RIL’s block holds 3.7 times established gas reserves: Niko
Reliance Industries flagging eastern offshore KG-D6 block holds 3.7 times more established gas reserves at 2.6 trillion cubic feet, the company’s minority partner Niko Resources said. Niko, which holds 10 per cent interest in the KG Basin block, in its earnings statement for 2015-16 fiscal said its share of proved reserves in KG-D6 block stands at 265 billion cubic feet of gas equivalent (2.65 Tcf for 100 per cent interest). After adding probable reserves, this jumps to 406 billion cubic feet of gas equivalent (Bcfe) or 4.06 Tcf. This compares 70 Bcfe of proved reserves for Niko’s 10 per cent share stated in the financial statement for the previous fiscal ended March 31, 2015. “Proved reserves and proved plus probable reserves of 265 Bcfe and 406 Bcfe, respectively, for the D6 Block in India as at March 31, 2016 reflect the reclassification of reserves for the R-Cluster and Satellites undeveloped discoveries due to the economic viability of the development of these discoveries at the prices assumed in the reserve evaluations of these fields,” Niko said. RIL, which is the operator of the block with 60 per cent interest, has so far brought to production only two gas and one oil discoveries out of the 19 find it had made so far. Hydrocarbon reserves are classified as proved (P1), probable (P2), or possible (P3) depending on their potential for being converted into actual production. P1 reserves are one which have 90 per cent certainty to be produced while probable reserves are one with 50 per cent certainty. P3 reserves are one with just 10 per cent chance of being produced. BP plc of UK holds the remaining 30 per cent stake in KG-D6 block. Niko Chairman and interim CEO Kevin J Clarke said with the government approving pricing freedom, subject to a cap, for discoveries in high pressure-high temperature, deepwater and ultra-deepwater areas, the KG-D6 consortium is moving ahead with developing the undeveloped discoveries. Kansas City Chiefs Womens Jersey
Petronet LNG plans $3 billion investment in overseas push
Petronet LNG aims to spend up to $3 billion in the next five years to expand overseas, setting up terminals in Bangladesh and Sri Lanka among other countries, its managing director said. Falling spot LNG prices have boosted consumption of the fuel in India and triggered demand for LNG infrastructure in countries long shut out of the gas trade. “We are thinking global and we are not looking inwardly only at India … we have potential and we should aim for 30 billion-40 billion rupees’ ($445 million-$596 million) worth of projects every year for five years,” Prabhat Singh told Reuters in an interview. Petronet has previously just focused on importing liquefied natural gas (LNG) for regasification at its plants at Dahej in Western Gujarat state and at Kochi in the southern state of Kerala. Singh said the company plans to invest Rs 50 billion to build a 5 million ton a year (mtpa) terminal at Kutbdia in Bangladesh and company officials would visit Bangladesh on July 23 to take the proposal forward. “We are hopeful of a favourable response from them,” he said. Last month Petronet also submitted a proposal for a 1-mtpa floating LNG terminal in Sri Lanka, which wants a gas link for its 600-megawatt power plant, Singh said. That would require 13 billion rupees in investment. Rising Indian demand for LNG has prompted Petronet to operate its 10 mtpa Dahej plant at 120 per cent capacity, meaning it is regassifying and selling an additional 20 per cent gas. However, its Kochi plant is operating at a fraction of its 5-mtpa capacity as pipelines linking the terminal to industrial clients are not ready yet. The country’s current LNG consumption is about 58 million cubic metres a day (mcmd), up from about 45 mcmd last year, Singh said, and Petronet is on the lookout for overseas gas deals to meet rising Indian demand. Russia last month offered Petronet and other Indian companies a stake in the second phase of its Yamal LNG project. Torry Holt Womens Jersey
ONGC mulling to relax eligibility criteria for hiring rigs; move may risk high stake business
ONGC is looking at relaxing eligibility criteria for hiring rigs in a move that could potentially put at risk the high stake business, casting doubts on its rationale given that rigs are available easy and cheap and the state run explorer can actually be more selective than ever. So far rigs that have been lying idle continuously for three years or more were not eligible to bid for ONGC jobs due to safety concerns. The change in clause, if approved, would allow rigs that have been lying idle for over three years, if they can produce certificate proving their fitness. “ONGC has received several representations for considering changes to the Bid Evaluation Criteria Clause with respect to rig idling. A committee is presently examining it,” ONGC said in a response to ET’s query. Industry is surprised by the timing of ONGC’s decision as there is oversupply of rigs and the company does not need to relax norms, especially at the cost of safety. In closed room off-record conversations, industry executives told ET that they suspect this move is to favour some specific service providers whose rigs haven’t drilled a single well in more than