Under pressure, Qatar says will boost gas production by 30 per cent
Energy-rich Qatar said Tuesday it plans to increase natural gas production by 30 percent over the next several years, as it faces pressure from its neighbours in a diplomatic crisis. State-owned Qatar Petroleum said it would go ahead with the output boost regardless of whether or not Saudi Arabia and its allies maintain a sweeping embargo they imposed last month. The company’s head, Saad Sherida Al-Kaabi, said the emirate intends to raise production to 100 million tonnes a year by 2024 by doubling the size of a project in the world’s largest gas field. “We will increase our energy production capacity from 77 million tonnes per annum to 100 million tonnes per annum, which represents a 30 per cent increase which will start five to seven years from now,” he told reporters. Qatar is already the world’s biggest producer of Liquefied Natural Gas (LNG). Kaabi said the decision to expand production by the equivalent of six million barrels of oil per day would cement the country’s position as a world leader in the gas industry. Qatar Petroleum had already said in April that it was lifting a self-imposed ban on development in the huge offshore North Field, which it shares with Iran and where the additional output will come from. The timing of the latest announcement is likely to be seen as as much political as economic as Qatar is locked in the Gulf’s worst diplomatic crisis in years. On Monday, the emirate gave its response to a 13-point list of demands its neighbours made for lifting their sanctions. Kaabi said Qatar wanted the production increase to be carried out through a joint venture with international companies. But he added that the emirate would still go ahead with it even if Saudi Arabia and its allies made good on their threat to sanction any international firm working with Qatar if it failed to meet their demands. “We have absolutely no fear of having the embargo in place,” he said. “Regarding the… possibility of embargo countries asking some of the international companies or contractors not to work with us, we absolutely do not have any issue with that. “The companies that choose not to work with us — that’s fine, that’s their choice. “If we run out of companies that will join us… if there are no companies willing to work with us, we will go to 100 million, 100 percent.” One of the richest countries in the world, Qatar’s vast wealth has largely been built on gas production. In 1997, when its first shipment of LNG sailed to Japan, Qatar’s exports were valued at around $5 billion. That figure had reached $125 billion by 2014, according to trade data site the Observatory of Economic Complexity. Jamie Langenbrunner Authentic Jersey
Spain’s power and gas firm Gas Natural targets $40 billion EDP merger -sources
Spanish power and gas company Gas Natural has approached Portuguese rival EDP about merging to form Europe’s fourth biggest utility by market value, people familiar with the matter said on Monday. Talks over a potential 35 billion euro ($40 billion) deal and its potential structure are still at an early stage and there is no certainty over their outcome, four sources said, although Gas Natural chairman Isidre Faine has already sounded out his Portuguese counterpart Antonio Mexia about a tie-up. A deal would create an Iberian champion competing with France’s Engie and EDF and not far behind heavyweights Enel and Iberdrola. And it could trigger a long expected wave of consolidation among Europe’s biggest utilities as they seek to gain scale and shift their revenue streams towards renewables to protect profits from steep competition and narrower margins. A Gas Natural-EDP merger is seen as a good strategic fit as EDP has made big headway in renewable power while Gas Natural remains strong in gas-fired or coal generated electricity. The two have a complementary footprint, especially in Latin America where the Spanish firm is strong in Chile and Mexico and the Portuguese group in Brazil as well as in the United States. “The combination of the two companies is quite attractive as Gas Natural lacks power generation in Latam and renewables. But the key to the deal is the politics”, said a major shareholder in one of the two firms. EDP declined to comment. Gas Natural said it was not in merger talks with EDP. CROSS-BORDER DEALS Any attempt to consolidate Europe’s fragmented energy market has so far raised eyebrows among European competition authorities who fear it could translate into higher prices. But sector insiders say the mood for cross-border deals has changed since the French election victory of Emmanuel Macron who has been a strong advocate of creating European champions. Meanwhile, Spain’s prime minister Mariano Rajoy and his Portuguese counterpart Antonio Costa, are working on increasing connections between the energy grids of the two countries and with Europe and none of either group’s main shareholders is seen as raising objections if the price is attractive. A merger would also mark the latest effort by Spain’s Criteria, which owns direct or indirect stakes in Caixabank , Abertis, Gas Natural, Repsol or Telefonica, to restructure its portfolio. The holding company, which is also managed by Faine, wants to focus on smaller stakes in bigger companies with potentially less political influence but higher financial returns. Criteria, which is reviewing a potential tie-up between toll road operator Abertis and Italy’s Atlantia, declined to comment. But it has a track record for such deals and in 2014 exchanged 100 percent of Agbar for 5 percent of Suez. “Faine has done it with Agbar and is about to do it again with Atlantia and Abertis,” a source with knowledge of the deal said. “Now, he is looking towards Portugal to replicate the move with Gas Natural and EDP.” Alex Anzalone Jersey
