Discovered Small Field activities in the State of Tamil Nadu
The Cabinet Committee on Economic Affairs (CCEA) has approved the award of 31 contract areas as part of the Discovered Small Field (DSF) Bid Round 2016. These fields were offered under new policy for small fields known as Discovered Small Field (DSF) policy, 2015, which offers improved fiscal terms with the aim to enhance Oil and gas production and reducing import dependency of the country. These fields were offered through an open and transparent international competitive bidding process. The bidding was open to all, including National Oil Companies (i.e. ONGC & OIL) and other central and state PSUs. Currently, there are 03 operational Exploration Blocks (Approximately 1461 sqkms) under Production Sharing Contract System in Tamil Nadu where hydrocarbon exploration is going on. Under Nomination regime, 31 Mining leases (approximately 3500 sqkms) have been granted in the State from where 600 tonnes of Oil and 3 million cubic meter of Natural Gas are produced per day. Till date, more than 700 wells have been drilled for extraction of Oil and Gas in the Tamil Nadu. These active operations are not hampering agriculture in nearby areas and do not pose any known environmental impact or health hazards on living beings of the operational area. The two contract areas, Karaikal (10.4 Sqkm) located in Puducherry and Neduvasal (10.0 Sqkm) located in Tamil Nadu awarded under DSF bidding round have an in-place volume of 4,30,000 metric tonne of oil and oil equivalent gas. In the past weeks, some concerns have been raised over the impact of E&P activities proposed to be undertaken in these oil and gas fields on agriculture & soil condition in the region, contamination of ground water table, effect of Methane generation, etc. Extraction of Oil and Gas from sub-surface is a well-established practice and the E&P industry uses state-of-the-art technology for the operations and takes maximum care for environmental effects. The operators also get Environment Impact Assessment done before carrying out any drilling activities and other activities. Process of drilling and production requires very limited surface land area (generally 120X120 square meter) which will not affect agriculture or the soil of the entire lease area. Additionally, operators are required to follow strict environmental norms for the use of operational land. Oil and gas extraction are being carried out from deeper earth area (generally > 1000m), and thus doesn’t affect ground water aquifers which are located at much shallower levels. Hydrocarbon extraction method is being used worldwide which has not seen any direct impact to water resources of the mining area. Also, while drilling for oil & gas, cement casing is used; hence, there is no impact on groundwater as such. As the principal component of Natural Gas, Methane is being used as house hold fuel globally in the form of PNG. Others concerns about adverse environmental impact on nearby areas and the people living there are also misplaced, as all petroleum operations require prior environmental clearances from Ministry of Environmental and Forest, wherein public hearing is an integral part of obtaining these clearances. As per the contract terms, these fields are to be put on production within three years from the date of Mining Lease (ML). Hydrocarbon production from these fields will result in several economic benefits to state and its people in the form of royalty, VAT, additional employment generation and economic development of the state. As per estimates, the two contract areas are expected to generate gross revenue of INR 3 billion, royalty to State Government of INR 400 million and additional employment for about 500 persons. Darian Thompson Jersey
ONGC may acquire HPCL in $6.6 billion deal
Oil and Natural Gas Corporation (ONGC) may acquire India’s third-biggest fuel retailer HPCL in an about Rs 440 billion (USD 6.6 billion) deal as part of the government’s plan to create an integrated oil giant. Following up on Finance Minister Arun Jaitley’s Budget announcement of creating an integrated oil company, India’s biggest oil and gas producer ONGC may buy all of the government’s 51.11 per cent stake in Hindustan Petroleum Corporation Ltd (HPCL). This will have to be followed by an open offer to acquire additional 26 per cent from other shareholders of HPCL. “The government is looking at creating an integrated oil company and the idea is to merge an oil producer with a refiner,” a top source said. There are only six major companies in the sector – ONGC and Oil India Ltd being the oil producers, Indian Oil Corp (IOC), HPCL and Bharat Petroleum Corp Ltd (BPCL) in refinery business and GAIL in midstream gas transportation business. The rest such as ONGC Videsh, Chennai Petroleum Corp (CPCL), Numaligarh Refinery Ltd and Mangalore Refinery (MRPL) are already subsidiaries of one of these six PSUs. “So, the options are very limited. One option is to merge refiners HPCL and BPCL with ONGC and merge IOC and OIL. Now this would create two large vertically integrated oil companies. But this would also mean limiting the choice for consumers to just two companies for buying fuel,” he said. The possible way out is to merge HPCL with ONGC while keeping BPCL separate. BPCL already has a flourishing upstream arm in Bharat PetroResources Ltd which can be strengthened further. “This way consumers will continue to have