Norway oil minister: no impact from Brexit on Norwegian gas exports to Britain
Exports of Norwegian gas to Britain will not be affected by Britain’s vote to leave the European Union, Norway’s oil and energy minister told Reuters. The Nordic country is Britain’s top foreign gas supplier, accounting for some 40 percent of all supplies in 2015. “There is no reason to believe that market access for Norwegian gas exporters to Britain will be affected by Brexit. We have been a stable gas exporter and we will continue to be so,” Tord Lien said in an interview. The minister also said he saw signs of improvement in the Norwegian oil industry, which has been struggling for the past two years due to a 60-percent decline in crude prices since June 2014. Darrell Green Jersey
Saudi energy minister tempers expectations for production freeze
LOS ANGELES: Saudi Arabian Energy Minister Khalid Al-Falih tempered expectations that the world’s major oil producers would look to freeze production next month, telling Reuters on Thursday that the “market is moving in the right direction” already. “We don’t believe any significant intervention in the market is necessary other than to allow the forces of supply and demand to do the work for us,” he said in an interview following a speech at the U.S.-Saudi Arabian Business Council in Los Angeles. Members of the Organization of Petroleum Exporting Countries (OPEC) will meet on the sidelines of the International Energy Forum (IEF), which groups producers and consumers, in Algeria from Sept. 26-28. Oil rallied last week in part on anticipation of a freeze, but those hopes have waned in the last couple of days. Speaking publicly for the first time since talk about freezing production surfaced in the last few weeks, Al-Falih said there have not yet been any specific discussions of a production freeze by OPEC, even though world supply remains high. His comments suggest the chances of a pact are minimal, as he pointed to a market rebalancing and steady demand. Benchmark Brent crude has rebounded sharply since January but struggled to stay above $50 a barrel. Saudi Arabia recently hit a record in terms of barrels-per-day production, and other member nations, including Iran, have said they will boost output. The kingdom, the world’s largest oil exporter, started to raise production from June to meet rising seasonal domestic demand as well as higher export requirements. Al-Falih did not say whether there was a specific level of output that would be necessary to stabilize the market. Saudi Arabia produced 10.67 million barrels per day of crude oil, the most in its history, in July, and Al-Falih said on Thursday that production has remained around that level, though he could not cite a specific number for August. Global marker Brent futures gave back some gains following Al-Falih’s comments, slipping as much as 35 cents, or 0.7 percent, over 20 minutes, before recovering somewhat. Brent was trading up 61 cents at $49.66 a barrel by 3:35 p.m. ET (1935 GMT). A previous attempt to freeze output at January levels to support prices collapsed in April after Saudi Arabia said it wanted all producers, including Iran, to join the initiative. Since Al-Falih’s appointment in April, Saudi Arabia has taken a softer tone toward Iran at OPEC. Al-Falih said no specific production level for a freeze has been broached yet. “If there is consensus that emerges between now and the Algiers meeting, Saudi Arabia as always will be a constructive player in these discussions and we will be willing to participate,” he said Thursday. Sean Mannion Authentic Jersey
Brazil probes Petrobras, Ultrapar gas units for alleged price fixing
Brazil’s antitrust agency has opened an inquiry into 11 companies for allegedly colluding to fix prices of liquefied petroleum gas (LPG) and divvying up customers in northeastern states, in the latest probe into suspected anticompetitive behavior. In a statement, Brasilia-based government watchdog Cade said companies exchanged information and imposed restrictions on resellers in order to “promote an artificial regulation of the market and to facilitate the functioning of alleged cartels.” The agency did not estimate how much consumers lost from the scheme. Some of the firms under investigation include Liquigas Distribuidora SA, a unit of state-controlled oil company Petroleo Brasileiro SA, or Petrobras, and Cia Ultragaz SA, a subsidiary of Ultrapar Participacoes SA, Cade said. Tetrobras kicked off an auction process to sell Liquigas in June. The probe is the latest in a drive against corrupt corporate practices in Brazil, where a bribe-for-contracts scandal between state firms and engineering