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Dec 2015
For anyone interested in the energy sector in India, it is imperative for him to keep track of the ongoing climate change negotiations in Paris.
8The outcome will have far reaching implications on India and on all energy sector stakeholders, from producers of energy to equipment and service suppliers to financiers.
8The ambition, according to a common draft, is to limit warming to 1.5 degree centigrade by the turn of the century or at least not more than 2 degrees (Click on Reports for the Draft Agreement that is now in circulation).
8Oil majors such as BP on the other hand claim that it is not possible to limit warming to two degrees anymore and it can in fact go up to an unacceptable three degrees or thereabout. Big Oil is talking of switching from coal to gas as an interim fuel but there are critics who claim that such a switch will not help curb emissions beyond a point.
8In this context, if the Paris conference promises to peg global warming at two degrees, then two scenarios are possible.
8One scenario, which is not an unlikely one, is that the warming target will not be achieved.
8The second possibility is that global resolve will be such that the energy-use matrix is changed to keep global warming under check.
8Under the second scenario, the transition to a low hydrocarbon based economy will be far quicker, thereby bringing about dramatic changes to how business is done in the energy sector.
8The oil and gas industry will also have to bear the brunt of the changes that will sweep across the world as a result of the steps to be taken to curb emissions.
8There are opportunities too to be gleaned out from the $100 billion per year transfer of funds from the developed to developing countries to target climate change. This over and above the vast amounts of the money that India will have to spend on its own to get its energy use matrix right.
8For service providers and equipment suppliers, the time has come to remain very alert:, to read everything that comes their way for telltale signs of what is in vogue and what is not, and accordingly look for opportunities.
8The good thing is that new opportunities will be available. The idea is to catch them before others do
Click on Reports for more. Details
8The outcome will have far reaching implications on India and on all energy sector stakeholders, from producers of energy to equipment and service suppliers to financiers.
8The ambition, according to a common draft, is to limit warming to 1.5 degree centigrade by the turn of the century or at least not more than 2 degrees (Click on Reports for the Draft Agreement that is now in circulation).
8Oil majors such as BP on the other hand claim that it is not possible to limit warming to two degrees anymore and it can in fact go up to an unacceptable three degrees or thereabout. Big Oil is talking of switching from coal to gas as an interim fuel but there are critics who claim that such a switch will not help curb emissions beyond a point.
8In this context, if the Paris conference promises to peg global warming at two degrees, then two scenarios are possible.
8One scenario, which is not an unlikely one, is that the warming target will not be achieved.
8The second possibility is that global resolve will be such that the energy-use matrix is changed to keep global warming under check.
8Under the second scenario, the transition to a low hydrocarbon based economy will be far quicker, thereby bringing about dramatic changes to how business is done in the energy sector.
8The oil and gas industry will also have to bear the brunt of the changes that will sweep across the world as a result of the steps to be taken to curb emissions.
8There are opportunities too to be gleaned out from the $100 billion per year transfer of funds from the developed to developing countries to target climate change. This over and above the vast amounts of the money that India will have to spend on its own to get its energy use matrix right.
8For service providers and equipment suppliers, the time has come to remain very alert:, to read everything that comes their way for telltale signs of what is in vogue and what is not, and accordingly look for opportunities.
8The good thing is that new opportunities will be available. The idea is to catch them before others do
Click on Reports for more. Details
It is important for viewers to read up the doomsday scenarios for the oil and gas industry that some analysts are now putting together.
8Click on our Reports section for one version which says that to keep warming under check, around $2 trillion worth of investments will have to be avoided over the next 10 years in the energy sector.
8Of this, around $1.3 trillion will be in oil projects and $459 billion in gas projects.
8The point to note about these reports is that they are not talking in air but their conclusions are based on exhaustive data and adept calculations.
8The study goes on to claim that investments will have to be curbed in countries such as the US, Australia, Indonesia, Canada and Malaysia, which together account for around three-quarters of the total unneeded capex.
8A lot of LNG projects will get junked.
8Coal bed methane is also going to run into trouble as it is more expensive to produce.
8It is assumed in the report that marginal LNG production will break even at around $10/mmBtu, but the price will be higher over the next 10 yeras in order to fetch a 15% IRR.
8Similarly for oil, that study shows that oil demand peaks around 2020. This means that the oil sector does not need to continue to grow
8Eventually it will be price volatility rather than volume erosion that is likely to have a bigger impact on the oil sector.
8The report clearly draws up an unwarrantedly uncertain future for the oil and gas industry. This may not be the scenario but nevertheless it is necessary to understand the other side of the picture.
Click on Reports for more Details
8Click on our Reports section for one version which says that to keep warming under check, around $2 trillion worth of investments will have to be avoided over the next 10 years in the energy sector.
8Of this, around $1.3 trillion will be in oil projects and $459 billion in gas projects.
8The point to note about these reports is that they are not talking in air but their conclusions are based on exhaustive data and adept calculations.
8The study goes on to claim that investments will have to be curbed in countries such as the US, Australia, Indonesia, Canada and Malaysia, which together account for around three-quarters of the total unneeded capex.
8A lot of LNG projects will get junked.
8Coal bed methane is also going to run into trouble as it is more expensive to produce.
8It is assumed in the report that marginal LNG production will break even at around $10/mmBtu, but the price will be higher over the next 10 yeras in order to fetch a 15% IRR.
8Similarly for oil, that study shows that oil demand peaks around 2020. This means that the oil sector does not need to continue to grow
8Eventually it will be price volatility rather than volume erosion that is likely to have a bigger impact on the oil sector.
8The report clearly draws up an unwarrantedly uncertain future for the oil and gas industry. This may not be the scenario but nevertheless it is necessary to understand the other side of the picture.
Click on Reports for more Details
The talk of a golden age of gas has been around for a while but will it ever come?
8There is talk that gas demand will go up as it will replace coal but the current glut of LNG supply demonstrates that the gas value chain is still capable of misreading future demand levels. The initial rush for US shale is now over, with questions being raised about its financial stability in a low oil price environment, a paper available with this website argues.
8With the costs of renewables falling, gas is already struggling to compete in some markets, or could be priced out soon in others.
8A paper available with this website argues that around $82 billion in LNG projects in Canada, $71 billion in the US and $68 billion in Australia planned for the next 10 years will not come through under certain demand scenarios. In all planned investment worth $ 283 billion will not get through.
8According to the scenarios build by this report, investments required to cater to LNG demand till 2024 already stand fully committed.
8From here on, only brownfield projects in the Pacific, a limited amount of US projects, the mega projects in Mozambique – supported by economies of scale and proximity to demand (India) and other more more speculative, but likely to be competitive projects – in Iran, Iraq and West Africa -- are likely to go though.
Click on Reports for more Details
8There is talk that gas demand will go up as it will replace coal but the current glut of LNG supply demonstrates that the gas value chain is still capable of misreading future demand levels. The initial rush for US shale is now over, with questions being raised about its financial stability in a low oil price environment, a paper available with this website argues.
8With the costs of renewables falling, gas is already struggling to compete in some markets, or could be priced out soon in others.
8A paper available with this website argues that around $82 billion in LNG projects in Canada, $71 billion in the US and $68 billion in Australia planned for the next 10 years will not come through under certain demand scenarios. In all planned investment worth $ 283 billion will not get through.
8According to the scenarios build by this report, investments required to cater to LNG demand till 2024 already stand fully committed.
8From here on, only brownfield projects in the Pacific, a limited amount of US projects, the mega projects in Mozambique – supported by economies of scale and proximity to demand (India) and other more more speculative, but likely to be competitive projects – in Iran, Iraq and West Africa -- are likely to go though.
Click on Reports for more Details
The global LNG report says that the gigantic Rovuma Area 1 Offshore block of which Anadarko is the operator can be viable after year 2025 and not before that.
8This will come as a huge blow to a clutch of Indian investors -- ONGC, Oil India and BPCL -- who hold big stakes in the project.
8The cash strapped Anadrako had said project start-up will get delayed till 2017 but according to the global LNG report, there is already a glut in the market and the Mozambique project will be not be able to come up before 2025.
8That is at least 10 years off. which is awful lot of time.
8The report however claims that the project viability will stand established, albeit only after 2025, because of economies of scale available given the massive size of the project, and its proximity to the Indian market.
But that will be at least 10 years from now.
Click on Reports for more Details
8This will come as a huge blow to a clutch of Indian investors -- ONGC, Oil India and BPCL -- who hold big stakes in the project.
8The cash strapped Anadrako had said project start-up will get delayed till 2017 but according to the global LNG report, there is already a glut in the market and the Mozambique project will be not be able to come up before 2025.
8That is at least 10 years off. which is awful lot of time.
8The report however claims that the project viability will stand established, albeit only after 2025, because of economies of scale available given the massive size of the project, and its proximity to the Indian market.
But that will be at least 10 years from now.
Click on Reports for more Details
Indian companies have not figured yet in the list of oil and gas companies which will have to cut their capex in the next 10 years.
Among those companies which will have un-needed capex up to the year 2025 are:
8Exxon Mobil: $72 billion
8Shell: $76 billion
8Rosneft: $33 billion
8BP: $45 billion
8Chevron: $44 billion
8NIOC: $44 billion
8PetroChina: $42 billion
8It has not been clarified whether capex cuts by Indian companies have not been included because their capex budgets were too small to be indexed or because Indian companies will have no cuts in their E&P budget and they will continue to invest in E&P acreages.
Click on Reports for more Details
Among those companies which will have un-needed capex up to the year 2025 are:
8Exxon Mobil: $72 billion
8Shell: $76 billion
8Rosneft: $33 billion
8BP: $45 billion
8Chevron: $44 billion
8NIOC: $44 billion
8PetroChina: $42 billion
8It has not been clarified whether capex cuts by Indian companies have not been included because their capex budgets were too small to be indexed or because Indian companies will have no cuts in their E&P budget and they will continue to invest in E&P acreages.
Click on Reports for more Details
Where does Indian oil and gas companies stand in the midst of all this turmoil?
8The global report claims that local production across the globe will continue to prosper in the midst of large capex cuts.
8So will India's gas discoveries in the East Coast suffer or prosper?
8To begin with, the government will have to clear all road blocks. Freeing controls on prices will be one step in the right direction, for there is no reason why these discoveries should elicit a price lower than what the market can support.
8In the long run, the road block for Indian companies such as RIL and ONGC will not be government policy -- as the government has really no option but to stay out of the way in today's environment -- as much it will be the landed price of LNG.
8Given that cost of equipment and services has fallen along with an increase in operational efficiency, the break-even price of Indian gas discoveries is likely to be lower than the landed price of LNG.
8Eventually viability can only be tested after the government lifts all barriers on gas pricing.
8ONGC's Rs 53,000 crore KG Basin capex can be brought to the LOI stage very quickly but that will depend upon how fast price controls are lifted.
