Oil & Natural Gas: News & Discussion

[Austin]

Rosneft to supply 2 million tonnes of oil to India in 2017

Rosneft plans to supply to 2 million tonnes of oil to India this year, the Russian oil major’s Chief Executive Igor Sechin told Russian President Vladimir Putin on Jan. 23.

“We will begin with 2 million tonnes this year and will increase this to 20 million tonnes, which corresponds to the refining capacity at the Essar refinery in Vadinar, which will now also become affiliated to Rosneft,” Sechin told Putin.

Rosneft signed a contract to purchase 49 per cent of the shares of Essar Oil Limited in October 2016 after the summit meeting between Russian President Vladimir Putin and Indian Prime Minister Narendra Modi.

Rosneft's Indian romance

Another 49 per cent of Essar Oil was purchased by a consortium of investors, the shares of which are distributed as follows: European commodity trader Trafigura – 49 per cent, the United Capital Partners (UCP) group, owned by Ilya Shcherbovich – 49 per cent and Essar – 2 per cent.

The $12.9 billion deal is the largest ever foreign direct investment in India.

India, which is looking to reduce its energy dependence on Persian Gulf countries, has also signed liquefied natural gas supply agreements with Gazprom.

[arun]

“The Abu Dhabi National Oil Company (ADNOC) and the Indian Strategic Petroleum Reserves Ltd (ISPRL), agreed on Wednesday to establish a strategic crude oil storage in the southern Indian city of Mangalore. The agreement mandated to store crude oil for emergency needs, covers the storage of 5.86 million barrels of ADNOC crude oil in underground facilities, at the Karnataka facility.” :

UAE, India sign historic partnership agreement

[udy]

^^^I cannot post on the original 2008 thread "The Indian Crude Oil Strategic Storage Megaproject ..."(locked).

IIRC the concept paper suggested something similar.

Since a start has been made with the UAE oil storage deal to fill half of the mangalore storage capacity.
Congratulations are due to ashishkp aka ashish puntambekar.

[AdityaM]

There are oil reserves, and then there are oil eating bacteria.
How does one maintain security of these reserves from biological mischief

pretty sure they haven't though of this

[vipins]

Government's plan to create an integrated oil company may see ONGC taking over HPCL or BPCL

The government’s plan to create an integrated oil company will likely involve Oil and Natural Gas Corp taking over either Hindustan Petroleum Corp (HPCL) or Bharat Petroleum Corp (BPCL) but won’t result in a mega merger leading to the creation of an industry giant.

[sameerp]