groups has helped accelerate the impeachment trial of President Dilma Rousseff. Suspicions of a so-called cartel in the LPG market first rose in 2009 when oil industry watchdog ANP filed a complaint, followed by a series of police and prosecutor investigations, the statement said. Searches and raids also took place a year later as part of a similar probe into anticompetitive prices. Subsequently, gas distributors GLP Minasgas SA Industria & Comercio and Supergasbras Energia Ltda, which are also part of the ongoing Cade probe, as well as some executives sought to negotiate plea deals. Cade did not disclose the terms of the accords. Representatives of Liquigas, Ultragaz, Minasgas and Supergasbras did not have an immediate comment. On Aug. 8, officials recommended that Cade’s board impose sanctions on Petrobras for alleged anticompetitive behavior in the natural gas distribution market. A timetable for a ruling on the Petrobras case is yet to be determined. Manu Ginobili Womens Jersey
Petroleum ministry strengthening its exploration division with another joint secretary
As part of India’s efforts towards energy security, the ministry of petroleum and natural gas is strengthening its exploration division. To boost this initiative and expedite hydrocarbon exploration in the country’s sedimentary basins, the critical ministry, responsible for meeting the economy’s energy needs, has introduced an additional position of a joint secretary (JS) in the exploration division. The division already has a joint secretary-rank official. This comes in the backdrop of India’s stagnant hydrocarbon production. The government has made energy security one of the primary areas of focus in its economic policy in order to achieve fast and sustainable long-term development. According to a government statement on 22 August, the Appointments Committee of the Cabinet has approved the appointment of Ashish Chatterjee, an Indian Administrative Service (IAS) officer of the Tamil Nadu cadre, as the new JS. This was done by “upgrading one vacant post of deputy secretary/director… to JS level for a period of two years”, the statement added. The petroleum ministry will now have six joint secretaries, including the two responsible for exploration. “He (Chatterjee) will be joining as the joint secretary in the exploration division in addition to the existing one,” said a government official requesting anonymity. India has 26 sedimentary basins roughly covering an area of 3.14 million sq. km. Of these, an estimated 75% are yet to be explored. India has total reserves of 763.476 million ton (MT) of crude oil and 1,488.73 billion cubic metre (BCM) of natural gas. Another government official, who also didn’t want to be identified, confirmed the development. The Narendra Modi-led National Democratic Alliance (NDA) government has made energy security one of the cornerstones of its economic policy in order to achieve fast and sustainable long-term development. The government has set up an ambitious target to halve the country’s energy imports by 2030. Given India’s plan to reduce its import dependence, domestic production will have to step up exponentially. India currently has 310 production sharing contracts. Experts think it is a good move. “The exploration division has been historically weak. It will be good to expand it. There are large agendas in place such as hydrocarbon exploration and licensing policy, and the auction of small discovered fields, which need to be implemented within a short time frame or the credibility gets hampered,” said R.S. Sharma, former chairman and managing director of state-run Oil and Natural Gas Corp. Ltd. Crude oil and gas production during 2014-15 was 37 MT and 34 BCM, respectively. India currently imports one-third of its energy needs and bought 202.85 MT of crude oil in financial year 2015-16 for Rs.4.16 trillion. The country is actively looking at new exploration and production opportunities to bridge the energy imbalance. Queries emailed to the spokesperson of the ministry of petroleum and natural gas on 24 August wasn’t immediately answered. The government offices are closed on 25 August. India’s demand for energy has been increasing. As per BP Global data, the country has emerged as the third-largest consumer of crude oil with a consumption of 4.2 million barrels per day (mbpd) for calendar year 2015, after the US (19.39 mbpd) and China (11.96 mbpd). India overtook Japan, which consumed 4.15 mbpd. Kyle Quincey Womens Jersey
OMCs shut biodiesel joint ventures due to lack of commercial viability
