Exxon revises down oil and gas reserves by 3.3 billion barrels
U.S. oil major Exxon Mobil Corp has revised down its proved crude reserves by 3.3 billion barrels of oil equivalent as a result of low oil prices throughout 2016, a company filing showed on Wednesday. The de-booking includes the entire 3.5 billion barrels of bitumen reserves at the Kearl oil sands project in northern Alberta, operated by Imperial Oil, a Calgary-based company in which Exxon has a majority share. It comes a day after ConocoPhillips Corp de-booked more than a billion barrels of its oil sands bitumen reserves, citing weak global crude prices. In total Exxon has 20 billion barrels of oil equivalent at year-end 2016, the Securities Exchange Commission filing said. The reduction reflects the number of barrels of oil equivalent that were now deemed uneconomic due to lower crude prices. In addition to the Kearl volumes, another 800 million barrels of oil equivalent in North America failed to qualify as proved reserves. However the reductions were partly offset by Exxon adding 1 billion barrels of new oil and gas reserves in the United States, Kazakhstan, Papua New Guinea, Indonesia and Norway. Under SEC rules Exxon and other U.S.-listed companies report reserves based on the average crude price on the first day of each calendar month during the year. Benchmark crude prices in 2017 have so far been higher than in 2016, meaning some of the volumes could be rebooked as proved reserves if these levels hold. Jarius Wright Jersey
Norway oil companies raise 2017 investment forecasts -survey
Norway’s oil companies have increased their 2017 investment plans in the last three months, signalling a smaller-than-expected contraction for the industry, a survey by the statistics office showed on Thursday. Investments in oil and gas extraction and pipeline transport were still expected to fall for the third year in a row as companies cut the spending after oil prices fell by more than 50 percent over the last two-and-a-half years. The country’s oil companies now plan to invest 149.4 billion crowns ($17.87 billion) next year in oil and gas extraction and pipeline transport, 1.9 percent more than the 146.6 billion crowns seen last November but down from 163.3 billion in 2016. “The increase is mainly due to higher estimates for field development, fields on stream and shutdown and removal,” Statistics Norway said in a statement. The numbers were helped by some removal projects being postponed from the fourth quarter to 2017, it added. The 2017 forecast should be viewed as positive news for the economy, Nordea Markets economist Erik Bruce said, adding it was probably 4-5 percent ahead of the central bank’s forecast when measured in inflation-adjusted terms. “It’s an argument in favour of the central bank lifting its interest rate path projections at the March meeting,… but not to the point of raising rates.” he added. SEB economist Erica Blomgren also said the survey was positive for the economy. “The central bank’s forecast (for 2017) may turn out to be too pessimistic,” she added. The Norwegian central bank said in December it expected to keep interest rates steady at a record low 0.5 percent in the years ahead, but added the probability of a rate cut was greater than the chance of a hike. Over the last two years oil and gas investments contracted by 27 percent, after rising by 70 percent from 2010-2014 when high and relatively stable oil prices supported new developments and high drilling activity offshore Norway. The Norwegian oil and gas industry’s share of gross domestic product (GDP) contracted to 12 percent in 2016 from 25 percent at its peak in 2008. Steve Grogan Womens Jersey
Modi government to launch first major oilfields auction in two months
The Modi government is planning to launch its first major auction of oilfields within the next two months under the revamped Hydrocarbon Exploration Licensing Policy (HELP) worked out by the oil ministry. This would also be India’s first oil blocks licensing round since 2010 when acreages were awarded in such an auction under the then applicable New Exploration Licensing Policy. Significantly, the bidding round would be conducted through the newly worked out Open Acreage Licensing Policy (OALP) that will allow interested firms to bid for blocks of their choice at any time of the year. A key highlight of the process would be the simultaneous launch of National Data Repository (NDR) a comprehensive database of the country’s key sedimentary basins that will provide the bidders data on contract areas that will be bid out. “NELP is history. We will formally launch the new bidding process and also the National Data Repository within a month or two. The draft NDR has already been submitted to the ministry by the Directorate General of Hydrocarbons (DGH),” a senior official in the know of the blueprint of the entire plan told ETEnergyWorld. He also informed the ministry has tasked accounting and consultancy firm PwC to work on the details of the bid document for OALP. The oil ministry is also working on a suitable regime