http://www.hellenicshippingnews.com/wha ... producers/

Every country needs a strategic fuel reserve to tide over conflict, natural disaster or a potential economic blockade. India is well on its way to doing the same, with a bit of help from its traditional oil suppliers in the Gulf. The move is also opening a window of opportunity for cooperation at various levels.
One major step in this direction was announced earlier this month when India’s minister of state for petroleum & natural gas, Dharmendra Pradhan, informed the country’s parliament about an oil storage and management agreement signed between Indian Strategic Petroleum Reserve (ISPRL) and Abu Dhabi National Oil Company (ADNOC) of the UAE. The agreement was for filling up one of the two caverns at Mangalore Strategic Petroleum Reserve (SPR) facility.
Pradhan said that India has 63 days of existing storage based on estimated commercial reserve of crude oil, petroleum products and gas. The total 5.33 million metric tons (MMT) reserve of the first phase of the program is estimated to supply approximately 10 and a half days of India’s crude requirement based on the consumption during 2015-16.
This is by no means a unique undertaking as other developing countries have either done it or are in the process of getting there. According to Global Market Insights, oil storage market size was over 1,400 million cubic meters in 2015 with forecast to grow over 4 percent from 2016 to 2025.
More importantly, this is happening at a time when oil market is beginning to recover after a difficult phase, leading to the dawn of a new reality for oil consuming countries, as well as Gulf oil producers, who have been supplying oil to India for decades.
Dr. Mohamed Ramady, energy economist and a geo-political expert on the GCC, says current oil prices have benefitted India in several ways, by reducing foreign exchange payments and creating more domestic and international competitiveness. According to him, this has prompted India to create strategic oil reserves like the US, China and Japan through imports, and through local currency swaps when oil prices fell to $35-40 ranges.
“Another element is to wean the economy away from higher polluting coal-based industries. A diversified oil reserve management policies also gives India a semblance of energy independence in case of supply disruptions due to geo-political events and the trend is to build up such reserves at the $50-55 price ranges,” says Ramady.
Signaling urgency
The ISPRL-ADNOC partnership – formalized during the visit to Sheikh Mohammed bin Zayed Al Nahyan to India in January – is just one example. Momentum gathering around the project, however, also signals the urgency.
“India has arrived a bit late to the game when it comes to setting up its strategic reserves,” says Vandana Hari, founder of Vanda Insights, a Singapore-based boutique provider of oil industry research and analysis. According to her, the 5 MMT – or just over 36 million barrels – of reserves is a beginning and doesn’t do much in terms of energy security.
“As a country dependent on imports for more than 70 percent of its crude needs – a ratio that is only set to grow rapidly – India will need to accelerate its SPR program. The norm in the OECD countries is 90 days of net oil imports in strategic storage,” she says.
Partnering with suppliers
Vandana says it makes perfect sense for India to bring in its major crude suppliers as partners in the strategic reserves program: it is a mutually beneficial dependency.
“The oversupplied global oil markets of the past three years have unleashed fierce competition for market share among producers in the Middle East, especially for the fastest-growing and major consuming countries in Asia such as India,” she says.
According to her, the UAE, for instance, needs storage space for its oil, and storing it near or within the consuming country means not only a captive market but savings on shipping time and freight during emergencies, when crude prices and transportation costs may have spiked.
“On the flip side, India gets ready access to crudes that are a part of its refineries’ regular diet. Leasing the storage space, rather than keeping it under government ownership and control is a good idea, as it provides India a source of income,” says Vandana.
Geopolitical uncertainties
Faraz Shams, a senior analyst at BRG Enterprises Solutions, says that with the oil markets showing signs of volatility and many oil producing regions being caught in geopolitical uncertainties, “it is imperative that big consumer countries move toward insulating themselves from the vagaries of the oil market and geopolitical upheavals”.
“The strategic reserves would go a long way in cushioning India from the disruptions in oil supplies in adverse circumstances,” he says. At the same time, according to Faraz, this will provide national oil companies of the Gulf an entry in the booming downstream sector in India.
“Companies like ARAMCO and ADNOC have already expressed interest in entering the burgeoning downstream projects in India partnering with local companies. The GCC countries have also committed to invest in the infrastructure sector in India through their Sovereign Wealth Funds, which can offer great returns in long term,” says Faraz.
Business and strategic potential
Building strategic reserves doesn’t mean disruption of energy interdependence that have existed between India and the Gulf for years.
“The reserves are only a small part of the total demand, over 80 percent of which is fulfilled by imports (202 million barrels of crude oil was imported in 2015-16). In fact, partnership such as the one with ADNOC with regard to filling the reserves offers further business opportunities to GCC-based oil companies,” he says.
Under the terms of agreement, India has first rights to the crude stored in the reserves. However, ADNOC can also utilize that oil to cater to the demands of regional countries which can be a great logistical advantage considering India’s strategic geographical location.
Saving cost?
To some though, this also signals a slight shift in India’s approach to energy mix, especially from this part of the world. Dr. Reza Yeganehshakib, professor of Middle Eastern studies at Fullerton College and a geopolitical and energy analyst, says India has been pursuing energy diversification for a long time but it became extensive after the fuel price decline.
“For India, this policy means not only diversifying the sources of energy (suppliers) but also the types of fuel, especially moving toward more natural gas and LNG imports to replace coal and crude oil,” he says. According to Dr. Reza, India imported 2,262 million metric standard cubic meters of LNG in October 2016 that shows an 18.6 percent increase in LNG imports comparing to that of 2015.
“By taking advantage of the recent decline in LNG prices and signing a long-term contract with RasGas of Qatar, India saved around $3 billion. While Saudi Arabia and UAE are still India’s top crude suppliers, consisting 21 percent and 13 percent of the country’s oil demand, it is expected that Iran, US, Qatar, and Australia will become India’s major LNG and natural gas suppliers by 2025,” Dr. Reza says.
Back to the future
This could possibly mean switching to LNG and natural gas and lowering crude import from GCC. “But when this happens, India will follow China’s footsteps in taking advantage of current low energy prices and store more oil and gas in its reserves to guard its economy against energy prices rebound in the future”.
Going by his assessment, India may initially increase its crude import from GCC countries as well as Iran and Nigeria to fill such new ISPRs. “Yet after 2025 when India is expected to import and use more LNG and natural gas, this crude import from GCC suppliers, Iran, and Nigeria may significantly drop”, , Dr. Reza concludes.
Not everyone is swayed by this argument though. Talmiz Ahmad, the former Indian ambassador to Saudi Arabia, Oman and the UAE, says India obtains the bulk of its oil imports (about 50 percent) from the GCC countries and this situation is not likely to change.
“In fact, by 2040, India will get about 90 percent of its oil from the Gulf. Gulf suppliers have the advantage of geographical proximity and the fact that Indian refiners are geared to using Gulf oil”. According to him, the proposed reserve is quite small and will have hardly any impact on the quantum of India’s oil imports.
Whether this new emerging reality shifts this traditional supply-demand relationship into more robust partnership between the two sides remains to be seen.
Source: Alarabiya

[Austin]

Saudi Arabia wants oil prices at $60 to discourage shale production

https://www.rt.com/business/378861-saud ... rice-high/

[Austin]

Official Arctic Reserves from Russian Energy Minister from recent Arctic Sumit

Russia’s offshore energy projects in the Arctic
http://tass.com/economy/938067
http://vestnikkavkaza.net/news/Novak-re ... serve.html

Reserves and production
According to the Russian Energy Ministry, Russia’s recoverable oil and gas reserves in the Arctic currently stand at 260 billion tonnes of equivalent fuel, or 60% of Russia’s recoverable hydrocarbon reserves. In 2015 the science doyen of the Oil and Gas Geology and Geophysics Institute under the Siberian branch of the Russian Academy of Sciences, Aleksey Kontorovich, estimated Russia’s oil and gas reserves in the Arctic at 100 billion tonnes.

Novak said that Russia intends to increase its oil extraction and exploration on the Arctic shelf if the oil prices on the international market grow.

According to him, the total value of energy resources concentrated in Russia's Arctic region exceeds $30 trillion.

[Austin]

When Will Russia Run Out Of Oil?

On a global level, 2015 and 2016 marked the lowest level of new conventional oil discoveries since 1952. In 2016, only 3.7 billion barrels of conventional oil were discovered, roughly 45 days of global crude consumption or 0.2 percent of global proved reserves. Globally, exploratory drilling fell by almost 20 percent in 2015 and fell even further in 2016. Russia’s exploration activities, which were hit not only by plummeting oil prices but also by a targeted sanctions regime, suffered a double blow during this period. In 2015, only seven new hydrocarbon discoveries were made in Russia, three of them in the Baltic Sea. In 2016, oil and gas companies in Russia discovered 40 prospective fields, however, the 3P reserves of the largest among them, Rosneft’s Nertsetinskoye, amounted to 17.4 million tons. This stands in stark contrast with pre-sanction period achievements, for instance, 2014’s largest find, Pobeda, is believed to contain 130 million tons of oil and 0.5TCm of gas.



