Oil & Natural Gas: News & Discussion

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hgupta
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Re: Oil & Natural Gas: News & Discussion

Postby hgupta » 25 Jun 2019 04:24

vimal wrote:^^ If US is finally drilling more oil then what use are all these ME abduls to them?


The US needs to keep the price of oil low. The US does not depend on exporting oil to other countries to prop up its economy. Their number one enemy in terms of economic impact is rapidly rising inflation and oil price is the biggest driver (but not the only one, just the biggest) in any rising inflation. It just needs to keep the oil prices stable because rising oil prices have a ripple effect throughout its economic sectors from agriculture & dairy to automotive to airlines which can cost US dearly as a whole as compared to lost profits by not selling at same price as international BRENT prices. US does not really care about the profit of oil although the producers of oil do but as policy priorities go, their number one priority is to keep the oil price stable so its economy doesn't suffer any shock and introduce inflation and the best way to do that is underbid international producers such as OPEC so they don't get uppity and start throwing its weight around. On a tangent, now the Saudis realize that they cannot corner the market anymore. They have effectively lost their ability to move the markets to terms more favorable to Saudis. That is why they are in a desperate mode to diversify their economy before they lose any more control. They are facing a multiple whammy of increasing US production, iranian production, and foreseeable declining/flattening demand for oil due to more EVs and renewable power stations coming online with each passing year in response to climate change and volatility in oil prices.

So the best way to keep the prices low is to keep producing a lot and keep the Mideast region stable. As long as those two requirements are met, US can enjoy low oil prices and keep its inflation rate low.

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Re: Oil & Natural Gas: News & Discussion

Postby chetak » 25 Jun 2019 06:21

hgupta wrote:
vimal wrote:^^ If US is finally drilling more oil then what use are all these ME abduls to them?


The US needs to keep the price of oil low. The US does not depend on exporting oil to other countries to prop up its economy. Their number one enemy in terms of economic impact is rapidly rising inflation and oil price is the biggest driver (but not the only one, just the biggest) in any rising inflation. It just needs to keep the oil prices stable because rising oil prices have a ripple effect throughout its economic sectors from agriculture & dairy to automotive to airlines which can cost US dearly as a whole as compared to lost profits by not selling at same price as international BRENT prices. US does not really care about the profit of oil although the producers of oil do but as policy priorities go, their number one priority is to keep the oil price stable so its economy doesn't suffer any shock and introduce inflation and the best way to do that is underbid international producers such as OPEC so they don't get uppity and start throwing its weight around. On a tangent, now the Saudis realize that they cannot corner the market anymore. They have effectively lost their ability to move the markets to terms more favorable to Saudis. That is why they are in a desperate mode to diversify their economy before they lose any more control. They are facing a multiple whammy of increasing US production, iranian production, and foreseeable declining/flattening demand for oil due to more EVs and renewable power stations coming online with each passing year in response to climate change and volatility in oil prices.

So the best way to keep the prices low is to keep producing a lot and keep the Mideast region stable. As long as those two requirements are met, US can enjoy low oil prices and keep its inflation rate low.


x posted from the american thread


Donald J. Trump Verified account @realDonaldTrump

China gets 91% of its Oil from the Straight, Japan 62%, & many other countries likewise. So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships on what has always been....
5:08 AM - 24 Jun 2019

17,680 Retweets
77,219 Likes





Donald J. Trump Verified account @realDonaldTrump

6h6 hours ago

....a dangerous journey. We don’t even need to be there in that the U.S. has just become (by far) the largest producer of Energy anywhere in the world! The U.S. request for Iran is very simple - No Nuclear Weapons and No Further Sponsoring of Terror!

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Re: Oil & Natural Gas: News & Discussion

Postby vimal » 25 Jun 2019 06:53

hgupta wrote:
vimal wrote:^^ If US is finally drilling more oil then what use are all these ME abduls to them?


