volume 22 issue 9 - august 10th 2015
DESCRIPTION
Volume 22 Issue 9 - August 10th 2015TRANSCRIPT
In this issuePolicy
• Opportunity For PLL To Regain 5% Stake In RasGas’ LNG Project 2• Does India Fit Into Iran’s Scheme Of Things? 3-4• Kelkar Committee Report Cold Storaged? 4-5• GSPC Punching Above Its Weight, But Failing To Land Its Punches 5-6• Net Impact Of More Fuel Outlets Remains To Be Seen 7-8
Regulation• India’s Perceived High Risk Geology Calls For A New Strategy 9-10• New Wild Cat Wells, Seismic Activity Register A Sharp Decline 10-11• Cairn India’s Merger With Vedanta Faces Many Hurdles? 11-12• Regulator PNGRB Advised To Read & Re-read The Act 12-13
Petro Intelligence: Scrap The Contract: Will Prabhat Singh Bite The Bullet? 14-15
Foreign Investments• FDI In Petroleum And Gas Sector Soars In 2014-15 16• Talks On PIC Investment In OPaL Inconclusive 16-17
Overseas Investment• Sanctions Free Iran Presents Opportunities 18
New Projects• Punj Lloyd Bags Rs 4.77 Billion Tankage Order 19• Tapi Pipeline Project To Be Launched In December 19-20• BPCL Aims At 50 Million Ton Capacity 20-21
Corporate Profile : GP Petroleums Ltd. 22-23
Companies• Good Days For Indraprastha Gas 24• PLL’s Revenues Decline As Spot Gas Prices Collapse 24-25
Alternative Energy: India Considering 100% Bio-diesel Vehicles 26
Markets• Oil Imports From Saudi Dip 27• Growing Market for PNG 27-28
Personalities 29-30
Tender Opportunities 31-32
Data Section 33-41
India Biz Database holds the exclusive Copyright for the information and data published in Indian Oil & Gas. Reproduction in any form, by way of trade orotherwise of the information and data, whether in whole or parts, is strictly prohibited.
Copyright by
India Biz Database® 95 Samachar Apartments, Mayur Vihar, Phase -1, New Delhi - 110091, India.
Subscription : 9871232019. Editiorial : 98401138973e-mail : [email protected]
ISSN: 0971-6068
Indian Oil & GasVOLUME 22 NUMBER 9 10TH AUGUST 2015
www.indianoilandgas.com
Indian Oil & Gaswww.indianoilandgas.com
incorporated into the contract only after the Indian negotiating team bargained for it.The purpose was to have a say on the board of RasGas and use its presence to influencethe deliberations in favour of the country. PLL was not seeking an exclusive privilegebut only parity with Korean and Chinese companies which were already providedequity stakes in the upstream venture in Qatar.
Policy 2
P. DasguptaMathur’s successor
Loved RasGasimmensely
Suresh MathurPLL’s founderMD & CEO
Tall and handsome
RasGas of Qatar which signed a confirmed contract with Petronet LNGLtd (PLL) in 1999 for supply of 7.5 million ton per annum of LNG hasviolated many vital provisions of the contract. It had committed toaccommodate PLL on the board of its upstream LNG project with a 5per cent stake given at face value price.
Soon after signing the contract, RasGas did set in motion the process ofviolating certain provisions and succeeded in its efforts with theconnivance of the PLL leadership. The equity stake commitment was
Opportunity For PLL To Regain5% Stake In RasGas’ LNG Project
Neither PLL board which has representatives from the promoter PSUsnor the PLL management headed by secretary in the Ministry ofPetroleum and Natural Gas seems to have raised the issue even once.
After successfully ducking the contract provision, RasGas through itsholding company Qatar Petroleum made an attempt to enter PLL boardby acquiring the 5 per cent stake held by Asian Development Bank(ADB).It is still a mystery why ADB was given this stake in PLL at facevalue of Rs 10 per share. This could have been given to any Indian
company. ADB is now keen to divest its stake. PLL share is now quoting around Rs 190,a neat profit of Rs 180 per share for doing nothing.
Qatar Petroleum’s proposal for acquiring ADB stake was supported by PLL managementand even the Ministry of Petroleum and Natural Gas. It had the total backing of a seniorgovernment of India official who enjoyed the rank of a minister of state under the UPAgovernment. He is acknowledged to be the New Delhi ambassador of the LNG lobby.This move, however, was stalled by GAIL chairman B.C. Tripathi who with the supportof the independent members of the board staked claim for the ADB stake in PLL. GAILis one of the four public sector promoters of PLL.
Indian Oil & Gaswww.indianoilandgas.com
3Policy
space it has lost to Saudi Arabia and others with regard to its crude oil marketingcontracts, especially with countries such as India and China.
But more importantly, there are also possibilities that Iran would open up its oil and gassector to foreign players, at least to an extent; and the new fiscal regime may allow forProduction Sharing Contracts (PSCs), something that the industry prefers.
This opening up, if it does happen, will likely attract considerable interest. This isbecause most of the resources in the middle-east are controlled by the National OilCompanies (NOCs) of these petroleum rich states such as Saudi Aramco, KuwaitPetroleum (KPC) etc and foreign companies are allowed into only a few countries-suchas Iraq for example, post the Saddam era.
However, even in Iraq, the international oil companies are only provided service contracts,which stipulate a per barrel fee to be paid to the International Oil Companies (IOCs),which is not all that lucrative to the firms. Should PSCs be allowed by the IranianGovernment, some of the major oil companies including BP, Total etc would likelycertainly be most interested, not to mention the big Chinese firms such as CNPC,Sinopec etc which have already made their presence felt in Iraq.
The question, therefore, is really whether India fits into Iran’s scheme of things, giventhe plethora of foreign oil and gas companies that may well be interested in Iran’s vasthydrocarbon potential-the country has the largest natural gas field in the world forexample at South Pars.
An indicator of this would be how Iran looks at India’s wish to revive the Farsi project,
Indian Petroleum and Natural Gas Minister, Dharmendra Pradhan issoon scheduled to visit Iran. This comes post the landmark nucleardeal between Iran and the six major world powers led by the UnitedStates which allows for the US and European Union (EU) sanctions tobe lifted on the Islamic country.
India’s attempt to press the forward button with regard to its engagementwith the energy rich Middle-eastern nation is probably prudent, giventhat the expectations are that Iran would look to quickly regain the
Hassan RouhaniIran president
Assessing the situation
Does India Fit IntoIran’s Scheme Of Things?
Indian Oil & Gaswww.indianoilandgas.com
4Policy
where the Indian consortium comprising ONGC Videsh Ltd (OVL), Indian Oil Corp(IOC) and Oil India Ltd (OIL) have made a large discovery-the Farzad-B natural gasfield, said to hold over 22 trillion cubic feet (tcf) of natural gas. However the consortiumwas unable to develop this field given the sanctions; leading to the Iranian side reportedlytaking the field back.
The sanctions had also led to the Iranian side backtracking on its commitment towardsLNG export to India. These two projects could well serve as the yardstick by which tojudge which way the Iranian side is thinking. Should India fail to operationalize boththese projects, it could well mean the Iranians are looking elsewhere.
Kelkar Committee ReportCold Storaged?
Dr. Vijay LKelkar
It is increasingly clear that the Modi government is not enamoured ofthe many “experts”- mainly government officials looking to enjoy postretirement government privileges - who called the shots in the UPAregime by virtue of heading committees which the UPA governmentused to set up at the drop of a hat. Many such reports submitted byexperts who headed committees set up by the previous governmentappear to have been cold storaged by the Modi government.
Now Dr Vijay Kelkar is not the usual expert. First, he is an economist and not ageneralist drawn from the “all knowing” IAS. Second, he is not known to be close tocertain industrial houses. Third, he has considerable domain knowledge having headedthe Bureau of Industrial Costs and Prices and having been Secretary of Petroleum duringthe heady days when the Ministry was headed by Satish Sharma, the go to man in theGandhi family. Fourth, Kelkar understands all about Finance having been FinanceSecretary and having chaired the Thirteenth Finance Commission.
Hence Dr Kelkar was certainly a good choice to head the Committee on Roadmap forEnhancing Domestic Oil & Gas Production and Sustainable Reduction in ImportDependency by 2030.
The committee submitted a 111 page report to the government. Among the majorrecommendations made by the Kelkar committee were: implementing market-linkedpricing of natural gas after March 2017; contract extension up to the economic life of
Indian Oil & Gaswww.indianoilandgas.com
5Policy
the blocks; revamping bidding parameters under the New Exploration Licensing Policy ;Continuing with the production sharing contract regime as opposed to the Rangarajan-proposed revenue sharing contract model; allowing the private sector to develop shalereserves in nominated blocks; creating an empowered Cabinet Committee on Energy(CCE) for policy formulation and integration of energy related issues; and making DGHan independent regulator for the upstream oil and gas sector
The initial report was submitted in January 2014, when the UPA government was still inpower and the final report was submitted in Sept 2014 to the new Modi government.Now nearly a year later, there is little evidence that the Ministry of Petroleum intends toimplement its recommendations. All that the Ministry has said in its usual bureaucraticstyle is that “report of the Committee is under consideration of the Government of India.After completing the examination of the Report, a view would be taken on therecommendations of the Committee expeditiously”.