Trump to promote U.S. natural gas exports in Russia’s backyard
President Donald Trump will use fast-growing supplies of U.S. natural gas as a political tool when he meets in Warsaw on Thursday with leaders of a dozen countries that are captive to Russia for their energy needs. In recent years, Moscow has cut off gas shipments during pricing disputes with neighboring countries in winter months. Exports from the United States would help reduce their dependence on Russia. Trump will tell the group that Washington wants to help allies by making it as easy as possible for U.S. companies to ship more liquefied natural gas (LNG) to central and eastern Europe, the White House said. Trump will attend the “Three Seas” summit – so named because several of its members surround the Adriatic, Baltic and Black Seas – before the Group of 20 leading economies meet in Germany, where he is slated to meet Russian President Vladimir Putin for the first time. Among the aims of the Three Seas project is to expand regional energy infrastructure, including LNG import terminals and gas pipelines. Members of the initiative include Poland, Austria, Hungary and Russia’s neighbors Latvia and Estonia. Trump’s presence will give the project a lift, said James Jones, a former NATO Supreme Allied Commander. Increased U.S. gas exports to the region would help weaken the impact of Russia using energy as a weapon or bargaining chip, said Jones. “I think the United States can show itself as a benevolent country by exporting energy and by helping countries that don’t have adequate supplies become more self-sufficient and less dependent and less threatened,” he said. Trump’s Russia policy is still taking shape, a process made awkward by investigations into intelligence findings that Russia tried to meddle in the 2016 U.S. presidential race. Russia denies the allegations and Trump says his team did not collude with Moscow. Lawmakers in Trump’s Republican Party, many of whom want to see him take a hard line on Russia because of its interference in the election and in crises in Ukraine and Syria, support using gas exports for political leverage. “It undermines the strategies of Putin and other strong men who are trying to use the light switch as an element of strategic offense,” said Senator Cory Gardner, a Republican from Colorado who is on the Senate Foreign Relations Committee. The Kremlin relies on oil and gas revenue to finance the state budget, so taking market share would hurt Moscow. “In many ways, the LNG exports by the U.S. is the most threatening U.S. policy to Russia,” said Michal Baranowski, director of the Warsaw office of think-tank the German Marshall Fund. COMPETITIVE ARENA The U.S. is expected to become the world’s third-largest exporter of LNG in 2020, just four years after starting up its first export terminal. U.S. exporters have sold most of that gas in long-term contracts, but there are still some volumes on offer, and more export projects on the drawing board. Cheniere Energy Inc, which opened the first U.S. LNG export terminal in 2016, delivered its first cargo to Poland in June. Five more terminals are expected to be online by 2020. Tellurian Inc has proposed a project with a price tag of as much as $16 billion that it hopes to complete by 2022, in time to compete for long-term contracts to supply Poland that expire the same year and are held by Russian gas giant Gazprom . “We would like to be a supplier that competes for that market,” Tellurian Chief Executive Meg Gentle told Reuters. A global glut in supply may, however, limit U.S. LNG export growth, regardless of Trump’s support. The glut has depressed prices and made it difficult for LNG exporters to turn a profit, said Adam Sieminski, an energy analyst with the Center for Strategic and International Studies. Russia has the advantage in Europe due to its proximity and pipeline connections. “Europe is going to be the great competitive arena between Russian gas and LNG,” said Daniel Yergin, the Pulitzer Prize-winning oil historian and vice-chairman with IHS Markit analysis firm. NORD STREAM Europeans will be watching to see whether Trump clarifies his administration’s position on a new pipeline to pump Russian gas to Germany, known as Nord Stream 2. The U.S. Senate in June passed a package of sanctions on Russia, including provisions to penalize Western firms involved in the pipeline. The new sanctions have stalled in the House of Representatives. The U.S. State Department has lobbied against the pipeline as a potential supply chokepoint that would make Europe more vulnerable to disruptions. The threat of sanctions adds to tensions between Washington and Berlin. Germany’s government supports the pipeline, and Trump’s position on it is a concern for European diplomats. Jamie Collins Jersey
GST: LPG becomes costlier by Rs 32 as tax rate increases, subsidy comes down
