ONGC arm OPal starts exports from Dahej plant to Singapore
ONGC Petro Additions (OPaL) has begun exports to Singapore and intends to float a tender soon for exporting more products to other countries. The first consignment of butadiene was shipped to Singapore, and the company wants to export more products benzene, etc. to other countries as well for which it will be floating tenders, Opal chief executive K Satyanarayana told PTI today. The Rs 30,000-crore OPal plant here is the first one set up under the petroleum, chemicals and petrochemicals investment region (PCPIR) in the Dahej SEZ, under which it has to export 50 per cent of production, Satyanarayana added. The city-based OPal is a joint venture promoted by ONGC, GAIL and Gujarat State Petroleum Corporation. This plant was commissioned by Prime Minister Narendra Modi on March 7. Satyanarana said “this is the single largest petrochemicals plant in the country and is working at full capacity now. We have annual capacity of 14 lakh metric tonnes of polymers, low and high density polyethelene, polypropylene and 5 lakh metric tonnes of benzene, butadiene and pyrolysis gasoline etc.” Dahej is among the first four PCPIRs planned in the country. The Dahej PCPIR has a potential to employ 32,000 people directly. “OPaL is in talks with Kuwait’s Petrochemical Industries Company (PIC) on a possible stake sale and is ready to offer as much as 40 per cent to the new partner,” said Satyanarayana. On the revenue said, he said once fully operational, the plant can generate annual revenue of Rs 16,000 crore. The petrochemicals sector has been growing at 10-12 per cent per annum since the last decade, and is expected to grow at 12-15 per cent in the next decade, he said. The optimism comes from the low per capita consumption of polymers in the country which is about 10 kg against the global average of 32 kg, showing potential for further upsides, he said. Andrew Hammond Womens Jersey
Government to offer incentives to companies keen on developing oil and gas blocks
The government will offer incentives to companies that take lead in proposing to develop oil and gas blocks of their choice leading to a government-monitored auction, according to the draft Open Acreage Licensing Policy (OALP). Besides encouraging companies to propose blocks for auction through the year, the open acreage policy will also keep alive the previous practice of the government carving out blocks and offering them to investors in an auction round. “The Directorate General Hydrocarbon (DGH) will also administer, when deemed necessary, rounds of awards of blocks carved out by the DGH, for contracting in addition to the option available to investors to make suo motu applications under OALP,” says the draft policy. Open acreage licensing is part of the Hydrocarbon Exploration Licensing Policy (HELP) unveiled last year. The DGH, an arm of the oil ministry, has now drafted the procedure to operationalise the OALP. The DGH maintains a national data repository that investors can access to study hydrocarbon data and determine their interest in specific blocks. Investors can then apply for a specific area for either reconnaissance contract that permits exploration for two years, or petroleum operations contract for 20 years, including an initial exploration phase of six years, according to the draft OALP. An investor’s expression of interest must be accompanied by a bank guarantee of $1 million for petroleum operations contract and half a million dollars for reconnaissance contract. The government will accept an expression of interest from investors in two six-monthly windows– ending in June and December — following which the interests will be evaluated, and if found fit will result in an open bidding overseen by the DGH. All bidders will be evaluated on technical and financial criteria. The maximum marks in technical evaluation available to an ordinary bidder is 90 under reconnaissance contract, but the investor submitting the expression of interest leading to this bid will get additional 10 marks, as per the draft OALP. Similarly, in petroleum operations contract, the one that first expressed interest gets five marks over and above the maximum 65 marks other bidders can aim for in technical evaluation. There is no incentive available in financial bids. The government will also incentivise investors transitioning from Reconnaissance to Petroleum Operations Contract. “Operator of the Reconnaissance Contract will be, in the event of failing to win that particular bid, allowed to match the financial and technical bid of the highest bidder,” as per the draft OALP. Jerome Bettis Jersey
Oil rules: If tax, other policies not fixed, India can’t attract investors
