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ONGC Proposes Rs 16,000-cr Investments
ONGC plans to invest Rs
16,200 crore on its upstream business for the financial year
2003-04, 47 per cent higher than the Rs 11,000 crore invested
last year, the Chairman, Mr Subir Raha, told analysts.
Of this, around Rs 5,700 crore will be spent on oil exploration,
production and development drilling within India and Rs 6,200
crore has been earmarked for investment in oil equity abroad.
The balance would be for other capital investments and for
Research and Development expenditure.
ONGC has reserves of more than $1 billion.
Mr Subir Raha told analysts and reporters the company would
probably make an announcement relating to a new find shortly. He
did not, however, divulge details. The company plans a total
investment of Rs 4,000 crore on exploration surveys and
drilling, Rs 1,700 crore on development drilling, Rs 4,000 crore
as production capex, Rs 300 crore on Research and Development
institutes and Rs 6,200 crore on acquiring oil equity abroad,
officials later explained.
ONGC Videsh Ltd, the subsidiary of ONGC, expects revenue
realisation of $30 to 40 million from the sale of gas from
Vietnam where it holds equity. The company also holds oil equity
in Sakhalin oilfields in Russia and is trying to acquire oil
equity in Libya, Myanmar, Kazakhstan, said Mr Atul Chandra,
Managing Director, OVL.
In the refining sector, the company is investing Rs 400-500
crore on product improvement to upgrade its manufacturing
facilities to produce MS and HSD conforming to Bharat III and
Bharat IV standards and Rs 250 crore on de-bottlenecking at its
newly acquired 9 million-tonne Mangalore Refinery. Mr Raha said
ONGC does not plan to increase MRPL's refinery capacity.
He said the company was awaiting gas price revision. "We are
subsidising our joint venture partners (private sector and
multinational companies), direct customers and even distributing
companies Gail India and Oil India to the tune of Rs 1300-1500
crore."
Speaking about ONGC's plans for retailing transport fuels petrol
and diesel, Mr Raha said the company would set up a retail
network of over 1,100 outlets over the next three to five years.
Only a couple of retail outlets will be put up in the current
financial year, Mr Raha said.
Source : The Business
Line, Mumbai, 27th June, 2003
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Totalfina Offers ONGC Stake In Oil/Gas Blocks
Totalfina has offered ONGC stake in its oil and gas blocks in
Absheron in Azerbaijan and Barbados in return for Indian
state-run firm farming in the French oil major in its three
Western offshore oil and gas blocks.
Francois Badoual, manager (international new venture
identification), Totalfina, has written to ONGC seeking to
"enter in a joint venture association with ONGC on selected
exploration licenses in India, for a stake in the order of
magnitude of 20 to 40 per cent, with or without operatorship
being delegated to Totalfina"
"By means of reciprocity, ONGC will get an optional right to
enter in a joint venture association with Totalfina on selected
blocks overseas, presenting similar exploration potential and
risks factors as those presented to Totalfina by ONGC," Badoual
wrote.
Totalfina has identified GS-OSN-2001/1 shallow water block in
Gujarat Saurashtra basin and CY-DWN-2001/1 deep water blocks in
Kaveri basin from the blocks awarded to ONGC in the third round
of offering under New Exploration Licensing Policy, and block
GK-DW-1 from the blocks the Indian company got on nomination
basis, sources said.
Totalfina is interested in GK-DW-1 in Kutch, Saurashtra deep sea
as it is having a deep-water block in adjoining area across the
border (in Pakistani territory) where a deep water well is
planned to be drilled.
"Within Totalfina's exploration portfolio, we have presently
selected the following blocks: block Absheron in Azerbaijan as
well as block Barbados. Depending on mutually acceptable
circumstances, we could consider other blocks in future," he
wrote.
In block GS-OSN-2001/1, ONGC holds 100 per cent interest whereas
in block CY-DWN-2001/1 it has 80 per cent with remaining 20 per
cent being held by Oil India Ltd.
ONGC board in its meeting on June 10 considered the proposal and
felt it "deserved consideration" and decided to enter into a
Memorandum of Cooperation (MOC) with Totalfina covering in
general manner the areas of cooperation without identifying the
specific blocks.
The MOC covers intellectual knowledge sharing in areas where
parties are in a position to complement each other; swapping of
information and collaboration in acreages presenting similar
exploration potential and risk factor; collaboration and sharing
of expertise in ONGC's deepwater acreages and adjacent area; and
collaboration in future opportunities.
Source :The Pioneer, New Delhi - 23rd June 2003
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ONGC Hikes Stake in MRPL
ONGC has increased its stake in Mangalore Refinery
Petrochemicals Ltd (MRPL) to 71.49 per cent from 51.25 per cent.
Last year, ONGC acquired 37 per cent stake from the Aditya Birla
Group following which its stake in MRPL went up to 51 per cent
after the financial restructuring.