Once touted as the fuel of the future, biodiesel, extracted from jatropha seeds, has lost its sheen for oil marketing companies. Due to lack of availability and commercial viability, the three oil marketing companies (OMCs)—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—have shut down the joint ventures companies they had started for jatropha cultivation to manufacture biodiesel. Oil extracted from seeds of the jatropha plant, which can grow on wasteland across the country, is blended with diesel to manufacture biodiesel. Biodiesel is also produced with vegetable oils, the primary feedstock for the fuel, which is scarce. Biodiesel was considered the answer to diesel’s polluting nature and thus was considered an attractive alternative fuel option. IOC, HPCL and BPCL had in 2008-09 planned to take up cultivation of jatropha across more than 180,000 acres in the states of Chhattisgarh, Madhya Pradesh and Uttar Pradesh. IOC and HPCL had formed a joint venture with the Chhattisgarh State Renewable Development Agency (CREDA) to take up large-scale jatropha farming across 74,100 acres and 37,000 acres, respectively. “IndianOil CREDA Bio-Fuels Ltd has not been incorporated in the preparation of consolidated financial statements as the management has decided to exit from these entities and provided for full diminution in the value of investment,” said IOCL in its 2015-16 annual report. The joint venture was incorporated in February 2009 with Indian Oil and CREDA holding 74% and 26% equity, respectively. So far, IOCL has planted jatropha in 8,000 hectares—for biofuel production in the states of Chhattisgarh, Madhya Pradesh and Uttar Pradesh. HPCL in its annual report said, “During 2015-16, in view of non-viability of operations, all business activities of CREDA HPCL Biofuel Ltd (CHBL) including cultivation and maintenance of Jatropha plantations have been suspended.” HPCL holds 74% in CHBL while CREDA holds 26%. BPCL which had formed a company called Bharat Renewable Energy in 2008 for its biofuels needs and has shut down the same. “Due to non-viability, the operations of this company have been closed down from September, 2014,” BPCL said in its 2015-16 annual report. Bharat Renewable Energy was set up in association with Hyderabad-based Nandan Biomatrix—a research and development company—and Shapoorji Pallonji Co., for producing biodiesel from jatropha in Uttar Pradesh across 70,000 acres. The company had plans to invest Rs. 22 billion in the next seven years to produce 1 million tons of biodiesel from jatropha plantations. India, which imports 80% of its oil consumption, envisaged blending of biodiesel with diesel as a measure to cut the import dependence on fossil fuel, enabling it to reduce the oil import bill. The country is targeting a more than seven fold expansion in its biofuels market over the next six years, oil minister Dharmendra Pradhan had said on 10 August. Blending 5% of biodiesel with regular diesel and 10% ethanol with petrol could boost the market to Rs. 500 billion by 2022, from about Rs.65 billion currently. To expand its biofuels market in six years, India would need 6.75 billion liters of biodiesel and 4.5 billion liters of ethanol, Pradhan had said. An industry analyst who offers solutions to bioethanol and biodiesel manufacturing plants, said claims by scientists that jatropha could be planted without water on barren land misled many entities. “A jatropha tree takes seven-eight years to grow. Thus the gestation period is long. Besides, there were assumptions that jatropha should be grown on barren land. Though jatropha survived without water, it did not yield oil. The assumption that it would give oil even without irrigation was misleading. No wonder the ventures of these companies has gone kaput,” he said. Brian Westbrook Authentic Jersey
IOC finds a short cut through Bangladesh to send fuel tankers to Tripura
Indian Oil Corporation will invest around Rs 6.50 billion in expanding its storage and bottling capacity in Tripura over the next three years as it looks to prevent fuel crisis in the state. Indian Oil-AOD, the company’s North East division, will also start moving a convoy of 20 tankers by the end of this month to the North Eastern state for the first time via Bangladesh to avoid the dilapidated NH-44 in Assam. “Apart from exploring new routes to supply fuel for ending the crisis in Tripura, we are looking to increase the storage capacity in the state. We are working on both the possibilities so that common people do not suffer there,” Indian Oil Corporation Executive Director (Indian Oil-AOD) Dipankar Ray told PTI. For this purpose, the company will set up one Petroleum, Oil and Lubricant (POL) depot and a new bottling plant in Agartala, he added. “The POL depot will incur an investment of