India’s mobility revolution is driving global oil demand – Kemp
“India is taking over from China as the main growth market for oil,” the International Energy Agency observed in its latest petroleum market update (“Oil Market Report”, IEA, May 2016). India’s oil consumption has grown at an average annual rate of 5 percent over the last decade and climbed over 4 million barrels per day for the first time in the year ending in March 2016. India is currently the world’s fourth-largest oil consumer after the United States, China and Japan, and set to overtake Japan for the third slot within the next 12-18 months (tmsnrt.rs/1Tgtums). Diesel remains the largest end market, accounting for more than 40 percent of all petroleum consumed in the country, according to the Ministry of Petroleum and Natural Gas. Liquid petroleum gas for cooking and petroleum coke for power generation are other major markets, each accounting for about 10 percent of final demand. Gasoline, by contrast, accounts for only 12 percent of total consumption, but is the fastest-growing segment, with demand rising by 10 percent a year for the last decade (tmsnrt.rs/1TgtHpu). Gasoline demand has been accelerating, with consumption up 11 percent in 2014/15 and more than 14 percent in 2015/16 (tmsnrt.rs/1Tgtwur). Growing gasoline demand is directly linked to the explosion in vehicle ownership among the country’s rapidly expanding middle and lower-middle class (tmsnrt.rs/1NvrhGA). The number of registered vehicles on India’s roads has been doubling every seven years and hit 182 million in 2013, according to the Ministry of Road Transport and Highways (“Road Transport Yearbook”, 2012/13). The majority of registered vehicles were motorcycles (133 million) with a much smaller number of cars, jeeps and taxis (25 million) and goods vehicles (9 million). The balance between two-wheeled and four-wheeled vehicles has remained fairly constant since the turn of the millennium. India still has a relatively low vehicle penetration rate compared with other developing countries let alone richer economies. There were just 149 vehicles for every 1,000 people in 2013 compared with 273 in Brazil, 277 in Mexico, 593 in Japan and 781 in the United States. With so many registered two-wheel vehicles, the penetration of passenger cars is exceptionally low by international standards. India has just 17 passenger cars per 1,000 people compared with 215 in Brazil, 450 in Britain and 540 in Germany. There is enormous potential for a further increase in both vehicle ownership and gasoline consumption as more and more households are able to afford to drive. The largest number of vehicles are registered in the major urban centers of Delhi, Bengalaru, Chennai, Pune and Mumbai, and the large states of Maharashtra, Uttar Pradesh, Tamil Nadu and Gujarat, all of which have a large number of relatively wealthy households. But the fastest growth rates in vehicle ownership over the last 10 years has been in relatively poor and peripheral states such as Tripura, Mizoram, Himachal Pradesh, Karnataka, Bihar, Uttarakhand and Chhattisgarh, which suggests vehicle ownership is rapidly spreading to a much wider cross-section of the population. Provided India’s economy continues to grow, and fuel prices remain moderate, India’s thirst for gasoline will be the most important source of oil demand growth over the next few years. The country is set to join the United States and China in a new group of Big 3 oil consuming countries. Calais Campbell Jersey
5,000 jobs affected by diesel vehicles ban in Delhi-NCR: SIAM
The ban imposed on diesel cars and SUVs of engine capacity 2,000cc and above in Delhi-NCR by the Supreme Court has impacted about 5,000 jobs in the automobile sector, according to the industry body Siam. It also said the ban, which is in effect since December 16, has resulted in production loss of around 11,000 units. “ … production loss due to the ban of these vehicles in NCR from December 16, 2015 to April 30, 2016 has resulted in 11,000 vehicles, which translates to impact on approximately 5,000 jobs in the industry,” Society of Indian Automobile Manufacturers (Siam) said in a written submission to the Supreme Court. Giving a ground level impact of the apex court’s restrictions, it further said “if extended across the country, it (the ban) would lead to a loss of production of 1,00,000 vehicles over the same period and would have impacted 47,000 jobs.” Stating that no dealer is financially capable of indefinitely holding such large stocks of 2,000cc