The US needs to keep the price of oil low. The US does not depend on exporting oil to other countries to prop up its economy.
...
So the best way to keep the prices low is to keep producing a lot and keep the Mideast region stable. As long as those two requirements are met, US can enjoy low oil prices and keep its inflation rate low.


Unkils actions on the ground are exact opposite of what you've stated. If stable ME is what Unkil wanted then attacking eyeraq, lebnon, syria, eyeran and propping up Daesh would be the last thing to do. With the new found shale oil Unkil can actually completely destroy ME and rule the oil cartels.

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Re: Oil & Natural Gas: News & Discussion

Postby chetak » 25 Jun 2019 07:42

vimal wrote:
hgupta wrote:
The US needs to keep the price of oil low. The US does not depend on exporting oil to other countries to prop up its economy.
...
So the best way to keep the prices low is to keep producing a lot and keep the Mideast region stable. As long as those two requirements are met, US can enjoy low oil prices and keep its inflation rate low.


Unkils actions on the ground are exact opposite of what you've stated. If stable ME is what Unkil wanted then attacking eyeraq, lebnon, syria, eyeran and propping up Daesh would be the last thing to do. With the new found shale oil Unkil can actually completely destroy ME and rule the oil cartels.



shale oil has severe environmental consequences and cannot be productionalised so easily without major political and social repercussions.

but the mere threat is enough to panic the mid east producers.

trumps transactional politics is now feared and dreaded by the ameriki's traditional allies, what with trump holding up the ugly mirror of realpolitik truth about the way it was and the way it's going to be.

earlier, these very same guys would always mock the "gauche" amerikis at each and every opportunity that they got.

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Re: Oil & Natural Gas: News & Discussion

Postby Mort Walker » 30 Jun 2019 10:54

The US has turned into the largest producer of shale oil and gas. It’s promotion started with the Obama administration and is continuing. The production is sufficient to keep oil prices stable between $50-$70/barrel. This is good for India. US oil is less than $50/barrel.

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Oil & Natural Gas: News & Discussion

Postby Peregrine » 27 Jul 2019 00:26

Reliance's refinery complexity index rises to 21.1%

The company in its latest annual report said the Jamnagar supersite ranks first in the world in complexity barrels, aided by best-in-class refinery and petrochemicals integration.

The complexity of Reliance Industries giant refinery complex at Jamnagar has risen by over 66 per cent to 21.1, giving it the ability to process a wide basket of crude oil and boosting its margins.

The company in its latest annual report said the Jamnagar supersite ranks first in the world in complexity barrels, aided by best-in-class refinery and petrochemicals integration.

Complexity index (CI) designates the capabilities of a refinery to upgrade the lowest quality crude to the highest quality refinery products, including fuels and petrochemicals.

"Complexity index of Jamnagar supersite, as per KBC, a global refinery consultant, has increased from earlier 12.7 to 21.1 or a 66.1 per cent boost with the start-up ofJamnagar expansion projects, including ROGC and downstream units, Paraxylene complex and Petcoke Gasification complex," it said. This gives the firm an "ability to run a wide basket of crudes".

The company has two refineries at Jamnagar -- a 33 million tonnes a year older unit that caters to the domestic market and a 35.2 million tonnes only-for-exports unit. Its total refining capacity of 68.2 million tonnes is just a shade lower than 69.2 million tonnes capacity with the country's biggest oilfirm, Indian Oil Corp (IOC).

Commenting on the annual report, Morgan Stanley said the company has a vision of being one of the top five petrochemical companies in the world. "RIL refinery processed about 170 different crudes, up from 150 during the past two years," it said. "RIL's refinery sales volume declined (to 54 per cent from 60 per cent), as domestic and captive sales increased."

In 2018-19, RIL's refining margin at USD 9.2 per barrel remained relatively strong even in a dynamic volatile market. "RIL maintained a significant premium of USD 4.3 a barrel over the benchmark Singapore complex margins. RIL's superior refining margins are a result of superior product slate, robust risk management, and higher secondary unit throughputs," the company said in its annual report.

