Massive oil sector investment coming to India; Chevron, Exxon, Total, others keen to invest this much money

Source: Financial Express, 13 January 2023

India will likely see an investment of USD 58 billion in finding and producing oil and gas resources in 2023, Oil Minister Hardeep Singh Puri said on Friday, adding global energy majors Chevron Corp, ExxonMobil and TotalEnergies are keen to invest.

India, the world’s third biggest oil-consuming and importing nation, is looking to raise domestic output to help cut down reliance on costly imports. India imports 85 per cent of its crude oil, which is converted into petrol and diesel, and roughly half of its natural gas that is converted to CNG and used in industries.

Speaking at the Voice of Global South Summit, Puri said the government has targeting to increase the geographical area under exploration and production to 0.5 million square kilometres or 15 per cent by 2025 from the current 0.25 million sq km.

“We are expecting an investment of around USD 58 bn in exploration and production (of oil and gas) by 2023,” he said. “Several multinational corporations like Chevron, ExxonMobil, TotalEnergies are showing keen interest to invest in Indian E&P sector.” India, he said, is ready to “explore opportunities for joint development and production of oil and gas assets for mutual benefit and also invite investment in our domestic E&P sector”.

Indian biggest fuel retailers gearing up for rural-led economic rebound

Source: Business Standard, Mar 01, 2021

If there’s one part of India’s economy that’s been relatively unscathed by the devastating impact of Covid-19 it’s the vast rural hinterlands. And the country’s biggest fuel retailers are sitting up and taking notice.

Stay-at-home orders first imposed from March last year had a disproportionate impact on India’s teeming cities, but in small towns and villages people mostly went about their business with fewer restrictions. A bumper agricultural crop and a splurge in government spending to pull the economy out of a slump is also expected to put more money into the hands of rural farmers and laborers.

The increasing economic importance of India’s hinterlands is influencing business expansion plans and accelerating a trend of more service stations being opened in the countryside. Bharat Petroleum Corp. and Hindustan Petroleum Corp. — two of the three biggest fuel retailers — both said they planned to raise the proportion of outlets they have in rural areas this year.

“While the first-level cities are getting saturated, demand is coming up in rural areas,” Hindustan Petroleum Chairman Mukesh Kumar Surana said. The new outlets Hindustan is looking to open would “have a reasonable component of second-rung cities and rural areas without any doubt,” he said.

India is pinning its hopes on the agricultural sector to help pull the economy out of its worst recession since the 1950s. Rural India was a bright spot in local automaker Mahindra & Mahindra Ltd.’s latest financial results amid strong demand for tractors and farm equipment. The rural sector continues to outperform urban India, Ambuja Cements Ltd. Chief Executive Officer Neeraj Akhoury said on a conference call with analysts last month.

HPC and BPC, together with Indian Oil Corp., account for more than 90% of Indian fuel sales. The share of rural service stations in the world’s third-biggest oil importer rose to 26.8% in January from 24.8% a year earlier, oil ministry data show, and the rate of increase looks set to accelerate this year.

Diesel is the most widely used petroleum product in India, accounting for around 40% of total fuel use. The agricultural sector is the second-biggest consumer of diesel after transportation.

Bharat Petroleum, the second-biggest fuel retailer, opened 2,212 outlets in the past year, with two-thirds of these in rural areas, the oil ministry data show. “We weren’t having a presence in the rural segment the way our competition had and that impacted us in Covid times,” said N. Vijayagopal, finance director at Bharat Petroleum. “So, we are now targeting an expansion drive of retail in places where we are under-represented — the rural side.”

India to see $66 billion investment in gas infrastructure

Source: The Economic Times, Dec 02, 2020

NEW DELHI: India will see a massive USD 66 billion investment in the building of gas infrastructure as the government pushes for greater use of the cleaner fuel with a view to cutting down carbon emissions, Oil Minister Dharmendra Pradhan said on Wednesday.

The government is targeting raising the share of natural gas in its energy basket to 15 per cent by 2030 from the current 6.3 per cent.

This will entail gas consumption rising manifolds from current 160-170 million standard cubic meters per day.

To cater to this, liquefied natural gas (LNG) import capacity is being raised, new pipelines laid to transport the fuel, and city gas infrastructure expanded to take the fuel to users, he said at KPMG India’s annual energy conclave ENRich 2020 here.