Graph 1. Russia’s Oil Production 1970-2020 and Russia’s Deep-Hole Oil & Gas Exploration Drilling.

Source: Russian Central Bank, IEA, Russian Statistics Agency.
It is only logical that against such depressive trends, that people start to question the sustainability of Russia’s current oil-producing renaissance

(Graph 1). When will Russia run out of oil? Were Sheikh Yaki Zamani’s “Stone age” simile to materialize, would Russia still be among the top producers when oil started its descent towards obsolescence?

The Ministry of Natural Resources and Environmental Protection of Russia states that not accounting for new discoveries, current oil reserves in Russia stand at 29 billion tons and under current consumption rates would be depleted by 2044 (its 2P gas reserves’ depletion would come about in more than 160 years). To this end, it would like to implement business-easing measures, e.g.: facilitate the issuance of licenses and to increase the size of the allotted subsoil block to a maximum of 500 km2 (which would mean a fivefold increase compared to existing regulations). The Ministry’s stimulating measures, however, should not obfuscate the fact that Russia still has vast amounts of untapped reserves waiting to be discovered. But where?

Frontiers

The future of Russian crude lies in oil that is more expensive, more geologically complex and further away from traditional regions of production. Just as West Siberia replaced the Volga-Urals Region in the 1970s as the Soviet Union’s main producing region, East-Siberia and offshore regions will overtake West-Siberia (which saw its share in the national output diminish from 71 percent in 2004-2005 to 57 percent currently). This change of “leaders” is long overdue as West-Siberia oil output was already expected to plummet in the 1990s, yet thanks to extended oil recovery methods and slower-than-expected development of other oil-rich regions it has managed to keep stable output numbers. Russia’s oil sector has been consistently hoodwinked by analysts, who, beginning from the early 1980s predicted an imminent production slump. The production fall did happen, reaching a low-point between 1996 and 1999 when production foundered to 301-305 million tons per year. The cause was to be sought in Russia’s overall economic depression, not in its dearth of resources.

Today, Russian companies are similarly constrained in tackling Russia’s three new oil frontiers – shale, Arctic and deep-water. It is no coincidence that U.S. and EU sanctions targeted the sales of technologies related to these sectors and not conventional – whilst Russian companies are well-equipped to deal with conventional fields, they relied heavily on Western know-how. Yet it is very unlikely that even a tightening of sanctions could stall Russia’s Arctic exploration activities for a longer period of time. Russia’s continental shelf contains most of the Arctic’s oil formations and approximately 60 percent of its undiscovered reserves. So far, the 3P reserves of Russia’s Arctic stand at 585 million tons and 10.4 TCm, yet most of its Arctic Seas were only superficially appraised. The Kara Sea, whose fields are almost exclusively gaseous, has been in the spotlight since the 1983 of the Murmanskoye gas field (120 BCm), yet the northern parts of the adjacent Barents Sea, which Russia’s Federal Agency on Subsoil Usage deems the most likely to yield top hydrocarbon discoveries in the next few years, are relative newcomers in prospective surveys.

Western oil & gas companies should be aware that the Russian government treats Arctic formations as resources of “federal significance” and it is unlikely to provide them a role other than that of a minority shareholder. There is more maneuvering room for oil formations in the riskier part of the Arctic – the as of yet impossible-to-assess Laptev and Chukchi Seas, where no large-scale surveying has been done. Moreover, after the UN Commission on the Limits of the Continental Shelf acknowledged the Okhotsk Sea as a Russian enclave, the least-researched Russian sea can now be prospected and appraised. Still, the Russian Arctic, along with frontier zones like the Timano-Pechora Basin and the Yenisey-Khatanga Basin, will play an important role in keeping Russia among world’s top 3 oil producers in the next 40-50 years. Yet there is more, Russia’s oil future is not only more Arctic, but also more shale-related.

Russia has been sitting on vast shale/tight oil reserves, which according to present data are second only to the United States. Yet it might easily surpass all its rivals, as the development of gigantic tight-oil formations, such as Bazhenov Suite, the largest shale deposit in the world covering a territory of more than 1 million km2 and assumed to contain at least 20 billion tons of oil, is still in its infant phase. The potential of the Abalak Suite underlying the Bazhenov, the Domanik Suite, stretching asymmetrically across the Volga-Urals Region from Perm to Orenburg, as well as many others, is still difficult to assess, yet virtually all of them are located in traditional oil-producing regions with a fully-established oil infrastructure. Although the first Bazhenov oil gush dates back to 1969, several factors have hindered the development of Russian tight oil, yet the principal among them was the availability of other, less-costly variants of production. The preference for easier-to-access, less costly formations is aptly reflected in Russia’s curbing of deep-hole exploration drilling (Graph 1).

As Russia’s tight oil needs at least an oil price level of 55-60 USD per barrel, bringing the first fields on-stream is still some way off as conventionals’ breakeven levels are in the 20-30 USD per barrel range. Despite a significant lag compared to the U.S. shale revolution, this might not be that unfavorable for Russia. It is expected that under the aegis of “import substitution”, Russian service companies might be fully up to the task to exploit Russia’s shale bounty by the 2020s, moreover, they are likely to work in an environment with significantly lower drilling costs, time and efficiency rates than their American counterparts in late 2000s (thus yielding more oil). By that time, perhaps, anti-Russian sanctions will be a yesteryear affair.