three fuel retailers in IOC, ONGC-HPCL combine and BPCL,” he said. HPCL will add 23.8 million tonnes of annual oil refining capacity to ONGC’s portfolio, making it the third-largest refiner in the country after IOC and Reliance Industries. ONGC already is majority owner of MRPL, which has a 15-mt refinery. The source said ONGC buying HPCL will require two sets of Cabinet approval – one where the government approves sale of its all or part of its 51.11 per cent stake to ONGC, and the other for allowing ONGC to spend the money on stake buy. Considering today’s trading price of Rs 561, ONGC will have to pay the government Rs 291.28 billion for 51.11 per cent stake. It will then have to buy another 26 per cent from the open market for Rs 148.17 billion, taking the total acquisition price to about Rs 440 billion. The merger will help the world’s third-largest oil consumer better compete with global majors in acquiring foreign assets. More than 12 years after a proposal to merge oil PSUs was first mooted by the then oil minister Mani Shankar Aiyar, Jaitley in his Budget for 2017-18 proposed to “create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies”. The behemoth so created will not just compete globally, but withstand oil price volatility by using profits the refining business make in low oil prices to make up for losses in upstream and vice versa. Ryan Callahan Womens Jersey
Bring natural gas under GST fold: BC Tripathi, CMD GAIL
Chairman of Gas Authority of India Limited (GAIL), B C Tripathi on Monday sought waiver off customs duty on LNG and raised his decibel for bringing in “natural gas” into GST fold, yelling that India desperately requires “a well crafted integrated energy policy” in the absence of which, it cannot move towards gas based economy and hardly create an intense urge and addiction for mass consumption of natural gas. Inaugurating a Conference on “India Moving Towards Gas Based Economy-Roadmap Ahead” under aegis of PHD Chamber of Commerce and Industry on Monday, Tripathi demanded that “an assured rate of return of 12 percent is essential for GAIL on its investments to connect entire India with gas pipeline network without entering into any partnership deed to accomplish the objective. “No country in the world, barring USA created a national gas grid entering into partnership arrangement and that it has been done by the national oil companies on their own and therefore, if an assured ROR of 12% is guaranteed to us, GAIL can connect India with such a network including north east and Tripura”, said Tripathi. “Natural gas sector has not been able to realize its full potential until now due to apathetic government policies including multiple stiff taxation on it like excise, VAT, octroi and other such local levies and therefore, it needs to be subsumed in GST regime with new integrated energy policy in place which can offer a preferential treatment for natural gas”, Tripathi said, cautioning that natural gas share in energy basket could increase to intended 15% only with suggested prescriptions. The CMD also felt that preferential treatment for natural gas sector has become necessary to produce clean energy by pouring in huge investments into it rather than reviving the retired thermal power plants with additional investments which could neither be cost competitive and continue to abet the pollution and pollutants that arise out of them. Tripathi also added that GAIL on its own way would promote campaign such as “Swachh Bijlee” for cleaner environment on lines of natural gas which is completely a cleaner fuel for mass consumption and has already set-up a Start-up fund of Rs.1 billion to promote innovation in the field of natural gas engines. Speaking on the occasion, Director Finance, Petronet LNG, R K Garg though welcomed reducing customs duty on LNG by 50%, however, felt that in view of its commercial significance, the duty on it should have been brought to zero per cent. President, PHD Chamber, Gopal Jiwarajka in his remarks promised that all concerns and roadmap suggested by Tripathi for transformation of natural gas sector will be taken to the highest level of policy making by the PHD Chamber as the suggested proposals mooted by GAIL are fully justified for promotion of natural gas. Derek Anderson Authentic Jersey
Hiranandani Energy starts construction work of jetty at Jaigarh port
Hiranandani Energy, the energy arm of Hiranandani Group, today said it has commenced the construction work of jetty for the floating storage and regasification unit (FSRU) project at the Jaigarh port in Maharashtra. The company is developing a FSRU-based LNG re-gasification terminal with JSW Jaigarh Port with a capacity of 4 MMTPA, which will ultimately be expanded to 8 MMTPA. “We are committed to deliver a commercially viable and environmentally friendly solution to the country. The commencement of the jetty construction work at Jaigarh Port is a major step in the development of the LNG re-gasification project,” H-Energy CEO Darshan Hiranandani said. He said the strategic partnership and association with JSW is a perfect fit in the development of infrastructure for importing much needed natural gas into the country. “The FSRU charter agreement will be the last major milestone in the project. We have 3 shortlisted bidders and are hopeful to finalise this soon,” Hiranandani said. “We hope to commence commercial operations of the LNG facilities before December 2018,” he