“An estimated investment of USD 66 billion is lined up in developing gas infrastructure, which includes pipelines, city gas distribution, and LNG regasification terminals,” he said adding 14,700-km gas pipelines are being added to the existing network of 16,800-km to form a national gas grid.

He, however, did not give breakup or timelines of the investment.

Elaborating on India’s energy strategy going forward, he said apart from achieving the renewable energy target of 450 gigawatts (GW) by 2030, India will focus on developing in an integrated manner a gas-based economy, cleaner use of fossil fuels, greater reliance on domestic fuels to drive biofuels and moving into emerging fuels, like hydrogen.

LNG import terminals and capacity additions are planned on both east and west coast. Also, the city gas network of retailing CNG to automobiles and piped natural gas to households and kitchens has been extended to 407 districts.

Besides CNG, the government is also promoting the use of LNG as fuel on long-haul trucks and buses.

“Recently, we have laid the foundation stone for the first 50 LNG fueling stations across the golden quadrilateral and major National Highways. Our goal is to set up 1000 LNG stations within 3 years which is likely to add about 20-25 mmscmd of new gas demand by 2035,” he said.

Besides, the National Biofuel Policy (NBP) is targeting blending of 20 per cent ethanol in petrol and 5 per cent of bio-diesel by 2030.

“Biofuel is not just science but also a Mantra that will provide new energy to not only India but also the entire world. It has the power to create a balance between our environment and economic development,” he said.

India joined the elite group of nations in August 2018 by successfully operating a flight running onbiofuel. “We are keen to expand the use of biofuels in the aviation sector to meet the new ICAO standards,” he said.

Pradhan said the government is also pushing for generating gas from municipal and agri waste and 5000 compressed biogas plants are planned.

“There is also an increased push to adopt hydrogen fuel mix. Last month, we launched the Hydrogen enriched- Compressed Natural Gas (HCNG) plant and dispensing station in Delhi and also rolled out the first set of buses with HCNG,” he said.

Pradhan said historically, global economic growth and the need for energy resources have been synchronous.

However, with increasing awareness of environmental threats, such as global warming and climate change there is aparadigm shift in the way this relationship is envisioned.

The global GDP is projected to double by 2040 but the associated global energy demand is estimated to increase only by 30 per cent, he said adding the situation of developed and developing countries however are not similar.

“As economic development catches up, energy needs of countries, like India will be higher and must be adequately met while being responsive to environmental and climate concerns,” he said.

India uses only 6 per cent of the world’s primary energy and the per capita consumption of energy is still one-third of the global average. “This, however, is rapidly changing. India’s developmental state triggers the rapid expansion of energy consumption and a need for robust energy security.”

According to different global agencies, the world total primary energy demand would increase at less than 1 per cent per annum till 2040 and this growth would be mainly supported by India and other Asian countries.

India is the third-largest energy consumer after the US and China. Its energy demand increased to 882 million tonnes of oil equivalent (Mtoe) in 2017.

According to BP Energy outlook 2020, India’s energy demand would grow at about 3 per cent per annum till 2040. “Our estimated per capita energy consumption would be half of the world average by 2040.”

India has committed to reducing the emissions intensity of its GDP by 33-35 per cent from 2005 levels.

“Our energy agenda is inclusive, market-based and climate-sensitive. We have adopted multiple pathways for the energy transition,” he said.

India is targeting 175 GW of renewable energy capacity by 2022 and 450 GW by 2030.

The solar installed capacity in India has increased by more than 13 times from 2.63 GW in March 2014 to 34.81 GW in April 2020.

Pradhan said India is an attractive investment destination for the energy sector as several policy reforms have enhanced ease of doing business. “A testament to the same is the projected investment of USD 143 billion in the Indian oil and gas sector.”

“We are keen to partner with global companies and investors for further strengthening of energy infrastructure in the country,” he said.

Saudi Aramco and UAE’s ADNOC are partnering in the marquee 60 million tonnes a year integrated refinery petrochemical project in Maharashtra.

“India also recognizes the importance of global collaboration on the energy sector,” he said. “India and Russia are targeting tripling bilateral trade to USD 30 billion in the next four years in areas such as LNG, shipping and so forth.”