The government has done well to launch an open acreage licensing policy (OALP) which allows oilcos to bid for acreage that they feel has oil/gas potential rather than wait for the government auction—once they evince interest, the field will be opened up for bidding. Since existing oilcos have a pretty good idea of what areas have better potential, OALP will help better India’s energy prospects. The lack of clarity on many policy issues, however, is best exemplified by the fact that India’s most successful private sector oil producer—Cairn India has invested $8 billion already to produce 800 million barrels of oil till date—is fighting the government in court on a variety of issues ranging from a patently unfair tax suit to not getting an extension for its oil block in Rajasthan. And despite the fact that its production sharing contract (PSC) allows it freedom to market crude oil, Cairn is forced to sell its product at a 10-20% discount to PSUs and private refining firms. While it is well known that Cairn discovered oil in its Rajasthan block in 1999—it bought the field from Shell which thought it was a dud field—the company felt it had a lot more potential and sought permission to continue drilling even after the first seven years of the PSC were over; by law, exploration is not allowed after that. Cairn got permission, as a result of which its ‘gross proved and probable hydrocarbons initially in place’ have risen from 5.2 billion barrels of oil equivalent in 2009 to 7.8 billion today—since it cannot extract the extra oil in its original 25-year PSC, it sought an extension. Logically, since 70-75% of oil revenues anyway go back to the government by way of cesses, profit-petroleum and profit-share for ONGC, you’d think the government would give the clearances quickly—unless this is given, how is a board to approve a capex plan for further exploration and development? This has not been given for several years now, though there is talk the government may hike the profit-petroleum—by how much, though, is not clear. It’s interesting to note that while the government is planning to hike the profit-share, the UK cut its petroleum-revenue-tax last year—effectively reversing changes introduced in 2011—in an attempt to boost the investment climate; at 63%, the UK’s tax on oil revenues is lower than India’s 70%. In the case of Reliance Industries Limited, the most successful private firm in the gas segment, apart from the case it is fighting with the government on its costs being excessive, it is in court asking for freedom to price the gas it produces—according to the PSC, though, full marketing freedom is allowed. Unless the government is, through its actions, able to convince would-be investors of its bona fides, it is difficult to see why there would be a surge in investments—while overall investments are down a third over the past seven years, those by the private sector are down to a twelfth. Joey Bosa Womens Jersey
Cairn Energy calls for return of $51m from India
Cairn Energy has called for an immediate payout of $51m from its embattled India subsidiary as its $1.6bn legal struggle with the Indian authorities nears its final chapter. The two year dispute has saddled the loss-making oil producer with spiralling legal costs, and foiled Cairn’s plans to sell off its remaining 10pc stake in Cairn India worth around $800m. The company told investors on Wednesday that the Indian government has now submitted its full claim for retrospective taxes and that $51m of previously restricted dividends have been released. It has requested that the sum is returned immediately. Simon Thomson, Cairn’s chief executive, said he remained confident that the outcome of the dispute, due next January, will be in Cairn’s favour. “As far as international arbitration goes we’re very pleased with the rate of progress that is being made,” he said. “The dividend may not be a huge sum but it is a help in strengthening our finances and it shows progress. It’s $1bn in total that we hope to reclaim so that would be significant.” Cairn is planning to sell off its remaining 10pc stake in Cairn India worth around $656m. The Indian government first began an investigation into Cairn India in 2014. A year later the authorities made a retrospective tax claim in relation to asset transfers made in 2006 when Cairn India was established. The claim demands that the UK-based oil explorer pay $1.6bn plus interest and penalties arising from unpaid tax owed by Cairn’s India operations in 2007. Cairn has consistently disputed the claim and is calling for $1.1bn in compensation. The fresh progress was announced alongside narrowing losses for the Edinburgh-based oil company, which is hoping for a North Sea production boom. Cairn reported a pre-tax loss of $95m last year compared to a loss of $515.5m in 2015 due to low oil prices and heavy spending on a string of new projects that are almost ready to begin generating revenue. Cairn holds a 20pc stake in Premier Oil’s Catcher oil project and a 29.5pc share of Enquest’s