Rather it appears that at least one of the main recommendations of the Kelkar report - toContinue with the production sharing contract regime as opposed to the Rangarajan-proposed revenue sharing contract model- is likely to be junked.
The ministry is proposing to introduce a revenue-sharing contract model to replace theexisting cost-recovery system, currently in place under production-sharing contracts(PSCs). The new revenue-sharing mechanism awards blocks to bidders based on howmuch oil and gas they agree to share with the government. The PSC model allowedupstream firms to recover all their costs before sharing profits with the government.
GSPC Punching Above Its Weight,But Failing To Land Its Punches
There has been many a twist and turn for Narendra Modi’s pet firm, Gujarat StatePetroleum Corp (GSPC), which is an entity promoted by the Gujarat State Government.The firm was once called ‘puny’ by a reporter many years ago, and has for long punchedabove its weight, perhaps in the line with the ambitions of the state Government.
However, it has found the going tough and has failed to land some of its punches. Afterbidding for and winning the right to construct major cross-country pipelines, it hasfailed to get much going on the ground, probably primarily given the paucity of thesource for the natural gas to transport. One may well ask why this issue was not given
Indian Oil & Gaswww.indianoilandgas.com
6Policy
enough thought by the firm before placing its bids, but then the same issue is impactingthe largest gas tranporter, flagship PSU GAIL (India) Ltd as well.
The firm has also for long been thinking about an Initial Public Offer (IPO) for raisingfunds, again something that has not seen the light of day. But perhaps the one projectthat has received the most attention is the company’s so-called landmark find in the KGBasin which the Prime Minister (who was then the Gujarat Chief Minister) had tom-tommed as India’s largest ever natural gas find with reserves around 20 tcf.
Much water has flowed down the proverbial Ganga since then, and the DirectorateGeneral of Hydrocarbons (DGH) finally certified a reserve estimate of about a tenth ofthe 20 tcf. But that doesn’t seem to be the end to the controversies, with the firm nowstruggling to meet even the revised gas production estimates. Recent reports indicatethat nearly a year after beginning trial gas production, which itself started much laterthan what was once envisaged, and investing ~USD 3.4 billion, GSPC is yet to startcommercial production from its Deen Dayal discovery.
As per the approved Field Development Plan (FDP), the natural gas production wasreportedly to reach ~3.8 mmscmd in the second year and achieve peak output of ~5.25mmscmd in the third, while current production has been only around 0.6 mmscmd.
One can certainly sympathise with the firm, given its larger peers PSU ONGC andprivate sector Reliance Industries Ltd (RIL) have found the going equally tough andRIL’s travails in the KG Basin are well known. There is little doubt that the field couldwell be one of the toughest ones in the country, being a deepwater one with HighPressure-High Temperature (HPHT) conditions; but again these were also known whenthe FDP was submitted and the company had RIL’s precedent on which to base itsestimates.
The question now is whether the Government will initiate any action against the statePSU for failing to meet its FDP estimates, akin to what it has done with RIL. Perhaps itis too early, but will this happen in future. There has been even some whispers that theGovernment may ask ONGC to take over the field.
That will be an admission that GSPC lacks the technical capability to develop such afield; and ONGC may itself be none too keen given that it needs to make largeinvestments of its own for its own discoveries in the same geography. So such adevelopment may or may not take place, but questions need to be asked of GSPC,especially how the firm plans to remedy the situation.
Indian Oil & Gaswww.indianoilandgas.com
7Policy
Net Impact Of More Fuel OutletsRemains To Be Seen
One of the few parts of the oil and gas sector that seems to be seeing some interest froma variety of players is the downstream fuel retail sector. This comes post the Governmentfinally managing to deregulate the two main transport fuels-petrol and diesel; andperhaps more importantly, crude oil prices remaining relatively subdued for the past fewmonths, which in turn, has allowed for the Government to maintain the ‘deregulation’ inpractice (had the crude oil prices risen to their previously elevated levels, it could wellhave been a different story, especially given the important state elections in UttarPradesh and Bihar, which are not only politically important for the ruling dispensation,but also areas where the electorate is perceived to be more sensitive to price increases).
In any case, the current scenario has attracted the interest of a number of players in boththe public and private sector. Essar Oil has perhaps been the most optimistic of theprivate sector firms so far; after earlier establishing around 1400 fuel outlets, it isreportedly looking to expand its numbers to almost 5,000; making it the largest privatefuel retailer in the country.
Meanwhile Reliance Industries Ltd (RIL), which had also established over 1200 fueloutlets, is a bit more circumspect (which it indeed has been for all its projects in the oiland gas sector these days), but will also likely look to re-enter the business should thederegulation last.
Mangalore Refineries and Petrochemicals (MRPL) is also looking at more outlets, as isglobal major Shell, which is one of the few foreign companies eligible to establish retailinfrastructure in the country given its investment in the Hazira LNG terminal. Shellalready has 70 retail outlets.
All this has perhaps prompted the PSU Oil Marketing Companies (OMCs) to also lookat further expansion. Reports indicate that between them, the three OMCs Indian OilCorp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd(HPCL) are considering over 30,000 -35,000 fuel stations in additional to the almost50,000 that they current have.
This calls into question the strategy of these players. The PSU OMCs are clearly lookingto retain their advantage and capture key locations along highways and in cities so as to
Indian Oil & Gaswww.indianoilandgas.com
8
retain their market shares. There is also a recent proposal to allow anyone to establishdealerships provided the interested parties are willing to make the required investments.
This could lead to the situation where the dealers struggle as the average sales per outletdecreases. This may result in the dealers clamouring for additional commissions to bepaid per litre of fuel dispensed, as indeed they have been doing periodically for a varietyof reasons.
Hence it remains to be seen whether the overall impact on the consumer will be positivedue to the increased fuel pump availability and more competition (leading to possiblybetter services and quality of fuel dispensed) or negative (due to increased dealerdemands for commissions owing to the need to stay afloat).
Policy
Regulation 9
India’s Perceived High Risk Geology
Calls For A New Strategy
The US-based, IHS Energy which was commissioned by PetroFed to recommend measures to
stimulate domestic oil and gas production has called for clarity and alignment of policy intent
based on India’s perceived high risk geology.
According to it, as India looks to boost exploration and production activity, the next wave of
volume growth may not come from traditional sources such as conventional shallow-water
and onshore conventional, that come at a lower cost and have a low breakeven range. The
next sources of volume growth in India are expected to come from play types such as
Deepwater, Ultra Deepwater, High-Pressure High-Temperature, EOR, Tight formation and
unconventional etc. These play types invariably come at a higher cost base and longer delivery
times to production.
Another aspect that is equally important is that India’s current inventory of reserves is limited
and majority of reserves of oil are currently in production and would be classified as mature
production. However, there are considerable undeveloped gas reserves in difficult areas with
potential to at least double gas production and considerably reduce import dependence. Besides
these gas resources, the next wave of volume growth will also need to come from exploration
and given that 80 per cent of the remaining sedimentary basins are still largely underexplored /
unexplored, and are considered high-risk from a geology perspective, much work needs doing
so as to attract investor risk capital.
Hence, it is critical, says IHS, that India’s policies evolve with clarity and alignment in regards to
the varying play types that will form a growing part of India’s production, as well as the high
risk geology from an exploration perspective. IHS has proposed the following initiatives:
Road map and timeline for de-regulation of gas price –given India’s increasing complex
play types, maturing production and frontier nature of unexplored acreage - underexplored,
high-risk and potentially low chance of success:
• Recognise price anomaly between crude oil and gas price, as well as the much higher
development and production costs for gas, in particular the transportation aspect
• Most resources in deep water, ultra deep water, HPHT and difficult frontier area development
(like unconventionals) are highly capital intensive – both for existing/ new discoveries.
Existing discoveries have potential to double India’s production.
Indian Oil & Gas
www.indianoilandgas.com
Indian Oil & Gaswww.indianoilandgas.com
10Regulation
• Road map and timeline for de-regulation of gas price on the basis of diesel price reform
success in India.