Similarly, under the ambitious Strategic Energy Partnership, India and the US energy trade is growing exponentially over the past few years.

India’s oil consumption jump marginally in October indicating mild economic recovery

Source: The Economic Times, Dec 01, 2020

Mumbai: India’s oil consumption went up slightly by 1.8% in October that could be first signs that the economic activity may be gradually picking up.

While the consumption saw a mild jump production and other indicators such as exports saw a decline as per a report by India Ratings and Research.

India’s domestic consumption of petroleum products increased 1.8% year on year to 4.2 million barrels per day in October 2020, the research said. Although the country’s production and exports declined by about 17% and 35% respectively, the report added.

Oil regulator PNGRB simplifies gas pipeline tariff

Source: The Economic Times, Nov 26, 2020

New Delhi: Oil regulator PNGRB has simplified the country’s gas pipeline tariff structure to make the fuel more affordable for distant users and to attract investment for building gas infrastructure. The Petroleum and Natural Gas Regulatory Board (PNGRB) has notified regulations for a ‘unified’ tariff structure for over a dozen pipelines that form the National Gas Grid which will lead to a 20-30 per cent rise in transportation charges paid by users near the source but a reduction for consumers in the hinterland.

“Unified tariff shall be determined by the Board in respect of the national gas grid system for each financial year before the start of such financial year,” it said.

Currently, the tariff is levied in proportion to the distance transported – the longer the distance, the higher is the charge. This resulted in consumers away from the coast paying higher charges as compared to those near it.

PNGRB has now notified a two-zone tariff structure – Zone-1 will be 300-km from the source of gas (gas field or LNG import terminal) and Zone-II will be beyond that.

PNGRB said the tariff for the first tariff zone will be 40 per cent of the tariff for the second zone.

This, industry sources said, will lead to an immediate increase in tariff for user industries such as power plants and fertilizer units in Gujarat, which is the landfall for ONGC’s offshore gas field as well as houses three gas import terminals. Consumers further away from the source, say in Uttar Pradesh or Bihar, will benefit as they will now pay a lesser tariff.

“The tariff for zone-1 of Hazira-Vijaipur-Jagdishpur pipeline (India’s main truck line from Gujarat to Uttar Pradesh via Madhya Pradesh) will rise from Rs 20 per million British thermal unit to Rs 26 per mmBtu,” a source said.

The increase will vary from pipeline to pipeline.

“On average, the tariff for zone-1 customers will go up by 20-30 per cent,” the source said.

The pipelines that will be part of the unified tariff plan include state-owned gas utility GAIL India Ltd-operated Hazira-Vijaipur-Jagdishpur (HVJ) and its supplementary Dahej-Vijaipur line and Dahej (in Gujarat) to Uran-Dabhol-Panvel (in Maharashtra) pipeline.

Also, the line from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, Bokaro in Jharkhand and Dhamra in Odisha (called the Pradhan Mantri Urja Ganga) and Dadri (Uttar Pradesh) to Bawana-Nalga and Dabhol-Bangalore pipeline would be part of it.

Reliance Industries subsidiary operated Shahdol-Phulpur line from its CBM block in Madhya Pradesh to Uttar Pradesh as also its formerly owned East-East pipeline from Kakinada in Andhra Pradesh to Baruch in Gujarat would also be part of the plan.

GSPL’s proposed Mehsana in Gujarat to Bhatinda in Punjab and onwards to Jammu/Srinagar as well as Mallavaram-Bhopal-Bhilwara-Vijaipur lines would also be part of it.

Indian Oil Corp (IOC) Dadri-Panipat pipeline is also part of the unified structure.

Sources said PNGRB will now notify unified tariffs for each of these pipelines.

The new tariff structure would help create a single gas market in the country by attracting investment to complete the gas grid and make it more easily accessible. This is part of the government’s plan to raise the share of gas in India’s energy mix to 15 per cent by 2030 from the current level of about 6.3 per cent to cut its carbon footprint.

India’s Oct crude imports mark biggest fall since July

Source: LiveMint.com, Nov 23, 2020

BENGALURU: India’s October crude oil imports posted their steepest fall since July and seventh consecutive monthly year-on-year decline as rising COVID-19 cases limited mobility and curbed consumption, government data showed on Monday.

Crude oil imports into the world’s third-biggest oil importer and consumer fell 21.6% from a year earlier to 15.14 million tonnes, or 3.58 million barrels per day (bpd), data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.