around Rs 5 billion, while Rs 1.43 billion have been estimated for setting up the bottling plant over the next 2-3 years. The investment includes land cost as well and the land parcels have already been identified for both the units,” Ray said. In Tripura, the company has a POL depot at Dharmanagar with a capacity of around 6,000 kilo litre (kl) and an LPG bottling plant at Bishalgarh with a capacity of 30,000 million tons per annum in double shifts. “The existing two facilities are not enough to cater to the growing demand of fuel in Tripura. So we have decided to expand our capacities by setting up new units. “The new POL depot will have an installed capacity of 32,000 kl, while that for the bottling plant will be 60,000 million tons a year, expandable up to 1,20,000 million tons,” he added. During monsoon in May-June this year, Tripura faced unprecedented fuel crisis as supply was badly hit due to pathetic road condition of NH-44 at Barak Valley in Assam and thousands of tankers were stranded on roads for weeks. The situation forced IOCBSE 0.95 % and Tripura government to scout for alternate ways to supply fuel in addition to augment the storage capacity. “One of the options that we already started is roll-on roll-off, where tankers are transported by open rail wagons from Bhanga in Assam to Churaibari in Tripura. However, this system is not economical for us as transporting 24 tankers one way cost us Rs 3,90,000,” Ray said. Jonathan Allen Jersey
KG Basin cost GSPC 12 times estimate
The Public Enterprise Committee of the Gujarat assembly chaired by former minister, BJP MLA Narottam Patel, has criticised the Gujarat State Petroleum Corporation (GSPC) for showing undue haste in acquiring the KG basin through aggressive bidding which had caused the state government loss of millions of rupees. The committee has noted in its report that against the estimated expenditure of US $109.70 million, the GSPC had actually incurred an expenditure of US $1,404.86 million for three phases of gas exploration. This was 12.81 times higher than what was estimated while placing the bids. The committee did not accepted the company’s excuse that when exploration was planned, the price of crude oil was $22 to $24 a barrel but it had shot up to US $140 by the time the actual work started. The committee’s report states: “The company did not evaluate the technical consultant’s advice and jumped in with a very high bid.” The latest report of the committee tabled on Tuesday is based on the Comptroller and Auditor General’s (CAG) observations about the GSPC for the year 2010-11. The committee has accepted the CAG observation that massive financial irregularities had taken place in the GSPC. Prior to deciding the bid, the technical and financial risks were not assessed properly and a very high bidding price was quoted. “As a result, during the 2006 to 2011 period alone, the company’s unsecured debt had increased to Rs. 21.4053 billion,” the report says. The estimated total loss to the state due to GSPC’s gas exploration misadventures in the past one decasde is around Rs. 300 billion. The committee scrutinises observations of the CAG on PSUs and suggests recommendations to the state government. For last several years, the state’s BJP government had tried to shirk responsibility by claiming that CAG’s observations were not certified by the assembly’s committee but this year the state government is left with no excuse. The report also accepts the CAG’s observation that the GSPC had partnered with the controversial company, GeoGlobal Resource, in an arrangement that posed no risk to the latter. “The committee is amused how the GSPC could partner with GGR only in profit but not in loss. It’s a totally unacceptable commercial decision,” the committee’s report says. Further, due to the faulty advice of GeoGlobal, the projected Rs. 5.3194 billion cost had increased to a massive Rs. 62.6568 billion, the report says. The committee has also asked the government to explain whether it knew of such a faulty deal. The committee, which monitors state-run public sector undertakings (PSUs), is yet to assess the CAG reports on GSPC from 2011 to 2015. It is expected that the committee will find more and bigger skeletons in the GSPC cupboard in the coming days. Ryan O’Reilly Jersey
PSU oil firms question Adani’s plan to set up Dhamra LPG terminal and pipeline project