8The RIL-BP combine may also throw in money into its discoveries depending upon how the gas pricing parameters are re-fixed by the government. Details
8The global report claims that local production across the globe will continue to prosper in the midst of large capex cuts.
8So will India's gas discoveries in the East Coast suffer or prosper?
8To begin with, the government will have to clear all road blocks. Freeing controls on prices will be one step in the right direction, for there is no reason why these discoveries should elicit a price lower than what the market can support.
8In the long run, the road block for Indian companies such as RIL and ONGC will not be government policy -- as the government has really no option but to stay out of the way in today's environment -- as much it will be the landed price of LNG.
8Given that cost of equipment and services has fallen along with an increase in operational efficiency, the break-even price of Indian gas discoveries is likely to be lower than the landed price of LNG.
8Eventually viability can only be tested after the government lifts all barriers on gas pricing.
8ONGC's Rs 53,000 crore KG Basin capex can be brought to the LOI stage very quickly but that will depend upon how fast price controls are lifted.
8The RIL-BP combine may also throw in money into its discoveries depending upon how the gas pricing parameters are re-fixed by the government. Details
If the world is now talking of cuts in planned capex by oil and gas companies around the world, what chance would auctions for Indian blocks in the future have of ever moving on to the production stage?
8More so as Indian sedimentary basins do not contain the kind of hydrocarbon resources that are there in other parts of the world.
8And in today's uncertain world, which operator would like to enter into a revenue sharing model for a block where the exact potential of the reservoir below is not known?
8Will India's new offshore bocks -- where a deepwater well can cost anywhere upwards of $25 million -- be viable at current or projected gas prices, particularly when there is no cost reimbursement?
8The cost plus model would guarantee that there would bea rate of return after costs are covered but in a revenue sharing model, revenues will have to be shared with the government long before breakeven can happens.
8For the government, a revenue share is more convenient as it will then not have to squabble over the cost of production with the operator.
8In this context, is this model for an E&P company viable ?
8It is perhaps not.
8The government must now pick up the brightest ideas from all stakeholders in the E&P business and make the entire effort business friendly.
8It is only then that there stands the possibility that local Indian oil and gas reserves will get tapped at a future date. Details
8More so as Indian sedimentary basins do not contain the kind of hydrocarbon resources that are there in other parts of the world.
8And in today's uncertain world, which operator would like to enter into a revenue sharing model for a block where the exact potential of the reservoir below is not known?
8Will India's new offshore bocks -- where a deepwater well can cost anywhere upwards of $25 million -- be viable at current or projected gas prices, particularly when there is no cost reimbursement?
8The cost plus model would guarantee that there would bea rate of return after costs are covered but in a revenue sharing model, revenues will have to be shared with the government long before breakeven can happens.
8For the government, a revenue share is more convenient as it will then not have to squabble over the cost of production with the operator.
8In this context, is this model for an E&P company viable ?
8It is perhaps not.
8The government must now pick up the brightest ideas from all stakeholders in the E&P business and make the entire effort business friendly.
8It is only then that there stands the possibility that local Indian oil and gas reserves will get tapped at a future date. Details
Even as the world debates on the future of the oil and gas industry, petroleum minister Dharmendra Pradhan, while speaking at a gathering of geophysicists last week, made the following points:
8Over the last 18 months, we have succeeded in resolving past rigidities in many NELP contracts.
8The testing method issue (for arriving at a discovery) has been resolved.
8All the Management Committee meetings were held in tim
8Government took the role of facilitator to resolve issues in each block.
8A concept note on ease of doing business in the E&P sector has been circulated for comments by all stakeholders
Click on Details for more Details
8Over the last 18 months, we have succeeded in resolving past rigidities in many NELP contracts.
8The testing method issue (for arriving at a discovery) has been resolved.
8All the Management Committee meetings were held in tim
8Government took the role of facilitator to resolve issues in each block.
8A concept note on ease of doing business in the E&P sector has been circulated for comments by all stakeholders
Click on Details for more Details
Chayan Chakrabarty is the President and CEO of Bengal Energy that has drawn up a three-well drilling contract in the block CY-ONN-2005/1.
8Chakrabarty has a tough job working in this onshore Cauvery Basin block squeezed between two difficult partners, GAIL and GSPC.
8Three wells will have depths of 1,500 metres, 1700 metres and 2,300 metres respectively.
8The first well is expected to be spud in 2016.
8Click on Reports for details on money to be spent as well details on seismic surveys and the kind of geological formations that the wells are likely to encounter in the block.
8Also know more about the the block and also on Chakrabarty's oil and gas assets in other parts of the world and how he has managed to hedge his bets profitably till the year 2017.
Click on Reports for more Details
8Chakrabarty has a tough job working in this onshore Cauvery Basin block squeezed between two difficult partners, GAIL and GSPC.
8Three wells will have depths of 1,500 metres, 1700 metres and 2,300 metres respectively.
8The first well is expected to be spud in 2016.
8Click on Reports for details on money to be spent as well details on seismic surveys and the kind of geological formations that the wells are likely to encounter in the block.
8Also know more about the the block and also on Chakrabarty's oil and gas assets in other parts of the world and how he has managed to hedge his bets profitably till the year 2017.
Click on Reports for more Details
Cairn India Ltd continue to work hard on the Ravva block that it jointly owns with ONGC and Videocon.
8The company is nqw looking for experienced oil field chemical suppliers under the following terms and conditions:
8Supply of consolidated chemicals for offshore and onshore terminals
8Storage and Inventory Management (vendor to supply storage/warehousing for all chemicals)
8Logistics and Handling (from its base to point of usage at various locations, well pads, terminals)
8Management of HSE aspects including maintaining MSDS database and developing contingency plans for handling
8Review of dosing locations and suggesting the optimum locations
8Collecting samples and setting up laboratories and procedures for Quality Control
Providing requisite skilled and qualified manpower for these jobs Details
8The company is nqw looking for experienced oil field chemical suppliers under the following terms and conditions:
8Supply of consolidated chemicals for offshore and onshore terminals
8Storage and Inventory Management (vendor to supply storage/warehousing for all chemicals)
8Logistics and Handling (from its base to point of usage at various locations, well pads, terminals)
8Management of HSE aspects including maintaining MSDS database and developing contingency plans for handling
8Review of dosing locations and suggesting the optimum locations
8Collecting samples and setting up laboratories and procedures for Quality Control
Providing requisite skilled and qualified manpower for these jobs Details
The website has learnt that subsequent to its story that urea units will be allowed to buy incremental gas from any supplier provided a transparent process is followed, the website has learnt that the circular in fact provided only for limited flexibility.
8The DOF has stipulated that in case the LNG requirement of a particular plant exceeds 10% of the quantity of LNG indicated by it for bidding due to shortfall in domestic gas, it can be procured from the L-1 bidder if the quantity is available with him.
8Then again, in case of shortage of gas due to unforeseen reasons, like reduction in supply of domestic gas, in respect of a plant which did not indicate any RLNG requirement at the time of bidding, such plant may arrange requisite gas on its own.
8This dispensation will be monitored by the FICC for proper implementation..
8So clearly the freedom to market gas comes with a lot of caveats.
Click on our details for more Details
8The DOF has stipulated that in case the LNG requirement of a particular plant exceeds 10% of the quantity of LNG indicated by it for bidding due to shortfall in domestic gas, it can be procured from the L-1 bidder if the quantity is available with him.
8Then again, in case of shortage of gas due to unforeseen reasons, like reduction in supply of domestic gas, in respect of a plant which did not indicate any RLNG requirement at the time of bidding, such plant may arrange requisite gas on its own.
8This dispensation will be monitored by the FICC for proper implementation..
8So clearly the freedom to market gas comes with a lot of caveats.
Click on our details for more Details
Some regulations can have a perverse way of working
8A case at point is GAIL's fight to be able to evacuate gas available from ONGC's North Tapti fields at the Suvali terminal in Gujarat to its high pressure trunk network just 38 km away.
8So far, GAIL had been in a swap arrangement with Gujarat State Petronet Ltd (GSPL) by which the gas at Suvali was distributed in a low pressure local network operated by Gujarat State Petronet Ltd GSPL.
8But with the supply of gas at Suvali going up, GAIL had wanted the gas to go directly to its main network. What is more there is not enough concomitant gas that can be swapped with GAIL's entitlement in the GSPL network.
8This move was opposed by GSPL on the ground that it has a network that can ferry the gas and it can take the excess gas to Hazira for onward transmission to GAIL's customers.
In other words, GSPL has argued that what GAIL is trying to do is built a pipeline that results in a duplicity of infrastructure.
8GSPL has a valid argument but GAIL's counter claim is that its customers will have to pay pipeline tariffs twice over in case the GSPL network is used, whereas GAIL is not planning to charge customers for transporting the gas from the Suvali terminal to its main network.
8The ball is now in PNGRB's court, and a decision is likely to be taken soon.
Click on our Reports section for more. Details
8A case at point is GAIL's fight to be able to evacuate gas available from ONGC's North Tapti fields at the Suvali terminal in Gujarat to its high pressure trunk network just 38 km away.
8So far, GAIL had been in a swap arrangement with Gujarat State Petronet Ltd (GSPL) by which the gas at Suvali was distributed in a low pressure local network operated by Gujarat State Petronet Ltd GSPL.
8But with the supply of gas at Suvali going up, GAIL had wanted the gas to go directly to its main network. What is more there is not enough concomitant gas that can be swapped with GAIL's entitlement in the GSPL network.
8This move was opposed by GSPL on the ground that it has a network that can ferry the gas and it can take the excess gas to Hazira for onward transmission to GAIL's customers.
In other words, GSPL has argued that what GAIL is trying to do is built a pipeline that results in a duplicity of infrastructure.
8GSPL has a valid argument but GAIL's counter claim is that its customers will have to pay pipeline tariffs twice over in case the GSPL network is used, whereas GAIL is not planning to charge customers for transporting the gas from the Suvali terminal to its main network.
8The ball is now in PNGRB's court, and a decision is likely to be taken soon.
Click on our Reports section for more. Details
GAIL has taken the example of how H-Energy was given permission to run a pipeline to Dabhol from its Jaigarh LNG terminal despite objections from the public sector gas major that it had a nearby pipeline in place to ferry the gas.
8GAIL had at that point claimed that its Dabhol-Bangalore pipeline was the nearest pipeline, just 22 km from the LNG terminal.
8But nevertheless, H-Energy was given permission by the PNGRB to build a pipeline to Dabhol, GAIL argues.
8GAIL is now using the same example, ironically, to counter a similar argument by GSPL for offtake of gas from the Suvali terminal.
Click on our Reports section for more. Details
8GAIL had at that point claimed that its Dabhol-Bangalore pipeline was the nearest pipeline, just 22 km from the LNG terminal.