added. Once operational, this will be the fifth LNG import terminal on the west coast. The west coast already has four LNG import terminals including: Dahej and Hazira in Gujarat; Dabhol in Maharashtra and Kochi in Kerala. Jaigarh also houses the 5 million tones Dabhol LNG terminal operated by gas utility Gail IndiaBSE -0.27 %. In addition to building the marine infrastructure in the port of Jaigarh to import and re-gasify the LNG, the project scope also includes construction of gas pipeline of around 60 km in length connecting the Jaigarh terminal to the existing natural gas pipeline network at Dabhol, the company said. According to the agreement, Jaigarh Port shall manage the construction of the jetty civil works and has appointed L&T Infrastructure Engineering Ltd., Chennai for jetty design. The civil construction works of the LNG jetty has been awarded to ITD CementationBSE -1.17 %, Mumbai. H-Energy and Jaigarh Port have jointly appointed COWI India Private Limited, Chennai to supervise the jetty construction. “Connected to the terminal, H-Energy’s Jaigarh – Mangalore pipeline development is also making substantial progress on its regulatory approvals and route surveys. It will be a lifeline to the Konkan region and Coastal Karnataka for the provision of natural gas to industry and homes,” Hiranandani added. H-Energy through its gas marketing company is negotiating medium and short term LNG sourcing and downstream gas supply contracts providing end-to-end gas solutions to the downstream customers. Matt Schaub Womens Jersey
ONGC set to create energy giant with control of HPCL
Oil and Natural Gas Corporation(ONGC) will take control of Hindustan Petroleum Corp (HPCL) as part of the government’s plan to create an integrated public sector oil entity comparable with big global oil companies like Shell BP and Exxon, top government officials said. “It is a very big decision. A Cabinet note will soon be moved. The government of India will transfer its majority shareholding (of 51.11% in HPCL) to ONGC, which will then become the holding company of HPCL,” said one of the officials cited above. The move will stop short of a complete merger, which may take longer, but the purpose will be served with this step, said the people cited above. ET was the first to report on February 21 that the government plans to integrate either HPCL or Bharat Petroleum Corp. Ltd (BPCL) with ONGC in line with the February 1 budget announcement to “create an integrated public sector oil major which will be able to match the performance of international and domestic private sector oil and gas companies.” ET had also reported that the status of all other oil companies such as Oil India Ltd (OIL) and Indian Oil Corp. (IOC) would remain unchanged. ONGC’s exploration functions will be integrated with HPCL’s refining and distribution capabilities. HPCL, which owns and operates two major refineries in Mumbai and Visakhapatnam, has India’s largest lubricants unit and second largest pipeline network of 3,015 km apart from a vast marketing system. The thinking behind such vertical integration is that it will reduce risk-high crude oil prices will boost the exploration business and when they drop, the distribution segment will benefit. “The world over, the largest and most successful oil companies like Shell, BP and Exxon, are vertically integrated,” said an official, stressing that ONGC-HPCL’s earnings will become more stable and investors will benefit from this reduced volatility. Royce Freeman Womens Jersey
80% of Rakhine gas goes to China
A report called “Myanmar’s natural resources ownership, management, income sharing and impact” carried out by the Ethnic Nationalities Affairs Centre says the Shwe natural gas project off the Rakhine coast has a daily natural gas production capacity of 500 million cubic feet and 80 per cent of it will be exported to China for 30 years. Only about 100 million cubic feet would be sent to Kyaukphyu in impoverished Rakhine State, the report said. It also said Myanmar received just US$13.8 million a year from land rental for the gas pipeline that stretched nearly 800km from Rakhine State to China. An oil pipeline runs parallel from an island near the port of Kyaukphyu. The oil pipeline sent about 22 million tonnes a year to China from Rakhine State, which remains one of the poorest areas of Myanmar with a large proportion of its citizens living in wretched conditions. The gas pipeline was built jointly by six companies from China, Myanmar, South Korea and India. The gas pipeline is estimated to have cost about US$5 billion. Residents and non-governmental organisations have condemned the Shwe project for offering no benefits to Rakhine State. The state remains distracted and divided by ethnic disputes, which were sparked in 2012, coinciding with the exploitation of the state’s energy resources. Barry Church Womens Jersey
Giant Leap in Iran’s Gas Condensate Exports