Lastly, one should not underestimate the tenacity of Russia’s conventional oil reserves, which thanks to enhanced oil recovery techniques and supplementary exploration will remain a force to be reckoned with. As demonstrated by the discovery of the Velikoye field in the Astrakhan Oblast (reserves estimated at 330 million tons of oil), Russia’s pre-salt layers, even in regions previously thought to be on the verge of depletion, might kickstart a new development vector in its energy matrix. As Russia’s Natural Resource Ministry cannot account for events that are still yet to happen, its 2044 depletion assumption reflects merely its inherent conservatism, not the country’s realistic capabilities. By all accounts, Russia will remain a major oil-producing nation throughout the entire XXIst century, with oil production moving to places that are further (north and east), deeper (both deepwater and pre-salt) and generally more costly.

By Viktor Katona for Oilprice.com

[Austin]

Independent Audit Confirms Saudi Aramco’s Huge Oil Reserves

The external audit of the oil reserves of Saudi Aramco ahead of its planned IPO has confirmed that Saudi Arabia’s oil giant has more than 261 billion barrels of reserves, Reuters reported on Friday, citing sources in the know.

On Thursday, news broke that Saudi Aramco had hired two U.S. firms - a unit of Baker Hughes and a Dallas-based reserves auditing firm to look into how much oil reserves it really has. Saudi Aramco had tasked Baker Hughes’ energy consulting services unit Gaffney, Cline & Associates, as well as Dallas-based DeGolyer and MacNaughton, to perform the reserves auditing, various sources have told Reuters.

According to The Wall Street Journal, which first broke the news of Aramco hiring Gaffney, Cline & Associates, Saudi Aramco had hired Gaffney, Cline & Associates late last year and its audit is now complete.

Today, sources told Reuters that the independent audit of the reserves produced no surprises, and generally confirmed the company’s own assessment.

According to Aramco’s own estimates, the Saudi oil giant has 261.1 billion barrels of crude oil and condensate reserves. According to the BP Statistical Review of World Energy, Saudi Arabia’s total proved reserves were 266.6 billion barrels at the end of 2015.

“Aramco’s reserves have always been reported internally in line with international practice,” a source familiar with the issue told Reuters.

According to two more sources, the audit has found that the reserves were “definitely not below” Aramco’s own estimates.

In view of next year’s share listing, Saudi Aramco is required to provide independent audit of its reserves. Significantly higher or lower reserves would greatly change the evaluation of the company, which Saudi officials say is worth around US$2 trillion.

Ahead of its planned IPO, Saudi Aramco is also on the hunt for advisers and was said to have recently sent requests for proposals to several investment banks that could become advisers in the process.

By Tsvetana Paraskova for Oilprice.com

[Peregrine]

India's oil imports from Iran plunge over gas field row

NEW DELHI: India's oil imports from Iran have fallen to their lowest since June 2016, shipping data shows, in possible retaliation for Tehran not awarding a gas field development to Indian companies.

India, Iran's top oil client after China, shipped in 4,87,600 barrels per day (bpd) in May, about 9 per cent less compared with April and nearly 40 per cent less than a peak registered in October, according to ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts.

Most Western-led sanctions against Tehran's nuclear programme were lifted in January last year, and India's Iranian crude imports began climbing two months later in March.

In the fiscal year to March 2018, though, India has said it plans to order about a quarter less Iranian crude due to a snub over development of Iran's Farzad B gas field.

"We stood by them in difficult times. We still buy substantial amounts of oil from them, and we expect reciprocity from Iran," oil minister Dharmendra Pradhan told reporters on Wednesday when asked if India was still hopeful of getting the development rights for the Farzad B field.

Following years of seeming rapprochement over the field, Iran has likely reached an agreement on the concession with Russia's state-controlled gas giant Gazprom, Russian and Indian media have reported.

Iran last month said India had not offered an acceptable proposal on the Farzad B development.

Sri Paravaikkarasu of energy consultancy FGE said India's lower Iran imports were a "reaction of Iran's decision to award the gas field to Russia and the availability of cheaper grades like those from Russia."

India was one of four countries - China, Japan and South Korea being the other three - that continued to import large amounts of Iranian oil after sanctions were toughened in 2012.

Some of the drop in imports from Iran may be due to lower demand. Overall, India imported about 4.2 per cent less oil in May, compared with April, due to a shutdown of the 180,000-bpd Bathinda refinery for upgrades.

In the first five months of 2017, India's oil imports from Iran still jumped about 64 per cent, the data showed.

While Iran's oil exports to India are stalling, supplies to Europe and Turkey hit their highest level since the lifting of sanctions in 2016.

Iraq continued to be India's biggest oil supplier for the second month in a row in May, followed by Saudi Arabia.

Middle Eastern oil in May accounted for 65 per cent of India's overall imports, compared to 71 per cent a year ago, while the import share of Africa and Latin America have risen, the data showed.

The shift is likely a result of an effort led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) to cut production to prop up oil prices.

Cheers

[Kakkaji]

BP, Mukesh Ambani tie up for Rs 40,000 crore oil plan for India

NEW DELHI: Reliance Industries and BP plan to together invest Rs 40,000 crore, or $6 billion, to develop three natural gas projects in the KG Basin that would help produce 30-35 million cubic meters of gas a day phased over 2020-22, top executives of the two companies said.

[chanakyaa]

(FT) Rosneft in talks to develop disputed oilfields with Iraqi Kurdistan

[chetak]

There are oil reserves, and then there are oil eating bacteria.
How does one maintain security of these reserves from biological mischief

pretty sure they haven't though of this

oil eating bacteria are expensive and are used in cleanup of polluted sites. They don't run around randomly attacking and eating up oil.

Oil from the mangalore strategic crude oil storage is used by the owner (ADNOC) for shipment to other customers and refilled constantly by them with India having the first right to buy it all in case of emergency.

They are effectively storing their oil nearer their customers at no cost to India but India has special and legal rights to this oil in case of emergencies.

we have another sites too, apart from Mangalore, they are Visakhapatnam and Padur(near Udupi), all located near refineries.