and above diesel passenger vehicles and SUVs, it said: “The banned stocks had to be transferred to non-NCR dealers for disposal.” Opposing levy of environmental compensation charge (ECC) on diesel vehicles, the automobile industry body said it “could result in permanent job loss of a significant number of industry employees and the problem becomes manifold if such measure gets extended to other parts of the country beyond NCR.” As there are several PILs filed for banning of four-wheeler diesel passenger vehicle and registrations are pending in different high courts in the country, Siam apprehended that a replication of the Supreme Court ban to across the country could “result in a huge, prejudicial adverse impact on manufacturing and direct and indirect employment on a pan India basis“. “Such adverse repercussions, even on existing employment and much more for future job creation are significant, and without a long term comprehensive policy could be potentially disastrous,” SIAM said in its submission. It further said: “There is no established link between engine capacity and emission levels. As such the 2,000cc limit is arbitrary and the impact of banning these vehicles has an infinitesimal effect on air quality.” Marquette King Authentic Jersey
IGL: Strong margin, volume trend to continue
A strong rebound in compressed natural gas (CNG) volumes, which grew 8.4 per cent year-on-year (y-o-y), was the highlight of Indraprastha Gas (IGL)’s results for the March quarter (Q4). Notably, this is the fastest volume growth in this segment (78 per cent of IGL’s revenues) over the past eight quarters. CNG volumes grew in a narrow band of two to six per cent in these eight quarters. Volume growth in piped natural gas, too, was at a multi-quarter high of 8.9 per cent, though slightly lower than analysts’ estimates of 10-12 per cent. Overall, volumes grew 8.4 per cent in Q4. Falling realisations, though, took some sheen off the top line, which fell 3.4 per cent year-on-year to Rs 8.82 billion and missed the Bloomberg consensus estimate of Rs 9.20 billion. Strong gains in earnings before interest, taxes, depreciation and amortisation (Ebitda) margin fuelled earnings, which grew 12.3 per cent y-o-y to Rs 1.08 billion and were in line with the estimate of Rs 1.09 billion. the cost of IGL’s key input, natural gas, fell 674 basis points to 59.5 per cent in Q4 and enabled a 308 basis points Ebitda margin expansion to 22.3 per cent, compared to the year-ago period. Margin gains could have been higher but for price cuts. The trend of improving volumes and as margins is expected to continue for IGL. The odd-even rule in Delhi (April 15 to 30) had pushed up CNG volumes by 15-20 per cent and would add two per cent to IGL’s volumes in the ongoing quarter, estimate analysts at Jefferies in a note this month. Factors such as conversion of taxis to CNG along with regulatory push to the greener fuel will continue to aid volumes. Petronet LNG’s renegotiation with RasGas has lowered the price of long-term LNG, which could, in turn, aid IGL’s industrial segment. This, along with volume contribution from acquisitions of Maharashtra Natural Gas and Central UP Gas, augurs well for overall volumes. The company’s monopolistic position in Delhi, strong return ratios and improving margin trajectory are some of the reasons why analysts are positive on IGL. In fact, Bloomberg consensus estimates peg IGL’s Ebitda margin at 22.8 per cent in FY17, an increase of 183 basis points over FY16. The scrip currently trades at 15 times the FY17 estimated earnings and appears fairly valued. While the business case appears strong, any sharp, unprecedented rise in gas prices is a risk factor. Reggie Miller Authentic Jersey
Drones to monitor GAIL pipelines
The Indian Railways and National Highways Authority of India use drones for similar purposes. The government has granted permission to the Gas Authority of India Limited (GAIL) to use drones for aerial surveillance of its pipelines. This follows the use of drones for similar purposes by the Indian Railways and the National Highways Authority of India. “As line patrolling is extremely difficult for pipeline sections passing through forests, rivers, environmentally sensitive areas and other inaccessible areas, GAIL (India) Limited has awarded an order for aerial surveillance of 200 kilometres for the Hazira Vijaipur Jagdishpur/Dahej Vijaipur pipelines with drones as a pilot project,” Minister of State (independent charge) of Petroleum and Natural Gas Dharmendra Pradhan told