India’s three state-owned downstream oil firms have questioned Adani Group’s plans to set up a 650-Kilometer pipeline network that will connect Adani’s planned 1.6 million tonne LPG terminal at Dhamra port in Odisha to Asansol in West Bengal and Duttapulia near the Indo-Bangladesh border. Adani Gas Ltd (AGL), the natural gas distribution arm of Adani Enterprises, plans to capture the fast growing market for cooking gas in Eastern India and Bangladesh through the pipeline. However, the three PSU fuel retailers – Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) – have raised questions on the ambitious project in separate submissions to the downstream regulator Petroleum and Natural Gas Regulatory Board (PNGRB). An email sent to Adani seeking response on the PSUs’ questions remained unanswered. Experts said setting up an LPG import terminal of 1.6 mtpa capacity could entail an investment of close to Rs 1,500 crore. AGL had in April this year submitted an Expression of Interest (EoI) to PNGRB seeking authorization for laying the pipeline. Adani plans to make the terminal operational by mid-2018 and expects the initial volume to be around 1.6 MTPA which will be later increased to 2.5 MTPA. The IOC-BPCL-HPCL combine, however, has raised questions on the issue of parallel infrastructure – another LPG terminal being built by BPCL and Aegis Logistics at Haldia and a parallel 670-Km pipeline being constructed by IOC from Paradip to Durgapur via Haldia. “HPCL is of the view that due to upcoming LPG import terminal at Haldia by ALL and BPCL, there is no foreseeable requirement for LPG import terminal in the proposed pipeline route from Dhamra to Haldia,” HPCL has told PNGRB. The country’s third largest fuel retailer is already proposed to book 150 thousand metric tonne per annum (TMTPA) of the IOC pipeline. HPCL has also tied-up for usage of the upcoming import facility at Haldia with ALL. It stated that Adani Gas will have to make provision for input to their proposed pipeline from the ALL terminal for throughput of HPCL. IOC has also called the proposed pipeline by Adani Gas parallel infrastructure. Dhamra stands at a 30-Km distance from the route of the IOC pipeline and the distance between Duttapulia and Kalyani (the end point of IOC pipeline) is 50-Km, IOC has told the regulator. “Out of the around 650-Km pipeline route, for almost 550-Km, Adani Gas’ pipeline route is similar to IOC’s under-construction pipeline. With the requirement of major LPG marketers – IOC, BPCL and HPCL – being met by IOC’s pipeline, there might not be a need to create parallel infrastructure,” the nation’s largest fuel retailer said. The firm has already constructed 250-Km of the total 670-Km pipeline and plans to further extend it to Patna and Muzaffarpur. Raising similar questions, BPCL has said that there is no requirement of LPG from Dhamra port up to Haldia. “However, in exigencies and after evaluating the economics and circumstances, the option to use Dhamra can be exercised,” the company told PNGRB, adding the reason for terminating the (Adani Gas) pipeline at Asansol is not clear. According to Adani’s EoI, the proposed pipeline from Dhamra to Asansol and the Duttapulia pipeline would help evacuate cargo from the upcoming LPG terminal and help in increasing the penetration of LPG in the under-serviced markets of Odisha, West Bengal, Jharkhand and Bihar. AGL has been operating CGD networks in Vadodara and Ahmedabad since 2004 and Faridabad since 2009. The company also holds a 50:60 joint venture with IOC authorized by PNGRB to develop and operate CGD networks in Allahabad, Chandigarh, Panipat, Daman, Ernakulam and Dharwad. AGL services a customer base of around 350,000 daily through a network of 65 CNG stations, 400 Km of steel pipeline and 5,850 Km of Medium Density Polyethylene (MDPE) pipeline. According to Adani Gas, the availability of draft and the infrastructure for handling Very Large Gas Carriers (VLGCs) were major considerations for selecting the location of the import terminal at Dhamra port. India consumes around 18 MT of LPG annually even as domestic production stands at 10 MT. The country imports more than 8.3 MT of LPG a year. The LPG consumption is expected to grow to 25 MT in 2020 of which nearly 16 MT will be imported. LPG consumption in the Dhamra hinterland has also grown to 2.8 MTPA driven by sharp rise in demand in West Bengal, Odisha, Jharkhand, Bihar, Chhattisgarh, Bangladesh and the north-Eastern regions of India. Bangladesh’s LPG supply is also heavily import-dependent. That nation consumed 150,000 tonne of LPG last year of which only 22,000 was produced locally. Tre Flowers Authentic Jersey
RIL may drop arbitration proceedings on government’s authority to fix gas prices