Kraken development. Both of these should deliver their first oil later this year and boost Cairn’s production by 25,000 barrels of oil a day. Cairn is also growing its presence in the Irish sea by taking a 30pc stake in Providence Resources’ Frontier exploration licence in the Porcupine basin through its subsidiary Capricorn Ireland. The subsidiary is also taking a 70pc working interest in the Europa Oil & Gas, also in the Irish Sea. Both oil minnows enjoyed a share price surge as a result of their respective deals. Providence Resources share price climbed over 7pc on AIM to 16.35p, while Europa jumped over 13pc higher to 5.38p. Mr Thomas said Cairn is also planning to push on with its “exciting” exploration and appraisal drilling programme in Senegal. Earlier in the week Cairn said that its latest successful well appraisal concluded ahead of schedule and under budget, taking the total number of wells to seven. Jake Bean Jersey
India Says Gas Field Decision on Iran
India’s oil minister says a final deal with Iran to develop the Farzad-B gas field in the Persian Gulf is currently “in Iran’s court”. The lifting of international sanctions against Tehran in January 2016 and the easing of financial and trade curbs gave a fresh lifeline to negotiations on developing the Farzad-B project. But the two sides have made little inroads in negotiations as Iran says India’s proposal to develop the offshore field is not attractive enough. “We have given it our proposal; now it’s time to react. They have to answer,” Oil Minister Dharmendra Pradhan told Reuters at the CERAWeek energy conference in Houston, Texas. A consortium headed by ONGC Videsh, the overseas investment arm of ONGC, discovered the field in the Farsi offshore block in 2008. However, the consortium could not obtain the permission to develop the field due to tighter international sanctions imposed on Iran due to nuclear program dispute. As a gesture of goodwill, Iran has so far excluded Farzad-B from a list of several dozen oil and gas projects that it plans to put out to tender under a new model of contracts. But it could no longer be the case should the negotiations fail. An oil official said in late November that Iran was keeping all its options open for tendering the Farzad-B Gas Field because negotiations with India over the coveted gas project had not produced anything of substance. “We are in the last round of talks with India’s Oil and Natural Gas Corporation over the Farzad-B project and should the two sides fail to come to an agreement, the project will be put out to an international tender,” Mohammad Meshkinfam, managing director of Pars Oil and Gas Company, said, adding that ONGC’s proposed master plan to develop the field “is not financially viable”. The National Iranian Oil Company is expected to announce its decision on India’s proposal soon. Rashod Hill Womens Jersey
Aadhaar is now must for free LPG connection under PMUY scheme
The government has made having an Aadhaar card must for poor women to avail of free cooking gas (LPG) connection under the Pradhan Mantri Ujjwala Yojana. While the government in October last year had made the unique identification number mandatory for everyone to get LPG subsidies, it has now extended the same for free cooking gas connections to women of BPL households. The government had last year launched the Pradhan Mantri Ujjwala Yojana to provide 5 crore poor women with free LPG connections in three years with a view to providing clean cooking fuel. “Individual beneficiary desirous of availing the benefits under the scheme (PMUY) is hereby required to furnish proof of possession of Aadhaar number or undergo Aadhaar authentication,” said a gazette notification issued by the Ministry of Petroleum and Natural Gas. Those below poverty line (BPL) women looking to avail free LPG connection but do not have the Aadhaar number, have been asked to apply for it by May 31. Once enrolled for Aadhaar, the beneficiary can apply for free LPG connection by providing the enrolment ID slip or a copy of such a request. Such application will have to be accompanied by one of the government identification documents like bank passbook with photograph, election voter ID, ration card, permanent account number (PAN), passport, driving licence, kisan photo passbook or a certificate of identity having a photo issued by a gazetted officer on an official letterhead, it said. The ministry has asked state-owned fuel retailing firms to facilitate enrolment of beneficiaries for biometric identification number, Aadhaar. In October last year, the government had made Aadhaar mandatory for availing of cooking gas (LPG) subsidies. The government currently gives 12 cylinders of 14.2—kg each at subsidised rates per household in a year. The subsidy on every cylinder is transfered in advance directly into bank accounts of individuals, who then buy the cooking fuel at market rates. The ministry notification issued on March 6 stated that the use of Aadhaar as identity document for delivery of services or benefits or subsidies simplifies the government delivery processes, brings in transparency and efficiency, and enables beneficiaries to get their entitlements directly to them in a convenient and seamless manner. “Aadhaar obviates the need for producing multiple documents to prove one’s identity,” it said. Riley Nash Jersey
