Anadarko Petroleum Corp said it agreed to sell a 10 per cent stake in a gas field offshore Mozambique to OVL (ONGC Videsh Ltd) for $2.64 billion in cash, as the US oil company looks to focus more on its domestic assets. The deal for Mozambique's offshore Area 1 is expected to close around the end of this year, Anadarko said. ONGC faces diminishing supplies from its aging oil and gas fields in India and has been buying interests in overseas assets. ONGC Videsh, the Indian company's overseas arm, recently paid $2.48 billion for a 10 per cent stake in another Mozambique gas field from Videocon Group. Anadarko also said it will remain the operator of Area 1 with a working interest of 26.5 per cent in the block, which is located in Mozambique's deepwater Rovuma Basin. The Rovuma field has the potential to become one of the world's largest liquefied natural gas (LNG) producing hubs by 2018, and is strategically located to supply gas to India at competitive prices. Recent discoveries have turned the Rovuma offshore field into a major draw for global energy producers and boosted Mozambique's natural gas reserves to around 150 trillion cubic feet, or enough to supply the world's No. 1 LNG importer - Japan - for 35 years. Also Read: Interview with ONGC CMD Sudhir Vasudeva (Reuters)
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Energy conglomerate Reliance Industries and British oil company BP announced a new gas condensate discovery off the east coast of India in the Cauvery basin. The discovery is situated 62 kilometres from the coast in the Cauvery Basin and is the second gas discovery in the block. Reliance is the operator of the block with a 70 per cent stake and BP has a 30 per cent share. (Reuters)
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State utility NTPC will seek another 4 million tonnes of thermal coal shipments in this financial year, following its current tender to import 5 million tonnes of the dry fuel to bridge an expected shortfall in local supplies.NTPC, India's top power producer with an installed capacity of 41,184 megawatts, has an annual import need of 16 million tonnes of coal in the year to March 2014, up 65 per cent from a year ago, when delays in awarding contracts trimmed shipments.NTPC could not import its estimated 16 million tonnes of coal last fiscal year "because of some procedural problem," said an NTPC official, who did not wish to be identified.It is, however, open to importing more if there is a compelling opportunity in this fiscal year, the official said."If we are able to get a good price, if everything is fine, if it goes our way, may be we will import more. Why not?"Coal fuels more than half of India's power generation, but domestic production has not kept up with demand from the power sector, leading to power cuts that crimp growth and result in costlier imports.The power producer is seeking a total of 5 million tonnes of thermal coal through seven tenders for supplying its various power stations spanning the country, for which last date for submission of bids is 6 September, the official said.These are on top of the 7 million tonnes of the fuel that is being delivered to the power producer since April.Shortfall"We plan to import 16 million tonnes of coal in 2013-14, which works out to around 28 million tonnes equivalent after adjusting for the higher energy value of imported coal," said the official.India produces mostly low-grade thermal coal with high ash content. About 70 per cent of the fuel Coal India produces has an energy value of 4,300 Kcal/kg or lower.NTPC requires 178 million tonnes of coal this fiscal year to fuel its generators, said the official. Of this, it expects to source 145 million tonnes locally, signing agreements with Coal India, which produces around 80 per cent of the country's coal.This along with the 16 million tonnes of imported fuel - equivalent to 28 million tonnes of local coal - leaves a fuel shortfall of 5 million tonnes for the power producer."We plan to get the balance 5 million tonnes from e-auction and from our own mine in Pakri Barwadih in this financial year," the official said, referring to Coal India's spot sales and NTPC's captive coal block in the North Karanpura Coalfields in the northeastern Jharkhand state.For the current tender, only shipments with below 32 per cent moisture, 20 per cent ash and 0.90 per cent sulphur, with gross calorific value in the range of 5,300-5,800 Kcal/kg would be considered, the tender document on its website showed.Successful bidders will need to deliver the coal from port to several NTPC power stations across India, the official said.NTPC said it expected the successful bidders to supply the coal within four months of it issuing the delivery schedule.India's coal imports in this fiscal year could hit 165 million tonnes to meet the local supply shortfall, another record after total imports crossed 135 million tonnes in 2012-13.(Reuters)
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Indian Oil Corp will start work on its first liquefied natural gas (LNG) plant at Ennore in the east coast by the end of this year, its chairman said on Tuesday, as it sees a gradual rise in local acceptance of the costly imported fuel.State refiners IOC, Hindustan Petroleum Corp and Bharat Petroleum, also major gas users, have all unveiled plans to build LNG plants as local gas output falls, which will increase the share of the costly imported fuel in India's energy mix.India's gas demand will rise to 466 million cubic metres a day (mcmd) in 2016-17 from 286 mcmd in 2012/2013, according to the government estimates, while its supply will be only half that.IOC, India's biggest retailer of fuel for transport and industrial uses accounting for half of demand, aims to supply clients who want to replace fuel oil and naphtha with gas, R.S. Butola told a news conference."When it comes to a fully-grown (mature) market, who has got better spread than Indian Oil? ... In the long term there should be much wider acceptance of market prices for gas," Butola said.The government in June took the unpopular step of raising domestic gas prices from April and linking them to global LNG benchmarks after keeping them frozen for three years.IOC is in process of tying up customers for the Ennore LNG terminal, which is likely to be ready in 2016/17, said its head of business development, A.M.K. Sinha. IOC is in talks with global firms including Russia's Gazprom to source gas for the Ennore plant, he added."We are in discussion with potential customers like Madras Fertiliser, Chennai Petroleum and some auto industries in the region. Day by day we are increasing our list," Sinha said.IOC has also signed an initial deal with Dhamra Port Ltd to build a 5 million tonne/year LNG plant in eastern Orissa state.It could annually use 2.5 million tonnes of LNG from the Orissa terminal for its planned 300,000 barrels per day Paradip refinery and its existing Haldia and Barauni refineries, Sinha said.IOC along with subsidiary Chennai Petroleum Corp controls about 31 per cent of the national refining capacity of 4.3 million bpd.HPCL's head of finance, K.V. Rao, also said his firm would replace naphtha and fuel oil at its two refineries with gas from its planned terminal in western Gujarat state.(Reuters)