The board of Reliance Industries will consider next year dropping the arbitration against the government on the latter’s authority to fix gas prices, sources familiar with the matter said. Reliance must withdraw the arbitration if it wants to charge a higher price for its deep sea gas, according to a recently announced government policy that has more than doubled prices available to gas from difficult fields. Following the policy announcement, Reliance hasn’t clearly said if it wants to withdraw the arbitration but has initiated the process of developing its deep sea fields in the KG Basin. Reliance and its partners, BP Plc and Niko Resources, have sought contractors for concept engineering and design for deep water field development. “The fact that Reliance Industries has sought vendors for the field shows that it is keen on developing it. Dropping arbitration is a precondition for availing higher prices for gas from the field. Therefore, once the development plan is ready, it will be put to the board next year which would then take a call if it made sense to develop the field and drop arbitration. It will be a purely commercial decision,” a source familiar with the matter said. The new policy on gas prices can potentially benefit Reliance’s eight discoveries with reserves of 2.53 trillion cubic feet of gas. The maximum price available to gas from difficult fields in India is $6.61 per unit currently, according to the government formula, which compares favourably with the global spot liquefied natural gas (LNG) rates hovering between $5 and $6 per unit these days. The price available to domestic natural gas from other fields is $3.06 per unit. The price of gas from difficult fields has been linked with alternative fuels. Kevin King Authentic Jersey
HPCL, GAIL to divest up to 50% stake in petrochem plant in Andhra Pradesh
Hindustan Petroleum Corp Ltd (HPCL) and gas utility GAIL India Ltd will divest up to 50 per cent stake in the Rs 300 billion petrochemical plant which is being set up in Andhra Pradesh. HPCL and GAIL are looking at setting up a 1 million tons Ethylene Derivatives plant, which will produce a wide range of petrochemical raw materials for the manufacture of detergents, paints and coatings, cosmetics, textiles and adhesives. “Currently, it is a 50:50 project but we are open to inducting a strategic partner,” HPCL Chairman and Managing Director Mukesh K Surana told here. The project at Kakinada in Andhra Pradesh, will cost Rs 300 billion. “We are willing to give up to 50 per cent stake in the project to the strategic partner,” he said. Some global petro hem companies have shown interest in the project but talks are at preliminary stage currently, he said without disclosing details. The planned project is a truncated version of the earlier proposed refinery-cum-petrochemicals complex in Andhra Pradesh. HPCL has for the timebeing shelved plans to build a new refinery and is only pursuing petrochemical project. HPCL and GAIL decided to do the petrochem plan together after their plans to team up with France’s Total, Lakshmi N Mittal Group and Oil India Ltd (OIL) for a 15 million tonnes a year refinery-cum-petrochemical plant at Visakhapatnam in Andhra Pradesh fell through. “That project fell as partners pulled out one after the other due to weak global demand,” another official said. “Now, HPCL and GAIL are looking at setting up a petrochemical plant at the Petroleum, Chemical and Petrochemicals Investment Region (PCPIR) sites identified by the state government at Kakinada.” Surana said currently detailed feasibility report (DFR) is being prepared and details will work out following that. HPCL owns a 7.5 million tons refinery at Mumbai and a 8.3 million tons unit at Vizag. While the Vizag plant is being expanded to 15 million tons, HPCL is expanding the Mumbai refinery to 9.5 million tons at a cost of Rs 40 billion by 2019, he said. Vizag refinery will also be expanded to 15 million tons by 2020 at a cost of Rs 209.28 billion. It has also setting up a 9 million tons refinery at Barmer in Rajasthan at the cost of Rs 373.20 billion. But the project hinges on the state government giving fiscal incentives, he said. HPCL had in 2007-08 planned an only-for-exports refinery to target demand in South East Asia and the Middle East. The five-way alliance of HPCL, explorer OIL, gas utility GAIL India, Mittal Investment Sarl and Total had in October 2007 signed a memorandum of understanding to look at the feasibility of setting up the Vizag project. In 2009, the Rs 500 billion project was put on hold as petrochemical demand then was seen as too weak to justify the investment. Total did pre-feasibility for the refinery project and demand studies, while GAIL was in charge of the study of the petrochemical unit. But the project was in 2010 put on back burner before equity structure could be decided Chad Thomas Womens Jersey