• India is unique where gas pricing formula is derived from hubs that do not reflect India’s net
importer status and its domestic E&P environment
• Case studies: Regional countries that are net importers such as China, Thailand and Indonesia
are persistently moving towards market pricing (refer supporting evidence slides)
o Indonesia is a prime example where upwards gas price movement is resulting in a
greater number of stalled/stranded gas projects moving into development
o Domestic gas production growth in Indonesia in turn provides
To support these recommendations, IHS points out that the net importers such as China,
Indonesia and Thailand are persistently moving towards market pricing. Recent projects in
Thailand and Indonesia have agreed prices in excess of 10 USD$/MMBtu. From a regional
perspective, India’s current domestic gas price is the lowest between regional peers even if the
graph is extended to 2015 – put simply, risk capital will not enter India where competing
countries have more attractive geology and pricing environment
Conduct Periodic Brainstorming Stakeholder Alignment Workshops to align all key stakeholders
(DGH, MOPNG, Industry) towards key objectives of being “production maximization” for a
large net importer like India.
New Wild Cat Wells, Seismic Activity
Register A Sharp Decline
Private E&P players in India’s hydrocarbon exploration have drilled less number of wild cat
wells in recent years compared to their performance ten years ago. They drilled an average of
only 47 new field wild cat wells per year in the last five years compared to an average of 84 per
year for the preceding 10 years.
Long term exploration technical success continues to be 3 in 10. Technical success is defined as
wells that have had oil and gas shows during drilling but assess field commerciality. Commercial
chances of success which relates to making discoveries that are commercial and will move into
production still stands at less than 1 in 10.
Seismic activity across the board is on a steep downward trend since the peak in 2008-09.
Seismic activity has a direct correlation to exploration.
Indian Oil & Gaswww.indianoilandgas.com
11Regulation
Cairn India’s Merger With Vedanta
Faces Many Hurdles?
Global metal giant Vedanta Resources is confident of closing the merger deal of Mumbai based
Vedanta with Cairn India Ltd, a cash-rich petroleum producing company owned by Vedanta
Ltd by March 2016.
Anil Agarwal, chairman of the Vedanta Resources, who is pushing hard for the merger with the
Ministries of Petroleum, Finance and Industry, believes that “This merger will further consolidate
our position as India’s natural resources champion, with a diversified portfolio of assets which
will deliver strong cash flows and reduce earnings volatility. We are confident that it will create
significant value for both sets of shareholders, as well as for Vedanta Resources.
After the merger, Vedanta is expected to emerge as India's first and largest diversified natural
resources company and will maximise returns to the shareholders of both the companies,
according to Vedanta CEO Tom Albanese.
However, the proposed merger has been facing hurdles on several fronts:
Opposition from Indian institutional investors. First, the merger requires the approval of
the minority shareholder s and institutional investors. Institutional investors such as the Life
Insurance Corporation of India reckon that the deal is against the interest of minority
shareholders like itself, and have not supported it yet.
United India Insurance Company Ltd (UIICL), one of the shareholders in Cairn India, has
India New Field Wildcat Exploration Drilling – Private Companies
Indian Oil & Gaswww.indianoilandgas.com
12Regulation
stated that it has not taken any stand on the merger issue of Vedanta and Cairn India Ltd."...the
decision (on merger Cairn India Ltd with Vedanta) would be taken by the company, at an
appropriate time," UIICL said in a statement.
Opposition from Cairn energy UK. Cairn Energy is Cairn India’s largest minority shareholder,
with a 10 per cent stake and Indian law requires that a majority of minority shareholders also
approve the deal. According to reports, Cairn Energy is set to vote against the merger of
Vedanta Ltd with its former subsidiary Cairn India. Cairn Energy would prefer to hold an
investment in an energy company and it also differs on valuations.
Obtaining FIPB approval. According to the proposal, Cairn India minority shareholders,
including Cairn UK Holdings, are to get preference shares, and therefore, the merger proposal
may require FIPB approval. The shareholding pattern of Vedanta Ltd could become a stumbling
block to obtaining the approval of FIPB. In Cairn India, the promoter Vedanta Group holds
59.88 per cent and minority shareholder Cairn UK Holdings has 9.82 per cent stake with
Foreign Institutional Investors controlling 14.26 per cent.
Even though 100 per cent foreign direct investment is allowed in both mining and petroleum
sectors, the FIPB may question the promoters’ investments via foreign entities. like Twin Star
Holdings.
Regulator PNGRB Advised To Read
& Re-read The Act
A recent tongue-in-cheek remark by one of this magazine's avid, though at times cynical friend,
set us thinking. "Do you know why the PNGRB did not seek a larger bench review of the
Supreme Court decision in the IGL case", he said: "because this time the Supreme Court may
have struck down all the other regulations also!
A snide remark but it set us thinking. In our earlier issues we had talked about the City Gas
Distributiion sector, more specifically the Supreme Court judgement in the PNGRB vs IGL
case.
In 2012, PNGRB had issued an order to IGL for reducing its 'network tariff' and 'compression
charges', implement the revised charges immediately and work out how it would return the price
differential to the customers. IGL had challenged this order on the ground that the Act did not
empower the Regulator to fix the network tariff. The High court had given its judgement in
favour of IGL and struck down the order.
Indian Oil & Gaswww.indianoilandgas.com
13Regulation
The Regulator contested the order in the Supreme Court and we had reported that the highest
court had upheld the High Court order. But our friend's remark made us revisit the Supreme
Court order. And we understood what he was saying. Apparently, there is much more to it than
just upholding the High Court order!
To understand this, it may be worthwhile reading the last part of the Supreme Court order.
".........The power to fix the tariff has not been given to the Board. In view of that the Board
cannot frame a Regulation which will cover the area pertaining to determination of network
tariff for city or local gas distribution network and compression charges for CNG. As the entire
regulation centres around the said subject, the said Regulation deserves to be declared ultra
vires, and we do so."
Apparently, while the High Court merely set aside the PNGRB order on IGL, the Supreme
Court quashed the Regulation itself under which the order was issued. We now understood
clearly what our friend meant when he said what he did. Since we are not legal experts, it would
not be correct on our part to comment on the judgement. But from a reading and re-reading of
the judgement the substance seems to be that the PNGRB has misinterpreted the Act while
assuming that it had the powers to issue the Regulation that it did.
This raises two very core issues!
Could there be other Regulations of the Board which are similarly flawed but not known as
such since they have not been contested!? And can network tariff still be a valid bidding criteria
if the Board which oversees the bidding has neither the power to fix it or regulate it!
These are issues which need the consideration of both the Board and the industry. The Board
could take this as a healthy feedback and review other Regulations, maybe in consultation with
the industry and prevent possible litigation in future. At the same time, the industry also
perhaps needs to be more serious in examining the notifications when they are issued for
consultations before the Regulations are issued. The City gas sector has both large and small
companies but not everyone may have the wherewithal, capacity, or even the will to sustain
litigation of this sort.
A new Chairman of the Board is to be appointed shortly and maybe if he or she brings in some
fresh thinking, it may extend to this issue also.
Petronet LNG Ltd (PLL) has a new boss. And for the first time since its inception, it has
a Gas Man who will call the shots as its chief executive. That in itself ought to change the
working culture at PLL which has been trying to emerge from the terrible crisis in which
it has wallowed for 15 years ago.
Petro Intelligence
by R. Sasankan
Scrap The Contract:Will Prabhat Singh Bite The Bullet?
Prabhat Singh, who has succeeded A.K. Balyan as PLL’s M.D and
CEO, has an unenviable task ahead of him because he finds himself
trapped between the devil and the deep blue sea.
PLL’s problems are well known. It has been saddled with a disgraceful
deal that requires it to buy costly LNG from RasGas of Qatar. At the
same time, it is under pressure from its marketers such as GAIL, IOC
and BPCL to bring down the price of regasified LNG to the prevailing
How will Prabhat Singh resolve the crisis? The entire gas business is
based on a back-to-back agreement. PLL signed a take-or-pay agreement
with RasGas of Qatar for 7.5 million tons of LNG per annum. The
state-owned companies such as GAIL, IOC and BPCL who market the
regasified LNG have signed a take-or-pay agreement with Petronet
LNG and they, in turn, supply gas to the consumers on the basis of a
similar take-or-pay agreement.
Initially, GAIL tried to frighten the consumers by saying that it would
Indian Oil & Gas
www.indianoilandgas.com
market rate. PLL- supplied gas costs $ 12-13/mmbtu to the consumer against $ 7-8/
mmbtu in the market.
Several consumers have refused to lift the costly gas and their number is bound to
increase in the coming days. GAIL, which markets 60 per cent of regasified LNG, has
decided to reduce the off-take at least by 30 per cent. Others such as IOC and BPCL are
also facing consumer resistance.
Prabhat SinghExcruciating dilemma
Hamad MubarakAl Muhannadi
CEO, RasGas
Indian market iscrucial
invoke the take-or-pay clause but eventually realised the futility of its strategy with LNG
price internationally plummeting to $7-8/mmbtu. International crude price continues to
slide, which implies a corresponding dip in the price of LNG. How long can RasGas hold
Indian Oil & Gaswww.indianoilandgas.com
15Petro Intelligence
R.P. SharmaGas pricing expert
They invariably hire international consultants some of whom often take them for a ride.
