been decided yet, but a decision would be taken soon. “This decision has to be taken by the political leadership. But, it is equally true that GSPC does not have many financial resources,” he said. According to officials, work on the LNG terminal is nearing completion, and it is expected to be commissioned by the end of this year. The project comprises receiving, storage and regasification facilities for liquefied natural gas (LNG). The project’s initial capacity of 5 mtpa can be expanded to 10 mtpa. Howie Kendrick Jersey
Talks on for gas pipeline from Chittagong to Tripura: Pradhan
The Ministry of Petroleum and Natural Gas has taken up with Bangladesh for laying a pipeline for carrying natural gas from Chittagong to Tripura to meet the crisis of cooking gas (LPG) in the North-eastern region, Oil Minister Dharmendra Pradhan said. “We are laying a pipeline for transportation of diesel from Siliguri in West Bengal to Parvatipur in Bangladesh. There is pipeline for carrying diesel from Numaligarh oil refinery in Assam to Siliguri. “In exchange, we have given the proposal for a gas pipeline from Chittagong to Tripura. We are pursuing the matter diplomatically and I would also visit Bangladesh soon,” Pradhan told reporters here. The pipeline if approved by the Bangladesh government would be laid by the side of the rail lines which pass near the Indo-Bangla international border, he said. Pradhan launched the Pradhan Mantri Ujjwala Yojana in Tripura here and distributed LPG connection to 20 below poverty line (BPL) families. In Tripura 0.922 million households are having LPG connections and efforts are on to bring 100 per cent coverage in the days to come. The Oil minister also laid the foundation for a new grassroots bottling plant here with 60 TMTPA capacity with an estimated cost of Rs 1.43 billion which would be completed by 2019. Pradhan said, now about 0.45 million households are covered by the existing bottling plant out of total 0.922 million households having LPG connection. With the completion of the new bottling plant the capacity of supplying LPG would be doubled and most of the households would be covered, he added. Dan Feeney Jersey
Indian Oil Corp approves buying up to 50% stake in GSPL LNG
Indian Oil Corp has approved buying up to 50 per cent stake in GSPL LNG. It has approved first stage expansion of its Gujarat refinery to 18 mmtpa of crude oil processing capacity at an estimated cost of Rs 150.34 billion. First stage approval for installation of a second catalytic de-waxing unit at Haldia refinery at an estimated cost of Rs 11.26 billion has also been received First stage approval for installation of ethanol plant using gas fermentation technology of Lanzatech USA at Panipat refinery for Rs 4.41 billion has also been received. Vadim Shipachyov Womens Jersey
GAIL seeks reworking of US LNG price deal
GAIL, India’s biggest gas transporter, has deals to buy 5.8 million tonnes of US LNG per annum for 20 years. “We need to be in sync with the market, whether it is buyer or seller. So, if market dynamics has changed and there is a glut of gas the world over with falling rates, the same should also reflect in our prices,” a source said requesting anonymity as the talks are private. GAIL, he said, is approaching US LNG sellers to reopen the contracts. It wants to renegotiate the 2011 sales and purchase agreement (SPA) with Cheniere Energy for import of 182.5 trillion British thermal units of LNG (equivalent to approximately 3.5 million tons) annually, with yearly fixed fees of USD 548 million and a term of 20 years. GAIL had agreed to pay Cheniere a price of USD 3 per million British thermal unit (mmBtu) plus 115 per cent of the final settlement price for the New York Mercantile Exchange Henry Hub natural gas futures contract for the month in which the relevant cargo is scheduled. Also, 15 per cent of the fixed portion of the contract sales price will be subject to annual adjustment for inflation. The source said GAIL wants the fixed portion to be lowered to bring down landed cost of LNG to around USD 7-8 per mmBtu as against the present USD 9.7. LNG in the spot or current market is available for less than USD 6 per mmBtu. US supplies are scheduled to begin from the next year. Cheniere, currently the only US company exporting LNG, is reportedly not in favour of reopening the signed contracts as it expects the signed ‘take-or-pay’ agreements to be honoured. Besides the 3.5 million tonnes per annum of LNG from Houston-based Cheniere, GAIL has booked 2.3 mt a year capacity at Dominion’s Cove Point liquefaction facility. GAIL had previously sought reopening of the August 2009 deal for import of 1.44 mt per annum of LNG for 20 years from Australia’s Gorgon project. Gas from Gorgon is indexed at 14.5 per cent of prevailing oil rate. The indexation agreed was one of the highest in the world. Gorgon LNG at an oil price of USD 50 per barrel would cost USD 7.25 per mmBtu at the loading port. Added to that will be shipping cost and import duty as also the cost of converting the super-cooled liquid gas back into its gaseous state, taking the price to USD 9.5. ExxonMobil-led Gorgon has not accepted the demand so far. In 2015, India renegotiated price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping save Rs 80 billion. The price of imported LNG under this agreement had been linked to crude oil (Japanese Customs Cleared Crude or JCC) and had a concept of floor and ceiling indexed to last 5-year average. The rate thus arrived was higher than spot LNG. A renegotiation of the deal was sought and RasGas of Qatar agreed to modify the pricing formula to link it with last 3-month average rate of Brent crude oil, the source said. Gerald Everett Jersey