Parliament. “Surveillance of a vast network of pipelines across the country is required to ensure the safety and reliability of pipelines and guard against sabotage, exposure, soil erosion, excavation and construction works,” Pradhan said. “Currently, it is being achieved through regular, periodic, foot-patrolling and air surveillance by hiring helicopter services on a monthly basis.” The drones will carry out surveillance using high-resolution and infrared cameras. NHAI signed a pact with the Indian Space Research Organization’s National Remote Sensing Centre and the North East Centre for Technology Application and Research for the use of UAVs to aid in surveillance of construction work. Separately, the Indian Railways has used drones to monitor the progress on the Dedicated Freight Corridor. Auston Matthews Womens Jersey
OPaL closes in on commissioning of Dahej units by procuring feedstocks
ONGC Petro additions Ltd (OPaL) is nearing commissioning of its dual feed cracker unit and dowstream polypropylene plant at Dahej. The company recently procured propylene and naphtha, which are the principal feedstock for the two upcoming units. An over $4.5 billion enterprise promoted by ONGC, OPaLis setting up SouthAsia’s largest integrated mega-petrochemicals complex at Dahej, Gujarat. The company recently procured propylene, a principal feedstock to start operations of its polyproylene unit wherein propylene was transported to OPaL’s petrochemical complex through road tankers. Moreover, Naphtha, the principal feedstock for OPaL’s Dual Feed Cracker Unit, arrived recently at GCPTCL port Dahej, through sea route from ONGC Hazira, for onward transmission through pipeline to OPaL’s production facility. “Procuring the feedstocks is a big leap forward towards the commissioning of this mega-project, as it will lead to starting of production operations of our Dual Feed Cracker Unit and downstream Polypropylene Plant,” said K Satyanarayana, chief executive officer, OPaL. According to Satyanarayana, the procurement will act as a ‘huge confidence booster’ for all its stake-holders who are waiting to see the plant go on-stream in the coming months. The multi-billion joint venture company was incorporated in 2006, as a public limited company under the companies Act, 1956, promoted by Oil and Natural Gas Corporation Limited (ONGC) and co-promoted by GAIL (India) Limited and Gujarat State Petroleum Corporation (GSPC). OPaL’s grass root mega petrochemical project at Dahej in Gujarat mothers a Dual Feed Cracker with a capacity to produce 1,100 KTPA Ethylene, 400 KTPA Propylene along with Polymerisation Units and various Associated Units consisting of Pyrolysis Gasoline Hydrogenation Unit, Butadiene and Benzene Extraction Units. The Polymer plants of OPaL has 2X360 KTPA of LLDPE/HDPE Swing unit, 1X340 KTPA of Dedicated HDPE and 1×340 KTPA of PP. The project in the advance stages of commissioning and is expected to go on-stream in 2016. Von Miller Womens Jersey
Numaligarh signs bio-refinery unit agreement with Chempolis
Bharat Petroleum Corporation Ltd’s Assam-based facility Numaligarh Refinery Limited (NRL) has signed a term sheet with Chempolis Ltd, a Finland-based bio refining technology for setting up a bio-refinery unit. The term sheet will be the basis for formation of a joint venture agreement for implementation of the project. A partnership agreement for the biorefinery project was signed between NRL and Chempolis in 2014. According to a statement from NRL, the company is implementing India’s first bio-refinery in Assam at an estimated cost of Rs 9.50 billion which would produce bio-ethanol with co-production of furfural and acetic acid from locally available non-food bio-mass feedstock. Bamboo is one of the major non-food biomass resources available abundantly in North East India and is among the fastest growing plants. 49,000 tons of bio ethanol produced annually would primarily be used to blend NRL petrol as mandated by the National Policy on Biofuel, with the surplus to be sold to other oil marketing companies. The company added that NRL has already inked MoUs with Nagaland Bamboo Development Agency (NBDA) and Arunachal Pradesh Bamboo Resources Development Agency (APBRDA) last year for sourcing of bamboo for the Bio Refinery. Cam Atkinson Authentic Jersey
RIL gets green nod for exploratory drilling project in Tamil Nadu