This is precisely what happened when the PLL leadership decided 15 years ago to opt for
the present disastrous pricing formula. It sought the opinion of a London-based petroleum
consultant about the likely price of crude in 2015. The consultant’s prediction was $ 15
per barrel.
Almost all LNG projects in the world have oil majors as their minority or majority
partners and they deal with these consultants quite often and cannot be expected to give
opinions that will affect their business adversely. Even if Prabhat Singh decides to hire
an international consultant, he should have an Indian team of experts, mostly from
GAIL, serving and retired, to ensure that PLL is not trapped again.
RasGas will not give in easily. So, how should PLL deal with the situation? We spoke
with a cross-section of experts. According to them, PLL has only two sensible options
before it. The best option is to establish that there was something malafide in the deal
and cancel the contract. It can stop accepting deliveries even as it investigates the
situation. The Government will have to formally tell RasGas that they suspect bad faith.
In the meantime, they can start buying gas in the spot market to feed domestic
consumers. A good law firm should be able to draft a formal notice to RasGas on these
lines.
The second but less desirable option, which we had advocated earlier, would be to
liquidate PLL or have a significant change of ownership. The first option has been
actually used in international contracts to start renegotiation.
Prabhat Singh has some tough choices to make – and he cannot afford to fail.
the Indian consumers to ransom by refusing to lower its price? Its price
is based on the moving average of the crude price of the past five years
which rules out any relief for the Indian consumer in the foreseeable
future.
Indian energy planners simply do not have the guts and gumption to
negotiate deals with foreign suppliers –and are usually bullied into
accepting terms whose deep implications they cannot comprehend.
Foreign Investments
FDI In Petroleum And Gas Sector
Soars In 2014-15
Over the last three financial years, Foreign Direct Investment (FDI) in petroleum and
natural gas sector has been more than Rs 83.75 billion.
Foreign Direct Investment (FDI) touched Rs 64.73 billion in 2014-15. This is nearly ten
times the FDI of Rs 6.78 billion in the preceding year of 2013-14.
The sector saw Rs 11.92 billion FDI in 2012-13.
In the first three months of current fiscal (2015-16), the sector has received FDI worth
Rs 313.5 million.
In the petroleum and natural gas sector, 100 per cent FDI is allowed in exploration and
production, refining by the private companies and marketing of petroleum products,
among other areas.
The Plan Capital Investment in the sector has reached Rs 2592.78 billion during the
period from 2012-13 till the end of June 2015.
FDI in petrleum and Natural Gas
16
Indian Oil & Gaswww.indianoilandgas.com
Talks On PIC Investment
In OPaL Inconclusive
Oil and Natural Gas Corporation has clarified that the talks to sell stake in long-
delayed mega petrochemical plant Petro –additions Ltd (OpaL) at Dahej in the state of
Gujarat to Kuwait's Petrochemical Industries Company (PIC) remain inconclusive.
YEAR FDI
2012-13 Rs 11.92 billion
2013-14 Rs 6.78 billion
2014-15 Rs 64. 73 billion
2015-16 (3 months only) Rs 313.5 million
Indian Oil & Gaswww.indianoilandgas.com
17
PIC, a subsidiary of state-run Kuwait Petroleum Corp (KPC), was in talks to buy at
least 26 per cent stake in ONGC Petro-additions Ltd, the firm that is building the Rs
271 billion project.
"Discussion had been held with PIC, Kuwait for equity participation in OPaL project up
to Apil 2015. However, no recent developments on this front have taken place for the
last two months and the discussion remain inconclusive as of date," ONGC said in a
regulatory filing.
ONGC had in 2006 set up ONGC Petro-additions Ltd (OPaL) for building a mega
petrochemical complex at Dahej in Gujarat. The plant was originally planned to come
on stream by end 2012 but delays have led to two revisions in completion dates.
Officials said the plant was mechanically completed by April 2015 and one of the units
commissioned in June. Other units will be sequentially commissioned and the entire
plant would start operations by fourth quarter of 2015 calendar year.
The 1.1 million tonnes plant was in 2006 estimated to cost Rs 124 billion.
ONGC was originally envisaged to hold 26 per cent in OPaL with state gas utility GAIL
India Ltd picking up 19 per cent and Gujarat State Petroleum Corp Ltd (GSPC) taking
5 per cent. The remaining 50 per cent was to either be given to a strategic investor or
offered in an initial public offering.
But after the cost and time overrun, both GAIL and GSPC have decided to restrict their
equity participation to the sum already paid. GAIL had paid Rs 9.95 billion for the 19
per cent stake when total promoters' equity was pegged at Rs 58.65 billion. Similarly,
GSPC had contributed Rs 290 million.
Foreign Investments
Overseas Investment
Sanctions Free Iran
Presents Opportunities
The lifting of sanctions against Iran presents a new opportunity for Indian Oil companies
- Indian refiners MRPL, Essar Oil and IOC are major buyers of crude- to invest in Iran.
Among the ripe opportunities are the development of the Farzad-B field, revival of the
Iran-Pakistan-India gas pipeline and the modernisation of the oil and gas infrastructure in
the Islamic nation.
Iran in 2013 proposed a production sharing contract for Farzad B but ONGC Videsh Ltd
has shied away from investing nearly $7 billion because of the sanctions. Subsequently
Tehran has decided to auction the field.
Now is the time for the Indian government to make a renewed bid for development rights
for the field.
A beginning has been made with the visit of the delegation comprised Rajiv Mehrishi,
secretary in the department of economic affairs, and Ashutosh Jindal, joint-secretary in the
petroleum ministry, and officials from ONGC Videsh.
18
Indian Oil & Gaswww.indianoilandgas.com
New Projects
Punj Lloyd Bags Rs 4.77 BillionTankage Order
Engineering and construction giant Punj Lloyd has bagged Rs 4.77 billion ($75 million)new tankage order from Japan-based Mitsubishi Heavy Industries, taking its orderbacklog to Rs 221.71 billion.
The scope of work entails confirmatory geotechnical investigation, early earth works,construction of two...LNG tanks on elevated piled foundation of LNG import, storage andre-gasification terminal project of Indian Oil Corporation at Ennore Port in Tamil Nadu.
Once completed, the LNG imported to the Ennore Terminal will be used by utilitycompany power generation plants as an alternative fuel and as feedstock by fertiliserplants.
To be completed in 33 months, the project timelines are extremely challenging, thecompany said. The company has constructed the LPG Import-Export terminal at Ennorefor its client, IndianOil-Petronas.
Tapi Pipeline Project To BeLaunched In December
The proposed $ 7.6 billion Turkmenistan-Afghanistan-Pakistan-India Natural Gas Pipeline(TAPI) Project aims to export up to 33 billion cubic meters (bcm) of natural gas per yearthrough a proposed approximately 1,800-kilometer (km) pipeline from Turkmenistan toAfghanistan, Pakistan and India. is set to begin construction in December
Deputy Prime Minister for Oil and Gas of Turkmenistan informed the prime minister ofPakistan that ground-breaking ceremony of TAPI gas pipeline project would be held inDecember this year.
Oil Minister Dharmendra Pradhan is leading a high-level delegation to Ashgabat,Turkmenistan, to attend the 22nd Steering Committee meet on the TAPI gas pipelineproject.
TAPI will carry gas from Turkmenistan's Galkynysh field, better known by its previousname South Yoiotan Osman that holds gas reserves of 16 trillion cubic feet.
19
Indian Oil & Gaswww.indianoilandgas.com
Indian Oil & Gaswww.indianoilandgas.com
20New Projects
From the field, the pipeline will run to Herat and Kandahar province of Afghanistan,before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending atFazilka (Punjab) in India.
The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day(mmscmd) gas for a 30-year period and will be operational in 2018. India and Pakistanwould get 38 mmscmd each, while the remaining 14 mmscmd will be supplied toAfghanistan.
France’s Total was working to take the lead on TAPI, but Russia is also said to haveexpressed interest.
BPCL Aims At 50 Million Ton Capacity
The Mumbai-based, Bharat Petroleum Corporation Ltd (BPCL), is the second largestrefining and marketing company in the public sector with a refining capacity of 31million ton. The company’s management has decided to raise it to around 50 milliontons by 2020-21.
The expansion in the next four years will cover its units at Kochi, Bina and Mumbai.The capacity increase at its fourth unit at Numaligarh, Assam, will depend on the Centregiving fiscal sops for the north-east in the near future. Expansion of units at Kochi, Binaand Mumbai will add 15 million tons.
The Kochi refinery currently processes 9.5 mt of crude oil. The integrated refineryexpansion project, which is slated for completion next year, aims to increase that limitby over 60 per cent to 15.5 mtpa. The new and improved unit is being built to producebetter-quality auto fuels from even lower-grade crudes. As for the six-million ton Binarefinery, a joint venture with Oman Oil company, its capacity will be expanded in twophases; to 7.8 mt by 2018 and 15 mt by 2020-21.