Even as the Narendra Modi government basks in the glory of a successful launch of the Goods and Services Tax (GST), the common man has seen mixed cues, as prices of some products have gone higher, while those of some others have reduced. Reports said on Monday that households will have to shell out more for a cylinder of cooking gas or LPG (Liquefied Petroleum Gas) from this month, owing to the new tax regime combined with a reduction in subsidy. LPG has been put in the 5 per cent GST slab, where earlier some states had absolutely no tax on the household essential and some others had a VAT between 2 to 4 per cent. Not only this, the common man will also have to pay more as installation, administration and documentation charges for new connections and also for the mandatory two-year inspection, reported Times of India. Additional cylinders have also been put under 18 per cent tax slab. The price rise is expected to be anywhere between Rs 12 and Rs 15 per cylinder, in states that earlier levied no tax on the fuel. In other states, the rise will depend on the gap between the rate of GST on LPG and rate of VAT applicable earlier. Moreover, the amount of subsidy has also been reduced, effective June, 2017. Speaking to the TOI about the reduction in subsidy, National Secretary of All India LPG Distributors Federation Vipul Purohit said, “The subsidy amount of Rs 119.85 paid to eligible consumers in Agra, for example, till June has also been reduced. According to the new notification, they will receive only Rs 107 in their bank accounts.” When put together, both these changes will effect the prices by Rs 32 per cylinder, depending on the state, said TOI. Factors like transportation and storage logistics will be contribute to the difference in pricing between various states. It is pertinent here to mention that there has been no effect of GST on the subsidy, and that the subsidy amount varies every month, due to change in the gap with international price. On the other hand, the prices of commercial LP cylinders will come down by about Rs 69, due to GST. Earlier the total tax on LPG for commercial use attracted a tax levy of 22.5 per cent (8% excise duty and 14.5% VAT), while under GST, it has been put under the 18 per cent tax slab. Ivan Rodriguez Womens Jersey
IOC launches 450-kg jumbo LPG cylinder in Coimbatore
Indian Oil Corporation on Monday launched 450-kg Indane Jumbo LPG cylinder in the Indian market. Indane Jumbo called the “Mini-Bulk” is available in minimum footprint size with a flow rate of up to 2,000 kg/hour and does not require licence to use. Talking to reporters on the sidelines of the launch, Indian Oil Executive Director – Tamil Nadu and Puducherry, R Sitharthan said Coimbatore, being a very industrialised city, was the best place to introduce the product in India. “With this launch we expect to meet the need of industries where space is a constraint and constant changeover is not possible.” he said. Despite its size, “Jumbo” is easy to handle and can be installed quickly, as ease of operation was one of the primary things that were kept in mind when it was conceptualised, apart from meeting the high flow rate requirement, he said. Being the most profitable PSU in India and ranked 161st in Fortune 500 Global List, with a revenue of 54.7 billion US Dollars, IOC is handling 11 out of 23 refineries in India and 12,848 kms of pipelines across the country, he said. Launched in 1970, Indane is delivered to the doorsteps of over 98 million households and sales crossed 10 million metric tonnes (MMT) after registering 10 per cent year-on-year growth during 2016-17, he said. Indane is now available in compact 5 kg cylinders for rural, hilly and inaccessible areas, 14.2 kg cylinders for domestic use, and 19 kg and 47.5 kg and 450 kg for commercial and industrial use, Sitharthan said. With 91 bottling plants in upcountry locations with state-of-the-art safety features, two million cylinders are rolled out a day, making the company the second largest marketer of LPG globally, after SHV Gas of the Netherlands, he said. The company has released an all-tie high 15 million LPG connections (PMUY + non-PMUY) during 2016-17 against 10.3 million during the last financial year, he said. Sitharthan said that as of today, a total of 44,43,637 customers had joined the “give it up” campaign resulting into savings of Rs. 17.5968 billion. Martin Jones Jersey
ONGC Videsh enters Namibian offshore
ONGC Videsh Limited (OVL) is eyeing entry in the Namibian offshore oil assets through definitive binding agreements. An official statement said, OVL has signed definitive binding agreements with Tullow Namibia Limited (Tullow), a wholly owned subsidiary of Tullow Oil plc, on June 28. These agreements are for acquiring 30 per cent participating interest in Namibia Petroleum Exploration License 0037 for Blocks 2112A, 2012B and 2113B and related agreements (License) out of Tullow’s existing participating interest of 65 per cent in the License. Pan continental Namibia (Pty) Limited with 30 per cent Participating interest and Paragon Oil and Gas (Pty) Limited with 5 per cent participating interest are other partners in the License. Tullow is the operator of the License and shall continue to remain operator after acquisition by ONGC Videsh. The acquisition is subject to satisfaction of customary conditions precedents including approvals of Namibian regulatory authorities and joint venture partners. Captain Munnerlyn Jersey