8But nevertheless, H-Energy was given permission by the PNGRB to build a pipeline to Dabhol, GAIL argues.
8GAIL is now using the same example, ironically, to counter a similar argument by GSPL for offtake of gas from the Suvali terminal.
Click on our Reports section for more. Details
The problem with really remote production locations for gas is that they are really remote for any kind of viable businesses to be set up to process the gas.
8The case at point is ONGC's attempt to sell 37,000 SCMD of gas -- on a fallback basis -- from the Banskandi EPS in the company's Cachar Forward Base in Assam.
8The reserve price of $3.82/mmbtu may seem low but it is really a high price considering the remote location.
8What is more to the reserve gas price, taxes and duties will have to be added.
8Then again, the bidder has to provide security deposits for the gas.
8Since ONGC is the monopoly supplier, what happens to the entrepreneur, if for some reason, the field runs into trouble?
8Clearly the buyer will have to put up an alternate feedstock stream to take care of such an emergency.
8It is really a no win situation for anyone except for the most optimistic of entrepreneurs.
8More flexibility is required in the pricing of such gas
Click on our Reports section for more. Details
8The case at point is ONGC's attempt to sell 37,000 SCMD of gas -- on a fallback basis -- from the Banskandi EPS in the company's Cachar Forward Base in Assam.
8The reserve price of $3.82/mmbtu may seem low but it is really a high price considering the remote location.
8What is more to the reserve gas price, taxes and duties will have to be added.
8Then again, the bidder has to provide security deposits for the gas.
8Since ONGC is the monopoly supplier, what happens to the entrepreneur, if for some reason, the field runs into trouble?
8Clearly the buyer will have to put up an alternate feedstock stream to take care of such an emergency.
8It is really a no win situation for anyone except for the most optimistic of entrepreneurs.
8More flexibility is required in the pricing of such gas
Click on our Reports section for more. Details
Raising operational and energy efficiency seems be the mantra today. Such efficiencies are considered to be a key element in keeping emissions low and global warming under check.
8While efficiencies are being improved in other industries, the Indian gas sector seems to be happily oblivious of it.
8Take the example of GAIL. In a study taken out by none other than Accenture, GAIL has claimed that its energy efficiency drive has brought about savings of Rs 182 crore over three year and it has stopped 363,653 tonnes of CO2 emissions from being vented out.
8But who is actually measuring this? Is there a standard operating procedure followed to measure such savings?
8Similarly, the world over, it has now been established that one of the major causes of global warming is the very high level of methane leakages in the gas transportation and processing network.
8Here again, GAIL has done some work but does it have the rigor and framework to measure emissions and lekages in its large transportation network across the country?
8The fact that a leaking pipeline lead to a blast that killed 21 people last year can be taken as a good indication that GAIL's network is one of the leakiest in the world. While attempts are being made to window dress its safety record, it is not possible to plug the gap in just one year
8In the Accenture report that is now being showcased in Paris, an example is given of how GAIL has switched to solar power from gas to fire its Closed Circuit Vapor Turbines (CCVT) that resulted in savings of Rs 2.20 crore annually on an investment of Rs 3.30 crore.
8Is that all GAIL, the country's largest gas company, has to showcase?
8If GAIL has indeed saved Rs 182 crore, it could have shown up another more representative example to the world.
Click on our Reports section for more. Details
8While efficiencies are being improved in other industries, the Indian gas sector seems to be happily oblivious of it.
8Take the example of GAIL. In a study taken out by none other than Accenture, GAIL has claimed that its energy efficiency drive has brought about savings of Rs 182 crore over three year and it has stopped 363,653 tonnes of CO2 emissions from being vented out.
8But who is actually measuring this? Is there a standard operating procedure followed to measure such savings?
8Similarly, the world over, it has now been established that one of the major causes of global warming is the very high level of methane leakages in the gas transportation and processing network.
8Here again, GAIL has done some work but does it have the rigor and framework to measure emissions and lekages in its large transportation network across the country?
8The fact that a leaking pipeline lead to a blast that killed 21 people last year can be taken as a good indication that GAIL's network is one of the leakiest in the world. While attempts are being made to window dress its safety record, it is not possible to plug the gap in just one year
8In the Accenture report that is now being showcased in Paris, an example is given of how GAIL has switched to solar power from gas to fire its Closed Circuit Vapor Turbines (CCVT) that resulted in savings of Rs 2.20 crore annually on an investment of Rs 3.30 crore.
8Is that all GAIL, the country's largest gas company, has to showcase?
8If GAIL has indeed saved Rs 182 crore, it could have shown up another more representative example to the world.
Click on our Reports section for more. Details
Authorities will have to look at the flaring and venting of natural gas and other emissions in the gas industry and make attempts to bring them down to zero levels.
8A study has shown that methane is the second most prevalent GHG emitted from human activities in the US, and nearly 30% of these emissions come from oil production, transmission, and distribution of natural gas.
8Higher control standards for such emissions will now be the norm than the exception, especially in India.
8The global warming potential (GWP) of methane is 25 times greater than that of carbon dioxide (CO2), and the venting of methane releases more than nine times as much CO2 equivalent GHG on a tonnage basis
8Technology not only exists but is readily available that provides 100% combustion efficiency against flaring or venting of gas, so that hydrocarbons are fully converted to CO2 and water vapor.
8The venting of gas happens in the production and transportation of oil and gas.
8Similarly, VOC emissions and pollutants known as air toxics, in particular, benzene, toluene, ethylbenzene, and xylene (BTEX) are released in the natural gas dehydration process.
8Technology now exists to reduce these pollutants to benign CO2 and water vapor through clean, efficient combustion technology that uses 60% to 80% less fuel gas than a traditional flare,
8Using such technology makes business sense too as reduction in operating costs typically delivers a payout in fewer than 6 months on the capital investment.
Click on Reports for more Details
8A study has shown that methane is the second most prevalent GHG emitted from human activities in the US, and nearly 30% of these emissions come from oil production, transmission, and distribution of natural gas.
8Higher control standards for such emissions will now be the norm than the exception, especially in India.
8The global warming potential (GWP) of methane is 25 times greater than that of carbon dioxide (CO2), and the venting of methane releases more than nine times as much CO2 equivalent GHG on a tonnage basis
8Technology not only exists but is readily available that provides 100% combustion efficiency against flaring or venting of gas, so that hydrocarbons are fully converted to CO2 and water vapor.
8The venting of gas happens in the production and transportation of oil and gas.
8Similarly, VOC emissions and pollutants known as air toxics, in particular, benzene, toluene, ethylbenzene, and xylene (BTEX) are released in the natural gas dehydration process.
8Technology now exists to reduce these pollutants to benign CO2 and water vapor through clean, efficient combustion technology that uses 60% to 80% less fuel gas than a traditional flare,
8Using such technology makes business sense too as reduction in operating costs typically delivers a payout in fewer than 6 months on the capital investment.
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It is best to allow competitive forces to bring about greater energy efficiency as is proved by India Oil Corporation's (IOC's ) efforts to stay on top of the curve.
8The company in fact did a global benchmarking study to identify best practices on improving operational efficiency. The aim was to be amongst the most efficient refineries in the world.
8Better energy efficiency leads to higher GRMs and that is the single most motivating factor that drove IOC to pump as much as Rs 3000 crore into projects that bring about a cut in energy usage.
8Some of the measures include replacement of high energy low efficiency equipment with more efficient alternatives.
8One example was the introduction of pre-heating of fuels across refineries to significantly reduce the energy needed in boilers.
8These projects have resulted in fuel savings to the tune of 50,000-100,000 tonnes of CO2 in the past 3 years alone,
8The interesting part is that there is a good return on such investments.
8Financial savings from IOC's efficiency drive is a whopping Rs 870 crore.
8In contrast, GAIL is a monopoly, its status accentuated by its primacy in the gas pooling system. The government often backs its demand to retain both transmission and marketing heteronomy.
8Attempts by the PNGRB to split up the monopoly is resisted tooth and nail by GAIL.
8Unless an adequate amount of transparency is introduced, expect little accountability from the gas major.
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8The company in fact did a global benchmarking study to identify best practices on improving operational efficiency. The aim was to be amongst the most efficient refineries in the world.
8Better energy efficiency leads to higher GRMs and that is the single most motivating factor that drove IOC to pump as much as Rs 3000 crore into projects that bring about a cut in energy usage.
8Some of the measures include replacement of high energy low efficiency equipment with more efficient alternatives.
8One example was the introduction of pre-heating of fuels across refineries to significantly reduce the energy needed in boilers.
8These projects have resulted in fuel savings to the tune of 50,000-100,000 tonnes of CO2 in the past 3 years alone,
8The interesting part is that there is a good return on such investments.
8Financial savings from IOC's efficiency drive is a whopping Rs 870 crore.
8In contrast, GAIL is a monopoly, its status accentuated by its primacy in the gas pooling system. The government often backs its demand to retain both transmission and marketing heteronomy.
8Attempts by the PNGRB to split up the monopoly is resisted tooth and nail by GAIL.
8Unless an adequate amount of transparency is introduced, expect little accountability from the gas major.
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Competitive forces also push private sector companies to push for energy efficiency.
A case at point is Essar Oil, which has been consistently recognized as one of the top climate disclosure leaders from India and among India’s most energy efficient companies.
8Essar Oil has been recognised for the 5th year in a row by Carbon Disclosure Project (CDP) initiative
8Harsh competition to stay afloat in the international market for petroleum products is what drives Essar so hard.
8The refiner is among the only two organisations in the energy sector to have made it to the index.
8The disclosure score assesses the quality and extent of a company’s response to emissions. A high disclosure score signals that the company provided comprehensive information about the measurement and management of its carbon footprint, its climate change strategy and risk management processes and outcomes.
8In recognition of Essar Oil’s sustained performance all these years, the company has also been featured in a CDP report on the 20 most energy efficient businesses in India.
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A case at point is Essar Oil, which has been consistently recognized as one of the top climate disclosure leaders from India and among India’s most energy efficient companies.
8Essar Oil has been recognised for the 5th year in a row by Carbon Disclosure Project (CDP) initiative
8Harsh competition to stay afloat in the international market for petroleum products is what drives Essar so hard.
8The refiner is among the only two organisations in the energy sector to have made it to the index.
8The disclosure score assesses the quality and extent of a company’s response to emissions. A high disclosure score signals that the company provided comprehensive information about the measurement and management of its carbon footprint, its climate change strategy and risk management processes and outcomes.
8In recognition of Essar Oil’s sustained performance all these years, the company has also been featured in a CDP report on the 20 most energy efficient businesses in India.
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Hindustan Petroleum Corporation Limited (HPCL) is planning to install three additional tankages at its Manmad installation in Nasik, Maharastra.
8This is one of the major marketing installation of HPCL that receives petroleum product from BPCL's dedicated pipeline.
8The products received are Motor Sprit (MS) BSIII, High Speed Diesel (HSD) BS III.