Among the refineries started in recent years, state-owned Bharat Petroleum Corp Ltd's Bina refinery in Madhya Pradesh has CI of close to 10 while Hindustan Petroleum NSE 3.22 % Corp Ltd's (HPCL) Bhatinda unit has a complexity of 12. IOC's latest refinery at Paradip in Odisha has a complexity factor of 12.2, making it capable of processing cheaper, higher sulphur and heavy crude.

In January 2018, RIL announced the successful commissioning of the world's first-ever Refinery Off-Gas Cracker (ROGC) complex of 1.5 million tonnes per annum capacity. The ROGC complex uses off-gases from Jamnagar refineries as feedstock, helping RIL emerge as one of the most efficient producers of polymers in the world.

Petcoke gasification project, one of the largest clean initiatives in the world, uniquely turned Jamnagar refineries 'bottom-less' by converting low-value petroleum coke into syngas (synthesis gas).

"One of the most complex projects, it has integrated 83 process units with refineries and other downstream units operating in extreme conditions, with temperatures ranging from (-)190°C to (+)1,480°C, and pressure fluctuating from vacuum to 120 standard atmosphere," the annual report said.

Reliance's refining complex, which is the largest in the world, is designed to operate solely on desalinated seawater, thus making freshwater resources from lakes and rivers available for communities to use.

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Re: Oil & Natural Gas: News & Discussion

Postby Mukesh.Kumar » 12 Aug 2019 14:24

ARAMCO buys 20% stake in Reliance oil refining business for $15 billion.

Bloomberg

Reliance to sell of 20% of oil-to-chemicals division to Aramco
Deal includes 1.24 million barrels-a-day Jamnagar complex


The world’s biggest crude producer will soon own a part of the world’s biggest oil refinery.

Saudi Aramco will buy a 20% stake in the oil-to-chemicals business of India’s Reliance Industries Ltd., including the 1.24 million barrels-a-day Jamnagar refining complex on the country’s west coast, Reliance Chairman Mukesh Ambani said at the company’s annual general meeting in Mumbai. Reliance values its oil-to-chemicals division at $75 billion including debt, implying a $15 billion valuation for the stake.


The move is the latest in a spree of Aramco refinery investments as the company plans to double its processing network to handle as much as 10 million barrels a day by 2030, locking in friendly buyers for the kingdom’s crude. As part of the deal, Reliance will agree to a long-term purchase of 500,000 barrels of crude a day from Aramco, Ambani said.


In a way ARAMCO is actually muscling its way into downstream refining. For $15 bn they have secured for themselves refining capacity at once of the most efficient planes in the world for 0.5 million bbls daily

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Re: Oil & Natural Gas: News & Discussion

Postby Mukesh.Kumar » 12 Aug 2019 14:33

Taking ballpark industry estimates today, cost for a 500, 000 refining capacity is USD 5 bn. So need to see what premium Relisnce is actually charging. What else is bundled in the deal.

But whatever said and done this is one id the biggest FDI deals and should go a long way in reducing the $32 bn debt if Reliance.

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Re: Oil & Natural Gas: News & Discussion

Postby Karthik S » 12 Aug 2019 14:34

So Jamnagar refinery is off target list of pakis I assume?

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Re: Oil & Natural Gas: News & Discussion

Postby hanumadu » 12 Aug 2019 15:48

I hope they use most of the money to clear some of the debt. And also pay the taxes resulting out of the deal.

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Re: Oil & Natural Gas: News & Discussion

Postby kit » 12 Aug 2019 23:27

chetak wrote:
hgupta wrote:







So i suppose Donald is going to mothball all the American fleets ?!! Why do they need to be the "self-appointed" policeman of the seas?

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Re: Oil & Natural Gas: News & Discussion

Postby Rishirishi » 14 Aug 2019 04:45

Mukesh.Kumar wrote:Taking ballpark industry estimates today, cost for a 500, 000 refining capacity is USD 5 bn. So need to see what premium Relisnce is actually charging. What else is bundled in the deal.