“Due to the surging coronavirus cases, travel is still being avoided in the tier two and tier three cities and that along with muted air travel is weighing on oil demand in India,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

“Also, when we come across such a huge fall (in imports), it generally points towards the fact that the existing demand is already being met by inventory from prior months.”

The import of oil products also slumped 53% to 1.65 million tonnes in October.

Meanwhile, exports of refined products fell 35.7% in October from a year ago to 3.84 million tonnes, and were down 20% from 4.80 million tonnes in September.

Diesel shipments continued to hold a major share of the total exports but were down 24% on year to 2.37 million tonnes and fell 11.2% on a month-on-month basis.

Exports of gasoline, or petrol, were down 19.8% to 797,000 tonnes versus a year ago.

India has the second-highest number of infections in the world after the United States with 9.14 million.

But looking ahead, factory activity is picking up and oil demand should rise in the next two to three months, Shah said. India’s factory activity in October expanded at its fastest pace in more than a decade.

Govt invites foreign investment in India’s strategic petroleum reserves

Source: Business Standard, Nov 10, 2020

New Delhi: India has invited global firms to invest in its strategic petroleum reserves (SPRs) as the nation’s energy consumption growth would be fastest among large economies in coming decades, oil minister Dharmendra Pradhan told a conference on Monday.

India’s share in global energy consumption is set to rise from 7% to 12% in 2050, Pradhan told the ADIPEC conference.

The nation, the world’s third-biggest oil consumer and importer, earlier this year filled its three SPRs in southern India with 5.33 million tonnes of oil when prices were low. To attract private investment in its SPRs, India recently allowed Abu Dhabi National Oil Co (ADNOC) to re-export some of its oil stored in Mangalore SPR, mirroring a model adopted by South Korea and Japan.

The country is building two more commercial-cum-strategic petroleum storage with capacity of 6.5 million tonnes.

“I invite global energy players to come and invest in this project,” he said, adding India’s fuel demand has almost recovered to the pre-Covid levels.

Last month, local sales of key fuels – gasoline, gasoil and cooking gas – in India rose compared to last year.

“We anticipate that this recovery path in energy demand growth in India will sustain in the coming months,” he said.

India wants to cut its carbon emissions and raise the share of gas in its energy mix to 15% by 2030 from the current 6.2%. Companies are investing $60 billion in creating oil and gas infrastructure over five years through 2024, which includes building gas import terminals and expanding gas pipeline networks to provide last mile connectivity to households and industries. The South Asian nation is spending $20 billion to produce 15 million tonnes of compressed biogas by 2023, and has recently started supplying hydrogen compressed natural gas for 50 buses as a trial.

ONGC invites bids to boost production in ageing oil and gas fields

Source: Business Standard, Nov 08, 2020

New Delhi: State-owned ONGC has invited bids from global oil and gas companies for undertaking work to boost production from its ageing fields as it looks to reverse declining output.

The 15-year Production Enhancement Contract (PEC) will require firms to commit to investing in capital and operating expenditure to increase production, higher than the existing baseline output, according to the tender document.

A tariff will be paid in USD per barrel of oil and USD per million British thermal units for gas for any incremental hydrocarbon produced and saved over the baseline.

ONGC on October 27, issued the expression of interest (EoI) notice offering 15-year PECs to outside contractors for an unidentified number of “mature” fields.

The company made no mention of oil or gas field names in the EoI notice, but sources said the fields are largely in Assam and Gujarat, the country’s oldest producing basins.

“ONGC intends to undertake production enhancement from its onshore mature fields under ‘Production Enhancement Contract (PEC)’ with suitable oil and gas companies of global repute who have technical expertise, financial capability and resources to increase production by improving the recovery from such fields,” the tender said.

Companies, it said, will be required to commit investment in capital and operating expenditure “to increase production from the existing production by introduction of new technologies.”

They will have to do reservoir modelling, reserves assessment and execution of a development plan to enhance production.

All the oil and gas produced will belong to ONGC and anyone interested has until December 1, 2020 to respond.

This is the second attempt by ONGC to induct partners in its ‘mature’ or ageing fields.

On December 28, 2018, it had invited PEC bids for Geleki field in Assam and Kalol in Gujarat. But only Schlumberger responded for Geleki and no bid was received for Kalol.

