Oil prices rise on prospect that Saudi Arabia seeking output cut extension
Oil prices rose on Wednesday, putting crude futures on track for their longest streak of gains since August 2016, as Saudi Arabia was reported to be lobbying OPEC and other producers to extend a production cut beyond the first half of 2017. Brent crude futures , the international benchmark for oil, were at $56.40 per barrel at 0117 GMT, up 17 cents, or 0.3 percent, from their last close, their highest since early March. If Wednesday’s price rises hold, they would mark the seventh straight daily increase. That would beat a six-day bull-run from August 2016, although the price jump then was 17.5 percent versus a 6 percent rise in the current rally of consecutive rises. U.S. West Texas Intermediate (WTI) crude futures were up 16 cents, or 0.3 percent, at $53.56 a barrel, also their highest level since early last month. Traders said that the price rises were a result of reports that Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), had told other producers that it wanted to extend a coordinated production cut beyond the first half of the year. OPEC and other producers, including Russia, have pledged to cut output by around 1.8 million barrels per day (bpd) during the first half of the year in an effort to rein in global oversupply and prop up prices. While compliance from some participants has been patchy, Saudi Arabia has made significant cuts, with production down 4.5 since the end of last year, despite a slight increase in March to 9.98 million bpd. “Saudi Arabian production reduction appears to be ahead of forecast and gave oil a boost,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. Despite this, there are still some concerns that oil markets remain bloated and oversupplied, especially in the United States where both production and inventories are surging. U.S. crude oil production has risen by 9 percent since mid-2016 to 9.2 million bpd, resulting in a surge in commercial inventories to a record 535.5 million barrels . The latest U.S. oil production and inventory data will be published later on Wednesday by the Energy Information Administration (EIA). Mike Schmidt Authentic Jersey
Parliament panel for reservation in Petronet LNG
A Parliamentary panel has asked the government to examine providing reservation to SC/STs in companies like Petronet LNG Ltd where state-controlled firms hold up to 50 per cent stake but are registered as private firms. No reservation in employment is provided in Petronet, India’s largest liquefied natural gas importer, as it is not a government company due to the structure of its shareholding. Petronet was formed in pursuance of the Cabinet decision in 1997 with state-owned GAIL, ONGC, BPCL and IOC holding 12.5 per cent stake each. A government company is one where 51 per cent of paid up share capital is held by the government or a state-owned company or companies. The Committee on Welfare of Scheduled Castes and Scheduled Tribes in a report tabled in Parliament said it was “unable to understand as to how it has been contended that the Government of India has no equity share in Petronet when four of its biggest oil companies have 50 per cent equity share.” “The Committee are of the view that Petronet is neither a private entity nor a government company but a joint venture,” the report said. Since Petronet was conceptualised by the government and the four state oil firms hold 50 per cent equity, it is a fit case for in-depth examination for the applicability of reservation policy in the company, it said. “In the first instance the Committee are constrained to note that the provision of reservation as enshrined under Article 16(4) of the Constitution of India was not implemented while setting up Petronet,” the report said. It further observed that there are 66 companies having 50 per cent government equity and where reservation for SC/STs is not being given. “The Committee, therefore, desire that as a first step the Ministry of Petroleum and Natural Gas may in consultation with the Ministry of Law examine the feasibility of applicability of reservation policy in all the joint ventures where the Government oil companies have shares/equity of less than or equity to 50 per cent,” the report said. The panel also wanted the Ministry of Personnel, Public Grievances and Pensions and Ministry of Corporate Affairs to examine insertion of the reservation clause in shareholding agreement in all the existing and future joint ventures. “The Committee expect that the issue be examined with an open mind in the light of the provision enshrined under Article 16(4) of the Constitution of India and an Action Taken Report submitted to it within four months,” the report said. Eli Harold Authentic Jersey
Oil consumption falls for third month in a row
India’s oil consumption fell for the third straight month in March as the demand growth in diesel, petrol and other products came to a crawl. The oil demand fell by 0.65% in March to 17,358 thousand metric tonnes (TMT). The country consumed 6,805 TMT of diesel in March, compared with 6,783 TMT in the year-ago period. Demand for petrol was 2,106 TMT as against 2,047 TMT in March 2016. The oil consumption rose sharply in the first nine months of 2016-17 but decelerated in the last quarter. The annual rise in oil demand in 2016-17 was 5%. Oil consumption had fallen 3% in February and 4% in January. In 2016-17, demand for diesel rose 1.8% and petrol 8.6%. Consumption of jet fuel rose 12% in the year. Travis Wood Jersey