But whatever said and done this is one id the biggest FDI deals and should go a long way in reducing the $32 bn debt if Reliance.


Ambni is ahed of the game as usual. Battery operated cars will soon replace petroleum cars and transport. The Saudis are securing them selves a marketshare and the Ambanis get to reduce debt.

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Re: Oil & Natural Gas: News & Discussion

Postby Vips » 14 Aug 2019 06:08

Indeed Ambani is ahead of the game and has made plans for life after EV's.

Reliance Industries chairman Mukesh Ambani’s decision to sell 20 percent stake of his firm’s oil-to-chemicals business to Saudi national oil company Aramco will allow RIL to have a strong presence in the global petrochemicals market dominated by western oil giants. Petrochemicals market that is pegged at over $540 billion in 2018 is expected to grow at the compound rate of more than 8% over the next decade. There are synergies between the operations of two companies as Reliance is shifting its focus from oils-to-chemicals while Aramco has the world’s largest petrochemical cracker plant, said a top former official.

Global petrochemicals market includes products like methanol, ethylene, propylene, butadiene, benzene among others is expected to grow to nearly $1 trillion by 2025. However, it is dominated by western companies like ExxonMobil, British Petroleum, Royal Dutch Shell, Chevron, LyondellBasell and others like Mitshui Chemicals.

Reliance has the world’s largest integrated refinery in Jamnagar, Gujarat with state of the art technology that can process even heavy and sour crude oil.

RIL has already announced that its Jamnagar refinery will only be producing aviation turbine fuel (ATF) and high-value petrochemicals.

“This signifies perfect synergy between the world’s largest oil producer and the world’s largest integrated refinery and petrochemicals complex,” said Mukesh Ambani while addressing the 42nd AGM of RIL.

“Reliance has developed a future-ready Oil-to-Chemical strategic vision to, progressively, transform the Jamnagar refinery from a leading producer of fuels to chemicals,” the company said in its annual report a day before its annual general body meeting. The deal with Aramco will allow the company to take advantage of this decision.

“There will be synergy between Aramco and Reliance and Reliance may take part in Aramco’s large petrochemical crackers. Because RIL also has petrochemicals and Aramco has the world’s largest petrochemical cracker,” said SC Tripathi, former petroleum secretary.

The combined might of Reliance Industries and Saudi Aramco will allow them to exert more influence in the global petrochemicals market dominated by western players.

“Synergies will be there. Because both of them are large producers of petrochemicals then they can possibly control the international market to a large extent,” SC Tripathi told Financial Express Online.

Ambani had bid for LyondellBasell and missed out on it in 2009. He must be ruing the lost opportunity.

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Re: Oil & Natural Gas: News & Discussion

Postby Kashi » 19 Aug 2019 07:22

ARAMCO buying a stake in Reliance, would this in any form affect the likelihood of Reliance buying Iranian crude in the future?

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Re: Oil & Natural Gas: News & Discussion

Postby nandakumar » 19 Aug 2019 11:57

The Reliance refinery is capable of processing very heavy (sour) crude. Recall that they were a major buyer of Venezeualean crude which is almost exclusively heavy crude. They stopped purchases after US sanctions. The advantage is lower prices for crude which helps generate higher refining margins. So Saudi investment in Reliance may not alter the business case for sour crude. Ambani needs the cash for repayment of loans taken for telecom investments which is generating only marginal positive cash flows. Nowhere near what is needed. His telecom investments as of March 2019 stand at Rs 3,60,000 cr while his entire investment in the oil business is only Rs 3,50,000 cr! The other thing is Ambani's stake in Reliance is now only around 40%. So any fresh infusion of money from Saudis would mean further loss of control. Of course there is a possibility that a chunk of FII money is actually his masquerading as PNote investment. Thus effectively he may still own 51%. That said, as he raises money from Aramco he cannot but cede control to it. But he may be okay with it. In the long run media, entertainment, sport and carriage of such content together a fair share of organised retail may be the way forward. He may ringfence telecom, retail business from oil where he might not be averse to ceding control. Aramco will be quite happy to bide their time. Their game plan would be to use Jamnagar complex as an oil to chemical business bypassing transport fuel barring aviation. The world will still need plastics and synthetic fabrics even if electric vehicles replace IC engines.