Schlumberger sought deviations which ONGC turned down.

ONGC re-launched the PEC process for Kalol and Geleki with a request for information (RFI) notice on July 22, 2020.

The government has been pushing ONGC to hire international oil service companies to raise output from its mature oil fields as it saw the foreign companies as the answer to declining production from ageing fields.

ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 per cent by 2022.

India currently imports about 85 per cent of its oil needs.

Originally, ONGC had on December 7, 2016, signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output.

Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them in 2017, on fears of courting controversy for handing fields on nomination basis.

Thereafter, the company in June 2017, floated an expression of interest (EoI) from service providers for undertaking production enhancement.

Schlumberger Asia Services, Halliburton Offshore Services Inc and Baker Hughes Singapore PTE Ltd were shortlisted as the firms were meeting pre-qualification criteria. Bids were originally sought by May 25, 2018, but saw several extensions and final bids came in 2019. At the close of bids, only Schlumberger made a financial bid for Geleki field.

India’s October LNG imports surge as demand rebounds to pre-Covid levels

Source: LiveMint.com, Nov 03, 2020

SINGAPORE: Indian imports of liquefied natural gas (LNG) surged in October, shipt-racking data from Refinitiv Eikon and data intelligence firm Kpler showed, as the country’s gas demand bounced back to pre-COVID levels.

LNG shipments to India in October rose to about 2.5 million tonnes, the highest monthly volumes on its record, Refiniv Eikon data showed.

Kpler pegged October arrivals at the second highest on record at 2.75 million tonnes, just under February’s imports of 2.79 million tonnes.

“City gas, gas-based power sector as well as revival from other sectors is boosting LNG imports into the country,” an India-based gas importer told Reuters.

“We are already back to pre-Covid levels with additional demand being seen from city gas and power sectors.”

Spot gas imports by the electricity generation sector, which account for over a fifth of India’s total consumption of the fuel, doubled in the June quarter to the highest in at least 14 quarters.

India’s natural gas prices fell to their lowest since 2014 for the October-March 2021 period which meant reduced costs for gas for fertilisers, automobiles and households.

Asian LNG spot prices had also until recently been near record lows, which boosted appetite for imports of the super-chilled fuel, traders said, adding that this could slow from December, however, with spot prices rebounding to a more than one-year high.

India has also been receiving at least one LNG cargo a month from Russia’s Yamal LNG plant since September, this year, after the last such flow was seen only in March, Refinitiv data showed. LNG shipments from Oman to India in October were also at a record high, the data showed. The South Asian country’s factory activity expanded at its fastest pace in over a decade in October as demand and output continued to recover strongly from coronavirus-related disruptions, in turn boosting gas demand.

India’s diesel consumption up first time in 8 months, rises 6.6% in Oct

Source: Business Standard, Nov 01, 2020

New Delhi: India’s gasoil consumption in October rose 6.6 per cent from a year earlier, the first such increase since Covid-19 restrictions were imposed in late March, preliminary data showed on Sunday, signalling a pick-up in industrial activity.

Diesel sales by the country’s three state fuel retailers totalled 6.17 million tonnes in October, according to provisional data compiled by Indian Oil Corp (IOC), the country’s biggest refiner and fuel retailer.

Sales of gasoil, which account for about two-fifths of India’s fuel demand, rose 27.5 per centfrom September.

Rising diesel sales in the world’s third-biggest oil consumer and importer should help refiners, who had to cut crude-processing runs during the coronavirus crisis.

IOC hopes to operate refineries at full capacity in a couple of months, up from 95 per centnow, as local fuel demand is rising, company chairman S.M. Vaidya said on Friday.

Rising gasoline and gasoil demand in India should also aid other markets hit by slow demand recovery.

Local gasoline sales in October rose above pre-pandemic levels for a second month in a row.

Gasoline sales rose 4 per centfrom a year earlier to about 2.4 million tonnes, about 8.6 per centhigher than September, the data showed.

State companies IOC, Hindustan Petroleum Corp and Bharat Petroleum own about 90 per centof India’s retail fuel outlets. State retailers sold 3.8 per centmore cooking gas in October than a year ago, at about 2.44 million tonnes, while jet fuel sales halved to 328,000 tonnes.