8HPCL through its Manamad installation is catering to the needs of 300 retail outlets and 50 industrial customers across 12 districts of Maharastra.
8This facility consists of a totalof eight above ground storage tanks (including 2 water tanks) and underground storage tanks.
8The company justifies the proposed project in view of the consistent increase in MS demand in market and the need to supply of gasohol ( MS+ Ethanol) to retail customers.
8The list of proposed additional tankages is as follows:-
-- One above ground motor spirit tank of 2500 KL capacity
--Two underground tanks of 180 KL capacity each for ethanol storage
8The onsent for establishment (CFE) from Maharashtra State Pollution Control Board has already been obtained.
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8This is one of the major marketing installation of HPCL that receives petroleum product from BPCL's dedicated pipeline.
8The products received are Motor Sprit (MS) BSIII, High Speed Diesel (HSD) BS III.
8HPCL through its Manamad installation is catering to the needs of 300 retail outlets and 50 industrial customers across 12 districts of Maharastra.
8This facility consists of a totalof eight above ground storage tanks (including 2 water tanks) and underground storage tanks.
8The company justifies the proposed project in view of the consistent increase in MS demand in market and the need to supply of gasohol ( MS+ Ethanol) to retail customers.
8The list of proposed additional tankages is as follows:-
-- One above ground motor spirit tank of 2500 KL capacity
--Two underground tanks of 180 KL capacity each for ethanol storage
8The onsent for establishment (CFE) from Maharashtra State Pollution Control Board has already been obtained.
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The advent of the low cost electric car will have a dramatic impact in the world.
8By the year 2025, the range of an EV is likely to go well beyond 250 km and may equal the mileage from a full tank of a regular car.
8The battery charging time too is likely to be cut drastically. A time might come when a car can be charged over a coffee break or in less than 10 minutes of even less.
8According to Goldman Sachs, there will be 10 times more electric vehicles in the market than today, bringing in $600 billion in revenues to producers of these cars.
8There will be as many as 25 million hybrid and electric vehicles in the world by 2025, account for a quarter of the total number of cars.
8Although technological advances play a significant role in enhancing battery capacity, growing economies of scale are the key driver of cost reductions. Led by Tesla and Panasonic’s 35GW Gigafactory, battery manufacturers have committed to approximately triple current production capacity over the next five years
8Then, experts have predicted, there will be a tipping point when electric cars are the only cars that will sell.
8It is difficult to project when this point will arrive but some experts believe that it can happen sooner than later given the very rapid pace at which technology is marching ahead.
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8By the year 2025, the range of an EV is likely to go well beyond 250 km and may equal the mileage from a full tank of a regular car.
8The battery charging time too is likely to be cut drastically. A time might come when a car can be charged over a coffee break or in less than 10 minutes of even less.
8According to Goldman Sachs, there will be 10 times more electric vehicles in the market than today, bringing in $600 billion in revenues to producers of these cars.
8There will be as many as 25 million hybrid and electric vehicles in the world by 2025, account for a quarter of the total number of cars.
8Although technological advances play a significant role in enhancing battery capacity, growing economies of scale are the key driver of cost reductions. Led by Tesla and Panasonic’s 35GW Gigafactory, battery manufacturers have committed to approximately triple current production capacity over the next five years
8Then, experts have predicted, there will be a tipping point when electric cars are the only cars that will sell.
8It is difficult to project when this point will arrive but some experts believe that it can happen sooner than later given the very rapid pace at which technology is marching ahead.
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The jury is still out on the capacity of a few other disruptive technologies to make the grade
8For whether they will becoming disruptive like solar or wind power or electric vehicles is something only time will tell.
8Marine power (which uses tidal energy) and fuel cell vehicles are intriguing technologies, but are still in the early stages of commercialization.
8Fuel cell driven vehicles (FCVs) are expected to grow at an 86% CAGR for the ten years from 2015 to 2025.
8Even at triple the pace, less than 1% of cars sold in 2025 would be FCVs.
8As far as Carbon Capture and Storage is concerned, less than 15 CCS projects are operational today and a number of CCS flagship projects in the US and Europe have been cancelled in the past two years.
8With limited potential for capital intensive CCS investment, there is imited near-term potential in this technology.
8Clearly, Indian companies or agencies looking to select the winning technology to bet upon will have to careful in what they select.
8The technology is evolving rapidly and today's winner can well be tomorrow's loser.
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8For whether they will becoming disruptive like solar or wind power or electric vehicles is something only time will tell.
8Marine power (which uses tidal energy) and fuel cell vehicles are intriguing technologies, but are still in the early stages of commercialization.
8Fuel cell driven vehicles (FCVs) are expected to grow at an 86% CAGR for the ten years from 2015 to 2025.
8Even at triple the pace, less than 1% of cars sold in 2025 would be FCVs.
8As far as Carbon Capture and Storage is concerned, less than 15 CCS projects are operational today and a number of CCS flagship projects in the US and Europe have been cancelled in the past two years.
8With limited potential for capital intensive CCS investment, there is imited near-term potential in this technology.
8Clearly, Indian companies or agencies looking to select the winning technology to bet upon will have to careful in what they select.
8The technology is evolving rapidly and today's winner can well be tomorrow's loser.
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A background research note with this website says that while targets have been fixed to control climate initiatives up to the year 2050, it is the next 15 years -- up to 2025 -- when we will see the most disruptive changes in technology that will dramatically change the existing energy paradigm in the world.
8As of now the choice is limited as bet is on just four "disruptive" technologies to deliver the world from warming up beyond acceptable limits and they are: Solar power, wind power, the electric car and the LED light.
8One technology that is being watched with much interest is the battery driven car that can be recharged through grid power.
The following progress is expected in the electric car in the next five years, from 2015 to 2020:
8The car battery cost is likely to come down 63% from $14,250 currently to a more acceptable $5,250.
8The weight of the battery is expected to halve from 250 kg to 120 kg in this interregnum.
8Battery capacity is expected to go up from 20 kWh to 30 kWh.
8The range of the battery car will go up 72%, from 160 km now to 275 km without recharge.
8Battery cars currently have just 1% of the market in 2010, and the figure has gone up to 3% now.
8Market share will climb to 7% in 2020 and will go up to 22% in 2025.
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8As of now the choice is limited as bet is on just four "disruptive" technologies to deliver the world from warming up beyond acceptable limits and they are: Solar power, wind power, the electric car and the LED light.
8One technology that is being watched with much interest is the battery driven car that can be recharged through grid power.
The following progress is expected in the electric car in the next five years, from 2015 to 2020:
8The car battery cost is likely to come down 63% from $14,250 currently to a more acceptable $5,250.
8The weight of the battery is expected to halve from 250 kg to 120 kg in this interregnum.
8Battery capacity is expected to go up from 20 kWh to 30 kWh.
8The range of the battery car will go up 72%, from 160 km now to 275 km without recharge.
8Battery cars currently have just 1% of the market in 2010, and the figure has gone up to 3% now.
8Market share will climb to 7% in 2020 and will go up to 22% in 2025.
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What is also likely to push the promotion of grid recharged electric vehicles is not national but sub-national compulsions, at the level of a state or a city within a country.
8California for example is striking out at conventional vehicles by pushing for zero emission norms. A system of credits has being worked out, providing higher credits to those vehicles who have larger electric power range with recharging time at 15 minutes or less. Californian emission norms are far tougher than what the US as a whole is willing to implement.
8So clearly, it is from cities or regions reeling under severe air pollution, where most of the action is likely to come to move towards electric vehicles.
8Beijing is another city that is imposing a tougher emission norm from what China has specified for the country as a whole. The Chinese norm itself is 118 g/km by 2020, which is significantly lower than the US limit of 146 gm /kg.
8Then again, London is now pushing harder by identifying an Ultra-Low Emission Zone which will from May 2016 onwards no longer exempt hybrid vehicles from the stiff Congestion charge. Only pure electric vehicles will be allowed in without the charge.
8Similar policies, favoring grid-connected vehicles over hybrid vehicles, have recently been put in place in California and Beijing.
8Delhi -- possibly under intense public pressure -- is going to be another city like Beijing, which will vigorously move in this direction -- because of the emergency levels of air pollution in the city -- even though electric cars are not in vogue in India at this juncture.
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8California for example is striking out at conventional vehicles by pushing for zero emission norms. A system of credits has being worked out, providing higher credits to those vehicles who have larger electric power range with recharging time at 15 minutes or less. Californian emission norms are far tougher than what the US as a whole is willing to implement.
8So clearly, it is from cities or regions reeling under severe air pollution, where most of the action is likely to come to move towards electric vehicles.
8Beijing is another city that is imposing a tougher emission norm from what China has specified for the country as a whole. The Chinese norm itself is 118 g/km by 2020, which is significantly lower than the US limit of 146 gm /kg.
8Then again, London is now pushing harder by identifying an Ultra-Low Emission Zone which will from May 2016 onwards no longer exempt hybrid vehicles from the stiff Congestion charge. Only pure electric vehicles will be allowed in without the charge.
8Similar policies, favoring grid-connected vehicles over hybrid vehicles, have recently been put in place in California and Beijing.
8Delhi -- possibly under intense public pressure -- is going to be another city like Beijing, which will vigorously move in this direction -- because of the emergency levels of air pollution in the city -- even though electric cars are not in vogue in India at this juncture.
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Norway is already being bandied as an example of how the world is going to eventually use electric cars.
8EVs and hybrid vehicles today make up as much as 16% of all vehicle sales in Norway.
8The Norwegian government promoted this development in several ways:
8Starting from the mid-1990s, Norway started to put in place subsides and other extensive incentives to instill consumer demand.
8Customers are incentivized by effective subsidies such as the exemption from purchase tax, VAT, toll road charges, registration tax, and annual circulation tax, free parking and, last but not least, the privileged permission to use bus lanes.
8In 2008, the Norwegian government followed up with the launch of a municipal EV charging infrastructure program, unleashing a rapid build-up.
8Nationwide Norway has jumped from under 500 charging stations in 2009 to just under 8,000 in 2015
8Regulatory incentives were in place since the 1990s, but it was not until the technological advancement of EVs made them acceptable as an alternative for end users that Norway’s EV market share took off.
8Is this replicable across the global car market?
8Subsidies such as those given in Norway are expected to be phased out when the cost of EVs come nearer to conventional cars in the next 5 to 10 years.
8With global warming now a reality and with cities around the world witnessing suffocating levels of pollution, many of them are now likely to put in regulatory and subsidy systems that will be somewhat akin to what Norway had done.
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8EVs and hybrid vehicles today make up as much as 16% of all vehicle sales in Norway.
8The Norwegian government promoted this development in several ways:
8Starting from the mid-1990s, Norway started to put in place subsides and other extensive incentives to instill consumer demand.