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Re: Oil & Natural Gas: News & Discussion

Postby pankajs » 19 Aug 2019 12:05

Kashi wrote:ARAMCO buying a stake in Reliance, would this in any form affect the likelihood of Reliance buying Iranian crude in the future?

To the extent that Reliance was/is a customer of Iranian crude.

This deal provides an assured market for the Saudi crude help them maintain their share of the Indian crude market.

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Oil & Natural Gas: News & Discussion

Postby Peregrine » 19 Aug 2019 17:48

chetak Ji and schinas Ji :

Your Posts chetak » 19 Aug 2019 16:18 & schinnas » 19 Aug 2019 16:35 on the J&K Union Territory-2019 Thread

1. How Reliance Industries manages to keep its refining margins high

2. World Oil Review 2018 ENI

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Re: Oil & Natural Gas: News & Discussion

Postby chetak » 19 Aug 2019 18:30

Karthik S wrote:So Jamnagar refinery is off target list of pakis I assume?


it was always off the list.

motabhai is anything but stupid.

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Oil & Natural Gas: News & Discussion

Postby Peregrine » 17 Sep 2019 18:42

X Posted on The next war in the Persian Gulf Thread

Crisis in the Gulf

The attack on Saudi oil facilities raises the risks of war

America and Saudi Arabia may feel compelled to retaliate against Iran

PRESIDENT DONALD TRUMP says America’s forces are “locked and loaded” to strike at those responsible for the devastating drone and missile attacks on Saudi Arabia’s industry on September 14th. Is he about to pull the trigger for another American war in the Middle East?

Responsibility for the strikes on the Khurais oilfield and the Abqaiq oil-processing facility—the biggest such plant in the world—was claimed by Iranian-backed Houthi rebels fighting a Saudi-led coalition in the war in Yemen. But American officials dismissed this notion. Not only was the weaponry involved made in Iran, they say. They also believe the attacks had come not from the south-east of the Arabian peninsula, ie, Yemen, but the north, from Iraq, where Iran runs proxy Shia militias; or indeed from the territory of Iran itself. “Iran has now launched an unprecedented attack on the world’s energy supply,” tweeted Mike Pompeo, the secretary of state. “There is no evidence the attacks came from Yemen.”

Mr Trump was more bellicose but, notably, less specific. He did not name Iran, though he suggested America knew who was responsible for the attacks, and was awaiting confirmation from Saudi Arabia as to the culprit. Within hours, the Saudi-led coalition fighting the Houthis in Yemen mostly endorsed Mr Pompeo’s account.

Even so, Mr Trump has been here before with his threats of war. He used the same “locked and loaded” phrase to menace North Korea in August 2017, before he met and “fell in love” with its dictator, Kim Jong Un, the next year. And just three months ago, Mr Trump revealed America had also been “cocked and loaded” when he aborted an air-raid against Iran just ten minutes before it was due to strike, because of the likely civilian casualties.

That planned raid was to punish Iran for shooting down an American surveillance drone, one of a series of Iranian provocations in recent months. They have included sabotage attacks, blamed on Iranian proxies, on ships in the Gulf; frequent drone strikes from the Houthis in Yemen (Mr Pompeo tweeted that Iran was behind “nearly 100” attacks on Saudi Arabia); and Iran’s announcement in July that it had breached limits imposed on its stockpile of low-enriched uranium that it accepted in 2015 in its agreement with world powers on curbing its nuclear program, the Joint Comprehensive Plan of Action (JCPOA).