This will involve an estimated outlay of between ?210-230 billion. Oman Oil, a partnerin Bina refinery, will not invest in the expansion.
The Numaligarh refinery is facing problems of declining trend in domestic crude oilsupplies from north-eastern oil fields and a withdrawal of six per cent discount on railfreight from the region’s refineries.
For BPCL in Numaligarh, expanding capacity to 9 million ton will allow it to import
Indian Oil & Gaswww.indianoilandgas.com
21
large quantities of crude, which will be more cost-efficient than importing smaller lotsto tide over the current shortfall in crude supply.
Part of the project’s plan is also to build a pipeline carrying petrol and diesel to Biharand eastern Uttar Pradesh. A more ambitious route would be supplying products toBangladesh and Myanmar but this will need a clearer political roadmap, the officialadded.
BPCL’s flagship and oldest refinery in Mumbai can refine 12 mt but consistently runs atover 100 per cent capacity. The company believes that de-bottlenecking and increasingdistillation can ramp up production to nearer 15 million ton.
New Projects
Corporate Profile 22
Indian Oil & Gas
www.indianoilandgas.com
GP Petroleums Ltd.
GP Petroleums Ltd. previously known as Sah Petroleums Limited, specializes in designing,
manufacturing and marketing, industrial and automotive lubricants, process oils, transformer
oils, greases and other specialties under the brand name IPOL in India and internationally
for more than three decades.
The company was incorporated in 1983 and is headquartered in Mumbai, India.
GP Petroleums Ltd is a part of Gulf Petroleum Group. Gulf Petrochem Group is a leading
player in the oil industry, specializing in oil trading and bunkering, oil refining, grease
manufacturing, oil storage terminals, bitumen manufacturing, and shipping and logistics.
Headquartered in United Arab Emirates, and having a presence in South Asia, the Far East
Asia, Africa and Europe, Gulf Petrochem has emerged as one of the well-established
manufacturers and traders of petroleum products in major parts of the world.
The company was formerly known as Sah Petroleums Limited and changed its name to GP
Petroleums Limited in April 2015 when Gulf Petrochem acquired 72.23% in Sah Petroleums
ltd on July 31st, 2014 held by promoters for Rs 600 million ($10 million) pursuant to a
share purchase agreement. Later on October 10th, 2014 an open offer was made for the
remaining 26% representing 13,255,940 equity shares at a price of Rs 15.70 per share.
GP Petroleums Limited now operates as a subsidiary of Gulf Petrochem PTE. Ltd.
Their manufacturing facilities are located at Thane in Maharashtra and Nani Daman in
Daman & Diu. The company has one of the largest in-house storage farms in the private
sector in India for storing oils sourced from all over the world
Products
GP Petroleums Limited designs, manufactures, and markets industrial and automotive
lubricants, and specialties and process oils in India and internationally. The company offers
automotive lubricants, including automotive engine oils for engine, gears, and transmissions,
as well as other parts of heavy/medium/light commercial vehicles, agricultural tractors,
pump sets, outboard motors, marine engines, commercial and passenger cars, and two and
three wheelers; automotive gear and transmission oils; and greases and specialties.
It also provides industrial lubricants comprising industrial oils and greases, neat oils for
metal working products, and industrial specialty oils primarily for the automobile, engineering,
steel, cement, sugar, and machining industries.
Indian Oil & Gaswww.indianoilandgas.com
23
In addition, the company offers rubber process oils and secondary plasticizers; transformer
oils; and white oils primarily for use as a mould releasing agent, insulant, defrothing agent,
as well as to manufacture antistatic oils, petroleum jellies, and aggarbatties..Its products are
used in various industries, including general engineering, rubber, tire, automotive, ball
bearing, textile, plastic, paint, cement, sugar mill, cosmetic, adhesive, transformers, etc.
GP Petroleums Limited markets its products under the IPOL brand. Recently, GP Petroleums
Ltd formed a strategic partnership with Spain’s No 1 petroleum company “Repsol” to
exclusively manufacture and market Repsol’s superior and comprehensive line of premium
quality lubricants across India.
Corporate Profile
Companies
Good Days For Indraprastha Gas
Things are certainly looking up for IGL, the sole supplier of CNG and piped cooking gas
in the national capital. First, the regulatory uncertainty has been removed with the before
the PNGRB..
the Supreme Court’s decision to dismiss the Petroleum and Natural Gas Regulatory Board
(PNGRB)’s special leave petition whereby the regulator was looking to cap the gas marketing
margin of IGL and had asked the company to cut its transportation and compression
charges by 64 per cent in April 2012. Had the Supreme Court not upheld the decision of
the Delhi High Court, IGL’s profitability would have been severely dented.
Second, IGL is set to spread its wings beyond Delhi and the national capital region, IGL
recently acquired Pune’s leading CGD Maharashtra Natural Gas and a majority stake in
Central UP Gas. This will reduce the risk of being dependent on only one city market.
At present, IGL owns around 10,000 km of pipeline network in Delhi, Noida, Ghaizabad
and Greater Noida. It sells fuels to over 800,000 vehicles in the NCR through a network of
over 300 CNG stations.
It also supplies piped gas to over 58.5 million households in Delhi and NCR towns. The average
daily sale has increased from 3.75 million standard cubic meters per day to 3.83 mmscmd. As a
result, Indraprastha Gas Ltd, has posted 4 per cent rise in turnover to Rs 9.92 billion in the first
quarter of the current fiscal, from Rs 9.57 billion in the year-ago period.
However Its net profit in the April-June period fell to Rs 1.01billion against Rs 1.14 billion
a year ago "due to lower realisation in industrial and commercial segment of piped natural
gas". Finally, IGL expansion plans are intact. A record number of over ten million
domestic PNG connections were provided by IGL in 2014-15.
PLL’s Revenues Decline
As Spot Gas Prices Collapse
Liquefied Natural Gas importer Petronet LNG Ltd (PLL) will have to contend with the
twin challenges of capacity utilisation and increased competition from rivals. A hint of the
difficulties ahead is already evident in falling reveunes: Petronet LNG total revenue during
24
Indian Oil & Gaswww.indianoilandgas.com
Indian Oil & Gaswww.indianoilandgas.com
25
the first quarter of fiscal 2015-16 fell 17.5 per cent to Rs 83.77 billion from Rs 101.60
billion in the same quarter last year.
The company, which handles large volumes of liquefied natural gas (LNG) imported from
Qatar for Indian companies, is faced with the problem of fully utilising its 10 million tons
per annum (mtpa) Dahej terminal capacity as domestic demand for its costly Qatari
cargoes recedes following the collapse of Spot prices of LNG over the past year.
Currently, the company buys 7.5 mtpa of LNG from RasGas under the long-term deal,
and has leased 1.25 mtpa of capacity to state-run GSPC Group in Gujarat. To ensure full
utilisation, Petronet LNG wants to lease out about two-thirds of the capacity at its Dahej
import terminal in Gujarat over the next four years to boost revenue
It has signed deals to lease out 6 mtpa of capacity to state-run firms by 2017, when the
capacity of the plant will be raised to 15 mtpa. Petronet LNG is in talks with various
companies to lease out 2.5 mtpa of capacity to be added in the next phase by 2019.
Petronet LNG will also have to face competition from the new terminal being set up both
by its rivals and by its own promoters. These include the Adani and GSPC led terminal at
Mundra, The Shell-GDF and GAIL promoted FSRU at Kakinada and the terminal at
Ennore promoted by Indian Oil Corporation –one of the promoters of Petronet LNG.
Companies
Alternative Energy
India Considering 100%Bio-diesel Vehicles
India’s Road Transport Ministry has come out with a draft notification mass emissionstandards which set the stage for manufacturing of vehicle engines that can ply on 100%bio-diesel. Such vehicles will be known as “B 100”.
Bio-diesel is both renewable and less polluting in comparison to diesel. B100vehicleshave been plying in Brazil and cities such as California and Berkeley in United States.The move aims at reducing dependence on import of crude oil and also to help reducevehicular pollution. Nearly 80 per cent of diesel is used only for transportation purposesin India.
The ministry has also included the standards for test requirements for type approval andextension for four-wheeled and three-wheeled vehicles using both B100 and diesel asfuel, or either of the two. The newly manufactured vehicles fitted with compressionignition engine compatible to run on diesel or mixture of bio-diesel up to 100% bio-diesel will be type approved as per the prevailing diesel emission standards.
"After receiving and going through the suggestions and objections, we will come outwith final notification. The manufacturers can then make engines that can run on theclear fuel," a road transport ministry official has been quoted as saying. According to thedraft notification, the compatibility of vehicle to level of bio-diesel blend will bedefined by the vehicle manufacturer and the same will also be displayed on the vehicle.