8Customers are incentivized by effective subsidies such as the exemption from purchase tax, VAT, toll road charges, registration tax, and annual circulation tax, free parking and, last but not least, the privileged permission to use bus lanes.
8In 2008, the Norwegian government followed up with the launch of a municipal EV charging infrastructure program, unleashing a rapid build-up.
8Nationwide Norway has jumped from under 500 charging stations in 2009 to just under 8,000 in 2015
8Regulatory incentives were in place since the 1990s, but it was not until the technological advancement of EVs made them acceptable as an alternative for end users that Norway’s EV market share took off.
8Is this replicable across the global car market?
8Subsidies such as those given in Norway are expected to be phased out when the cost of EVs come nearer to conventional cars in the next 5 to 10 years.
8With global warming now a reality and with cities around the world witnessing suffocating levels of pollution, many of them are now likely to put in regulatory and subsidy systems that will be somewhat akin to what Norway had done.
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The website had written earlier that the biggest challenge to the demand for MS and HSD could come from the electric vehicles (EVs).
8The technology has been around for quite some time, but it is only now that there is talk that such a car can be cost competitive to a conventional diesel or petrol driven passenger car.
8The forecast is that EVs could be cost competitive by 2025 but the point to note is that it can happen earlier than what has been predicted.
8The cost of Tesla’s recent Model-S was at least five years ahead of this industry's own projection.
8As such, assuming learning rates are maintained, EVs could be cost competitive with internal combustion engine (ICE) cars by 2025 according to conservative estimates..
8One could expect that once cost parity is reached, demand for EVs will increase exponentially
8BMW, for example, has already said they expect all their models to be electric by 2025.
8Interestingly however big oil companies such as Exxon Mobil and Shell have not taken these projections into consideration. Instead, they continue to be bearish on the cost competitiveness of EVs
8The winds of change will sweep India as well. And the huge liquid fuel edifice -- in terms of retail outlets and distribution networks -- built laboriously by the oil companies may become outdated in 10 years time if EV technology continues to move as rapidly as it is doing now.
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8The technology has been around for quite some time, but it is only now that there is talk that such a car can be cost competitive to a conventional diesel or petrol driven passenger car.
8The forecast is that EVs could be cost competitive by 2025 but the point to note is that it can happen earlier than what has been predicted.
8The cost of Tesla’s recent Model-S was at least five years ahead of this industry's own projection.
8As such, assuming learning rates are maintained, EVs could be cost competitive with internal combustion engine (ICE) cars by 2025 according to conservative estimates..
8One could expect that once cost parity is reached, demand for EVs will increase exponentially
8BMW, for example, has already said they expect all their models to be electric by 2025.
8Interestingly however big oil companies such as Exxon Mobil and Shell have not taken these projections into consideration. Instead, they continue to be bearish on the cost competitiveness of EVs
8The winds of change will sweep India as well. And the huge liquid fuel edifice -- in terms of retail outlets and distribution networks -- built laboriously by the oil companies may become outdated in 10 years time if EV technology continues to move as rapidly as it is doing now.
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Will the advent of the electric car mean the death of the quintessential petrol or diesel retail outlet?
8If electric cars are going to take over, what will the Oil Marketing Companies do with the thousands of retail outlets that they have laboriously built over the last several decades?
8What will happen to all the oil refineries if the requirement of diesel and petrol were to fall dramatically or disappear within a 10 to 15-year timeframe when electric cars replace conventional cars?
8Agencies like the EIA are still conservative in their estimate of how disruptive technology can hit the oil and gas sector but it is time for Indian petroleum companies to prepare for an entirely new future or else their very survival will become difficult.
8What is required is a disaster response plan from them taking the worse case scenario into account.
8Disruptive technology has a surreptitious way of undermining existing businesses, and the slow and stolid OMCs will not know what will hit them when the storm begins.
8Give the silos in which they live, it is quite possible that the Tsunami will hit when they are least prepared for it.
8Will it make sense to then to convert their retail outlets into re-charging outlets for electric vehicles? Will there be more money in erecting real estate in retail outlets, at least in those outlets that are company owned and located near city centres?
8This is clearly the biggest crisis that the oil marketing companies are facing.
8How and when they react to the challenge is going to determine how their future will unfold.
8Multiple strategy teams and consultants will have to be immediately deployed to study the progress of disruptive technology and the timeframe in which it will mature.
8Rapid responses will have to be evolved to tackle these changes.
8A war is soon goingto come on, and the OMCs will have to fight it with all their strength.
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8If electric cars are going to take over, what will the Oil Marketing Companies do with the thousands of retail outlets that they have laboriously built over the last several decades?
8What will happen to all the oil refineries if the requirement of diesel and petrol were to fall dramatically or disappear within a 10 to 15-year timeframe when electric cars replace conventional cars?
8Agencies like the EIA are still conservative in their estimate of how disruptive technology can hit the oil and gas sector but it is time for Indian petroleum companies to prepare for an entirely new future or else their very survival will become difficult.
8What is required is a disaster response plan from them taking the worse case scenario into account.
8Disruptive technology has a surreptitious way of undermining existing businesses, and the slow and stolid OMCs will not know what will hit them when the storm begins.
8Give the silos in which they live, it is quite possible that the Tsunami will hit when they are least prepared for it.
8Will it make sense to then to convert their retail outlets into re-charging outlets for electric vehicles? Will there be more money in erecting real estate in retail outlets, at least in those outlets that are company owned and located near city centres?
8This is clearly the biggest crisis that the oil marketing companies are facing.
8How and when they react to the challenge is going to determine how their future will unfold.
8Multiple strategy teams and consultants will have to be immediately deployed to study the progress of disruptive technology and the timeframe in which it will mature.
8Rapid responses will have to be evolved to tackle these changes.
8A war is soon goingto come on, and the OMCs will have to fight it with all their strength.
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Over a period of time -- and necessarily any time very soon -- the fate of as many as 58,913 retail outlets set up the three oil marketing companies -- IOC, PCL and HPCL -- are at stake.
8For reference purposes, the website carries here the latest data (as of November 30, 2015) on retail outlets owned by the trio.
The data is arranged under the following heads:
8State-wise company wise allocation of retail outlets
8Outlets that have been allotted and in operation
8Outlets that have been allotted but are not in operation but are in different stages of commissioning
8The infrastructure is massive by any yardstick, with Maharashtra exhibiting the highest number of outlets.
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8For reference purposes, the website carries here the latest data (as of November 30, 2015) on retail outlets owned by the trio.
The data is arranged under the following heads:
8State-wise company wise allocation of retail outlets
8Outlets that have been allotted and in operation
8Outlets that have been allotted but are not in operation but are in different stages of commissioning
8The infrastructure is massive by any yardstick, with Maharashtra exhibiting the highest number of outlets.
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A study shows that there are a clutch of disruptive technologies that promise to reduce greenhouse emissions in the pipeline today.
8All of them have interesting concepts to offer and some of them are already under implementation and may be financially viable but only a few will ever make it big or achieve the scale that will ensure success.
8The technologies that are competing for limelight are solar energy, first generation biofuels, hydrid cars, hydro power, onshore wind energy, LED lights, nuclear power, smart grid, biomass, stationary battery, second generation biofuels, Carbon Capture and Storage, smart appliances and marine power.
8Eventually a research group has identified only four technologies that have achieved the size and scale to be dubbed disruptive.
The technologies are:
--Solar power
--Wind power
--LED lighting
8While nuclear and hydro power remain important low carbon sources in the global energy mix, they don't seem to have the critical mass to make the all important difference.
Biofuels have been among the most heavily subsidized low carbon technologies, but growth is fading as governments are scaling back their support as they worry not only about the impact on global food security (biofuels supply only 0.3% of global fuel, but use 2%-3% of global farmland) but also about the limited emissions savings once the entire lifecycle is taken into account.
8Offshore wind and concentrated solar power are no match for onshore wind and solar PV, whether in terms of scale, volume growth, or cost reductions. They make up a mere 2% of wind and solar power installed, and are still heavily dependent on subsidies.
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8All of them have interesting concepts to offer and some of them are already under implementation and may be financially viable but only a few will ever make it big or achieve the scale that will ensure success.
8The technologies that are competing for limelight are solar energy, first generation biofuels, hydrid cars, hydro power, onshore wind energy, LED lights, nuclear power, smart grid, biomass, stationary battery, second generation biofuels, Carbon Capture and Storage, smart appliances and marine power.
8Eventually a research group has identified only four technologies that have achieved the size and scale to be dubbed disruptive.
The technologies are:
--Solar power
--Wind power
--LED lighting
8While nuclear and hydro power remain important low carbon sources in the global energy mix, they don't seem to have the critical mass to make the all important difference.
Biofuels have been among the most heavily subsidized low carbon technologies, but growth is fading as governments are scaling back their support as they worry not only about the impact on global food security (biofuels supply only 0.3% of global fuel, but use 2%-3% of global farmland) but also about the limited emissions savings once the entire lifecycle is taken into account.
8Offshore wind and concentrated solar power are no match for onshore wind and solar PV, whether in terms of scale, volume growth, or cost reductions. They make up a mere 2% of wind and solar power installed, and are still heavily dependent on subsidies.
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Which way are the Indian E&P companies headed in this turmoil?
8Should they be transiting to holding more ecological friendly fossil fuels like gas instead of oil, or should they look for new business opportunities altogether?
8Where should an ONGC or a GAIL or a Cairn India be headed from here?
8All these companies are very badly equipped to handle disruptive change.
8The thinking process is just not right and internal processes do not allow for innovation.
8They would rather take the risk of sinking another few billion dollar in hydrocarbon reserves than spend the same money investing in cutting edge low carbon technology
8It is unlikely that the ONGC chairman will ever think of putting some of his surplus money in a battery start-up firm -- that promises to come up with a disruptive yet low cost, low weight and quickly chargeable energy storage technology. He will be happier picking up a stake in a remote Siberian gas field where the reserves are high and the acquisition cost is attractive.
8It is equally unthinkable that Oil India will ever pick up a small stake in an electric vehicle manufacturing start-up somewhere in California.
8GAIL would know no better than to invest in one more LNG terminal with the ostensible aim of supplying gas to India even though there is now such a glut of new LNG terminals all over the world that it is impossible for many of them to make money for a long time to come.
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8Should they be transiting to holding more ecological friendly fossil fuels like gas instead of oil, or should they look for new business opportunities altogether?
8Where should an ONGC or a GAIL or a Cairn India be headed from here?
8All these companies are very badly equipped to handle disruptive change.
8The thinking process is just not right and internal processes do not allow for innovation.
8They would rather take the risk of sinking another few billion dollar in hydrocarbon reserves than spend the same money investing in cutting edge low carbon technology
8It is unlikely that the ONGC chairman will ever think of putting some of his surplus money in a battery start-up firm -- that promises to come up with a disruptive yet low cost, low weight and quickly chargeable energy storage technology. He will be happier picking up a stake in a remote Siberian gas field where the reserves are high and the acquisition cost is attractive.