[ashthor]

One more strategic crude oil storage site is supposed to come up in Odisha.

[arun]

^^^ Besides Mangalore, Visakhapatnam and Padur; two more are coming up. The two are the strategic oil storage facility proposed to come up in Odisha, at Chandikhol, which you mentioned and another strategic oil storage facility that is proposed to be created at Bikaner in Rajasthan.

[Peregrine]

Under pressure Qatar says to boost gas production 30 per cent

DOHA: Energy-rich Qatar said on Tuesday it plans to increase natural gas production by 30 per cent over the next several years, as it faces pressure from its neighbours in a diplomatic crisis.

Saad Sherida Al-Kaabi, the head of Qatar Petroleum, told a press conference that the emirate intends to raise production to 100 million tonnes of natural gas a year by 2024.

"This new project will strengthen Qatar's leading position," Kaabi told reporters.

"We will remain the leader of LNG for a very long time."

Qatar is the world's biggest producer of Liquefied Natural Gas (LNG). Qatar's current production is up to 77 million tonnes per year. The expansion will increase output levels up to the equivalent of six million barrels of oil per day, Kaabi said.

The announcement comes as the Gulf faces its worst diplomatic crisis in years after Saudi Arabia and its allies+ imposed a sweeping embargo on Qatar last month.

Its timing is likely to be seen as as much political as economic.

On Monday, Qatar gave its response to a 13-point list of demands+ its neighbours made for lifting their sanctions. Kaabi said Qatar wanted the production increase to be carried out through a joint venture with international companies.

But he added that the emirate would still go ahead with it even if Saudi Arabia and its allies made good on their threat to sanction any international firm working with Qatar if it failed to meet their demands. "If there are no companies willing to work with us, we will do the 100 million tonnes," he said.

Saudi Arabia, the United Arab Emirates, Egypt and Bahrain severed diplomatic and transport ties with Qatar, the world's top seller of liquefied natural gas (LNG), accusing it of supporting terrorism. Doha denies the accusation.

The four Arab states will meet on Wednesday to discuss whether to end the crisis or impose further sanctions on Qatar.

Comments : May be it is the time for India to have a Long Time "Large" LNG Contract with the Qatires
Cheers

[Prem]

http://www.thehindu.com/todays-paper/tp ... 505800.ece
India aims to widen oil import sources

Indian Oil Corporation placed India’s first ever shale oil order two days ago with the U.S., according to company Chairman Sanjiv Singh, who said that the prices from the U.S. were very competitive even when compared with those from Gulf nations.Mr. Pradhan added that the increasing oil imports from new sources such as the U.S. was also putting pressure on OPEC countries to reduce the ‘Asian premium’ on oil prices they charge Asian countries, including India.“Two days ago, we gave the first shale oil order, the first time shale oil will come to India,” Mr. Singh said, also speaking following the meeting between the two ministers. “And, the U.S. is giving at prices competitive with the Gulf prices. We bought four cargoes [the] day before yesterday.”“The government supported us in this case,” Mr. Singh added. “We used to buy oil on an FOB (Free On Board) basis. Now, these small shale producers cannot give a complete supply, so we have allowed them to aggregate and ship it to us. It is their ship that will deliver to us.”Under the FOB model, the buyer takes delivery of the item as soon as it leaves the seller’s shores, which means that shipping costs are borne by the buyer. The deal with U.S. companies by IOC and BPCL, for 3.5 million barrels and 1.9 million barrels respectively, has PetroChina transporting the oil on behalf of the U.S. companies.“We have been asking for the Asian premium to be removed for a while now,” Mr. Pradhan said. “Now, the market dynamics are forcing them to reduce the Asian premium. What was going slow through bilateral engagements, is now being achieved. The American shale oil and gas are coming at a new normal price, and gives us leverage.”

[Austin]

In India's Largest FDI, Russian Group Completes $12.9 Billion Buyout Of Essar Oil

http://profit.ndtv.com/news/corporates/ ... il-1739970

The company director, Prashant Ruia, said the firm will pay back as much as Rs. 70,000 crore to lenders, including SBI, ICICI Bank, Axis Bank, IDBI Bank and StanChart, among others.

Mumbai: The Ruias-run Essar Oil today announced the completion of sale of its India assets to the Russian government controlled Rosneft-led consortium for $12.9 billion.

The deal comes more than 10 months after it was announced on October 15 last year on the sidelines of the BRICS summit in Goa.

The transaction got delayed after the lenders wanted their debt worth over Rs. 45,000 crore to be cleared.


The Essar Oil-Rosneft deal is the largest foreign direct investment (FDI) into the country till date and also the largest outbound investment from Russia.

The deal includes the Russian company-led consortium, including Oil Bidco and a fund led by Trafigura-UCP.

The deals includes sale of its 20 million tonne refinery at Vadinar in Gujarat and a captive power plant and captive port as well as over 3,500 petrol pumps.

The company director, Prashant Ruia, said the firm will pay back as much as Rs. 70,000 crore to lenders, including SBI, ICICI Bank, Axis Bank, IDBI Bank and StanChart, among others.

This will bring down the group's debt by over 60 per cent.

[Austin]

Hydrocarbons story shows way forward with Russia - By PS Raghavan

The writer is convenor, National Security Advisory Board

The recent acquisition of Essar OilBSE -0.15 % by a consortium led by Russian oil giant Rosneft has some interesting features. It is Russia’s largest foreign investment, and India’s largest inward investment. Essar’s Vadinar refinery will add 20% to Rosneft’s refining capacity. It will refine Rosneft’s crude holdings, mainly from Venezuela, replacing West Asian sources.

In the near-term, the consortium plans to expand annual refinery output to 24 (from 20) MT, add a downstream polypropylene unit, and increase Essar’s retail outlets from 3,500 to 6,000. Rosneft’s India foray has been mirrored by recent hydrocarbons investments in Russia by Indian companies.