Petronas pitches $1 bln offshore gas project stake to oil firms-sources
Malaysia’s Petronas has pitched an estimated $1 billion stake in a prized upstream local gas project to potential bidders including Royal Dutch Shell , ExxonMobil Corp, Thailand’s PTT Exploration and Production and Japanese firms, sources familiar with the matter said. If successful, the deal could mark Petronas’ biggest upstream stake sale since oil prices started declining more than two years ago. Petronas is targeting lowering operating expenses, job cuts and project rollbacks to help it navigate through the low oil price environment. The state-owned oil and gas company has approached about a dozen prospective buyers including global oil majors and Asian firms focused on Southeast Asia, said the sources, who declined to be identified as the talks are private. They said Petronas has begun providing financial and operational data to the companies and expects to receive bids over the next few weeks. Citing sources, Reuters reported in February that Petronas was considering selling a stake of as much as 49 percent in the SK316 offshore gas block in Malaysia’s Sarawak state. In a statement to Reuters, Petronas said that through its subsidiary, Petronas Carigali Sdn Bhd, it is looking for partners who can bring the technology and capabilities to explore, develop and efficiently operate the various fields and opportunities in the SK316 offshore gas block. “We are confident that we will attract the right partners to maximise the potential value of these opportunities to help meet the world’s growing oil and gas demand,” Petronas said. It was not immediately known what the individual companies’ response to Petronas’ approach was. ExxonMobil declined to comment, while Shell referred the query to Petronas. A spokeswoman for PTTEP declined to comment on the deal but said the company was keen to invest in Southeast Asia because it had expertise in the region where costs and risks were low. Tre Madden Authentic Jersey
GAIL India to hire ships on short term to ferry LNG from US
State gas utility GAIL India Ltd will hire ships on short term to ferry gas from the US after it was forced to scrap a USD 7 billion tender for making vessels in India, Oil Minister Dharmendra Pradhan has said. After dragging for more than two years, GAIL had in October last year scrapped a tender for hiring newly built ships to ferry liquefied natural gas (LNG) from the US after bidders did not agree to ‘Make-in-India’ terms. The company wanted shipbuilders to manufacture one out of three ships in India. “The tender was cancelled by GAIL as the bids received contained multiple deviations and were not in line with the tender condition,” Pradhan said in a written reply to a question in Lok Sabha. The bidders, he said, did not relent on “major deviations” they sought for the ships to be built at Indian shipyard. Because of this, “the bids were considered non-responsive as per GAIL’s tendering procedure and the tender for charter hiring of LNG ships to import LNG from the US was cancelled on October 15, 2016,” he said. Two Japanese bidders a consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui and Co. and a consortium comprising Mitsubishi Corporation- Kawasaki Kisen Kaisha Ltd (K Line) and GasLog, had sought several deviations from the tender conditions, which were not agreeable to GAIL. In the tender, GAIL sought to time-charter nine newly built LNG ships of a cargo capacity of 150,000-180,000 cubic meters to LNG it has tied up from Sabine Pass and Cove Point LNG projects in the US, with supplies slated to start from January 2018. Bids were sought in lots of three, with the condition that one of the three ship will be built at an Indian shipyard. Pradhan said GAIL has initiated action to charter hire ships on short term basis for a period of 3-4 years to ferry LNG from the US. “GAIL has informed that supply of US LNG is expected to commence from January 2018,” he said, adding a committee headed by NITI Aayog vice chairman has been constituted to look into the issues of desirability of acquiring shipbuilding technology/capacity for LNG ships. Report of the committee is awaited, he said. Bruce Bochy Authentic Jersey
Aramco seeks stake in India’s biggest proposed refinery
Saudi Arabia based and the world’s largest oil producer Saudi Aramco, is interested in taking a stake in India’s biggest oil refinery, planned to be set up on the west coast in Maharashtra. The 60 million metric tons per annum refinery has been mooted by Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL). “Saudi Aramco is interested in picking a stake in the west coast refinery while Abu Dhabi National Oil Co (ADNOC) is keen on investing in petrochemical projects,” media reports quoted union oil minister Dharmendra Pradhan as saying on the sidelines of the Global Natural Resources Conclave. IOC holds a 50 per cent stake in the refinery, while BPCL and HPCL will have a stake of 25 per cent each, which is estimated to cost Rs 1800 billion and will also house a mega petrochemical complex. The project will be set up in two phase of which phase one will have a 40 million metric tons per year refinery, an aromatic complex, naphtha cracker unit and a polymer complex and will cost around Rs 1200-1500 billion. The second phase will have a 20 metric tons per annum refinery and will cost around Rs 500-600 billion. (AR) Denis Potvin Authentic Jersey