26
Indian Oil & Gaswww.indianoilandgas.com
Markets
Oil Imports From Saudi Dip
Crude oil import from Saudia Arabia was down to 34.99 million tons in the year to
March 31, 2015 from 38.18 million tons 2013-14.
While imports from sanction-hit Iran were almost flat at 10.95 million ton, shipments
from Kuwait fell to 17.85 million ton from 20.35 million ton. Imports from Iraq were
almost flat at 24.51 million ton but the same from UAE rose 15 per cent to 16.11 million
ton.
Overall, imports from Middle East fell by over 5 per cent to 109.88 million ton. Crude
oil imports from Africa and South America rose 10 per cent each as Indian refiners
bought more heavier but cheaper grade oil, he said.
Indian refineries have consistently reduced imports from traditional markets like Saudi
Arabia and stepped up purchases from newer geographies like Mexico and Venezuela
as imports have become viable due to availability of cheaper variants and softening of
shipping cost.
India imported 189.44 MT of crude oil in 2014-15, almost unchanged from the previous
fiscal, to meet over 80 per cent of its oil needs. Saudi Arabia was the top supplier with
Iraq being number two.
Venezuela was a very close third with 24.40 MT of oil supplies, 13 per cent higher than
2013-14. With 17.82 MT of crude oil supplies, Nigeria was tied with Kuwait for the
fourth spot. Mexico supplied 5.06 MT of crude oil in 2014-15, marginally higher than
4.94 MT a year ago.
Growing Market for PNG
The Petroleum & Natural Gas Regulatory Board (PNGRB) has envisaged a phased
roll out plan for development of City Gas Distribution (CGD) networks in several
Geographical Areas (GAs) in various States
PNGRB authorized entities are targetting 1,784,851 PNG connections in the next two
years. PNGRB established under the PNGRB Act, 2006 grants authorization for City
and Local Area Natural Gas Distribution Networks. The entities authorized by the
27
Indian Oil & Gaswww.indianoilandgas.com
Indian Oil & Gaswww.indianoilandgas.com
28
PNGRB set up CNG stations in their respective authorized Geographical Areas (GAs)
depending upon technical feasibility and commercial viability.
According to information furnished by Petroleum Planning and Analysis Cell (PPAC),
the number of households currently covered under PNG is 2938117, as on 30-06-
2015.
The target for domestic Piped Natural Gas (PNG) connection is a biddable parameter
and is set by entities themselves at the time of bidding.
Market Watch
Personalities 29
Ved Prash MahawarONGC’s New Director (Onshore)
www.indianoilandgas.com
Ved Prakash Mahawar has taken over as Director (Onshore) ofONGC. He will be looking after all the onshore operations ofONGC. Mahawar brings with him 33 years of experience inmanaging drilling and operational functions.
He pioneered the critical well control expertise for ONGC. A veteranof numerous blow out control job and proven experience in handlingthe complicated well control problems in onshore and offshore fields of ONGC, OVLand other operators in the country.
Subramanian SarmaTo Head L&T Hydrocarbon
Indian Oil & Gas
L&T has appointed Subramanian Sarma as non-executive directorand also the CEO & Managing Director of its wholly-ownedsubsidiary L&T Hydrocarbon. Venkataramanan, MD & CEO of L&T,who used to oversee the company so far, is retiring in September.
Sarma, who will be based in West Asia, was earlier managing director
of Petrofac - Onshore Engineering & Construction where he was responsible for thecompany’s onshore EPC projects worldwide. He has over 30 years of experience in theoil & gas industry. Having joined Petrofac in 1997, he has handled the complete valuechain including business development, process engineering, project management andexecution.
Sudhir SharmaIs OVL’s Director (Exploration)
Sudhir Sharma has taken over as Director (Exploration ) of ONGCVidesh Ltd, the overseas arm of ONGC. He has three decades ofexperience in various domestic and overseas projects. Most recently,he was the country manager and legal representative for company’sColombia operations. He began his career in 1980 with ONGC’sInstitute of Petroleum Exploration.
Indian Oil & Gaswww.indianoilandgas.com
30
Sanjay KrishnaIs New Addl. Secretary in MoPNG
Kumar Sanjay Krishna has been appointed Additional Secretary andFinancial Adviser in Ministry of Petroleum and Natural Gas.
Kumar Sanjay krishna was Joint secretary in Department ofDisinvestment., Since March 2014. Sanjay Krishna is an IAS officerbelonging to the 1985 batch or the Assam Megalaya cadre. He hails
from Assam
His previous stints at the centre have been in the PMO, Dept of economic affairs andand dept of Disinvestment. He has also been posted abroad as Director of the Tea Boardat New York. He is a post graduate in Physics.
Hital MeswaniIs New RIL-HR Director
Hital Meswani, responsible for building some of Reliance Industries'biggest projects including the Hazira petrochemical and the Jamnagarrefinery complexes, will now be the firm's new HR director.
Hital, younger brother of RIL executive director Nikhil Meswani,will run the HR department after the departure of Prabir Jha.
Meswani, a chemical engineer from University of Pennsylvania's School of Engineeringand Applied Sciences, and a Wharton alumnus, joined RIL in 1990.
Personalities
Tender Opportunities
• ONGC
Tender No: N15MC15004
Brief Description: Replacement Of 02 No. Fire Water Pump Packages At Neelam
Process Complex
Category: Replacement
Approximate Quantity: NA
Contract Period in case of Services: NA
Tender Originating Location : Mumbai
Type of tender: ICB
Cost of tender document(IN INR): 60000
Cost of tender document(IN FC): NA
Earnest money Deposit(IN INR): 2836260
Earnest money Deposit(IN FC): 43960
Issue / Sale of Tender document: 11 Aug 2015, 12:05am
To 6 Oct 2015, 3:55pm
Other: Being E-tender, tender can be purchased online only from the e-tender site:
https://etender.ongc.co.in
Last Date of receipt of queries for Pre-bid Conference: 31 Aug 2015
Pre-bid Conference Venue: ONGC NBP Green Heights, Plot No. C-69, Bandra
Kurla Complex, Bandra (E), Mumbai
Pre-bid Conference: 7 Sep 2015, 11:00am
Closing of tender: 6 Oct 2015, 4:00pm
• ONGC
Tender No: C28RC15001
Brief Description: Purchase of Sucker Rod and Accessories
Category: Production Equipment
Approximate Quantity: As Per Tender Document
Contract Period in case of Services: NA
Tender Originating Location : Cambay
Type of tender: ICB
31
Indian Oil & Gaswww.indianoilandgas.com
Indian Oil & Gaswww.indianoilandgas.com
32
Cost of tender document(IN INR): 6000
Cost of tender document(IN FC): $100
Earnest money Deposit(IN INR): As Per Tender Document
Earnest money Deposit(IN FC): As Per Tender Document
Issue / Sale of Tender document: 5 Aug 2015 12:00pm
To 25 Aug 2015 1:55pm
Last Date of receipt of queries for Pre-bid Conference: NA
Pre-bid Conference Venue: NA
Pre-bid Conference: Not Applicable
Closing of tender: 25 Aug 2015 2:00pm
Opening of Tender: 25 Aug 2015 3:00pm
Place of submission of tender: Office Of The I/C MM, ONGC, Cambay Asset,
Cambay-388620
Place of Opening of tender: Office Of The I/C MM, ONGC, Cambay Asset,
Cambay-388620
Estimated Cost: NA
Job completion time: NA
Site Location: NA
Pre Qualification criteria: NA
Other details: This is an e-tender under two bid system. Bidder shall have to log into
the website http:/etender.ongc.co.in, select the desired bid invitation no., register and
pay the tender fee in INR by using Credit Card for issue of tender document. For new
bidders, all details like how to apply for access authorization, how to register, how to
pay tender fees, how to submit bid etc, are available in the area Guidelines to Bidders
in the homepage of above website.
Tender Opportunities
Indian Oil & Gaswww.indianoilandgas.com
33
CRUDE PRODUCTION
June 2015
Crude Production
CRUDE OIL PRODUCTION IN JUNE 2015
Planned target : 3.011 million ton
Actual : 3.101 million ton
Achievement : 102.99% of the target
CRUDE OIL PRODUCTION IN APRIL - JUNE 2015
Planned target : 9.065 million ton
Actual : 9.306 million ton
COMPANY-WISE PERCENTAGE ACHIEVEMENT IN JUNE 2015
ONGCL
Planned target : 1.850 million ton
Actual : 1.854 million ton
Achievement : 100.21% of the target
OIL
Planned target : 0.289 million ton
Actual : 0.271 million ton
Achievement : 93.97% of the target
PRIVATE/JVC
Planned target : 0.872 million ton
Actual : 0.976 million ton
Achievement : 111.89% of the target
REASON FOR SHORTFALLS COMPARED TO TARGET
ONGC: Production in Mehsana fields was affected due to increase in water cut, decline in air injection and
power shut-down. Closure of gas lift wells caused by leakage in Hazira Motwan Gas Pipeline. Production
affected in Ankleshwar fields due to high watercut, aging of field and reservoir issue.