The National Iranian Oil Company exported 24 million barrels of gas condensates in January to Asian and European buyers — the outbound volume being over and above the average figures seen during the past several months. Since the easing of international economic sanctions in January last year, Iran’s gas condensates exports have risen nearly four times, reaching a daily average of 550,000 barrels from just around 150,000 barrels per day in 2012 when trade and financial restrictions were in place, Shana reported. According to Ali Kardor, NIOC managing director, gas condensates output was around 300,000 bpd in 2013, but production capacity has since shot up by 50%, exceeding 600,000 barrels per day. Combined exports of crude oil and condensates have also climbed to 2.8 million bpd, said the official. Condensates are in the twilight zone between crude oil and natural gas. They possess characteristics of both oil and gas, and have values and market drivers both similar to, and distinctly separate from, oil and gas. Underscoring that the main buyers of Iranian gas condensates in Asia are its traditional oil customers, namely China, India, South Korea, Turkey, Taiwan and Japan, he noted, “BP received its first gas condensates cargo from NIOC last year under single-shipment contracts and negotiations are underway for NIOC to sign long-term contracts with Shell.” In related news, Iran had stored up 10 million barrels of condensates in China as part of efforts to expand its presence in the world’s second-largest energy market, but the entire inventory has been sold, the Oil Ministry said earlier in the week. Tehran turned to leasing oil storage tanks in China during the sanctions, making the country an export base for its petroleum products in the Far East as financial and trade restrictions had significantly curtailed Iranian oil trade and shipment. “With each barrel at $40, export of 50 million barrels of condensates generates $2 billion in revenues, Kardor was quoted as saying by Shana on Saturday. Condensate output is slated to reach 1 million barrels a day upon the launch of all phases of South Pars, the giant gas field shared by Iran and Qatar, the NIOC chief added. But Tehran has said it wants to reduce the outbound shipments of condensates and instead use the fossil fuel for manufacturing goods with higher value added. Condensate exports are set to decrease sharply upon the launch of several oil processing plants, including the Siraf and the Persian Gulf Star Refinery, the latter said to be the largest refinery project in the Middle East. Export of petroleum products has also risen to record levels in the first 10 months of the current fiscal year as 450,000 barrels of oil derivatives such as naphtha, diesel, bitumen and sulfur, were exported in large volumes to Southeast Asian clients from Mahshahr, Asalouyeh, Lavan and Bandar Abbas ports in southern Iran. Drew Stafford Authentic Jersey
Odisha govt withdraws tax sops to IOC’s Pradip refinery
In a big jolt to Indian Oil, the Odisha government has withdrawn tax incentives given to the Rs 345.55-billion Paradip refinery, making the company reconsider its plans to invest another Rs 520 billion in the state. Less than two months after serving the first show-cause notice, the Odisha government on February 22 wrote to its single-biggest investor saying it is withdrawing the promised 11-year deferment on payment of sales tax on Paradip refinery products sold in the state, sources said. The withdrawal will cost Rs 20 billion to Indian Oil Corporation (IOC) this year and will progressively increase every year as more petrol and diesel as also petrochemicals are sold within the state. The sources said that besides leading to levy of sales tax on 2 million tonnes of petrol and diesel sold in the state annually, the withdrawal is threatening viability of investments in downstream petrochemical plants as products from it will be consumed by an array of synthetic fibre and plastic industries and now tax will also be levied on them. When asked, IOC Director (Refineries) Sanjiv Singh said he would not like to discuss merits of the state government’s decision in the media. “IOC had invested about Rs 500 billion in Paradip refinery on the Odisha coast and in associated projects (like pipelines and port). We had plans for more investment, especially in downstream petrochemical projects and refinery expansion, considering the incentives given by the state. But in the present scenario, future investment options will require to be reassessed,” he said. IOC plans to expand the 15-mt-a-year Paradip refinery by 5 million tonnes as well as set up a polypropylene plant and a monoethylene glycol production facility at the site of the 1-year old refinery. He hoped Odisha will reconsider the decision and restore the incentives that were mutually agreed upon in 2004. Odisha had originally offered the tax incentives to IOC and its then partner Kuwait Petroleum Corp (KPC) in December 1998 to invest in setting up a refinery in the state. These investments were withdrawn in February 2000, leading to the company shelving the project. It restored the incentives and signed an MoU with IOC on February 16, 2004, for providing a set of eight sops. The sources said the state government withdrew the tax incentives in “public interest”, citing 6-year delay in commissioning of the project that was larger in capacity than originally planned 9-mt plant. IOC, however, is quick to point out that the February 16, 2004, MoU clearly allowed change in design, capacity and configuration of the project. Sources said the Odisha government was informed about the change in capacity and the delay in construction caused by cyclone, land acquisition and law and order problems. Also, the state government had allowed the company to avail of construction period incentive, listed in the MoU, totalling Rs 5.50 billion. Singh said restoration of the tax incentives will send a positive signal to prospective investors in the state. “Paradip refinery has already added to the overall development of the area in and around Paradip,” he added. Justin Simmons Womens Jersey