In 2015-16, ONGC Videsh acquired from Rosneft a 26% stake in Vankorneft, Russia’s second largest oilfield by output. A consortium of Oil India, Indian Oil and Bharat Petroleum took another 23.9%. It also bought 30% stake in another Rosneft subsidiary, Taas-Yuriakh. Together, these constitute a $5 b investment. ONGC Videsh’s earlier investments in Russia also total $5 billion.

The mutual interests should restrain both governments from policies that may undermine the profitability of the investments. There are also wider implications. These two way commitments should help overcome misperceptions that have inhibited investment flows between the two countries. Corporate India’s perceptions of the impact of Western sanctions on Russia has been the main deterrent.

Sanctions on Russia have a limited territorial and sectoral coverage. Western companies have found ways around them

International Monetary Fund assessments show that the Russian economy moved from recession to growth in 2016 and that its fundamentals have survived both recession and sanctions. They include a healthy current account surplus, low unemployment (5%), low external debt (including corporate debt) of about 30% of GDP and undervalued corporate stocks.

Bilateral business success stories have largely escaped publicity. Chennai-based Carborundum Universal has a 100% investment in Europe’s largest silicon carbide manufacturer, located in Russia. Reliance Industries, with Russian partner Sibur, is constructing a butyl rubber plant in Gujarat.

The hydrocarbons story shows the way for other investments. Russia’s natural resources riches should attract resource-hungry India. Russia has recently offered incentives for investment in its far eastern region, including infrastructural support and favourable tax regimes.

Finally, and importantly, there is a beneficial political impact of such investment exchanges. In an increasingly fluid environment, India-Russia relations retain strong political and strategic logic.

[Peregrine]

Reliance Industries plans major expansion at world's largest oil refinery complex

MUMBAI/NEW DELHI: Reliance Industries operator of the world's largest refining complex, is considering expanding its oil processing capacity by over 40 percent by 2030, according to two sources familiar with the matter.

Reliance may expand the capacity at its dual refinery complex in Jamnagar in the western Indian state of Gujarat by 30 million tonnes a year to 100 million tonnes per year, according to the sources, who saw the expansion plans in a presentation by the company on potential energy scenarios to 2030.

Reliance made the presentation to India's Center for High Technology (CHT), a unit of the Ministry of Petroleum and Natural Gas that evaluates projects and assesses their technological requirements.

The plans signal that Reliance remains bullish on the outlook for India's fuel demand even as the government is considering plans to electrify all of the country's vehicles by 2032. Still, India's demand for diesel and gasoline to power existing and expecting combustion engine vehicles will likely remain strong as its population grows and becomes more wealthy.

"The plan to is to have petrol and diesel output capacity of close to 60 million tonnes by 2030, produced from cheaper heavy grades," said one of the sources.

Reliance did not respond to an emailed request for a comment on the possible expansion.

Reliance operates two refineries at the Jamnagar complex with an installed capacity of 1.2 million barrels per day (bpd), or 60 million tonnes per year.

The plants typically operate above their installed capacity and process 1.4 million bpd of crude, or about 70 million tonnes per year. The refineries are among the most complex in the world and have facilities that can maximize the production of diesel and gasoline from so-called heavy, or higher density, crude oil that typically sells for less than other crude grades.

Raising the refining capacity at the Jamnagar complex to 100 million tonnes per year would equal about 2 million bpd.

The expansion makes sense in light of forecasts for strong fuel demand growth in the country, the world's third-biggest oil consumer. Consultant FGE estimates India's fuel demand to rise to 6.5 million bpd in 2030 from an estimated 4.2 million bpd in 2017.

Although, Reliance has not yet prepared a blueprint for the expansion and details of the costs are yet to be worked out, it would require around $10 billion to complete the plan, said the one source.

In 2014, Reuters reported that Reliance was planning a 400,000 bpd expansion at the Jamnagar site. That plan is yet to be approved by the environment ministry, according to the ministry website.

Cheers

[ashthor]

A question to all the gurus. With the arrival of electric cars and even people are talking of planes.
Almost all the car manufactures are talking about moving over to the batteries.

Where do we see the this industry say 10-15 years from now?

[tandav]

There are oil reserves, and then there are oil eating bacteria.
How does one maintain security of these reserves from biological mischief

pretty sure they haven't though of this

oil eating bacteria are expensive and are used in cleanup of polluted sites. They don't run around randomly attacking and eating up oil.

Oil from the mangalore strategic crude oil storage is used by the owner (ADNOC) for shipment to other customers and refilled constantly by them with India having the first right to buy it all in case of emergency.

They are effectively storing their oil nearer their customers at no cost to India but India has special and legal rights to this oil in case of emergencies.

we have another sites too, apart from Mangalore, they are Visakhapatnam and Padur(near Udupi), all located near refineries.

AFAIK Oil Eating bacteria especially the clean up kind are aerobic and therefore efficient when oxygen/air is available. These reserve caves are unlikely to be oxygen rich and will probably be nitrogen gas sealed . Will update with links when time permits

[Prem]

http://www.livemint.com/Industry/KVPui1 ... -buyi.html
Dharmendra Pradhan tells Opec chief India has other oil buying options

New Delhi: Soon after India started importing crude oil from the US at $2 a barrel cheaper than Dubai crude, oil minister Dharmendra Pradhan told the 14-member cartel of producing nations, the Organization of the Petroleum Exporting Countries (Opec), that New Delhi has other buying options.Pradhan who met Opec secretary general Sanusi Mohammad Barkindo in the capital on Sunday said “responsible pricing” by the producers’ grouping was important for India’s socioeconomic and development, a statement from the oil ministry said. Opec accounts for 86% of crude oil, 75% of gas and 95% of liquefied petroleum gas (LPG) that India imports.The statement said quoting the minister that India is putting a lot of emphasis on diversifying its crude oil supply sources and tapping new supply sources. The Indian side also highlighted the recent arrival of crude oil cargo of 1.6 million barrels from US.“Three Indian public sector refineries have already placed a cumulative order 7.85 million barrel from the US. In addition, a private sector refiner has also placed an order of two million barrels from the US,” said the statement quoting Pradhan.Opec’s Barkindo is in India to attend a conference. Pradhan also said that in today’s oversupplied market, it was important for producers to understand the perspective of consuming countries and the changes that have taken place in these demand centres. India has a refining capacity of 2

[Mort Walker]

Whoever has the best price will get contacts. Be it the ME countries, Russia or the US.