OIL: Loss incurred due to environmental reasons on account of bandhs & blockades. Loss in well head
potential due to rise in water cut and sand ingression problems in few wells of greate Hapjan field. Less
than expected increase in Wellhead potential from drilling operations.
Private/JVCs: Underperformance of MA wells in KG-DWN-98/30 Field, Eastern Offshore. Increase inwater cut in existing wells in CB-ON/3 field and production operation discontinued as well as not commer-cially viable at present in CB-ONN-2002/3 in Gujrat. New wells lined up for production in RJ-ON/6 inRajasthan.
Indian Oil & Gaswww.indianoilandgas.com
34Crude Production
CRUDE PRODUCTION
June 2015
(Source : Ministry of Petroleum & Natural Gas)* Provisional. ** revised.
Companies
Production
ActualTarget June June
2015* 2014**
(Figures in 000' Tons)
Cumulative Production
ActualTarget
I. ONGCL
Onshore 490.780 472.584 510.904 1479.012 1438.478 1576.724
Andhra Pradesh 22.002 25.748 23.144 67.546 74.555 71.831
Assam 79.165 79.828 93.129 238.259 242.264 288.295
Gujarat 368.380 345.758 374.868 1109.898 1055.453 1155.206
Tamil Nadu 21.233 21.250 19.763 63.309 66.206 61.392
Offshore 1359.237 1381.254 1340.025 4072.646 4130.440 3927.591
Eastern Offshore 1.193 1.773 0.983 3.981 5.641 3.15
Western Offshore 1247.475 1268.076 1210.888 3733.334 3779.332 3531.722
Condensates 110.569 111.405 128.154 335.331 345.467 392.717
TOTAL 1850.017 1853.838 1850.929 5551.658 5568.918 5504.315
II. OIL INDIA LTD.
Assam 288.233 270.867 277.330 866.066 835.730 833.493
Arunachal Pradesh 0.443 0.412 0.591 1.344 1.250 1.946
TOTAL 288.676 271.279 277.921 867.410 836.980 835.439
III. DGH (Private/JVC)*
Onshore 677.848 746.510 768.515 2056.138 2232.785 2370.099
Arunachal Pradesh 5.738 4.113 6.320 17.404 12.588 20.341
Gujarat 15.781 11.592 11.936 47.868 35.320 38.554
Rajastthan 656.329 730.805 750.259 1990.866 2184.877 2311.204
Offshore 194.355 229.378 224.608 589.544 666.824 676.263
Eastern Offshore 93.293 119.681 106.478 282.989 370.731 307.721
Gujarat Offshore 28.325 31.109 32.155 85.920 90.053 97.142
Western Offshore 72.737 78.588 85.975 220.635 206.040 271.400
TOTAL 872.203 975.888 993.123 2645.682 2899.609 3046.362
GRAND TOTAL(I+II+III) 3010.896 3101.005 3121.973 9064.750 9305.507 9386.116
Onshore 1457.304 1490.373 1557.340 4402.560 4508.243 4782.262
Offshore 1553.592 1610.632 1564.633 4662.190 4797.264 4603.854
$: Includes production Tripura.
Apr. - Apr.-
June'15 June'14
Indian Oil & Gaswww.indianoilandgas.com
35Natural Gas Production
(Source : Ministry of Petroleum & Natural Gas)
NATURAL GAS PRODUCTION
June 2015
* Provisional . **Revised data.
1. ONGCL 1803.511 1908.696 1898.479 5483.090 5653.368ONSHORE 385.355 452.820 401.053 1179.384 1350.061Andra Pradesh 48.763 89.256 52.691 154.381 275.261Assam 32.576 38.821 35.297 101.185 116.469Gujarat 112.305 120.762 118.832 349.029 365.309Rajsthan 0.377 0.072 0.719 1.775 1.227Tamil Nadu 94.786 106.805 97.149 280.447 329.923Tripura 96.548 97.104 96.365 292.567 261.872OFFSHORE 1418.156 1455.876 1497.426 4303.706 4303.307Eastern Offshore 21.047 1.295 21.964 64.323 4.103Western Offshore 1397.109 1454.581 1475.462 4239.383 4299.204
2. OIL 225.044 222.542 221.789 641.642 676.858Assam 207.272 212.963 208.900 598.049 636.649Arunachal Pradesh 1.045 0.909 1.084 3.144 3.211Rajasthan 16.727 8.670 11.805 40.449 36.998
3. PRIVATE/JVC 694.371 763.197 731.940 2119.835 2276.062ONSHORE 91.625 80.559 97.084 278.843 229.969Arunachal Pradesh 1.702 1.773 1.669 5.041 4.976Gujarat 7.861 8.773 8.183 23.713 26.896Rajasthan 82.062 70.013 87.232 250.089 198.097CBM 32.107 17.641 32.151 94.242 52.734Jharkhand (CBM) 0.077 0.196 0.097 0.264 0.638Madhyapradesh (CBM) 0.167 0.270 0.175 0.496 1.327West Bengal $ (CBM) 31.863 17.175 31.879 93.482 50.769Offshore 570.639 664.997 602.705 1746.750 1993.359Eastern Offshore 377.620 424.768 403.165 1169.418 1282.296Gujarat Offshore 6.195 10.871 4.059 14.019 33.295Western Offshore 186.824 229.358 195.481 563.313 677.768
GRAND TOTAL 2722.926 2894.435 2852.208 8244.567 8606.288CBM 32.107 17.641 32.151 94.242 52.734Onshore 702.024 755.921 719.926 2099.869 2256.888Offshore 1988.795 2120.873 2100.131 6050.456 6296.666
2015* 2014
JuneArea/State
Natural Gas Production
(in Million cubic metres)STATE-WISE DETAILS OF NATURAL GAS PRODUCTION
May*
2015Apr. -
June '15*Apr.-
June'14*
$ Coal Bed Methane Production
NATURAL GAS PRODUCTION (INCLUDING JVC/PRIVATE) IN JUNE 2015
June 2015* - Target : 2814 million cubic metresJune 2015 - Actual : 2723 million cubic metresPercentage achievement : 96.78%
April - June 2015* : 8245 million cubic metresApril - June 2014 : 8606 million cubic metres
Indian Oil & Gaswww.indianoilandgas.com
36Refinery Production
REFINERY PRODUCTION
June 2015
REFINERY PRODUCTION (IN TERMS OF CRUDE THROUGHPUT) IN JUNE 2015
Planned target : 18.390 million ton
Actual : 19.484 million ton
Achievement : 105.94% of the target
CUMULATIVE REFINERY PRODUCTION IN APRIL- JUNE 2015
Planned Target : 54.759 million ton
Actual : 56.277 million ton
The refinery production was 5.94% higher than the target in June 2015. Cumulative Production was
4.22% higher than the production of 54.000 million ton attained in April - June 2014.
REASON FOR SHORTFALL
IOC, Barauni: Due to planned Shutdown in CRU for catalyst regeneration in Apr-May, 2015.
IOC, Gujarat: Due to planned M & I Shutdown of all major units in Apr-May, 2015.
IOC, Haldia: Throughput is restricted due to Naphtha containment.
IOC, Mathura: Due to Exchanger problem in DHDT (Diesel Hydro Deep Treatment Unit) in Apr-May, 2015.
IOC, Digboi: Throughput is restricted due to exchanger problem in HDT (Hydro Deep Treatment Unit) in
June, 2015 and planned M & I shutdown of major units (CDU, CRU, DHT etc.) during Q-1 / 2015-16.
IOC, Panipat: Lower than MoU due to high stocks of Naphtha (PNC interruption) & black oil.