Mr Trump was elected on a promise to get America out of its drawn-out wars in the Middle East, and has often sought to draw down America’s military presence in the region. Indeed, his reluctance to resort to military action is one of many differences of opinion that led to the departure of his hawkish national security adviser, John Bolton.

Yet the attacks on Abqaiq and Khurais—if Iran was indeed responsible—are its most serious provocations yet. That is one of three reasons why Mr Trump’s latest threats may be more substantial than his earlier ones. The second is their very familiarity. A man as conscious of his own image and importance as the president will not want to become known for repeatedly crying wolf.

Third is what Emile Hokayem, an analyst at the International Institute for Strategic Studies, a think-tank in London, calls a “design flaw” in the policy of “maximum pressure” on Iran that America adopted when Mr Trump pulled it out of the JCPOA last year. The policy, of crippling Iran’s economy through sanctions in the hope of forcing it to abandon its nuclear programme and rein in its proxies elsewhere in the Middle East, “lacks a strategy of escalation”. Iran, for its part, certainly does have such a strategy. As it steadily ratchets up its provocations, America and its Saudi allies risk looking toothless.

At the very least, faint hopes that Mr Trump might meet Iran’s president, Hassan Rouhani, in the next few weeks seem dashed. The idea for the first such presidential summit since the Iranian revolution in 1979 was pushed by France’s president, Emmanuel Macron, at the G7 summit in Biarritz last month. Mr Trump and Mr Rouhani seemed to entertain the idea, but it was always opposed by Iran’s supreme leader, Ali Khamenei, and the powerful Islamic Revolutionary Guard Corps. Some think the attack on Saudi Arabia is an attempt by hardliners to scupper any hope of a rapprochement.

The oil market, badly disrupted by the lost production, may in fact be a deterrent to American military action. Part of the immediate spike in the price (of about 20% initially, before easing back) was the result of the supply shock. It reduced Saudi oil output by nearly 60%, and the world’s by 6%. Saudi officials said they hoped to restore one-third of production by the end of Monday. But getting back to pre-attack levels will take weeks.

In response, Mr Trump on Sunday authorised the release of stocks from America’s Strategic Petroleum Reserve to “keep the markets well-supplied”. He also said the government would expedite approvals of oil projects in Texas and elsewhere. The pressure on the price, however, comes not just from the big cut in production, but from the mounting fear of conflict—ie, of much more severe disruption to come. With worries growing about the problems facing the global economy, war in the Middle East would hardly be a solution.

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Oil & Natural Gas: News & Discussion

Postby Peregrine » 17 Sep 2019 18:46

X Posted on The next war in the Persian Gulf Thread

The drone strikes in Saudi Arabia spook oil markets

But prices are still below their peak for the year

Image

OIL PRICES leapt when markets opened on September 16th, following a drone attack on the Abqaiq oil-processing plant and the Khurais oilfield in Saudi Arabia on September 14th. At one point prices were as much as 20% higher—the biggest intraday jump since Iraq invaded Kuwait almost 30 years ago. At 7pm London time Brent, the leading international benchmark, was 14.7% up, at $69.09 per barrel.

Prices have been remarkably choppy this year: driven up as American sanctions on Iranian and Venezuelan oil have threatened to restrict supply; and down by signs that the world economy is slowing down, dampening demand. Saudi Arabia, by far the biggest producer in the Organisation of Petroleum Exporting Countries (OPEC), has tried to stabilise prices, with limited success. In December 2018 OPEC and others, notably Russia, said they would cut production by 1.2m barrels a day. During the year the Saudis have reduced their own output by more than they promised as other OPEC countries have kept pumping. Yet prices have remained volatile, and even now Brent is 8% below its peak for the year (see chart). The rise of shale oil in America—now the world’s biggest oil producer—has made it even harder for OPEC to control global oil prices.