8It is equally unthinkable that Oil India will ever pick up a small stake in an electric vehicle manufacturing start-up somewhere in California.
8GAIL would know no better than to invest in one more LNG terminal with the ostensible aim of supplying gas to India even though there is now such a glut of new LNG terminals all over the world that it is impossible for many of them to make money for a long time to come.
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The fact that the global tanker market continues to remain bullish was evident from the announcement that Great Eastern Shipping has bought a 46,000 DWT Japanese Medium Range Product Tanker which has since been renamed as "Jag Padma".
8The tanker will join the company's fleet by January, 2016
8The Company’s current fleet stands at 30 vessels, comprising 21 tankers (8 crude carriers, 12 product tankers, 1 LPG carrier) and 9 dry bulk carriers (4 Kamsarmax, 5 Supramax) with an average age of 9.6 years aggregating 2.36 million DWT. The order book of the company comprises three dry bulk carriers and one product tanker.
8The worldwide market for buyouts witnessed more activity in recent days. On the tanker side, there was an en-bloc sale of the “Front Avon” (50,800dwt-blt 13, S. Korea) and the “Front Arrow” (49,452dwt-blt 13, S. Korea) which were sold to Ardmore Shipping, for a price in the region of $34 million each.
8There was also the sale of the “Saffo” (38,369dwt-blt 08, China) which was sold to Moller AP, for a price in the region of $18 million
8In the Panamax sector, we had the en-bloc sale of the “Pearls Seas” (74,483dwt-blt 06, China), the “DIiamond Seas ” (74,274dwt-blt 01, Japan) and the “Sapphire Seas” (53,702dwt-blt 05, China) which were reported sold for a price of $15.5 million
8In the Supramax sector we had the sale of the “Karvados" (50,992dwt-blt 06, Japan), which was sold to Turkish buyers for a price in the region of $5.5 million
8Meanwhile, even though no significant gains were noted last week in the charter hire rates for tankers, sentiment remains as positive as ever, with the lack of extreme volatility reaffirming a fundamentally strong market as low prices drive trade in crude and petroleum products.
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8The tanker will join the company's fleet by January, 2016
8The Company’s current fleet stands at 30 vessels, comprising 21 tankers (8 crude carriers, 12 product tankers, 1 LPG carrier) and 9 dry bulk carriers (4 Kamsarmax, 5 Supramax) with an average age of 9.6 years aggregating 2.36 million DWT. The order book of the company comprises three dry bulk carriers and one product tanker.
8The worldwide market for buyouts witnessed more activity in recent days. On the tanker side, there was an en-bloc sale of the “Front Avon” (50,800dwt-blt 13, S. Korea) and the “Front Arrow” (49,452dwt-blt 13, S. Korea) which were sold to Ardmore Shipping, for a price in the region of $34 million each.
8There was also the sale of the “Saffo” (38,369dwt-blt 08, China) which was sold to Moller AP, for a price in the region of $18 million
8In the Panamax sector, we had the en-bloc sale of the “Pearls Seas” (74,483dwt-blt 06, China), the “DIiamond Seas ” (74,274dwt-blt 01, Japan) and the “Sapphire Seas” (53,702dwt-blt 05, China) which were reported sold for a price of $15.5 million
8In the Supramax sector we had the sale of the “Karvados" (50,992dwt-blt 06, Japan), which was sold to Turkish buyers for a price in the region of $5.5 million
8Meanwhile, even though no significant gains were noted last week in the charter hire rates for tankers, sentiment remains as positive as ever, with the lack of extreme volatility reaffirming a fundamentally strong market as low prices drive trade in crude and petroleum products.
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Newbuilding activity in the tanker market sustained its momentum from the week prior almost exclusively on the back of tanker orders that are all pouring in, as strong activity and firm rates provide incentives for investing in the sector.
8But analysts are now opining that orders should sooner rather than later start following a more sober pace.
8On the positive side, tanker ordering has been providing some much needed support to shipyards that are under financial stress and increased competition for quite some time now.
8As the race to survive in the shipbuilding industry intensifies, builders are trying to tackle anything that prevents the industry to freely rebalance.
8In fact, earlier this month, the much talked about bail out of DSME seems to have caused discontent amongst European shipyards, expressed at the OECD shipbuilding meeting in Paris.
8In terms of recently reported deals, Super Eco Tankers placed an order for two MRs (50,000dwt) at Dae Sun, in S. Korea for a price in the region of $ 35 million and delivery set in 2017.
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8But analysts are now opining that orders should sooner rather than later start following a more sober pace.
8On the positive side, tanker ordering has been providing some much needed support to shipyards that are under financial stress and increased competition for quite some time now.
8As the race to survive in the shipbuilding industry intensifies, builders are trying to tackle anything that prevents the industry to freely rebalance.
8In fact, earlier this month, the much talked about bail out of DSME seems to have caused discontent amongst European shipyards, expressed at the OECD shipbuilding meeting in Paris.
8In terms of recently reported deals, Super Eco Tankers placed an order for two MRs (50,000dwt) at Dae Sun, in S. Korea for a price in the region of $ 35 million and delivery set in 2017.
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For reference purposes, the website carries here the following data:
8Details of the revisions carried out in the retail selling prices of petrol, diesel and domestic LPG in recent times.
8Year wise (up to April-October, 2015) import of crude from Saudi Arabia (imports are gradually falling from the Gulf's largest producer of crude oil)
8State wise details of existing City Gas Distribution companies as on October 1, 2015
8Details of theft and pilferage of petroleum products
8Details of 5 kg cylinders sold in the last three years
8The average price of the Indian basket of crude in the last three years and the net profit of IOC, HPCL and BPCL in the last two years, including the first half of 2015-16.
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8Details of the revisions carried out in the retail selling prices of petrol, diesel and domestic LPG in recent times.
8Year wise (up to April-October, 2015) import of crude from Saudi Arabia (imports are gradually falling from the Gulf's largest producer of crude oil)
8State wise details of existing City Gas Distribution companies as on October 1, 2015
8Details of theft and pilferage of petroleum products
8Details of 5 kg cylinders sold in the last three years
8The average price of the Indian basket of crude in the last three years and the net profit of IOC, HPCL and BPCL in the last two years, including the first half of 2015-16.
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The government has launched the Made in India campaign with much fanfare but will it implement the recommendations made by the Steering Committee on Indigenization of the Upstream Oilfield Equipment and Services Sector?
8The committee was made up of representations from Ministry of Petroleum, Ministry of Commerce, Department of Industrial Policy and Promotion, various Oil PSUs and representatives from FICCI, CII and AOGO.
The following are the actionable areas identified by the committee in the short term (one year) and the medium term (three years):
8Suitable amendments in the public procurement norms to mandate aggregation of requirement and local content as procurement criteria as a short term initiative.
8A target of indigenization of 50% in the upstream sector in the medium term
8Setting up of dedicated manufacturing zones/clusters catering to Oil field services such as ship building, offshore platforms and rigs in the medium term.
Comment: It is pertinent to note that the upstream sector is highly technology intensive. It remains a moot point whether the Indian market has the depth to allow for an indigenization level of 50% within a period of three years. Setting up dedicated manufacturing clusters for oil field equipment is one thing but getting companies to invest in them is another ball game altogether.
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8The committee was made up of representations from Ministry of Petroleum, Ministry of Commerce, Department of Industrial Policy and Promotion, various Oil PSUs and representatives from FICCI, CII and AOGO.
The following are the actionable areas identified by the committee in the short term (one year) and the medium term (three years):
8Suitable amendments in the public procurement norms to mandate aggregation of requirement and local content as procurement criteria as a short term initiative.
8A target of indigenization of 50% in the upstream sector in the medium term
8Setting up of dedicated manufacturing zones/clusters catering to Oil field services such as ship building, offshore platforms and rigs in the medium term.
Comment: It is pertinent to note that the upstream sector is highly technology intensive. It remains a moot point whether the Indian market has the depth to allow for an indigenization level of 50% within a period of three years. Setting up dedicated manufacturing clusters for oil field equipment is one thing but getting companies to invest in them is another ball game altogether.
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It is going to be very difficult for private Indian downstream companies to break the monopoly that the public sector oil marketing companies have over the petroleum products distribution network in India.
8This is evident from the refusal by HPCL to allow Essar OIl's request for movement of products through HPCL’s Mundra-Delhi pipeline.
8Oil PSUs have informed the government that existing pipeline networks are, by and large, operating optimally presently and there is practically no scope for sharing capacity of any pipeline to any other company.
8But this is not the way the PNGRB looks at the situation.
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8This is evident from the refusal by HPCL to allow Essar OIl's request for movement of products through HPCL’s Mundra-Delhi pipeline.
8Oil PSUs have informed the government that existing pipeline networks are, by and large, operating optimally presently and there is practically no scope for sharing capacity of any pipeline to any other company.
8But this is not the way the PNGRB looks at the situation.
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The Department of Fertilizers (DOF) has decided to ease the stranglehold of GAIL in the supply of gas to the fertilizer industry.
8Sources said that the Fertilizer Industry Coordination Committee (FICC) -- the subsidy dispensation arm of the DOF -- has issued a circular to urea companies giving them the freedom to source their gas from non-GAIL sources but the companies will have to follow a "transparent process" to establish price discovery.
8Such prices will then be worked into the cost of production of urea and subsidy will be dispensed accordingly.
Click on Details for more on the new policy and how it will work Details
8Sources said that the Fertilizer Industry Coordination Committee (FICC) -- the subsidy dispensation arm of the DOF -- has issued a circular to urea companies giving them the freedom to source their gas from non-GAIL sources but the companies will have to follow a "transparent process" to establish price discovery.
8Such prices will then be worked into the cost of production of urea and subsidy will be dispensed accordingly.
Click on Details for more on the new policy and how it will work Details
As this website has said before the LNG business was undergoing a dramatic transformation
8The biggest blow to innovation was to allow GAIL the absolute monopoly in the supply and pricing of gas under the pooled price system.
8At best GAIL should have been the aggregator of gas for supply to the fertilizer industry but the gas major was instead been given an opportunity to enforce a stranglehold.
8The Fertilizer Industry Coordination Industry should have been the accountant not GAIL for the urea industry.
8Given that the LNG market was evolving at a breathtaking pace, and new products are in the market, the buyers should have been given the flexibility to elicit gas from different sources from the very beginning. IF gas could be procured at a price lower than what was offered by GAIL, it would have saved the exchequer money.
8The need for de-monopolization of the supply chain and the application of the common carrier principles through the PNGRB should have been a prerequisite for a pooling system to work effectively, we wrote . This would have allowed for more creativity and flexibility.