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GVK Power and Infrastructure posted a net loss in its June quarter, weighed down by sluggish investments on infrastructure in a slowing economy and higher interest payments on outstanding debt.The company posted a net loss of Rs 30.59 crore in the quarter, compared with a loss of Rs 64.30 crore a year earlier. Net sales fell 14.5 per cent to roughly Rs 700 crore.The company had been expected to post a loss of Rs 110 crore, according to an estimate of two analysts tracking the company.Like its peers in the power sector, GVK has grappled with fuel shortages for its power plants, while its highway construction business has been hit by environmental clearance hurdles.Overseas, GVK's $10 billion coal mining project, which is a joint venture with Australian mining magnate Gina Rinehart's Hancock Coal, has been delayed to 2016.(Reuters)
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Ireland's CRH, one of the world's largest building materials providers, is set to buy a controlling stake in India's Sree Jayajothi Cements Ltd for about $250-$300 million, two sources with direct knowledge of the matter told Reuters.Sree Jayajothi Cements, a unit of the Shriram Group, has a 3.2 million-tonne cement plant in Andhra Pradesh. The deal could be announced as early as on Monday, 12 August, said the sources, who declined to be named.CRH will buy Sree Jayajothi Cements through its Indian unit, My Home Industries, the sources said.Shriram Group, which has interests in the financial, power, infrastructure, construction and real estate sectors, did not have an immediate comment, while officials at My Home Industries were not available.Indian boutique investment bank Mape Advisory advised Shriram Group on the transaction, one of the sources said.Shriram Group was said to have had talks earlier with investors including Blackstone Group and KKR for selling its stake in the cement business.(Reuters)
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Mexico is pushing to double crude oil exports to China next year and boost India-bound shipments, the next stage of a long-term plan to diversify oil sales away from an increasingly energy-independent United States.Mexico is also open to importing light crude supplies from the United States, the country's top oil trade executive said in an interview, a sign that the world's No. 10 oil producer may be ready to give up decades of total crude oil self-sufficiency in order to take advantage of a growing glut of U.S. shale oil."We expect to market increasing volumes of our crudes" to both China and India, said Luis Felipe Luna, CEO of P.M.I. Comercio Internacional, the international oil trading arm of Mexico's state oil monopoly Pemex.Crude oil shipments to China, which have risen from zero in 2010 to more than 20,000 bpd so far this year, will reach a yearly average of 30,000 barrels per day (bpd) but could more than double in 2014, said Luna.Exports to India already stand at nearly 100,000 bpd but are likely to increase in the short and medium term, he said in a rare interview this week. In total, Asia could be taking as much as a fifth of Mexico's 1.1 million bpd of exports.The United States is still by far Mexico's largest oil export partner, but shipments have halved since 2006 to less than 850,000 bpd this year, according to US government data, the lowest rate in two decades due to both declining Mexican production and rising US output.(Reuters)
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Tata Power Company posted an unexpected net loss of Rs 115 crore in the April-June quarter, hit by higher finance costs and foreign exchange losses.Analysts had forecast a net profit of Rs 264 crore compared with Rs 146 crore in the same period a year ago.Tata Power, part of the salt-to-steel Tata Group, has been expanding its business abroad, including in Africa and the Middle East.But its biggest domestic power plant, Mundra, located in Gujarat, has come under financial stress as a regulatory decision allowing it to pass on the rising costs of imported coal to customers has yet to be implemented.Ratings agency Moody's cut its ratings outlook to "negative" from "stable" on Tata at the start of July, citing "material covenant breaches on bank debt" for the Mundra project.(Reuters)
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Energy major Reliance Industries and state-run exploration firm Oil and Natural Gas have signed an initial agreement to consider sharing Reliance's offshore infrastructure at the KG basin, off India's east coast.Reliance and ONGC will conduct a joint study over the next nine months to work out a formal agreement and firm up commercial terms, the two companies said late on Saturday.Reliance, controlled by billionaire Mukesh Ambani, operates India's largest offshore gas field but has struggled with a slump in gas production over the past two years. It is estimated to have spent close to $8 billion to develop its blocks in the Krishna Godavari (KG) basin.ONGC, which has also struggled to maintain production from its aging wells off India's west coast, hopes to produce from six to nine million standard cubic metres per day (mscmd) of gas by 2017 from its offshore east coast blocks, adjacent to Reliance's blocks there.The agreement will minimise ONGC's initial capital expenditure and help in early monetisation of its deep water fields, ONGC Chairman Sudhir Vasudeva said in a statement.(Reuters)
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Swiss cement maker Holcim said on Wednesday, 24 July it would increase its stake in Ambuja Cements Ltd as part of a restructuring of its operations in India.Holcim will increase its shareholding in Ambuja to 61.39 per cent from its current stake of just over 50 per cent, the Zurich-based firm said in a statement.Ambuja will in turn acquire Holcim's 50.01 per cent stake in ACC Ltd. Both Ambuja and ACC will continue to operate as separate entities."The transaction is expected to be neutral on Holcim's earnings per share in the first full year following the completion of the transaction and accretive thereafter", said Chief Executive Bernard Fontana.(Reuters)
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