The main questions for oil markets are whether a wider military conflict ensues, thereby threatening even more of the Gulf’s output, and how fast Saudi Arabia can resume production. On September 15th Aramco promised a progress update in “about 48 hours”. Saudi Arabia could replace some of its lost oil from its stocks. But analysts at Rystad Energy, a research firm, warn that could be harder than officials suggest, as stocks are at their lowest in ten years. Other OPEC countries and Russia said on September 16th that they would not immediately pump extra oil to fill the gap.

The attacks call into question plans by Saudi Aramco, Saudi Arabia’s state-owned oil company, to launch what is expected to be the biggest stockmarket listing in history. Last month, during Aramco’s first-ever earnings call with investors, Khalid Al-Dabbagh, the chief financial officer, declared the company’s goal to be “to maintain our position as a world-leading crude-oil producer and lowest-cost producer while providing reliable crude oil supply.” That reliability was already in question. Five days after the call, Houthi rebels claimed responsibility for a drone attack on the company’s Shaybah oil field, which produces 1m barrels of oil a day. The attacks on Abqaiq and Khurais has now laid bare the extent of Aramco’s vulnerability.

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Re: Oil & Natural Gas: News & Discussion

Postby Vips » 18 Sep 2019 18:44

US hints at oil for India on concessional terms.

The US may offer oil and gas to India on concessional terms from its own reserves to help the latter tide over any shortages arising from the drone attacks on Saudi Arabian Oil Company, or Aramco, that have caused the biggest-ever disruption in global crude oil supplies.

Diplomatic sources here said that supply details would be discussed in detail during the visit of the official Indian delegation to the US stating September 21, where Prime Minister Narendra Modi is also scheduled to meet US President Donald Trump. The delegation also includes a large number of Indian business honchos, including chiefs of public and private sector oil companies.

"We can expect Indian oil companies to sign memoranda of understanding with their US counterparts for increasing oil imports to meet the country's domestic demand. Saudi Arabia meets close to 20 per cent of oil needs of the country and if there is a supply disruption, the US can become a dependable ally if terms of such supplies are favourable," one source said.

India has also sounded Russia for increasing their oil supplies. Rosneft PJSC has agreed to assist India with its energy security efforts against the backdrop of the drone attacks on the Saudi oil facilities. Rosneft Chairman Igor Sechin conveyed this during his meeting with Petroleum Minister Dharmendra Pradhan on Tuesday.

The talks with US on oil supplies hinges on the terms of exports. The sources said that the US could offer concessions oil exports on par with the terms India enjoyed with Iran. The Islamic Republic offered cheaper freight and a 60-day credit period to Indian importers such Indian Oil Corporation, Mangalore Refinery and Petrochemicals (MRPL) and Nayara Energy (formerly Essar Oil).

"The offer has been indicated and this needs to be worked out in detail when the delegation level visit happens later this month. Transportation cost is an issue to bring oil from the US," the diplomatic source quoted earlier said.

Though Indian oil companies have started importing oil from the US for the past couple of years, the quantity remains miniscule and forms just about 1 per cent of country's total oil imports. But this quantity can grow with the US shale oil market becoming relevant again at current crude levels and an increase in total rig count in the world's largest oil guzzling nation.

"The rig count in US has risen sharply in past few months (1,038 now) indicating that oil production there is on the rise. One estimate suggests that the US will pump in additional 4 million barrels of crude oil in the next couple of years. This provides ample opportunity for India to tie up long term contracts there. Already, spot purchase contracts from US have seen a rise," said a government official aware of the developments. The emergence of the US as a major oil supplying nation indicates that it could be the biggest gainer in any disruption in global oil production.

The shift to the US would not be sudden as gas transportation company GAIL, oil marketing firm Bharat Petroleum Corporation Ltd (BPCL) and the country's largest oil refiner Indian Oil Corporation have sealed deals for supplies of US crude earlier as well. The shale oil price there now has also become very competitive in comparison to Middle-East and Gulf crude. In fact, the narrowing of price differential between the international crude oil benchmark Brent and Dubai crude has made US oil more competitive even after higher transportation charges. A discount of $ 2-4 per barrel on American oil over Dubai crude makes it cover freight costs.