8The website had earlier pointed out that GAIL alone could not be given a monopoly on gas sourcing and supply because the market had become too complex and the gas major did not have the capability or the flexibility to keep pace with the rapidity of change. It was time for more nimble players to step in, we pointed out.
8We also said that it was time for the other players as well as the buyers to gas to be brought in and given a free hand. The buyers needed a free hand as between them some of them had enough muscle power to innovate and drive though bargain prices.
8We argued then that it could well be possible that IFFCO, the world's largest fertilizer cooperative, could scoop out LNG cargoes at prices that could be a dollar or emore cheaper from a distressed Australian LNG supplier than the price at which GAIL could supply, for example.
Click on Details for more Details
8The biggest blow to innovation was to allow GAIL the absolute monopoly in the supply and pricing of gas under the pooled price system.
8At best GAIL should have been the aggregator of gas for supply to the fertilizer industry but the gas major was instead been given an opportunity to enforce a stranglehold.
8The Fertilizer Industry Coordination Industry should have been the accountant not GAIL for the urea industry.
8Given that the LNG market was evolving at a breathtaking pace, and new products are in the market, the buyers should have been given the flexibility to elicit gas from different sources from the very beginning. IF gas could be procured at a price lower than what was offered by GAIL, it would have saved the exchequer money.
8The need for de-monopolization of the supply chain and the application of the common carrier principles through the PNGRB should have been a prerequisite for a pooling system to work effectively, we wrote . This would have allowed for more creativity and flexibility.
8The website had earlier pointed out that GAIL alone could not be given a monopoly on gas sourcing and supply because the market had become too complex and the gas major did not have the capability or the flexibility to keep pace with the rapidity of change. It was time for more nimble players to step in, we pointed out.
8We also said that it was time for the other players as well as the buyers to gas to be brought in and given a free hand. The buyers needed a free hand as between them some of them had enough muscle power to innovate and drive though bargain prices.
8We argued then that it could well be possible that IFFCO, the world's largest fertilizer cooperative, could scoop out LNG cargoes at prices that could be a dollar or emore cheaper from a distressed Australian LNG supplier than the price at which GAIL could supply, for example.
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Like everything else in the energy sector today, the LNG market is also evolving at a frightening rapid pace, leaving both buyers and sellers grasping for growth.
8Supplies have now become flexible. If all contracts that are to be renewed are taken as flexible because the buyer has the right to chose the contract he wants, as much as 25% of LNG to be traded in 2015 will have flexible parameters in terms of pricing, volumes and length of contract. This figure will go up to 42% in 2025, though some experts believe that this is a conservative figure.
8Is LNG then likely to become a global commodity?
8The drivers are of course the increased liquidity in the market and the number of participants. There is a also a fragmentation of the market place that helps in the commoditization of LNG. Plans to set up LNG and gas hubs in Asia will also drive this trend.
8But on the other hand there are some inhibitors too. Existing long term contracts will take time playing through. Juxtaposed against this is the fact that LNG terminals can come up only if long term financing is secured and this has to work in tandem with long term supply contracts.
8Commoditization however is likely to get a boost as there is increasing demand uncertainty and buyers have competing fuel options.
8The tideis are turning but only time will tell how far it will turn.
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8Supplies have now become flexible. If all contracts that are to be renewed are taken as flexible because the buyer has the right to chose the contract he wants, as much as 25% of LNG to be traded in 2015 will have flexible parameters in terms of pricing, volumes and length of contract. This figure will go up to 42% in 2025, though some experts believe that this is a conservative figure.
8Is LNG then likely to become a global commodity?
8The drivers are of course the increased liquidity in the market and the number of participants. There is a also a fragmentation of the market place that helps in the commoditization of LNG. Plans to set up LNG and gas hubs in Asia will also drive this trend.
8But on the other hand there are some inhibitors too. Existing long term contracts will take time playing through. Juxtaposed against this is the fact that LNG terminals can come up only if long term financing is secured and this has to work in tandem with long term supply contracts.
8Commoditization however is likely to get a boost as there is increasing demand uncertainty and buyers have competing fuel options.
8The tideis are turning but only time will tell how far it will turn.
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How liquid is the LNG trade?
8Hard numbers are still not available but by one estimate, around 70 million tonnes of LNG was sold in 2014 on contracts that run for four years or less. 40 million was traded on a one year or less basis and 10 million tonnes on spot basis.
8Long term contracts are being replaced with shorter duration contracts.
8Flexible volumes mean that they will respond to market signals. In other words, spare capacities will be the norm going ahead.
8The LNG market too has become much more diversified as both buyers and seller have grown in numbers. .
8The tyranny of distance has been broken with both the US and Canada aggressively breaking into the world market. The US and European gas hubs are being increasingly "tied in", thereby changing the game quite a bit.
8Since buyers have more choices, LNG sellers will have to become more competitive and responsive in the years ahead.
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8Hard numbers are still not available but by one estimate, around 70 million tonnes of LNG was sold in 2014 on contracts that run for four years or less. 40 million was traded on a one year or less basis and 10 million tonnes on spot basis.
8Long term contracts are being replaced with shorter duration contracts.
8Flexible volumes mean that they will respond to market signals. In other words, spare capacities will be the norm going ahead.
8The LNG market too has become much more diversified as both buyers and seller have grown in numbers. .
8The tyranny of distance has been broken with both the US and Canada aggressively breaking into the world market. The US and European gas hubs are being increasingly "tied in", thereby changing the game quite a bit.
8Since buyers have more choices, LNG sellers will have to become more competitive and responsive in the years ahead.
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Despite directives that give urea companies the right to chose their gas supplier, and this website' belief that GAIL's monopoly must be broken, most of them are likely to stick around with the public sector gas major.
8A quick poll by this website shows that urea units will stay with GAIL until the entire picture clears up.
8The reasons for this is that GAIL is likely to provide non-price concessions -- as they have already begun doing -- that other smaller LNG players are unlikely to match.
8So, for a new LNG entrant, breaking GAIL's stranglehold may not be all that easy.
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8A quick poll by this website shows that urea units will stay with GAIL until the entire picture clears up.
8The reasons for this is that GAIL is likely to provide non-price concessions -- as they have already begun doing -- that other smaller LNG players are unlikely to match.
8So, for a new LNG entrant, breaking GAIL's stranglehold may not be all that easy.
Click on Details for more Details
For reference purposes, the website carries here the details of how independent directors are selected by the government for public sector companies.
8A search committee goes about nominating names that are then sent to the Appointments Committee of the Cabinet for approval.
8The Committee is made up of the secretaries of the DPE, the DoPT, petroleum ministry and two non-official members.
8In some oil sector companies such as the Indian Oil Corporation (IOC), the newly appointed directors are familiraized with the working of the companies.
8Periodic presentations are made to update them on all business-related issues and new initiatives undertaken by the companies.
8In IOC for example a strategy meet of the Board is held generally once in a year to deliberate in detail the strategic issues, policy decisions and prospective plans for the future.
8The Directors are also nominated for training programmes/seminars conducted by SCOPE and other government authorities.
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8A search committee goes about nominating names that are then sent to the Appointments Committee of the Cabinet for approval.
8The Committee is made up of the secretaries of the DPE, the DoPT, petroleum ministry and two non-official members.
8In some oil sector companies such as the Indian Oil Corporation (IOC), the newly appointed directors are familiraized with the working of the companies.
8Periodic presentations are made to update them on all business-related issues and new initiatives undertaken by the companies.
8In IOC for example a strategy meet of the Board is held generally once in a year to deliberate in detail the strategic issues, policy decisions and prospective plans for the future.
8The Directors are also nominated for training programmes/seminars conducted by SCOPE and other government authorities.
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In a large company like IOC, there are many Board Committee in which independent directors are made chairmen or play a key role in the decision making process.
The website carries here the list of committees that IOC has where independent directors play a ;leading role.:
8Audit Committee
8Project Evaluation Committee
8CSR Committee
8Health, Safety & Environment Committee
8Marketing Strategies Committee
8Remuneration Committee
8Stakeholder Relationship Committee
8Establishment Committee
8Deleasing of Immovable Properties Committee
8Spot LNG Purchase Committee
8LNG Sourcing Committee
8Contracts Committee
8Planning & Projects Committee
8Risk Management Committee
These Committees are very powerful and it is imperative on the part of a equipment and service provider to understand what exactly do these committees do. These committees are the final authority on a range of decisions taken in large PSUs on a regular basis.
Click on Reports for more on role and function of these committees. Details
The website carries here the list of committees that IOC has where independent directors play a ;leading role.:
8Audit Committee
8Project Evaluation Committee
8CSR Committee
8Health, Safety & Environment Committee
8Marketing Strategies Committee
8Remuneration Committee
8Stakeholder Relationship Committee
8Establishment Committee
8Deleasing of Immovable Properties Committee
8Spot LNG Purchase Committee
8LNG Sourcing Committee
8Contracts Committee
8Planning & Projects Committee
8Risk Management Committee
These Committees are very powerful and it is imperative on the part of a equipment and service provider to understand what exactly do these committees do. These committees are the final authority on a range of decisions taken in large PSUs on a regular basis.
Click on Reports for more on role and function of these committees. Details
The Indian economy has grown at a robust 7.4% in Q-2. 2015-16.
8It is important for viewers to know what is the disaggregated performance of their own segments such as oil and gas, power and the mining industry.
8A perusal of these figures provide a broader and holistic perception that eventually has an impact on business opportunities.
8The key indicators of mining sector involve the production of coal, crude oil, natural gas and other mining activities.
8These segments registered growth rates of 0.9 per cent, 1.7 percent, 0.5 percent and 2.7 percent respectively, significantly lower than the overall rate of growth.
8In other words these sectors under-performed in Q2 but did that actually translate into lower orders down the line for equipment and service provider?
8Not really because every performance must be seen in a relative context.
8In the same period in 2014-15, the coal sector grew at 8.8% whereas the growth rates for coal, (-)2.4 percent, crude oil (-)7.9 percent, gas - (1.5 per cent) and and (+) 0.5 per cent for other mining activity.
8The point is that there is no one-on-one relationship between the growth rate of a segment such as oil or gas and the way it translate into orders for the industry.
8There is usually a time lag between the two.
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8It is important for viewers to know what is the disaggregated performance of their own segments such as oil and gas, power and the mining industry.
8A perusal of these figures provide a broader and holistic perception that eventually has an impact on business opportunities.
8The key indicators of mining sector involve the production of coal, crude oil, natural gas and other mining activities.
8These segments registered growth rates of 0.9 per cent, 1.7 percent, 0.5 percent and 2.7 percent respectively, significantly lower than the overall rate of growth.
8In other words these sectors under-performed in Q2 but did that actually translate into lower orders down the line for equipment and service provider?
8Not really because every performance must be seen in a relative context.