Oil Ministry orders detailed review of ONGC board of directors
Oil & Natural Gas Corp is in for a shakedown with the petroleum ministry ordering a detailed review of its board of directors for a possible revamp of the functional heads, following prolonged delays in projects linked to output enhancement.While examining the status of oil and gas production last January, Petroleum Secretary KD Tripathi noted lapses in the development of discovered oilfield Ratna and R-Series, restarting of oil production from Amguri field as well as in conducting two-dimensional seismic surveys to identify new oil and gas reserves. “In this context, Secretary advised Joint Secretary (Exploration) to examine on file the re-organisation of ONGC Board of Directors, in particular the role of functional directors, with a view to have a lean structure facilitating quick decision making to boost the overall performance,” says the minutes of the meeting. Following replies by the ONGC officials during the January 17 meeting, Tripathi directed that each of the three projects be directly monitored by Director General of upstream quasi-regulator Directorate General of Hydrocarbons. Jake Matthews Jersey
AG&P and Air Liquide Global E&C Solutions sign MoU to deliver fully integrated LNG infrastructure solutions in Southeast Asia
AG&P (Atlantic, Gulf and Pacific Company), a leading integrator of infrastructure solutions across the LNG supply chain, has signed a Memorandum of Understanding (MoU) with Air Liquide Global E&C Solutions, the engineering and construction arm of the Air Liquide Group, to develop small-scale LNG infrastructure for LNG distribution across Asia. By combining their respective strengths, AG&P and Air Liquide will be able to offer unique, fully integrated and cost-optimized solutions for LNG distribution with a focus on liquefaction, transportation and downstream infrastructure to deliver LNG to end users seeking LNG for power, shipping, ground transport and other industrial applications. Under the MoU, AG&P will integrate the technologies offered by Air Liquide with its expertise in planning, designing engineering, financing and operating LNG infrastructure modules to build technologically-advanced blocks that can plug into any part of the LNG supply chain. This will deliver end-users faster and more cost-competitive solutions that maximize a project’s value. Commenting on the strategic alliance, AG&P’s Chairman, Mr. Jose P Leviste (Jr.), said, “This milestone agreement with Air Liquide will enable the integration of downstream LNG infrastructure, including small scale regasification terminals, distribution hubs, truck loading stations and boil-off gas handling systems into AG&P’s LNG supply network for rapid delivery of tolled gas to last-mile customers. Our aim is to streamline Air Liquide’s know-how in gas processing technology and patents with AG&P’s experience in design, engineering and construction to bring the most competitive solutions to customers across Asia. We offer unique products for both onshore and offshore applications.” As part of this MoU, AG&P and Air Liquide will begin developing standardized downstream LNG modules (some as skids) that optimize costs and shorten delivery time. The MOU as well covers innovative Boil-off Gas (BOG) management systems eliminating the need for investment in BOG compressors, while ensuring that no gas is vented or flared, bringing environmental and economic benefits to the customer. AG&P has a long and successful track record as an integrator of pragmatic solutions for the oil and gas industry with specific expertise in LNG. It is only one of three companies globally to have a global technical and licensing agreement for membrane tank design from the French giant, GTT. In addition, AG&P owns a major stake in Gas Entec, the leading Korea-based engineering firm. AG&P further has entered in a joint venture with Risco Energy Group of Indonesia. Recently, AG&P has announced its development of an LNG terminal in East India with Hindustan LNG. AG&P also co-owns and operates the Hydro Deck, a unique giant mobile port, through a joint venture with global heavy lift and logistics leader, ALE. Domenico D’Élia, Vice President and Chairman, Air Liquide Engineering and Construction said, “We chose AG&P to be our partner because of their reputation for innovation, safety record and fast delivery. Through this