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Re: Oil & Natural Gas: News & Discussion

Postby pandyan » 25 Sep 2019 07:16

Tellurian Signs $7.5 Billion LNG Pact With India’s Petronet
https://www.bloomberg.com/news/articles/2019-09-21/tellurian-signs-7-5-billion-pact-with-petronet-for-u-s-lng
$2.5 B for 18% stake
$5 B in debt commitment (what does this mean?)

Benefits for India
Delivery of 5 Mt LNG/year
Gulf coast delivered cost $3-4 per million btu
Delivered cost to India between $5-6 per million btu

1 Mt LNG = 49,257,899 MMBtu
5 Mt LNG = 246,289,495‬ MMBtu
https://www.unitjuggler.com/convert-energy-from-MMBtu-to-MtLNG.html?val=10
Total LNG cost/year = $ 1.3 B

Bart S
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Re: Oil & Natural Gas: News & Discussion

Postby Bart S » 25 Sep 2019 07:24

^How does this compare with Qatar or Iran?

pandyan
BRFite
Posts: 393
Joined: 31 Jul 2006 05:12

Re: Oil & Natural Gas: News & Discussion

Postby pandyan » 25 Sep 2019 08:14

https://economictimes.indiatimes.com/industry/energy/oil-gas/india-could-review-long-term-lng-contract-prices-dharmendra-pradhan/articleshow/70838170.cms?from=mdr
India imports 8.5 million tonnes per annum of LNG from Qatar under two long-term contracts and has tied up 5.8 million tonnes a year supplies from the US. It also has a 2.5 million tonnes import contract with Gazprom of Russia and a 1.44 million tonnes deal with Gorgon project of Australia...

While long-term LNG from Qatar comes for USD 8.5-9 per million British thermal unit, the same gas is available in the spot market for less than half the price.


However, I am not sure how Tellurian deal works. Is LNG free (due to 18% stake + 5 B in debt commitment) and we need to pay only for shipping?
[update]
https://www.rigzone.com/news/75b_louisiana_lng_investment_advances-23-sep-2019-159874-article/
Tellurian is funding Driftwood in an unorthodox manner. The company minimizes its debt by seeking upfront payments from investors who would own the project and obtain LNG at cost, the news agency explained.
....
Rather than sell contracts, Tellurian is taking on partners who would each take on a proportional share of the project debt, company spokesperson Joi Leczar told Rigzone Monday. She pointed out that Petronet’s deal would be worth $7.5 billion in total: 5 mtpa in LNG equating to $2.5 billion in equity and a $5 billion share of the project debt. Tellurian would secure the debt on behalf of the project partners, Leczar added.


https://www.rigzone.com/news/wire/want_the_gas_buy_the_company_a_new_way_to_finance_us_lng-16-apr-2018-154259-article/
Monday, April 16, 2018
After amassing billions in debt and pushing a bold spending plan, Charif Souki was fired in 2015 by the liquefied natural gas company he founded. Now heading a new company, he’s changing his plan of attack.

Souki’s latest idea is to mostly deal debt out of the picture. The company he chairs, Tellurian Inc., is seeking investors to pay a total of $12 billion up front to fund the proposed Driftwood LNG export terminal in Louisiana. In return, they get a stake in the project and the ability to buy fuel at cost moving forward, with no markup based on a changing marketplace.
...
“They have a proven track record of executing a project," said Sam Margolin, lead analyst at Cowen and Company LLC in New York, in a phone interview. "These are expensive, really complicated, really difficult projects.”..
So far, Total SA has invested $207 million in the company, Bechtel Corp. added other $50 million and General Electric Co. invested $25 million. Tellurian has also raised $100 million in public equity. according to a company presentation.

At the same time, the market is clearly skeptical: Tellurian’s value has fallen by half to just over $2 billion since February 2017, when it went public. The most likely reason: It’s based on a gamble. The company fell 3.5 percent to $8.50 at 9:50 a.m. Monday in New York


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