[Prem]

[Austin]

7 Top Oil Stocks With Largest Proven Oil Reserves

[Austin]

http://www.livemint.com/Industry/KVPui1 ... -buyi.html
Dharmendra Pradhan tells Opec chief India has other oil buying options

Some one should ask Mr Dharmendra what did his government do when Energy prices are low and it it still low compared to 2014.

US is net Importer of Energy so cannot be a sustainable source of Energy for India , More Ever the refineries cannot be changed over night to blend other crudes that takes years and money to do.

Energy Prices would eventually rise their high and low cost are cyclic in Nature and we need to look into alternate form of energy something we can reduce Oil/Gas Conventional Energy source by 50 % in next 20-25 years.

[chetak]

http://www.livemint.com/Industry/KVPui1 ... -buyi.html
Dharmendra Pradhan tells Opec chief India has other oil buying options

Some one should ask Mr Dharmendra what did his government do when Energy prices are low and it it still low compared to 2014.

US is net Importer of Energy so cannot be a sustainable source of Energy for India , More Ever the refineries cannot be changed over night to blend other crudes that takes years and money to do.

Energy Prices would eventually rise their high and low cost are cyclic in Nature and we need to look into alternate form of energy something we can reduce Oil/Gas Conventional Energy source by 50 % in next 20-25 years.

this govt should have brought out a white paper on the state of the country, the economy as well as the dismal state of the empty coffers left behind when the previous govt demitted office. This was done purposely to hobble Modi and bleed the new govt from day one.

Also, landmines like the RTE, MNREGA, LAB etc was the poisonous gift of the rabidly anti India NAC, sowed purposely to break the back of the Modi govt with the active connivance of the home grown as well as the offshore break India forces.

The press has only partially been tamed and the BIF is again rearing their ugly heads because they see Modi growing even more in popularity as the elections are fast approaching and that this fact has really panicked them.

Where else would the Govt get its money from?? Petroleum was the only sure source, taxed and evenly applied and affecting everyone across the board.

The problem now is that the BIF has realised that the Modi govt has done wonders based primarily on petroleum taxation and the revenues collected therefrom.

In the second term, they all well know that instead of "blow to Modi", there will be many a fatal "blow from Modi" permanently shutting down their dukhans and obliterating their dubious sources of livelihood.

So now, the loud clamour from presstitutes for lowering taxes by the centre is gathering volume while not a single word is being said about equally rapacious states collecting the very same taxes from the very same source.

[Austin]

The Government has Majority Mandate for 5 years something not seen since 1996 , So there is no point to what Governement has done in the past but focus of when the current one can do ..They already took bad decision on Demonitisation and HSR in my view they also wanted to grab all the EPFO money thankfully saved by Public Resentment and Anger on the Street ..... If you are in India you know prices of food has touched sky high and it affect day to day life. GST is a good decision but this will take time to work.

Hopefully they will learn their lessons and try to reduce price and stop burdening the poor and middle class there is still time ..Now if International Oil Prices Rise due to OPEC Deal or We have a 2008 like Crash due to its cyclic nature [ we are in 9th year post crash ] which we might have it then GOI will have external factors beyond its control to deal with.

[chetak]

The Government has Majority Mandate for 5 years something not seen since 1996 , So there is no point to what Governement has done in the past but focus of when the current one can do ..They already took bad decision on Demonitisation and HSR in my view they also wanted to grab all the EPFO money thankfully saved by Public Resentment and Anger on the Street ..... If you are in India you know prices of food has touched sky high and it affect day to day life. GST is a good decision but this will take time to work.

Hopefully they will learn their lessons and try to reduce price and stop burdening the poor and middle class there is still time ..Now if International Oil Prices Rise due to OPEC Deal or We have a 2008 like Crash due to its cyclic nature [ we are in 9th year post crash ] which we might have it then GOI will have external factors beyond its control to deal with.

HSR??

I agree with demon as done by Modi. It was inevitable and has High denomination notes had reached ridiculous proportions and the body blow was long over due. This huge a cash to GDP ratio should have been controlled by nobel prize likely contender RBI rajan as well as the "world famous economist" MMS. The naxals, congis and people like SP, BSP, and other political big guns benefitted from this very high ratio.

any change, irrespective of what it may be will quickly gather two sides. If prices are increased or decreased, sellers or consumers are bound to be unhappy.

people have already acclimatized to higher petrol prices and they will lump it. No one will reduce prices because they are paying less for petrol. rail, airfares and food prices will not come down. Everyone will justify higher prices by claiming that they lost money about 200 years ago somewhere ittiyadi, and that they have to make up for it.

GST will take time to kick in and begin to payoff. In the meanwhile, some smart guys will find ways to circumvent it and our ever ready aam aadmi will become complicit in the matter because he saves a few bucks.

In India, cheating on taxes is our birthright, no??.

High petrol prices haven't really affected anyone I know. I don't hear cribbing in petrol pumps either or about prices in shops or in malls. Maybe some folks buy less or don't buy at all. my purchasing has not been affected in the least.