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. Claudio Reyna Authentic Jersey
Bharat Petroleum Corporation Ltd to venture into gas biz: CMD D Rajkumar
Bharat Petroleum Corporation Ltd (BPCL) plans to venture into gas business and diversify resources for source of fuels as part of its five-year plan, a top official said today. “BPCL under the next five-year plan has set a target of Rs one lakh crore to be spent for all its expansion activities which includes marketing, refining etc…,” BPCL chairman and managing director D Rajkumar told reporters here. “We want our market cap to reach Rs 2.50 lakh crore. That is 2.5 times increase of what it is now. We have also planned to venture into gas business. That will be our next value chain,” he said. To a query, he said, the company has taken up ‘an experiment’ to import crude oil from the United States under its ‘diversification’ exercise. “We have imported two cargos of crude (from US) as an experiment. That is one (cargo) with crude with high sulphur and another (cargo of) crude with low sulphur. One million barrels each. This is basically with a view to diversify resources that are available to us”, he said. “We really want to ensure that the prices are kept within the limits. For that it is necessary we source it from the right sources. We have been looking at various sources. Whatever we import, the crude will be refined in our existing refiners within the existing configuration”, he said. “Right now, what we are trying to do is to diversify our sources in an efficient manner.”, he said. Talking about the company’s financial performance, he said BPCL clocked Rs 2.42 lakh crore revenue with a profit after tax at Rs 8,339 crore. “We hold market share of 24 per cent and our market cap is more than Rs one lakh crore”. To a query on expansion of outlets, he said the company currently has 14,000 outlets across the country. “In Tamil Nadu, we have about 4,524 outlets. Depending upon demand we will expand”. Josh Archibald Jersey
High Profits Boost Foreign Refineries’ Scramble for Nigerian Crude
Shortage of certain grades of crude oil in the international market following production cuts by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC, coupled with booming refinery profits, have forced foreign refineries in the United States and Asia to scramble for cargoes of Nigerian crude. This latest development is in contrast to recent months when the loading of cargoes of Nigerian crude had lingered after the programmes were issued by the producing companies. At the peak of the militant attacks on oil and gas infrastructure in the Niger Delta in 2016, which led to the declaration of force majeure by the international oil companies (IOCs) on four Nigerian grades of crude oil, supply disruptions had created delivery uncertainties that forced crude buyers in India and the United States to shun Nigerian crude. For instance, India’s Hindustan Petroleum Corporation Limited had cancelled a vessel it chartered to carry two million barrels of Nigeria’s Qua Iboe following the force majeure declared by ExxonMobil on the exports of this grade of crude oil. ExxonMobil had declared the force majeure on Qua Iboe after a drilling rig working for another oil company damaged its pipelines. The development had prompted the state-run Indian Oil Corporation Limited, which is a major buyer of Nigerian grades to cancel the tender for Qua Iboe. Also, Indonesia’s Pertamina, which is also a buyer of Nigerian crude, shunned the Nigerian grades and opted for Congolese Coco, Angolan Girasol and Saharan Blend from Algeria. Pertamina had said it shifted its preferences as a result of the violence in the Niger Delta, which made the delivery of Nigerian cargoes uncertain. The Senior Vice-President of ISC Pertamina, Daniel Purba, had told Reuters that the firm was “monitoring” Nigeria, but “currently it’s still not affecting crude purchasing”. However, Reuters has reported that the booming refinery profits are helping Nigerian oil producers sell cargoes quickly, aided by the crisis in Venezuela, and the shortage of certain types of crude amid OPEC production cuts. Competition among buyers has boosted offers for Nigeria’s Forcados grade to as much as $1.70 above dated Brent, while offer levels climbed for nearly all other Nigerian grades. Crude buyers are said to be keen on buying Nigerian crude partly due to strong profits for sulphur-rich fuel oil, which is boosting demand for Nigerian oil. Nigerian crude has lower sulphur content and produces more fuels such as gasoline. Though light crudes suffered because most production additions this year, from US shale, Libya and Nigeria, were light crude, the shortage of certain grades as a result of OPEC cuts led some buyers to shift to light oil. According to reports, the long-suffering Nigerian grades are finding keen buyers in the United States and Asia as refineries run full steam on strong margins. While the United States refinery margins were said to have rallied to a two-year high on Tuesday, Europe’s refinery runs were also said to be on track for a six-year high for August before Europe’s largest oil refinery went into an unplanned shutdown over the weekend. CM Punk Jersey