Indian Oil & Gaswww.indianoilandgas.com
37Refinery Production
Public Sector
IOC, Guwahati 80.000 93.288 79.427 263.000 282.067 244.436
IOC, Barauni 516.370 541.215 549.075 1566.370 1542.776 1651.220
IOC, Gujarat 1107.640 1176.205 1026.354 2779.647 2984.377 3314.592
IOC, Haldia 675.000 667.002 666.018 2015.000 1976.822 1952.199
IOC, Mathura 714.000 732.791 691.154 2156.000 2107.316 2189.028
IOC, Digboi 57.000 51.361 54.468 150.000 135.720 149.547
IOC, Panipat 1290.000 1212.379 773.798 3913.000 3871.890 2840.316
IOC, Bongaigaon 198.295 200.486 166.748 601.495 667.097 524.493
BPCL, Mumbai 986.000 1056.418 1076.384 3213.000 3356.624 2888.364
BPCL, Kochi 880.000 902.920 923.418 2670.000 2724.945 2476.540
HPCL, Mumbai 613.114 652.845 526.765 1526.370 1623.206 1397.009
HPCL, Visakh 566.045 588.392 659.790 2148.989 2134.609 1879.130
CPCL, Manali 536.900 905.605 879.251 2263.000 2712.872 2658.556
CPCL, Narimanam (CBR) 41.100 48.103 33.262 124.660 130.497 160.542
NRL, Numaligarh 235.000 260.817 254.676 557.000 413.071 724.557
MRPL, Mangalore 1250.000 1463.305 1116.636 3850.000 3910.816 3241.359
ONGCL, Tatipaka 5.347 5.497 4.590 15.866 13.705 11.867
Joint Venture
BORL, Bina 500.000 601.084 561.456 930.000 1173.733 1489.335
HMEL, GGSR, Bhatinda 737.705 897.020 672.500 2237.705 2718.043 2381.795
Private sector
RPL, Jamnagar 2603.000 2713.896 2603.000 7225.384 7477.962 7225.384
RIL, SEZ 3100.000 3023.283 3100.000 9459.000 9147.458 9459.000
Essar Oil Ltd, (EOL) 1697.886 1689.786 1707.064 5093.659 5171.825 5140.984
Total 18390.402 19483.698 18125.834 54759.145 56277.431 54000.253
Refinery
Target Actual*
June
2014**
Production
June 2015
(Figures in 000' Tons)
(Source : Ministry of Petroleum & Natural Gas)
Cumulative Production
Target Actual*
Apr. -
June'14**
Apr. - June'14
REFINERY PRODUCTION
June 2015
* Provisional ** Revised
Indian Oil & Gaswww.indianoilandgas.com
38Refinery-wise Capacity Utilisation
REFINERY-WISE CAPACITY UTILISATION
June 2015
Capacity Utilisation
June 2015 Cumulative Apr. - June'15
ProratedInstalled
Capacity$
ActualCrudeT' put*
% Utili-sationof I/C**
ProratedInstalled
Capacity$
ActualCrudeT' put*
% Utili-sationof I/C
Refinery
( Figures in 000' Tons)
(Source : Ministry of Petroleum & Natural Gas)
PUBLIC SECTOR/JVC
IOC, Guwahati 82.000 93.288 113.77 249.000 282.067 113.28
IOC, Barauni 492.000 541.215 110.00 1492.000 1542.776 103.40
IOC, Koyali (Gujarat) 1123.000 1176.205 104.74 3406.000 2984.377 87.62
IOC, Haldia 615.000 667.002 108.46 1865.000 1976.822 106.00
IOC, Mathura 656.000 732.791 111.71 1989.000 2107.316 105.95
IOC, Digboi 53.000 51.361 96.91 162.000 135.720 83.78
IOC, Panipat 1230.000 1212.379 98.57 3730.000 3871.890 103.80
IOC, Bongaigaon 193.000 200.486 103.88 584.000 667.097 114.23
BPCL, Mumbai 984.000 1056.418 107.36 2984.000 3356.624 112.49
BPCL, Kochi 779.000 902.920 115.91 2362.000 2724.945 115.37
HPCL, Mumbai 533.000 652.845 122.48 1616.000 1623.206 100.45
HPCL, Visakh 680.000 588.392 86.53 2064.000 2134.609 103.42
CPCL, Manali 861.000 905.605 105.18 2611.000 2712.872 103.90
CPCL, Narimanam 82.000 48.103 58.66 249.000 130.497 52.41
NRL, Numaligarh 246.000 260.817 106.02 746.000 413.071 55.37
MRPL, Mangalore 1230.000 1463.305 118.97 3730.000 3910.816 104.85
ONGCL, Tatipaka 5.000 5.497 109.94 16.000 13.705 85.66
Joint Venture
BORL, Bina 492.000 601.084 122.17 1492.000 1173.733 78.67
HMEL, GGSR, Bhatinda 738.000 897.020 121.55 2238.000 2718.043 121.45
PRIVATE
RPL, Jamnagar 2705.000 2713.896 100.33 8205.000 7477.962 91.14
RIL, SEZ 2213.000 3023.283 136.61 6713.000 9147.458 136.26
EOL, Vadinar 1639.000 1689.786 103.10 4973.000 5171.825 104.00
Total 17631.000 19483.698 110.51 53476.000 56277.431 105.24
* Provisional** I/C Stands for Installed Capacity
The overall refinery capacity utilisation in June, 2015 was 110.51% against 102.54% in June 2014. The
overall refinery capacity utilisation in April - May, 2015 was 105.24% against 100.99% in April - June 2014.
Indian Oil & Gaswww.indianoilandgas.com
39
(Qty in '000 tons)
PRODUCTION OF PETROLEUM PRODUCTS
April - June 2015
PRODUCTS
**LPG 778 842 810 2430
NAPHTHA 1390 1542 1422 4354
MS-III 881 935 970 2786
MS-IV 395 446 496 1337
MS Others 973 1464 1422 3859
ATF 618 789 924 2331
SKO 539 562 648 1750
HSD-III 3383 4237 3977 11597
HSD-IV 1153 1411 1591 4155
HSD Others 2561 3020 2824 8406
LDO 36 27 42 105
LUBES 83 89 82 254
FO 744 916 690 2350
LSHS 43 73 47 164
BITUMEN 490 514 434 1438
RPC/Petcoke 825 1044 1070 2939
Others 1535 1570 1686 4791
TOTAL 16426 19483 19136 55045
REFINERIES 16150 19198 18873 54220
FRACTIONATORS 276 286 263 825
TOTAL 16426 19483 19136 55045
April 2015 May 2015 June 2015 Apr-Jun'15*
* Provisional.
Data for RIL (SEZ), Jamnagar,Refinery for May and June 2014 is estimated.** includes LPG production from Natural Gas.LSHS - Low Sulphur Heavy Stock
(Source : Oil Companies)
*
Prodcution of Petroleum Products
Indian Oil & Gaswww.indianoilandgas.com
40
CONSUMPTION OF PETROLEUM PRODUCTS
April - June 2015
(Quantity in '000 Tons)
PRODUCTS
LPG 1480 1505 1487 4472
SKO 568 577 567 1711
HSD 6487 6446 6293 19226
MS 1783 1834 1769 5386
Naptha+NGL 936 1303 892 3131
ATF 475 495 468 1438
LDO 26 25 41 91
Lubricants & Greases 292 254 253 799
FO & LSHS 482 475 487 1444
Bitumen 548 539 419 1506
Petroleum coke 1126 1196 1212 3534
Others 504 540 516 1560
All Products total 14705 15189 14404 44297
April 2015 May 2015 June 2015 Apr-Jun 2015*
There is a significant difference between SALE and CONSUMPTION. All
products sold either by wholesale or retail dealers need not necessarily be
consumed during a particular time-frame.
i) All figures are provisionalii) The consumption estimates represent market demand and is aggregate of : (a) sales by oil Companies in domestic market , and (b) consumption through direct imports by private parties.
While data for company sales are actual, that of private direct import are estimated, which may undergo change on receiptof actual data.
(Sources : Oil Companies, DGCIS & Major consumers)
*
Consumptions of Petroleum Products
Indian Oil & Gaswww.indianoilandgas.com
41
Source : Oil Companies. All figures are Provisional.POL imports by private parties taken from raw data of DGCI&S which is with a 2 month lag period.IOCL: Nepal sales taken in exports of IOCL. For Nepal exports , average US$ exchange rate considered .BPCL :For Nepal and Bhutan exports , average US$ exchange rate considered*LNG import not included
IMPORTS
TOTAL CRUDE OIL 15535 17454 15353 48342
PRODUCTS
LPG 683 819 651 2154
MS/ Petrol 120 154 170 444
Naphtha 80 113 61 254
SKO/ Kerosene 35 0 6 41
HSD/ Diesel 10 7 7 24
LOBS/ Lube oil 132 146 146 425
Fuel Oil/LSHS 21 87 166 275
Bitumen 64 39 39 141
Others 755 641 659 2055
PRODUCT IMPORT 1902 2006 1905 5813
TOTAL IMPORT 17437 19460 17258 54155
PRODUCT EXPORT
LPG 24 19 20 64
MS/ Petrol 935 1341 1287 3563
Naphtha 576 492 614 1682
Aviation Turbine Fuel 153 260 377 791
HSD/ Diesel 1366 1495 1810 4671
SKO/ Kerosene 1 1 1 3
LDO 0 0 0 0
LOBS/ Lube Oil 4 1 3 8
Fuel Oil/LSHS 363 498 130 991
Bitumen 8 10 8 25
Others 313 424 275 1012
TOTAL PRODUCT EXPORT 3743 4542 4525 12811
PRODUCT WISE IMPORTS / EXPORTS
April - June 2015
(Qty ‘000 tons)
April 2015 May 2015 June 2015* Apr-June'15*
Product-wise Imports / Exports