three years. ONGC did not respond to a specific query on this allegation. “On the basis of committee report, a decision shall be taken considering the interests of the company, upholding transparent procurement procedures,” ONGC said. The proposal is likely to be considered by the company next week. Over a year ago, ET had reported that ONGC was considering hiring nine rigs from private companies through nomination rather than the mandatory tendering process, triggering controversy over the reason behind it. The plan was scrapped after ET’s report. Industry sources alleged the same set of service providers were being “helped” then too. Industry executives said recent tenders of international oil majors require that rigs have not been lying idle for more than 6-12 months. Globally, rig utilisation is less than 70% and availability of rigs is not a problem for ONGC. Industry executives said the firm’s move may be to support service providers at the time of slowdown, but they raised safety concerns. “Downturn in crude oil prices started hardly one and a half years back and until then, prices for hiring rigs was high and operators worldwide were busy. We saw rig availability almost exactly matching ONGC requirement and sometimes supply did not match up to the demand. But that’s not the case now. So why relax the norms now?” asked a senior executive. Thomas Vanek Jersey
India stares at oil deficit in 15 years, says IOCs director for refineries
India, a net exporter of oil products, may not have any surplus capacity in 15 years going by the current rate of consumption and planned expansion, said the chief of refineries at Indian Oil Corporation, the country’s largest refiner. “We are already not very much surplus. In 15 years, in spite of all planned steps, the country might be in deficit. But that should not worry us as we can import,” Sanjiv Singh, the company’s director for refineries, told ET. India has a capacity to refine 230 million tonne (mt) a year. Singh said this will rise to 300 mt by 2030 based on expansion of existing facilities. In addition, the government is assessing the feasibility of building a new, giant refinery of 60 mt on the west coast, which can significantly change the demandsupply situation once it is erected. The net export of petroleum products has declined in the past two years, falling to 32.3 mt last fiscal from 42.6 mt in the previous year. This trend, Singh points out, will magnify in the following years despite plans to augment the refining capacity. In 2015-16, consumption of petroleum products rose 11% to 183 mt against a production growth of just 4.5%. Of the total output of about 230 mt, a tenth is consumed by refineries internally with the balance made available for domestic consumption and exports. The demand for energy is expected to stay strong in an economy that is expanding at 7.6%, throwing up opportunities for refiners to expand. “Nothing is going to drastically change till 2030. Oil and gas consumption is going to grow even till 2040,” Singh said referring to the possible impact of renewable energy and electric cars on the demand for oil and gas. But he also added a note of caution: “If technology radically changes and our consumption reduces, the demand will come down”. “The crude market is very wide but the products are available only with a few companies,” said Singh, explaining why the country is better placed importing crude rather than refined products and it should aim to have enough refining capacity to meet local demand. The only disadvantage of adding refinery is the potential of environmental pollution, but “if we can control that, it would be great,” he said. The government recently set up a committee to prepare a report for enhancing state refinery capacity by 2040. The panel, comprising oil ministry officials and executives of state and private refiners, will assess primary energy mix of the country and demand for petroleum products by 2040 in its report to be submitted in three months. Indian Oil Corporation plans to add about 20 mt in the next five years to take its capacity to 100 mt. Other state firms, Bharat Petroleum and Hindustan Petroleum, too have major expansion plans. Justin Bailey Womens Jersey
IndianOil: Fuelling growth
Indian Oil, the country’s largest public sector oil refiner and marketer, had a good 2015-16 fiscal year. The company’s consolidated profit more than doubled year-on-year to ?112.19 billion despite a 21 per cent dip in revenue to about ?3540 billion. The strong profit growth was thanks to a few factors. The fuel pricing reforms — diesel decontrol and direct bank transfer of LPG subsidy — along with the rout of crude oil over the past two years slashed the under-recoveries of the oil marketing companies. Indian Oil’s net subsidy burden in 2015-16 was just ?90 million compared with ?12 billion in 2014-15. Its borrowings continued to reduce and interest cost dipped 13 per cent last year. A favourable refining market environment helped too; the company’s gross refining margin (GRM) — the difference between price of its product basket and the cost of crude oil — rose to $5.06 a barrel in 2015-16 from $0.27 a barrel in 2014-15. The GRM would have been higher, but for the heavy inventory loss booked by the company when crude oil was touching new