French energy giant Total to sign Iran gas deal, biggest since sanctions lifted
French energy giant Total will finally sign its multi-billion-dollar agreement to develop an Iranian offshore gas field on Monday, the oil ministry said, in the biggest foreign deal since sanctions were eased last year. “The international agreement for the development of phase 11 of South Pars will be signed on Monday in the presence of the oil ministry and managers of Total, the Chinese company CNPC and Iranian company Petropars,” a ministry spokesman told AFP. Total signed a preliminary deal with Iran in November, taking a 50.1 percent stake in the $4.8 billion (4.2 billion euro) project. China National Petroleum Corporation (CNPC) will own 30 percent and Petropars 19.9 percent. Total will put in an initial $1 billion for the first stage of the 20-year project. The gas produced will “feed into the domestic Iranian market starting from 2021,” a Total spokesman told AFP in Paris. He said the company would “implement the project with the strictest respect for national and international law”. The contract was initially due to be signed in early 2017, but CEO Patrick Pouyanne said in February that Total would wait to see whether the US adminstration of President Donald Trump reimposed sanctions on Iran. Trump threatened during his campaign to tear up the landmark accord between Iran and six world powers that came into force in January 2016 and eased sanctions in exchange for curbs to Tehran’s nuclear programme. His administration has taken a tough line on Iran and imposed fresh sanctions related to its ballistic missile programme and military activities in the region. But the White House has kept the nuclear deal alive, continuing to waive the relevant sanctions every few months as required under the agreement. It is partway through a 90-day review on whether to uphold the deal, although any move to abandon it would be strongly opposed by the other signatories — Britain, France, Germany, China and Russia. Monday’s signing will mark Total’s return to Iran, which has the second-largest gas reserves and fourth-largest oil reserves in the world. The French firm led development of phases two and three of South Pars in the 1990s and had signed up to develop phase 11 back in 2009. But it was forced to abandon its projects in Iran in 2012 when France joined European Union partners in imposing sanctions, including an oil embargo, over the country’s nuclear programme. Iran’s oil officials have been keen to attract Western investment and know-how to improve the country’s outdated energy infrastructure. Iran has also signed preliminary agreements with Shell and Russia’s Gazprom to develop oil and gas projects. Such deals have not been without controversy in Iran, which has bitter memories of exploitation and interventions driven by foreign oil interests. Conservatives criticised the move to award tenders to foreign firms last year. That forced the oil ministry to confirm that domestic conglomerates, including one controlled by the elite Revolutionary Guards, would be allowed to compete. The first stage of the new 20-year project at South Pars will cost around $2 billion and consist of 30 wells and two well-head platforms connected to existing onshore treatment facilities. The site will eventually pump 50.9 million cubic metres (1.8 billion cubic feet) of gas per day into Iran’s national grid. Paul Byron Jersey
India’s highest petrol pump runs out of diesel
At an altitude of 12,250 feet from sea level, the only petrol pump in the entire Spiti valley has been without diesel for nearly a week now. This in the midst of the peak tourist season. Spiti is connected by road from Shimla and Manali but the tankers carrying fuel are not able to reach the filling station in Kaza, which is claimed to be the highest petrol pump of the country, due to multiple landslides and a damaged bridge. The nearest filling stations are in Kinnuar, Manali or Tandi (Lahaul) which are reachable only after several hours of journey. While local residents claim that they are not getting sufficient petrol or kerosene either, the administration has claimed that problem was limited to availability of diesel only. “Two tankers are stuck near Gramphu on Manali-Kaza road due to landslides and four tankers are not being allowed to cross Akpa bridge of Kinnaur as Border Roads Organization (BRO) engineers believe heavy vehicles can cause the bridge to collapse,” Spiti additional deputy commissioner Vikram Singh Negi said. “We have some diesel in storage. We are selling it only those in dire need so that vehicles can reach the next filling station. One of the tankers is expected to reach Kaza very soon which will definitely provide some relief,” he added. The Indian Oil’s filling station at Kaza is being run by HP State Civil Supplies Corporation. As the Apka bridge in Kinnaur was not able to carry heavy machineries, the official were planning to transfer fuel to small vehicles to decrease the weight on tankers. On the other side, landslides between Gramphu and Chhatru on Manali-Kaza road were blocking the road repeatedly. June to October is the peak tourist season in Spiti valley. Other months being extremely cold with temperature at some places dipping below minus 25 degrees Celsius, this is the season to start various construction works in the valley. Not only tourists but local taxi operators, buses and all machines running on diesel have been rendered useless. Washington Redskins Jersey