India’s oil imports from Iran top 500000 bpd in 2016/17
India’s Iran oil imports jumped to a record high in 2016/17 topping half-a-million barrels per day as refiners boosted purchases after lifting of sanctions previous year. Refiners shipped in about 541,000 bpd of Iranian oil in the 2016-17 financial year, a growth of about 115 per cent over the previous year. Iran was India’s second biggest oil supplier – a position now belonging to Iraq – before economic sanctions aimed at Iran’s nuclear programme hampered its trade relations, forcing the South Asian nation to tap alternative suppliers. Reliance Industries, Hindustan Petroleum, Bharat Petroleum and HPCL-Mittal Energy Ltd (HMEL) were among Indian refiners that resumed imports from Tehran following the removal of anti-Tehran sanctions. India’s two largest crude oil importers from Tehran will cut their import from five million to four million tonnes in 2017-2018, reported the Indian Express, in an attempt to put pressure on Tehran to award the rights to develop the 12.5 trillion cubic feet discovery to the Indian state owned oil and gas company ONGC Videsh Ltd (OVL). National Iranian Oil Co. will cut the credit period on crude oil sales to 60 days from 90 days for refiners such as Mangalore Refinery & Petrochemicals Ltd. and Indian Oil Corp., the people said, asking not be identified as the matter isn’t public yet. International Olympic Committee and MRPL – largest state buyers of Iranian crude – will cut imports from Tehran to 4 million tonnes in 2017-18 from 5 million tonnes in the previous year. While the European Union and United Nations lifted sanctions on Iran over its nuclear programme more than a year ago, the United States has held separate measures in place and President Donald Trump’s administration has promised a tough line. Overall, India’s oil imports rose 4.7 percent in March from the previous month and by about 4.9 percent from a year ago, the report added. India is Iran’s second-biggest customer and the emerging center of global oil demand. Oil market sources say Iran has sold all the oil it had stored at sea for years – a sign of the country’s positive performance in marketing its vital crude oil supplies. The Organization of the Petroleum Exporting Countries pledged to reduce output by about 1.2 million bpd, but Iran was allowed a small increase to compensate for years of isolation. Iran’s Oil Minister Bijan Namdar Zanganeh said “there are many other customers” if India decides to cut imports, the state-run Islamic Republic News Agency reported on April 5. Iran and India were aiming to conclude an agreement on developing the field by February. Richard Mallinson, analyst for Energy Aspects, believes it is nearly inevitable that exports will now decline: “We do think that (floating storage) has been the primary cause of the boost in exports; we see a very hard path for Iran to raise crude output until it can get the Western expertise and investment back into the upstream, which has been notably slow to materialize”. “Their proposal was not profitable to Iran“. OVL has submitted a revised master development plan of over Dollars 5 billion for developing the field. Chad Thomas Jersey
You could soon be paying a different price every day for your petrol and diesel. Read how
Prices at petrol pumps may change every day, similar to what happens in many advanced markets, as state oil companies plan to review rates daily to align them with international prices, replacing the current practice of fortnightly revision. Indian Oil Corp, Bharat PetroleumBSE 3.52 % and Hindustan PetroleumBSE 1.16 %, which control nearly 95% of the country’s fuel retail market, are considering ways to roll out the plan to review petrol and diesel prices daily, top executives at state oil firms told ET. Executives of state oil firms met Oil Minister Dharmendra Pradhan and the ministry officials on Wednesday to discuss the idea of daily fuel pricing. “The idea of daily fuel pricing has been there for sometime. But now we have the technology to implement it. So we will do it,” a top executive said, without giving a timeline for the launch. The automation at most filling stations, which allows companies to centrally change prices, as well as the availability of digital technologies and social networks have made it much easier for companies to convey price changes to their 53,000 filling station across the country. Price transmission used to be a cumbersome exercise in the past with dealers waiting for phone calls and fax messages from companies for new prices and then rushing to lowering or raising their supply orders, causing inconvenience to suppliers. Daily changes mean prices wouldn’t rise or drop sharply, as they did last week. On March 31, state oil companies cut prices of petrol by Rs 3.77 per litre and diesel by Rs 2.91per litre. Prices would change just by a few paise every day, bringing no shock to customers. This means companies