lows last year. Indian Oil’s inventory loss was higher than that of peers BPCL and HPCL, since many of its refineries are located away from the coast; this entails more transport time and higher levels of stock keeping. Promising outlook The Indian Oil stock, which has rallied sharply over the past two to three years, has lagged its peers. There still seems good upside potential in the stock. At ?468, it trades at about 10 times its trailing 12-month earnings, lower than the average 14 times in the past three years. Also, the company’s prospects look promising, thanks to a favourable pricing environment and recent big ticket expansions expected to pay off in the coming years. Besides, the company’s plans to expand refinery and petrochemicals capacity should improve margins and aid earnings growth. Investors with a long-term perspective can buy the stock. In the near term, the rise in crude oil price since January should mean inventory gains for Indian Oil. This should help offset the recent weakness in the refining margins, which are inherently cyclical. While it is tough to predict crude oil prices, they are expected to be in the range of $45-$60 a barrel, given the global demand-supply dynamics. This is a comfortable level for the oil marketing companies with less risk from inventory loss and under-recoveries. Better volumes Demand for petroleum products in the country is expected to grow at a healthy pace. Over the medium to long term, Indian Oil’s recently commissioned 15 million tons (mt) Paradip refinery is expected to ramp up to full capacity by 2017-18. This high complexity refinery should improve the company’s volumes and profitability. Besides, the company’s plans to expand and upgrade its existing refineries to raise total capacity to over 100 mt by 2022 from about 80 mt currently should help. So should the aggressive investments in petrochemicals over the next few years; the business contributes about a third of the company’s operating profit and provides a hedge against volatile oil prices and refining margins. Besides this, the company is adding to its formidable pipeline network and has 45 per cent stake in the upcoming 5 mtpa gas regasification plant in Ennore, Tamil Nadu. It is also adding to its small presence in the upstream business by making use of low prices to acquire stakes in hydrocarbon assets abroad. With a comfortable financial position (debt-to-equity ratio at 0.7 times), funding is not a constraint. Thomas Chabot Jersey
Oil and ‘Outsiders’: Outrage in Assam Over the BJP’s Decision to Privatise Oil Fields
Back in 1980, Dulal Sarma, a leader of the All Assam Students Union (AASU), slashed open his chest with a blade to write these Assamese words with blood on a road in Guwahati – thus creating one of the most enduring images of the six-year-long students’ agitation Assam saw against “outsiders”. The words, which meant “We shall give our blood, not oil”, became one of the most popular slogans of the agitation which helped fuel a widespread assertion of Jatiotabadi or a sense of strong sub-nationalism in the state. When the leaders raised that slogan in protest marches, masses responded with approval, “We shall spill our blood but shall never part with the oil which we own.” The Numaligarh and Guwahati oil refineries are the products of the sentiments this slogan evoked in the 1980s. Assam’s newly elected chief minister Sarbananda Sonowal also shouted this slogan at the time. It defined the then conspicuous ‘us versus them’ battle line. ‘Them’ meant the central government, widely looked at in the state as a colonial force akin to the British, interested only in plundering its natural resources. Sonowal in those days was a leader of AASU, which spearheaded the agitation against undocumented Bangladeshi immigrants along with the All Assam Jatiotabadi Yuva Satra Parishad (AJYCP). Much has changed since. He is now the face of the Bharatiya Janata Party (BJP) in the state, a party whose government at the Centre has recently taken the decision to auction 12 of Assam’s oil fields to private players – in other words, to “outsiders”. Over the years, Sonowal may have shifted his base from AASU to the Asom Gana Parishad (AGP) and then to the BJP, but it turns out that the traces of the strong sub-nationalism seen in the 1980s around tel (oil) has remained intact. Indications of this have appeared repeatedly in the last two weeks – in local newspaper headlines, heated debates on Guwahati-based TV channels, protests by students’ organisations like AASU, AJYCP and the Tai Ahom Yuva Parishad (TAYP) and various trade unions, and also in conversations on social media and elsewhere. Since Union petroleum minister Dharmendra Pradhan said at a press meet in Guwahati on June 25 that 12 small oil fields of the state are among the 67 fields across the country which the Centre would let open for international bidders on July 15, all the political parties, including coalition partners of the Sonowal government – the Bodo People’s Front (BPF) and the AGP – have been raising questions. Those opposed to the move are accusing the government of “selling the state’s resources to outsiders” in the name of bringing poriborton (change), a term the BJP and its coalition partners extensively used to defeat the 15-year-old Congress