agreement, we will be able to meet the dynamic requirements of customers in the vast region of Asia where small quantities of LNG need to be delivered efficiently to end-users scattered across vast distances.” The demand for LNG continues to grow worldwide as countries seek to replace oil and heavy fuel oil with LNG as a cleaner and cheaper fuel for power generation, shipping, ground transport and industrial use. However, uptake remains slow because of a lack of the requisite infrastructure and investment to deliver reliable and sustainable supply. Much of Asia requires massive development of assets to bring the gas from its source to demand centers dispersed over vast geographies where it is estimated that $70 to $80 billion USD needs to be invested in gas infrastructure over the next decade. Through this MoU, AG&P and Air Liquide will pioneer the development of this much-needed LNG infrastructure. Archie Manning Jersey
PM dedicates OPaL plant to the nation
Prime Minister Narendra Modi today dedicated ONGC Petro additions Ltd’s (OPaL) Rs 30,000-crore plant to the nation at the Dahej Special Economic Zone. “It is India’s largest petrochemical plant having an investment of Rs 30,000 crore,” Modi said on the occasion. “Today, the average per capita consumption of polymers in India is 10 kg, while the global average is 32 kg. There is tremendous potential for growth in the wake of higher disposable income of middle class and urbanisation. As per an estimate, OPaL’s market share in the polymer sector will be 13 per cent by 2018,” he said. The Prime Minister said the Gujarat government has worked very hard for over 15 years to develop the Dahej SEZ under the Petroleum, Chemical and Petrochemical Investment Region (PCPIR). “Dahej has become mini India, as people from across the country are now working here. When I was Gujarat CM, I used to visit Dahej. I saw this place getting developed brick by brick. Because of the efforts of Gujarat Government, Dahej achieved such tremendous success,” Modi said. “Due to government’s efforts, Dahej SEZ has secured a place among the top 50 SEZs of the world. This region has given employment to lakhs of citizens. So far, it has fetched a total investment of Rs 40,000 crore. I congratulate all the people who are behind the success of Dahej SEZ,” he said. Modi also visited the plant and saw a detailed presentation inside the main control room of OPaL. He was accompanied by Gujarat Chief Minister Vijay Rupani, Union Ministers Mansukh Mandaviya and Nitin Gadkari. Modi expressed confidence that this PCPIR in Gujarat would give employment to 8 lakh people upon its full utilisation. “Dahej was selected for one of the four PCPIRs to be developed across the country. At present, it provides employment to over 1.25 lakh people. When this PCPIR starts functioning at its full capacity, it would give employment to around 8 lakh persons,” he added. Modi said he has personally seen this PCPIR growing. “Therefore, it is natural for me to have an emotional bonding with it,” Modi said. OPaL is the single largest petrochemical plant in India that has a capacity to produce 14 lakh tonnes of polymers and 5 lakh tonnes of chemicals such as benzene annually. It is a joint venture company promoted by ONGC, GAIL, and GSPC with an investment of Rs 30,000 crore, an official statement by ONGC said. Jay Beagle Jersey
Italy’s 15-cargo LNG buy tender attracts competitive bids
A tender to supply Italy with about 15 liquefied natural gas (LNG) cargoes between April and September attracted highly competitive winning bids from traders including Gunvor, Trafigura, MET and Uniper, trade sources said. Companies offered to supply the shipments at only a slight premium to prevailing prices at Britain’s National Balancing Point (NBP) trading hub, traders said. At the same time bids for a tender to supply Argentina with LNG attracted bids carrying a $0.30 per million British thermal units (mmBtu) premium to NBP levels, whereas the prices for the Italy tender showed only a slight premium, traders said. “It was very aggressively bid and suppliers may in the end opt not to deliver the cargoes if the economics don’t make sense,” one trader said. Under the tender, suppliers retain cancellation rights. The list of suppliers may not be exhaustive and the exact quantities to be delivered by each party are preliminary and could not be fully confirmed. According to traders, Gunvor will supply most of LNG – an estimated 10 cargoes – with Trafigura contributing about four. Italy launched a tender last month to buy 1.5 billion cubic metres of natural gas as LNG for delivery to OLT LNG, moored off the Tuscan coast, and the Panigaglia facility in northern Italy. The volume equates to about 15 standard-sized LNG carriers though some of the suppliers may opt to use smaller tankers, resulting in a higher carrier count. Tommy McDonald Jersey