can easily take price hikes without worrying about political backlash. A price hike is often held back during election season as it is seen as detrimental to the interest of the ruling party. To compensate oil companies for that, the government allows them to keep prices higher even when an alignment with international rates may warrant a decrease. State firms skipped price revision for two and a half months before announcing cuts last week although international rates went up and down sharply during the period. India lifted price control on diesel in 2014 and on petrol in 2010, which allowed state companies to charge market prices, and encouraged private companies to reenter the fuel retailing business. At present, state companies review prices at the end of every fortnight and raise or reduce them depending on the prevailing international prices. Brian Orakpo Womens Jersey
Indian Oil to expand LPG facilities in Kerala and Tamil Nadu
Indian Oil Corporation Ltd (IOCL) will augment its LPG production facilities in Kerala and Tamil Nadu to meet the increased demand for the gas that is growing at 11% annually with the completion of construction of LPG import terminal and the pipeline connecting it to Salem. Both the projects which are in the process of construction together involve an investment of close to Rs 3000 crore. IOCL’s 6 lakh tonne per annum facility at Puthuvypin in Kochi is linked to the 498 km pipeline jointly implemented by IOC and Bharat Petroleum Corporation Ltd. (BPCL). IOCL general manager and Kerala head P S Mony said the pipeline will connect the import terminal with BPCL Kochi Refinery, IOCL’s Kochi bottling plant and BPCL’s upcoming bulk LPG terminal at Palakkad before terminating at Salem. It will feed IOCL’s LPG bottling plants at Coimbatore and Erode. The project to be completed by February 2018 is expected to earn Kerala government an additional revenue of Rs 300 crore per annum. “With the commissioning of the import facility and pipeline we expect the inter-state bullet truck movement to come down to 20-30 per day from the present 70-80 trucks traversing daily from Mangalore to Kerala LPG plants through the narrow and difficult terrain of Kerala, thereby reducing the road traffic and accidents,” Mony said. The present storage capacity of Kochi plant is sufficient only for 1.5 days of production. With the augmentation of capacity the storage facility will be increased to 8 days. This will help to tide over any emergency strikes/supply shortage issues and help in improving the LPG supply situation in Kerala, he added. Alexander Nylander Jersey
ONGC drills record 501 wells in FY17
Oil and Natural Gas Corp (ONGC) has set a new record of drilling over 500 wells in 2016-17 at an expenditure of Rs 15,747 crore as the major state-owned explorer steps up efforts to boost domestic output. ONGC drilled 501 wells in the financial year ended March 31, 2017 as compared to 386 wells in 2015-16. This is the first time in 23 years that ONGC has crossed the 500-well mark. Oil and gas exploration is a risky business and only drilling of wells can guarantee a discovery and confirmation of reserves. The company exceeded the government mandated target of 490 wells. Of the 501 wells drilled, 334 wells were in onshore and the remaining 167 in offshore, ONGC Chairman and Managing Director Dinesh K Sarraf said here. “While many explorers worldwide decided to slow down due to the prevailing low price scenario, ONGC had taken the conscious decision to step up the exploration efforts. Despite this challenging environment, the ONGC drilling and well services has put in a commendable performance,” he said. Sarraf said several steps were taken during the last financial year to cut down rig deployment time, increase operational efficiencies and cost control. ONGC operates some 105 drilling and 74 work over rigs. It is among the few companies in the world to have drilled 127 deepwater wells in diverse and challenging areas. The company’s Director (T&S) Shashi Shanker said: “Setting a new benchmark of 501 wells in a year is a phenomenal achievement, especially considering the challenges the oil and gas industry has faced globally during the past two years. “There is a continuous emphasis in ONGC on induction of state-of-the-art technology, optimum utilisation of resources and minimisation of non-productive time of rigs to increase operational efficiency.” Offshore, which contributes to 80 per cent of ONGC’s 24 million tonne a year crude oil production, exceeded all its drilling targets. Targets were also surpassed in drilling onland where majority of ONGC’s owned rig fleet is deployed. He said as drilling activities account for ONGC’s major expenditure, an increase in drilling efficiency would translate to additional savings. In order to have a more focused approach towards onshore, offshore (shallow waters) and offshore (deep waters) operations a new concept ‘Company within Company’ was rolled out in Mumbai High Asset to bring about operational efficiency in offshore drilling operations. Drilling of record number of wells has not just led to establishing newer resources but also augment production from the old and depleting fields. But for these drilling oil output would have dropped to 22 MT. Patric Hornqvist Authentic Jersey