government in the April assembly elections. Firebrand RTI activist and farmers’ leader Akhil Gogoi was the first to protest the move. On June 25, the general secretary of Krishak Mukti Sangram Samiti (KMSS), with more than 400 supporters in tow, flashed banners and raised slogans outside a five-star hotel in Guwahati where Pradhan was meeting 200 potential private bidders. One of the banners said, “Tez dim, tel nidiu”. The same day, in the upper Assam town of Duliajan, which has the headquarters of the public sector unit Oil India Limited (OIL), AASU members burnt effigies of Prime Minister Narendra Modi, Pradhan and Sonowal, demanding the Centre roll back its decision. It also called for a 12-hour Assam bandh. On July 13, it plans a protest march in Nazira, an oil-rich district of the state. TAYP also called for a bandh on July 3. From July 4 to 8, the AJYCP joined the agitation with a series of protests across the state including yet another Assam bandh and blocking the National Highway 31 and train services. It threatened to intensify its agitation if the Centre didn’t withdraw its decision. The petroleum minister said, “These 12 oilfields, which have a resource potential worth Rs 170 billion, would not only help roll about Rs 40 billion in Assam’s economy, but will also create jobs and add to the state’s revenue from oil royalty”. Not only that, the Centre also has the plan to turn “Assam into the oil hub of southeast Asia“. The Centre, the minister said, in its Hydrocrabon Vision 2030 for the northeast, has envisaged investing Rs 1300 billion in the petroleum sector in the region in the next 14 years, of which Rs 800 billion will be invested in Assam alone. “In the current financial year, we are investing about Rs 60 billion in Assam,” he said. The numbers quoted are impressive. So is the hope for job opportunities for local youth and a potential jump in the state’s earnings from oil royalty, both crucial for the betterment of the state. Yet, not too many seem to accept Pradhan’s argument. “This is nothing but an attempt to sell our natural resources to multinationals,” Akhil Gogoi told local media. He said, “The BJP had promised to protect jati, mati, bheti (ethnicity, land and resources) of the people of Assam in its campaign for the assembly elections based on which people voted for it. But within just one month of coming to power in the state, it has put up 12 oilfields for sale to private companies.” In a letter addressed to the prime minister, KMSS said, “Assam’s petroleum resources have served little the interests of the region earlier and this must change. Earnings from these resources must be carefully invested in Assam to allow her to prosper economically. The decision to allow Foreign Direct Investment and thus handing over these oilfields to the private economic concerns will further ensure that Assam will again be deprived of her rightful claim to petroleum.” It is a sentiment shared by many in the state. Speaking to The Wire, AASU president Dipanka Kumar Nath said, “Privatisation of oil fields would take away the people’s right over the state’s resources. In Gujarat, the Centre handed over the oil
Russia offers Indian firms stake in Yamal LNG project
Russia has offered Indian oil companies a stake in the second phase of Yamal LNG, the biggest project to produce liquefied natural gas in the Arctic. The offer of stake in JSC Yamal LNG was made when Oil Minister Dharmendra Pradhan visited St. Petersburg last month, sources privy to the development said. Petronet LNG, India’s biggest natural gas importer, is studying the offer, they said adding other state-owned firms like Indian Oil Corp (IOC) may join in later. Novatek OJSC, Russia’s second-biggest natural gas producer, had in 2013 offered a 9 per cent stake in the USD 27 billion Phase-I of Yamal LNG project to a consortium of Petronet, IOC and ONGC Videsh Ltd. But later, OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), did not find the offer attractive and the Indian consortium backed off. Novatek stitched a consortium with CNPC of China (20 per cent), Total of France (20 per cent) and China’s Silk Road Fund (9.9 per cent). The Russian firm holds 50.1 per cent stake in the project that comprises development of the South-Tambeyskoye field with proven deposits of 1.3 trillion cubic meters of natural gas and the construction of natural gas liquefaction plant (LNG) for producing 16.5 million tons of LNG a year by 2017. Now the company is planning a second phase and is offering a stake to Indian firms, sources said. Sources said OVL was previously interested in getting into the upstream part of the project, i.e gas field development. Petronet was keen to offtake LNG. OVL, they said, may envisage interest if the stake is accompanied by some say in upstream part. OVL-IOC-Petronet were originally interested in taking up to 15 per cent stake in Yamal project, which also requires construction of an airport and port on the Arctic Ocean. But a smaller 9 per cent stake was offered to them after Novatek in September 2013 sold a 20 per cent stake in the project to CNPC. Total SA had in March 2011 bought 12 per cent stake in the project for about USD 4 billion. Since then, it has raised the stake to 20 per cent. Sources said Petronet, which operates two LNG import facilities in Gujarat and Kerala, has been offered the stake in the phase-II as it offers a ready buyer of gas. In Petronet, Russia seeks a buyer who can take at least 5 million tons a year of LNG from the Arctic project. Cody Ceci Womens Jersey