of incentives for Exploration and Production (E&P) companies to motivate them to increase production under HELP. “NDR, OALP and the attractive clauses of HELP will transform the E&P scenario in India. It will help in ramping up production and incentivize investments in the sector,” the official said. The next round of auction under HELP will follow the just-concluded bidding for Discovered Small Fields (DSF) under which 31 oil blocks are to be awarded to around two dozen mostly small-sized firms. The HELP regime is expected to cut down delays in development of blocks and legal disputes with companies because of its revenue share methodology, the ministry believes. Under HELP, an upstream player will be allowed to explore both conventional and unconventional oil and gas resources including Coal Bed Methane, Shale gas and oil and gas hydrates under a single license. The new policy also stipulates a differential structure of royalty rates based on the depth of the field. The new policy and the upcoming auctions are part of the ministry’s effort to achieve the target of cutting down India’s import dependence for energy by 10 per cent by 2022 set by Prime Minister Narendra Modi Darius Leonard Authentic Jersey
Petroleum and Natural Gas Regulatory Board becomes dysfunctional due to lack of replacements for retiring members
Lack of replacements for the retiring members in the past one and a half years has left Petroleum and Natural Gas Regulatory Board (PNGRB), the nation’s downstream regulator, with just one member, making the board dysfunctional that can potentially delay the latest round of award of rights to build pipeline in eight districts. The board, formed under an Act of 2006, comprises a chairperson, a member (legal) and three other members appointed by the central government. Chairperson S Krishnan retired in August 2015 while three other members—PK Bishnoi, Kiran Kumar Jha and Subhash Chandra Batra (member-legal) —have retired in the past six months. Basudev Mohanty is the only serving member on the board now. The board decides by a majority and its decisions don’t become invalid due to any vacancy, according to the Act. But since the quorum requires three members, the board can’t meet and decide on anything. “This has impaired the working of the board and created a regulatory vacuum,” said a source with direct knowledge of the regulator’s functioning. The government had last year advertised for the position of PNGRB member but there is no clarity on its outcome. The oil ministry didn’t respond to ET’s email query on what it was doing to deal with these vacancies, and if there was a plan to replace PNGRB by another regulator for the energy sector. PNGRB has a few other vacancies as well, including those of key advisors, for a long time, constraining its functioning, according to sources. PNGRB’s job is to regulate the refining, transport and marketing of petroleum products, ensure enough supply across the country, protect consumer interest, foster fair trade, and authorise companies that would build and operate fuel pipelines. The board has the power of a civil court and a bench comprising member (legal) and one or more members nominated by the chairperson decides on disputes arising among the downstream companies or with outsiders. The absence of members has practically suspended this function of the board, said a source. Another effect of vacancies would be a delayed decision on the award of rights in the eight round to build and operate city gas networks in eight districts in Haryana, Goa, Puducherry, Uttar Pradesh and Maharashtra. PNGRB had invited bids in November and is accepting applications until February 23, following which the bids are to be examined and successful bidders awarded. Another source said many other routine activities such as consultations with stakeholders on various proposals are unaffected due to vacancies. Only when a final decision has to be taken that the board is required, he said. Cordarrelle Patterson Jersey
India can be much larger producer, consumer of natural gas
India has the potential to become a much larger producer and consumer of natural gas by 2022 when it is expected to surpass China in terms of population, a first of its kind Congressional report on India’s natural gas said today. “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 the report. The CRS 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 report 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. In its 19-page report, 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. The legislation 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. LKJ ANB UZM ANB Sonny Jurgensen Authentic Jersey
After 8-year-long legal tussle, Centre to pay Rs 63.20 billion as oil royalty to Assam