India gives Iran $11 Billion `Best Offer’ on Farzad-B gas field
An Indian consortium is willing to spend as much as $11 billion to develop a giant Iranian natural gas field and build the infrastructure to export the fuel as long as the Persian Gulf nation guarantees a “reasonable return” on the project, according to the company leading the group. ONGC Videsh Ltd. has offered to invest as much as $6 billion on the Farzad-B field and spend the remaining amount to build a liquefied natural gas export facility, according to Narendra Kumar Verma, managing director of the overseas investment unit of India’s largest explorer, Oil & Natural Gas Corp. The group is seeking a return of about 18 percent, and Indian companies are willing to buy all the gas exported from the project, Verma said. “We have given our best offer to them. Now, it is up to them to agree or not agree,” Verma said in a phone interview. “We have told the Iranian authorities very clearly that some basic returns are necessary.” As India, the world’s fourth-largest LNG buyer, seeks to lock up gas resources to meet growing demand and spur the use of cleaner-burning fuels, Iran is emerging from sanctions that stifled investment in its energy sector. The Persian Gulf nation on Monday plans to sign a formal contract with Total SA and China National Petroleum Corp. to develop its share of the offshore South Pars project, the world’s biggest natural gas field. Officials from Iran’s Ministry of Petroleum and the National Iranian Oil Co. were unable to comment Sunday on Farzad-B. The two countries had aimed to conclude a deal by February on developing the field, which India has said holds reserves of almost 19 trillion cubic feet. The consortium, which includes Indian Oil Corp. and Oil India Ltd., has been trying to secure development rights to the Farzad-B gas field since at least 2009. Delay Damage The delay over a final outcome has started hurting oil trade between the two countries. India, which bought Iranian crude even during the years of U.S.-led sanctions against Tehran, has recently reduced purchases, leading to the withdrawal by Iran of some benefits on sales in retaliation, Bloomberg reported in April. “We are ready to invest,” Verma said. “Ultimately, that’s positive for them.” The South Asian nation is promoting the cleaner-burning fuel to curb the use of more polluting alternatives such as coal and petroleum coke, an oil-refining byproduct, to meet its pledge of slashing emissions by a third by 2030. ONGC Videsh and Indian Oil each own 40 percent interest in the Farsi block that holds Farzad-B field, while Oil India has 20 percent. Jaromir Jagr Jersey
Hydrocarbons Sector: Next Bidding Round For Discovered Small Fields In Oct
Giving a major boost to new entrants in the hydrocarbons sector, the Ministry of Petroleum and Natural Gas is set to launch the second round of bidding for discovered small and marginal fields (DSF) in October. This will happen simultaneously with the Open Acreage Licensing (OAL) rounds. The OAL policy was officially launched on Wednesday by Petroleum Minister Dharmendra Pradhan. “We are planning to come up with DSF II, in order to attract more fresh players and start-ups to the sector, as big companies may not be keen on small blocks and their focus would be on OAL. This will be kicked off from October, happening along with the OAL rounds,” said an official source close to the development. In the first round of small field auction, of the 22 companies that were successful in grabbing blocks, 15 were newcomers. A majority of the bidders were keen on onshore blocks, with 31 of the 46 blocks getting successful bidders. According to the strategy chalked out by the petroleum ministry, small field rounds are likely to be over by the end of March 2018. Meanwhile, those players who were awarded the blocks in the first round of DSF have started getting mining leases. “We have already got the mining lease for one of our blocks. With all the clearances in place, we expect to start production within three years time. We are also looking forward to OAL rounds and DSF II,” said P Elango, managing director of Hindustan Oil Exploration. For the blocks awarded under DSF so far, the expected in-place reserves are 40 million tonnes of oil and 22 billion cubic metres of gas, to be monetised over 15 years. “In our case, we will have to get the mining lease, and it needs to be renewed. We expect that it is likely to happen within a month,” said D S Rajput, managing director of Dubai-based South Asia Consultancy FZE, only foreign entity to have got a block in DSF. He added his company would be bidding for more blocks in the second round of DSF. Elango, who formerly spearheaded the operations of Cairn India, said, “In OAL rounds, a lot of foreign and big players are likely to participate. The major advantage that I see is that the explorer will also have an idea about the adjacent areas as well. Moreover, pricing freedom will be the biggest advantage compared to the NELP rounds.” The blocks awarded in the DSF round expects a cumulative peak production of 15,000 barrels of oil a day and two mscmd (million standard cubic metres a day) of gas over the economic life of the fields awarded. The estimated total revenue is a little over Rs 46,000 crore. Logan Thomas Authentic Jersey