The Centre’s green panel has given its nod to RIL for carrying out eight additional exploratory well drilling to ascertain reservoir capacity and commercial viability of hydrocarbons in the block CY-III-D5 in Bay of Bengal off the coast of Tamil Nadu. Reliance Industries has been awarded exploratory rights for hydrocarbons prospecting in the offshore block DY-III-D5 under the New Exploration Licensing Policy-III. RIL has already been given the environment clearance to drill 11 exploratory wells in this block. As on date, the company has drilled nine wells and discovered hydrocarbons in three wells. Since seismic data and the drilling campaign shows presence of hydrocarbons in the block, RIL is planning to carry out eight additional exploratory well drilling to establish the reservoir capacity in this block. “In a recent meeting, the Expert Appraisal Committee of the Environment Ministry examined the proposal. After detailed deliberations, the committee recommended the project for environment clearance,” a senior government official said. The Committee has recommended the Ministry to give final clearance to RIL’s project subject to certain specific and general conditions, the official added. Among key conditions specified, the Panel has suggested the company to ensure gas produced during the testing should be flared with appropriate flaring booms. The flare system should be designed as per good oil field practices and oil industry safety directorate guidelines. The company should ensure that there is no impact on flora and fauna due to drilling of wells in the offshore sea. It should undertake conservation measures to protect the marine animals/biota in the region. The company should monitor the petroleum hydrocarbons and heavy metals concentration in the marine fish species regularly and submit report to the government. Among others, the Panel suggested that all the hazardous waste generated at the rig/offshore facility should be properly treated, transported to on shore and disposed of in accordance with the norms. Reliance entered the exploration and production business by becoming a 30 per cent partner in an unincorporated joint venture with British Gas and RIL in the Panna Mukta and Mid and South Tapti blocks. Besides Panna Mukta and Tapti (PMT) blocks, their domestic portfolio comprises of five conventional oil and gas blocks in Krishna Godavari, Mahanadi, Cauvery Palar, Gujarat Saurashtra and Cambay Basin and two Coal Bed Methane (CBM) blocks in Sohagpur East and West in Madhya Pradesh. The company also has blocks in overseas. Bryan Trottier Jersey
Iran ends free shipping of oil to India: Dharmendra Pradhan
Iran has ended free shipping of crude oil to India and has asked refiners like Mangalore Refineries (MRPL) and Essar Oil to arrange for freight, Oil Minister Dharmendra Pradhan said. Iran had in November 2013 offered free delivery of crude oil to Indian refiners as tough Western sanctions crippled its exports. With shipping lines refusing to transport Iranian crude for fear of being sanctioned, Iran used its shipping line for the delivery and did not charge for transportation. “From April 2016, NIOC has informed oil-importing companies like MRPL and Essar Oil that the future delivery would be based on Free on Board (FOB) basis and the freight has to be arranged by the buyer,” Pradhan said in a written reply to a question in the Rajya Sabha here. FOB is a trade term requiring the seller to deliver goods on board a vessel arranged by the buyer. During the last two-and-a-half years, Iran sold Indian refiners crude oil on cost, insurance and freight (CIF) basis. CIF is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination. Pradhan said the National Iranian Oil Company (NIOC), however, has agreed to provide vessels and insurance till such time Indian companies are able to arrange the same. Iran came out of western sanctions in January and has since then made several changes in the way it trades its vast oil. Besides ending free shipping, it has terminated a three-year-old system of getting paid for half of the oil dues in rupees. “NIOC has asked for all the payments in euros,” he added. Iran wants all bills raised from April to be settled in euros and the nearly USD 6.5 billion that refiners like Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MPRL) owe it in past dues, to also be cleared in euros. Since February 2013, Indian refiners like Essar Oil and MRPL paid 45 per cent of their import bill in rupees to the UCO Bank account of the Iranian oil company. The remaining has been accumulating, pending finalisation of a payment mechanism. With the lifting of sanctions, the payment channels will reopen and Iran is seeking