8In the same period in 2014-15, the coal sector grew at 8.8% whereas the growth rates for coal, (-)2.4 percent, crude oil (-)7.9 percent, gas - (1.5 per cent) and and (+) 0.5 per cent for other mining activity.
8The point is that there is no one-on-one relationship between the growth rate of a segment such as oil or gas and the way it translate into orders for the industry.
8There is usually a time lag between the two.
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For reference purposes, the website carries here key developments that have and will have an impact on the oil & gas sector by the end of the current week and ahead.
8All key developments of the last week in oil and gas and other related areas both domestically and in the international market,
8Key developments to watch out for in the ensuing week, domestically and outside of India
8A weekly sector review of the oil & gas and the power industry.
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8All key developments of the last week in oil and gas and other related areas both domestically and in the international market,
8Key developments to watch out for in the ensuing week, domestically and outside of India
8A weekly sector review of the oil & gas and the power industry.
Click on Reports for more Details
It has now become popular for companies of every hue to come out with a green imitative statements and Indian Oil Corporation is no exception
8But for the perennial spotter of business opportunities, it is important to figure out which way the wind is blowing and, according, make course corrections to focus more narrowly on the products and services that are likely to be in greater demand in a green energy conscious era.
The website carries here the details of the initiatives taken to mitigate global warming:
8Energy conservation refinery projects
8Pipeline network expansions
8Wind power projects
8Grid connected solar projects
8Off grid solar projects
8Fuel station solarisation
8Energy audits
8Green buildings
8Energy efficient lighting
8Green lanterns
8Effluent treatment
8Bio-fuel production and blending
8Natural gas
Click on Reports for detailed subject wide data Details
8But for the perennial spotter of business opportunities, it is important to figure out which way the wind is blowing and, according, make course corrections to focus more narrowly on the products and services that are likely to be in greater demand in a green energy conscious era.
The website carries here the details of the initiatives taken to mitigate global warming:
8Energy conservation refinery projects
8Pipeline network expansions
8Wind power projects
8Grid connected solar projects
8Off grid solar projects
8Fuel station solarisation
8Energy audits
8Green buildings
8Energy efficient lighting
8Green lanterns
8Effluent treatment
8Bio-fuel production and blending
8Natural gas
Click on Reports for detailed subject wide data Details
IOC has also drawn up a future roadmap of green energy projects that it intends to pursue.
Among them are:
8Alternative energy (around 280 Mw of power to be generated)
8Sustainable business development plan
8Import reduction targets
Future plans include investments in:
8Ligno-cellulosic ethanol
8Lithium-ion batteries
8Fuel cells
8Waste to fuel
8R&D work
Click on Reports for detailed information on these topics Details
Among them are:
8Alternative energy (around 280 Mw of power to be generated)
8Sustainable business development plan
8Import reduction targets
Future plans include investments in:
8Ligno-cellulosic ethanol
8Lithium-ion batteries
8Fuel cells
8Waste to fuel
8R&D work
Click on Reports for detailed information on these topics Details
There were some critics who thought the the bio-fuel industry would die a natural death with the plunge in oil and gas prices over the last one year.
8The assumption was that blending will be difficult to sustain in a low crude price environment unless it is backed with adequate subsidy.
8In this context, there is a lot to learn from how the US bio-fuel industry is coping with the changed paradigm.
8America continues to push for higher levels of bio-fuel use in the years ahead and new targets have been set.
8The emphasis seems to be on advanced cellulosic biofuels
8The US example cannot be replicated in its entirety but there will still large segments of the promotion process that can be plugged into India.
8India has ambitious targets set for biofuels development and the US model can serve as a base template.
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8The assumption was that blending will be difficult to sustain in a low crude price environment unless it is backed with adequate subsidy.
8In this context, there is a lot to learn from how the US bio-fuel industry is coping with the changed paradigm.
8America continues to push for higher levels of bio-fuel use in the years ahead and new targets have been set.
8The emphasis seems to be on advanced cellulosic biofuels
8The US example cannot be replicated in its entirety but there will still large segments of the promotion process that can be plugged into India.
8India has ambitious targets set for biofuels development and the US model can serve as a base template.
Click on Reports for more Details
It must go to the DOF's credit that it has evolved a very extensive and in-depth Result Framework Document that lays down in great detail the activities of the DOF during a year. This template is followed every year to assess the performance of a government agency or department.
8For reference purposes, the website carries here a sample report of how the RFD is framed and formulated.
The following details are available in the RFD
8A detailed breakdown of the policy parameters in terms of what was targeted and what was achieved.
8Comprehensive planning and subsequent mplementation of production and import matrices for fertilizers
8A full framework for movement of fertilizers: proposed vs.actuals
8Disbursement and processing of subsidies: target timelines and what was actually achieved
8Action taken to monitor PSU performance
8Efforts made to improve transparency in decision making
Click on Reports for more Details
8For reference purposes, the website carries here a sample report of how the RFD is framed and formulated.
The following details are available in the RFD
8A detailed breakdown of the policy parameters in terms of what was targeted and what was achieved.
8Comprehensive planning and subsequent mplementation of production and import matrices for fertilizers
8A full framework for movement of fertilizers: proposed vs.actuals
8Disbursement and processing of subsidies: target timelines and what was actually achieved
8Action taken to monitor PSU performance
8Efforts made to improve transparency in decision making
Click on Reports for more Details
An extensive presentation on the feasibility of the $4.5 billion Middle East to India Deepwater Pipeline, promoted by Delhi based SAGE, has claimed that the gas that is to be ferried from the Gulf up to the Gujarat coast will be cheaper in comparison to LNG from any source.
8Gas will be collected through a network of pipelines from gas rich countries in the region and then transported through the deepwater pipeline into India.
8SAGE claims that the landed cost of gas delivered through the deepwater pipeline will be a reasonable $8.25/mmbtu, assuming a dry gas at port price of $5/mmbtu in Oman.
8The company has then gone on to calculate the landed cost of gas via the LNG route with the proposed onland pipeline from Iran to India, assuming a dry gas price at Iran of $5/mmbtu. Similar calculations have been made for the landed cost of LNG in India from other parts of Asia and the US, assuming a port price of $6/mmbtu, and $4/mmbtu from the US.
8The landed cost of LNG from Iran will be $9.5/mmbtu, From other parts of Asia to India, the landed LNG cost will be a high $11/mmbtu.
8The landed cost of LNG, according to SAGE, will be $10.25/mmbtu from the US.
8The company claims that only the onland pipeline from Iran to India will be cheaper in comparison to the undersea pipeline, with the landed cost pegged at $7.75/mmbtu.
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8Gas will be collected through a network of pipelines from gas rich countries in the region and then transported through the deepwater pipeline into India.
8SAGE claims that the landed cost of gas delivered through the deepwater pipeline will be a reasonable $8.25/mmbtu, assuming a dry gas at port price of $5/mmbtu in Oman.
8The company has then gone on to calculate the landed cost of gas via the LNG route with the proposed onland pipeline from Iran to India, assuming a dry gas price at Iran of $5/mmbtu. Similar calculations have been made for the landed cost of LNG in India from other parts of Asia and the US, assuming a port price of $6/mmbtu, and $4/mmbtu from the US.
8The landed cost of LNG from Iran will be $9.5/mmbtu, From other parts of Asia to India, the landed LNG cost will be a high $11/mmbtu.
8The landed cost of LNG, according to SAGE, will be $10.25/mmbtu from the US.
8The company claims that only the onland pipeline from Iran to India will be cheaper in comparison to the undersea pipeline, with the landed cost pegged at $7.75/mmbtu.
Click on Reports for more Details
How does a deepwater pipeline become cheaper than LNG?
8According to SAGE, this is essentially because there are no liquefaction and regasification cost involved.
8That knocks off around $3/mmbtu in liquefaction cost and $1/mmbtu in regasification cost.
8The company assumes a transportation cost of $2.25/mmbtu for its deepwater pipeline in comparison to LNG ferrying cost of 0.5/mmbtu from Iran, $1/mmbtu from other parts of Asia and $2.25/mmbtu from the US.
8It is only with the onland pipeline from Iran that there are no other charges except a transportation cost of $2.35/mmbtu which makes it the cheapest option.
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8According to SAGE, this is essentially because there are no liquefaction and regasification cost involved.
8That knocks off around $3/mmbtu in liquefaction cost and $1/mmbtu in regasification cost.
8The company assumes a transportation cost of $2.25/mmbtu for its deepwater pipeline in comparison to LNG ferrying cost of 0.5/mmbtu from Iran, $1/mmbtu from other parts of Asia and $2.25/mmbtu from the US.
8It is only with the onland pipeline from Iran that there are no other charges except a transportation cost of $2.35/mmbtu which makes it the cheapest option.
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SAGE has been at work for six years on this project.
8The maximum water depth through which the pipeline will traverse is a whopping 3,450 metres and the total length will be 1300 kms. The project duration is five years and pipeline construction will take two years.
8The flow rate is going to be 31.1 mmscmd with a 24-inch diameter pipeline and the high tensile steel grade to be used in the pipeline is DNV SAWL485 FDU.
8Three things are required to be in place -- availability of mills who can makes these steel pipes, ultra deepwater vessels to lay these lines and deepwater repair system for the pipelines.
According to SAGE, Welspun, Jindal Saw, Tatas, JFE and Europipe have the capacity to build these steel lines
8Two vessels, Casterone and Aegir, are already available and a third, dubbed Pioneering Spirit, is under commissioning for laying these lines.
8Driverless subsea pipeline repaid systems are available with Saipen, Subsea7, Technip and several others. The ROV for this will have to work at water depths of 3500 metres, on soft clay and on seal bed slopes of up to 28 degrees and they will have to be capable of repairing anything, from minor dents to replacement of multiple pipe joints.
8The company claims that there are already deepwater pipelines in existence but none would be as deep as the one it is planning.
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8The maximum water depth through which the pipeline will traverse is a whopping 3,450 metres and the total length will be 1300 kms. The project duration is five years and pipeline construction will take two years.
8The flow rate is going to be 31.1 mmscmd with a 24-inch diameter pipeline and the high tensile steel grade to be used in the pipeline is DNV SAWL485 FDU.
8Three things are required to be in place -- availability of mills who can makes these steel pipes, ultra deepwater vessels to lay these lines and deepwater repair system for the pipelines.
According to SAGE, Welspun, Jindal Saw, Tatas, JFE and Europipe have the capacity to build these steel lines
8Two vessels, Casterone and Aegir, are already available and a third, dubbed Pioneering Spirit, is under commissioning for laying these lines.
8Driverless subsea pipeline repaid systems are available with Saipen, Subsea7, Technip and several others. The ROV for this will have to work at water depths of 3500 metres, on soft clay and on seal bed slopes of up to 28 degrees and they will have to be capable of repairing anything, from minor dents to replacement of multiple pipe joints.
8The company claims that there are already deepwater pipelines in existence but none would be as deep as the one it is planning.
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