Petronet LNG Calls For A Consortium Of Oil Companies To Acquire & Build Acreages Abroad Including India, Says Its MD & CEO
Managing Director & CEO, Petronet LNG, Mr. Prabhat Singh floated a proposal for creation of a consortium or SPV (special purpose vehicle), consisting of companies such as Petronet LNG, GAIL, ONGC, EIL and OIL to jointly bid for prospective properties for exploration of natural gas and as well setting up of LNG terminals in overseas fields, particularly those of Sri Lanka, Bangladesh and the like. Inaugurating a conference on How to Survive in Low Oil & Gas Price Scenario under aegis of PHD Chamber of Commerce and Industry, Mr. Prabhat Singh also disclosed that his company has offered to convert the fossil fuel fed economy of Andaman & Nicobar with that of natural gas, stating that such a proposal has already been submitted to the Lieutenant Governor of the Island. The Petronet LNG and administration of Andaman & Nicobar Island were progressing satisfactorily on the subject as the latter is suitably inclined to convert its eco-system with cleaner fuel rather than staying on to diesel fed economy, he indicated. Elaborating on the issue of proposed consortium or SPV, Mr. Singh hinted that it has been conceived by the Petronet LNG at a time when the company expects that the prevailing scenario of low oil and gas price would stay on for another five years and that to thrive on such circumstances, the consortium and SPV approach of national oil companies would be ideal situation to acquire oil & gas including terminal acreages and assets overseas including India. According to him, the Ministry of Petroleum and Natural Gas is aware of it and that the Ministry’s intent is also there on it without disclosing a definite roadmap to convert it into reality. The idea has been briefly floated and discussed and its conclusiveness should follow as India would be bidding to acquire gas properties and to build LNG terminals in countries like Sri Lanka and Bangladesh for which if India proceeds with collective approach, it would establish and edge over others, said Mr. Singh adding that such an approach is also called for under prevailing circumstances to building energy storage facilities and other such assets domestically. Speaking on the occasion, Executive Director-Corporate Planning, ONGC, Mr. Yash Malik pointed out that collaborative approach of national oil companies is the right solution to creating oil and gas assets in India to enable it thrive under the low oil and gas price regime, articulating that Indian oil sector needs a fiscal regime better than what prevails currently. Mr. Malik also pointed out that in the low price scenario of oil and gas, his company is successfully going ahead with joint venture approach. Chairman, Hydrocarbons Committee, PHD Chamber, Mr. Rajeev Mathur said that the gas sector has been successfully confronting with the challenges of the emerging time. Joel Heath Jersey
Gujarat Gas gets nod for network
Gujarat Gas has received the Petroleum and Natural Gas Regulatory Board’s approval to build, lay, operate, and expand city or local natural gas distribution networks in Panchmahal and Anand districts of Gujarat. It has 25 years or 300 months of infrastructure exclusivity, valid up to July 2041, and marketing exclusivity of five years, valid up to July 3, 2021, for both the networks. Victor Rask Authentic Jersey
Massive expansion of IOC plant at Cherlapally
The Indian Oil Corporation has taken up a massive expansion of its LPG bottling plant at Cherlapally at a cost of Rs. 30 crore keeping in view the future demand. The capacity of the plant will be more than doubled from 120 thousand metric tonnes (tmt) per annum to 250 tmt per annum when the 72-carousal high-speed machine is commissioned in March 2017, a senior IOC official said. He shot down fears of LPG distributors that the work would lead to disruption in supplies of cylinders as the other bottling plants of IOC at Thimmapur on Mahbubnagar – Ranga Reddy border, Paravada in Visakhapatnam, Kondapally near Vijayawada and Kadapa would chip in. The downtime loss would be absorbed by these units. The Cherlapally unit rolled out about 39,000 cylinders per day with the present 2 X 24 head carousal and the same would go up to 75,000 cylinder per day after March. The carousals are inlet – outlet filling systems to fill empty cylinders with cooking gas, rotating 360 degrees, when they were despatched by a conveyor belt. With the latest machinery, IOC would overtake the capacity of HPCL bottling unit which is also located at Cherlaplly. The HPCL had installed 66-head carousal which was the first in the country in 2010. On the other hand, IOC was working with the present 2 X 24 head carousal since 1998. The IOC is the biggest supplier of cooking gas in the State in the brand name of Indane with 36 lakh customers, including 16 lakh connections in Hyderabad and Ranga Reddy. About 23,000 tonnes of LPG was supplied in Telangana, including 12,000 tonnes in Hyderabad, per month. Joonas Donskoi Jersey