the pending dues in euros. MRPL owes close to USD 3 billion to Iran while Essar Oil has an outstanding of about USD 2.5 billion. Indian Oil Corporation (IOC) owes over USD 580 million to Iran while smaller payments are due from HPCL-Mittal Energy (HMEL) and Hindustan Petroleum Corporation. Iran has accumulated about Rs 12,000 crore in the UCO bank account which it could use to make payments for imports of steel and other commodities from India. “In the international market, contracts for supply of crude oil are negotiated on FOB or CIF basis. Hence, the cost of import of crude oil from Iran during 2016-17 will depend on the negotiated terms and conditions between NIOC and Indian oil companies,” Pradhan added. Jason Spezza Authentic Jersey
Tens of Thousands of Gallons of Crude Oil Spill Into Gulf of Mexico
The Coast Guard said that the spill had been contained and that two companies were being contracted to begin clean-up operations. The Bureau of Safety and Environmental Enforcement, which is part of the U.S. Interior Department, said Shell Offshore Inc. reported that production from all wells that flow to its Brutus platform, about 90 miles south of Timbalier Island, Louisiana, had been shut off. No injuries or evacuations were reported, the safety bureau said. Shell said Thursday night that a company helicopter spotted the sheen near its Glider subsea system at the Brutus platform. No drilling occurs at the site, which is an underwater pipe system that connects to a central hub, the company said. “No release is acceptable, and safety remains our priority as we respond to this incident,” Shell said. Adam Joseph Duhe Womens Jersey
Initiative of Ministry of Petroleum and Natural Gas on the New Excise Policy 2016 by Government of Bihar
1. Recently, Government of Bihar has announced New Excise Policy, wherein total ban has been imposed on liquor in Bihar. Government of Bihar had requested Ministry of Petroleum & Natural Gas to explore whether the oil companies would be able to lift the entire ethanol produced by the distilleries in Bihar. 2. The Central Government is keen to undertake developmental works more specifically for the agriculture sector in the State of Bihar. The proposal of Government of Bihar has been considered by Ministry of Petroleum and Natural Gas in consultation with Oil Marketing Companies (OMCs). OMCs under MoP&NG have informed that about 6 crore litres of ethanol may be produced in Bihar through molasses route. OMCs will strive to absorb this ethanol for EBP to help the State of Bihar. This initiative is likely to give approx. 300 crore to the farmers of the State through sugar mills / distilleries. This will also ensure proper utilization of molasses in the State. 3. This Government is committed to promote alternate renewable source of energy such as Bio-ethanol and Bio-diesel which would reduce our dependency on import of crude oil, address growing environment issues and provide better remuneration to the farmers. As a step in this direction, Government of India is running Ethanol Blended Petrol (EBP) Programme in 21 States and 4 UTs with immediate target to achieve 10% ethanol blending in Petrol. In-order to support the Domestic Industry, Government has also decided to source ethanol from domestic sources only. 4. In the past, Ethanol supplies were enough to meet only 30% of the blending requirement. During the sugar year 2013-14 only 38 crore litres of ethanol could be supplied for EBP Programme. In-order to give a stimulus to this programme, Government in December’2014 enhanced the Ethanol procurement price and opened alternate route including Lignocelluloses route for Ethanol production. Oil Marketing Companies also eased the procurement process for the benefit of suppliers. ? 5. All these steps have helped in doubling the ethanol supplies during the Sugar Year 2014-15 wherein 67.42 crore litres have been supplied for blending in Petrol. This year OMCs have floated tender for 266 crore litres of ethanol procurement to meet 10% blending target. There is considerable improvement in the response from the Sugar Industry which has offered more than 135 crore litres for the current sugar year. 6. Other plans specifically for the State of Bihar include, capacity expansion of IOCL Barauni Refinery from 6 MMTPA to 9 MMTPA, up gradation of this refinery to produce BS-VI quality products, integration of this refinery to produce other value added options/specialty products and establishment of Petro-chemical complex at Begusarai, Bihar. Shaq Mason Jersey