India can be much larger producer, consumer of natural gas: US Congress report
India has the potential to become a much larger producer and consumer of natural gas by 2022, according to a first-of-its-kind Congressional report. “India’s natural gas plans have implications for a number of issues in which Congress has expressed an interest,” the bipartisan and independent Congressional Research Service (CRS) said in a report on India’s natural gas sector. The report noted that India could see greater demand for energy with its population expected to be around 1.4 billion people by 2022, making it the world’s most populous country. “India has the potential to become a much larger producer and consumer of natural gas by 2022,” it said. Issues of interest include prospects for US hydrocarbon exports, investments by US energy companies, Indian investments in US natural gas production, India’s ability to meet its international commitments to reduce greenhouse gas emissions to combat climate change and India’s plans for integrating itself into the growing South Asian energy market, the 19-page report, released yesterday, said. The independent research wing of the US Congress brings out periodic reports on issues of interest to American lawmakers so that they can make informative decisions. However, the reports are not considered to be official documents of the Congress. The CRS said in the mid-2000s, members of both houses of Congress expressed interest to formalise closer energy ties between the United States and India, and a legislation was introduced but it was not enacted into law. However, the executive branch has implemented programmes to further improve the energy partnership between the two nations, it said. India’s current assessment of total reserves–resources that are economically and technically viable under existing market conditions–are estimated to represent less than one per cent of the global natural gas, the report said. As India attempts to shift away from coal and oil over the coming decades, natural gas production, especially from offshore resources, is seen as a way to increase domestic supply, it noted. Combined with improving infrastructure for imported LNG, India could become a bigger natural gas consumer in the future, the report said. CRS said in the past decade, India has incentivised foreign access to its upstream sector as a way to increase domestic production. Some of India’s energy companies are also investing more in US energy projects and have signed contracts to import US LNG, it said. Doug Middleton Jersey
More than 100,000 litres of petrol stolen from Mathura Refinery pipeline
Discovery of theft of a massive amount of petrol from a pipeline of the Mathura Refinery has sparked investigation into what police said was a highly organised racket. While the Indian Oil Corporation has estimated the amount of petrol stolen at 1 lakh litres in February, investigators said the racket had been going on since September last year and the actual amount could be much higher. The oil pilferage came into light on the night of February 16 when, during patrolling, refinery guards found an oil truck parked near a pipeline which supplies refined petroleum to Jalandhar. Mathura Refinery manager Virender Kumar filed an FIR against unidentified men at the highway police station in Mathura and mentioned an estimated “100 kilo litres” (1 lakh litres) had been siphoned off so far. “A trench was found to have been dug at the spot, which is 9.1 km from the refinery complex. The thieves were siphoning the petrol from the high-pressure pipe network. Digging a trench around the pipeline and then stealing oil from the pipe in this manner is the work of a team of experts. Without proper knowledge of oil pipelines, this sort of thing can’t be done safely,” Kumar told TOI. “Our initial assessment is that close to 1 lakh litres was stolen on the night of February 16, but since the racket seems to have been going on for months, we believe the loss is much higher. The actual figures will be arrived at after the plant at Bijwasan, near the Kapashera border, confirms to us about the amount of oil they have received over this period,” Kumar added. Mahesh Kumar Mishra, deputy inspector general of police of Agra zone said, “There is a group of nearly 17 men including members of the oil mafia, policemen, refinery staff and local labourers, who are involved in this oil pilferage. They have been active since September last year. Till now we have arrested four men and have come across at least 10 more names.” A prominent businessman of the area who owns several petrol pumps and is suspected to be involved in the oil mafia is also being investigated, police officials said. The apprehended men have been identified as Ram Hari, Ravi Chaudhary and Tarvenderjit Singh, who is a petrol pump owner in Agra. They have been booked under relevant sections of the Petroleum and Mineral Pipelines Act, Prevention of Damage to Public Property Act, Explosive Substances Act, Essential Services Amendment Act and the Indian Penal Code. “Three men, identified as Chetan, Gema and Ravi alias Viddhi from Faridabad were called to dig the trench and help in siphoning the oil,” officials added. Anton Forsberg Authentic Jersey