People do crib about hotel food prices and how these buggers have started gouging their customers under the guise of GST and that is being corrected. Food price is a very sensitive barometer and directly ties in with the happiness quotient of the aam aadmi. This has to be closely monitored and ruthlessly addressed.

[Austin]

The Man on the street do crib and there is a strong under current which likely the ruling elite wont feel till the time they get it , I remember during NDA-1 they were still winning state but lost the Parliament election of 2004 , It is very difficult to judge the mood on the street unless you meet them daily and experience it. You could be right though Time will Answer.

Coming back to the topic it appears the oil prices will go up further due to Kurdistan Crisis Brent already at 57 + , Also likely OPEC will extend the current cuts to another year to stabilise the price around $50-60 generally works for all

[Peregrine]

Newest outpost for US crude exports: India

NEW YORK/NEW DELHI: India is set to emerge as a key market for American crude exports in coming months, as refineries are ramping up "test" purchases of US grades to diversify their imports.

US exports recently set a weekly record with nearly 2 million barrels of crude a day sent overseas. But shipments to India have been rare, with just a few deliveries since the US lifted its ban on crude exports in late 2015.

Indian refineries are starting to increase purchases as the country seeks to secure more supply from outside the Middle East. Refiners are testing both US sweet and sour crudes in their facilities, a common practice when importing crude from new sources.

"A lot of these (Indian refiners) want to see what it's like if they run it," said one Houston-based oil broker. "They want to get a taste of US crude."

Those refiners are taking advantage of a wide spread between US oil and other global benchmarks, which has created an attractive discount on American crude grades.

Foreign refiners, including those in India, have bid up those physical grades against the US crude benchmark to multi-year highs, traders and brokers said. That includes onshore grades from the Permian Basin in West Texas and the Eagle Ford further east, as well as offshore US Gulf grades including Mars Sour and Southern Green Canyon.

In June, Prime Minister Narendra Modi and US President Donald Trump met and discussed energy exports to India. Since then the Modi administration has been encouraging more crude imports by waiving some shipping requirements.

Indian refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corporation Limited were given a special permission by the shipping ministry to import oil from the United States until March.

"They've been stepping up to be a sizeable importer; they're looking to diversify away from the Middle East," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.

The executive of India's state-owned Hindustan Petroleum Corp Ltd said in August the company was assessing whether US crude could replace Nigerian barrels; it made its first buy of US oil in September.

One supertanker carrying nearly 2 million barrels discharged in India earlier this month, according to Eikon shipping data, while two other vessels carrying a combined 3 million barrels are set to arrive in November.

Prior to this, US crude rarely went to India, with only one month this year - February - showing deliveries, according to US EIA data through July.

In August, IOC bought 950,000 barrels of light sweet Eagle Ford shale oil and 950,000 barrels of heavy sour Mars crude for end-October delivery from trading firm Trafigura. In October the company bought 1 million barrels each of US Southern Green Canyon (SGC) and WTI Midland crude.

In October, India's Reliance Industries Ltd, the world's largest refining complex, purchased 1 million barrels of Midland and a similar-sized cargo of Eagle Ford crude for November delivery.

Cheers

[ashthor]

http://www.moneycontrol.com/news/busine ... 17075.html

We believe that USD 60 a barrel in WTI is just a dream because of two reasons.
U.S. shale will increase supply
Electric vehicles will reduce demand

As the world’s largest auto market, China’s electric-vehicle (EV) policy, which is still being formulated, could supercharge the race for EVs. China is expected to come down heavily on autos that cloud its skies with pollution.

According to the Financial Times, China plans to produce 7 million EVs per year by 2025 and to spend at least USD 60 billion on related subsidies between 2015 and 2020.

India has already taken a lead by having an auto policy that sees all new vehicles on road in 2030 to be electric.

With two of the most populous nations working towards EV push, crude oil is likely to see less demand. A Bloomberg New Energy Finance report predicts EVs will cut crude demand by 8 million barrels a day by 2040. This could send chills down the spines of oil sheikhs.

Then, there are others who think growing interest in alternative energy fuels could drive oil prices to USD 10 a barrel over the next six to eight years.

Saudi Aramco’s IPO seems to have been shelved, but its very thought originated from the Saudi Belief that Crude Oil is on a downhill. Saudis probably wanted to sell Aramco before crude collapsed.

Reliance Industries has also sold off its overseas oil assets. They will probably now work on the battery energy and its solutions.

[Prem]

Saudi asking China to become major stakeholder in ARAMCO. Does this mean some truth in coming collapse of Crude demand?.

[Austin]

Russia’s Gazprom To Help Build Iran-India Gas Pipeline

https://oilprice.com/Latest-Energy-News ... eline.html

[Rishirishi]

Russia’s Gazprom To Help Build Iran-India Gas Pipeline

https://oilprice.com/Latest-Energy-News ... eline.html

With all that cheap solar and wind power, does India really need this energy source ?

[Austin]

BP Chief Says Shale Will Have Limited Effect On Global Oil Market

[chetak]

Russia’s Gazprom To Help Build Iran-India Gas Pipeline

https://oilprice.com/Latest-Energy-News ... eline.html

we should get out of this trap.

This will be an albatross around our necks besides serving paki interests if it passes through their damned territories.

[chetak]

Saudi asking China to become major stakeholder in ARAMCO. Does this mean some truth in coming collapse of Crude demand?.

An unsubdued and an uncontrollable India will become a real nightmare for the hans.

The CPEC security and infrastructure will become very high priority once again, undoubtedly benefiting and also strengthening the slippery paki hands.

If the hans take equity in ARAMCO, it will hurt amreki and western interests and that will have it's own fallout in the region.

A new chapter of the old time great game will be opened.

Interesting times ahead, if it actually happens.