The Centre on Wednesday agreed to pay Rs 63.20 billion to the Assam government as crude oil royalty as part of an out-of-the-court settlement after eight years of protracted legal battle. The amount will be paid by the central government to the Assam government over a period of three financial years commencing 2016-17. Assam chief minister Sarbananda Sonowal thanked Prime Minister Narendra Modi, finance minister Arun Jaitley and petroleum minister Dharmendra Pradhan for the “proactive and bold steps” which led to the out of the court settlement. “The Central and state governments were fighting in courts over the oil royalty issue since 2008 when both the governments were ruled by the Congress. “But within nine months of the BJP government coming into power in Assam, we have resolved the dispute and the central government agreed to pay Rs 63.20 billion as oil royalty. We are thankful to the Modi government,” Sonowal told PTI here. While in 2016-17, the central government will pay Rs 9.48 billion; in 2017-18 it will pay Rs 28.44 billion and in 2018-19 will pay Rs 25.28 billion. This is in addition to the Rs 14.50 billion already received. The Oil India Limited produces 3.2 million tonnes crude oil in Assam annually, while Oil and Natural Gas Corporation Limited produces 1.1 million tonnes crude oil every year in the state. The OIL and the ONGC have been paying royalty to the central and the state governments in terms of statutory provisions of oilfields (Regulations and Development) Act 1948 and Petroleum and Natural Gas Rules, 1959. The Petroleum Ministry on October 30, 2003 had directed upstream companies, including ONGC, to give discount in price on sale of crude oil to the Oil Marketing Companies. The notional price of the crude oil produced by upstream companies is initially derived on the basis of the average international price and then discounts are fixed as decided by the central government. Case Keenum Authentic Jersey
Petronet LNG’s impressive showing
Shortage of domestically produced gas leading to better demand prospects for liquefied natural gas, or LNG, is what has fundamentally propelled Petronet LNG’s stock. Shares of Petronet LNG Ltd have increased an impressive three-fifths so far this fiscal year. Shortage of domestically produced gas leading to better demand prospects for liquefied natural gas (LNG) is what has fundamentally propelled the company’s stock upwards. The LNG importer’s profit growth has been robust each quarter so far in fiscal year 2017 and the December quarter results are no exception. Net profit increased spectacularly, more than doubling compared to the same quarter last year to Rs 3.97 billion. Operating profit increased 114% year-on-year to Rs 6.07 billion. The Petronet LNG management told analysts in a conference call that the Dahej (Gujarat) capacity expansion to 15 million tonnes (from 10mt) was fully operational during the December quarter. The company said that the volume of 187 trillion British thermal units regasified at the Dahej terminal in December quarter is a marginal increase over the September quarter and a 36% increase over the December 2015 quarter. However, Petronet LNG’s Kochi (Kerala) terminal continues to operate at miserably low utilization levels—6% during the December quarter. Pipeline infrastructure problems have adversely affected utilization levels at the Kochi terminal and that has been a worry. “On the Kochi pipeline issue, Petronet LNG management shared that work on the first phase (Kochi-Mangalore pipeline) has started,” point out analysts from IIFL Institutional Equities in a report on 15 February. According to the brokerage firm, once this line is complete, utilization of the Kochi terminal would increase to 40%. However, further ramp-up in utilization would depend on completion of Kochi-Bangalore, the second pipeline, which is likely to be completed only by 2019. Needless to say, developments on this front will be an important trigger for the stock. It helps that spot LNG prices are expected to remain subdued in the coming years on account of higher supply in global markets thanks to capacity additions. The Petronet LNG stock’s remarkable appreciation reflects that it captures this good news including the recent commissioning of expanded capacity. But further outperformance could be difficult. Incremental expansion at the Dahej terminal to 17.5mt is expected to be completed by fiscal year 2019. “Given we already assume further capacity expansion benefit of 2.5mmt with full utilization by FY19/FY20 and earnings growth post-FY20 would be minimal, we expect stock would be de-rated going forward,” wrote analysts from Elara Securities (India) Pvt. Ltd in a report on 14 February. Currently, one Petronet LNG share trades at about 17 times estimated earnings for the next fiscal year based on Bloomberg data. Derrick Henry Jersey
Oil giant: Govt mulls merging HPCL or BPCL with ONGC
The Oil and Natural Gas Corporation may take over either Hindustan Petroleum Corporation Ltd or Bharat Petroleum Corporation Ltd if the Centre’s idea of an ‘integrated oil major’ materialises. An official involved with the development said the plan is to transfer the government’s holding in one of the companies to ONGC, making the latter the holding company. This will enable the creation of an integrated oil major. The Centre holds 51.11 per cent stake in HPCL, and 54.93 per cent in BPCL. “The other oil companies — Oil India, in the upstream sector, and Indian Oil Corporation in the downstream sector — will operate unchanged,” he added. The concept of the holding company was first proposed in 2005 by a committee headed by V Krishnamurthy. The committee, while concluding that the merger of oil PSUs may not be an advisable option, had suggested two alternatives, namely, creation of a holding company or a coordination body. According to RS Sharma, former Chairman and Managing Director, ONGC, a holding company concept may work out better. Sharma, who also is Chairman of FICCI Hydrocarbon Committee, said creating a holding company will result in optimisation of resource-sharing and upfront cost-savings of 10-15 per cent. The total market capital of listed oil-sector PSUs is over ?7000 billion. The holding-company mechanism will also yield huge disinvestment proceeds to the government, Sharma said, adding that this concept will result in minimum disruption to the existing corporate structure. Danton Heinen Jersey
Bengal decides to enter into joint venture with GAIL
West Bengal government today decided to enter into a joint venture with the Gas Authority of India Limited to supply natural gas to every household in greater Kolkata. Chief Minister Mamata Banerjee gave her approval to the joint venture at a meeting of the Cabinet’s standing committee on industry held at the state secretariat today, state finance minister Amit Mitra said. “It’s been a long time since we are talking about city gas supply and now today the decision has been taken by the chief minister,” Mitra told reporters. He said that GCGSC, which is a 100 per cent state-owned company, will have an equity of 26 per cent while GAIL will hold 74 per cent stake for the Rs 3,000-crore project, the minister said. GAIL would invest for the project while the state government would provide various assets like the land and infrastructure support, he said. The minister said that urban areas would first have the supply and thereafter it which would be supplied all over the state including the small towns. The pricing of the gas was yet to be decided, he said. In another important decision, the government as part of its city beautification drive has taken a decision to pass on the innumerable electrical wires, cables, telephone lines hanging overhead via underground ducts. According to a source at the secretariat, a committee under Chief Secretary Basudeb Banerjee has been formed for the purpose. It was also learnt that at today’s meeting Chief Minister Mamata Banerjee asked her ministers to be at their respective areas during the upcoming Holi and Shiv Ratri festivals to avoid any untoward incident. Greg Lloyd Authentic Jersey
India looks to expand energy ties with Myanmar, sell refined crude
India plans to sell refined crude oil products to Myanmar as part of New Delhi’s efforts to deepen ties with its eastern neighbour, which is expected to see strong demand for fuels as it builds new roads, factories, utilities and airports. Indian oil minister Dharmendra Pradhan began a five-day trip to Myanmar on Monday, scouting for opportunities in oil exploration, refining and products retailing. Prime Minister Narendra Modi wants to expand ties with the country’s eastern neighbours including Myanmar to develop its landlocked northeastern states. Pradhan is also expected to discuss laying fuel and gas pipelines linking India’s northeastern states with Myanmar. The Indian oil minister’s trip comes months after Myanmar leader Aung San Suu Kyi visited New Delhi, courting investments in sectors left in disarray under nearly 50 years of a military dictatorship. A sweeping electoral victory for Suu Kyi’s party in 2015 paved the way for the lifting of US sanctions against Myanmar last year. Numaligarh refinery Ltd (NRL), a unit of India’s state-run Bharat Petroleum Corp, is looking at selling gas oil into northwest Myanmar, its managing director said. “Initially, it will be a small quantity. We will look for a long-term contract for diesel exports after expansion of our refinery, ” Padmanabhan told Reuters. NRL plans to treble its refining capacity to 180,000 barrels per day in four to five years. Myanmar’s refined fuels consumption is estimated to rise at an average annual rate of 6 percent over the next 10 years to 2026, BMI Research, a unit of credit ratings agency Fitch Group, said last month. “Demand for automotive fuels (gasoline, diesel) will grow particularly strongly, as rising consumer wealth and car ownership combine to rapidly expand the size of Myanmar’s vehicle fleet at a healthy clip of 18.6 percent per annum over the next five years,” it said. B Ashok, chairman of India’s top refiner Indian Oil Corp, earlier this month said his firm was looking for downstream opportunities and the sale of refined fuels to Myanmar. ONGC Videsh Ltd, a unit of Oil and Natural Gas Corp, last year said the firm was in exploratory talks with Gazprom for the supply of natural gas through a complex swap involving Russia, China and Myanmar. Steven Nelson Authentic Jersey