MRPL, in a communication to The Stock Exchange, Mumbai (BSE)
said, "Exercising the call option for MRPL shares, held by
various banks and financial institutions, allotted to them under
the debt-restructuring package, ONGC has acquired 35,60,04,552
equity shares of MRPL. These shares shall continue to remain as
locked-in till March 29, 2004.
MRPL recorded a turnover of Rs 8,058 crore (Rs 5,354 crore) for
the year ended March 31, 2003 as against Rs 5,354 crore the
previous year. The company also managed to reduce its losses
from Rs 492 crore last year to Rs 412 crore in the year ended
March 31, 2003.
The company is planning to invest around Rs 600 crore to upgrade
its manufacturing facilities to produce petrol and diesel
conforming to Bharat III and Bharat IV standards. Investment of
about Rs 75 crore is also likely to be made for manufacturing
Mix Xylenes, which will add value to the product mix profile.
De-bottlenecking of the existing facilities is planned to
improve capacity utilisation and cut costs.
In terms of the new shareholders agreement entered between HPCL
and ONGC in March, HPCL has committed to continue lifting the
products from MRPL. Earlier, MRPL underwent a Rs 525 crore
restructuring whereby debt was converted into equity, preference
shares and zero-coupon bonds (ZCB).
ONGC has also agreed to the conversion of a maximum of Rs 365
crore of rupee term-debt - which was 20.8 per cent of MRPL
equity post-restructuring - being converted into equity share
capital. As per the debt-for-equity swap being worked out,
senior rupee term-lenders and DPG banks will receive a minimum
of Rs 400 crore and Rs 125 crore of these instruments,
respectively.
As per the restructuring, preference share capital exchanged at
par will carry a coupon rate of 0.01 per cent per annum
redeemable in two equal installments at the end of nine and ten
years. ZCBs too shall be exchanged at face value in two equal
installments at the end of nine and 10-years. Of the total debt
of Rs 4,375.44 crore to be restructured, the rupee term-debt
amounts to Rs 2,388.41 crore with the foreign currency loan
component at Rs 848.26 crore.
Source : The
Financial Express, Mumbai - 21st June, 2003
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Negotiations
on for supply of third LNG train output
Negotiations are continuing to identify prospective customers
for long-term supply of liquefied natural gas (LNG) from the
upcoming third train project, Dr Mohammed bin Hamad al Rumhy,
Minister of Oil and Gas, said yesterday. Discussions are
progressing with leading LNG players from both the East and the
West, the minister added.
The recent LNG supply deals clinched by Oman
on the sidelines of the World Gas Conference in Tokyo relate to
spot cargoes, the minister pointed out, adding that long-term
supply deals are finalised after a lengthy process. Spanish
utility Union Fenosa has committed to procure half of the 3.8
million tonne annual output of the third LNG train over a
20-year period. The unit, which takes the combined annual LNG
output to 10 million tonnes, will be commissioned in 2006.
Source : Oman Daily
Observer - 16th June 2003
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Oman LNG exploring new
markets
Oman LNG expects tough competition from other liquefied natural
gas producers in the Far Eastern countries but the company is
confident of securing contracts in the United States and Europe
for 2004 supplies.
An official from Oman LNG said: "The LNG market in the Far East
is becoming more competitive, that means marketing in those
countries has now become quite a challenge,"
"The other challenge is that some markets in the Far East are
going through some problems from internal crises and unexpected
bad weather conditions that forced customers to suspend
operations," he added.
However, Oman LNG is confident of securing contracts in Europe
and the United States because of the growing demand. "We are
going to be more aggressive in Europe and the US for our 2004
production. These markets plan many new terminals and we also
know that they are fast using up their reserves, which will
increase volume growth," he said.
Oman LNG produced near full capacity in 2002 selling 6.5 million
tonnes, six million more than the previous year, from the
plant's capacity of 6.6 million tonnes a year.
Source : Khaleej Times - 15th June, 2003
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Qatar plans QR87b
energy projects
President, Abdullah bin Hamad Al Attiyah, Qatar's Minister of
Energy and Industry - told businessmen that the country plans to
invest around QR87 billion in energy projects over the next five
years. Qatar has about 4.5 billion barrels of oil and its huge
North Field is the largest single non-associated gas field in
the world with proven reserves in excess of 900 trillion cubic
feet.
Qatar's is set to become the worlds largest exporter of LNG,
with plans to build new 7.5 million tonnes per annum (mtpa)
trains and raise export levels to 40 mtpa. It hopes to become
world leader in Gas-to-Liquids projects, and there are plans to
build the world's largest ethane cracker in Qatar's Ras Laffan
Industrial City.
Addressing members of the American Business Council of Qatar in
Doha, Al Attiyah said the oil and gas sector has contributed
about 60 per cent of the country's GDP over the past couple of
years. Until now, oil has been the main contributor, but Al
Attiyah told the gathering that natural gas is expected to
overtake oil as a revenue earner within the next ten years.
Source : Khaleej Times -
10th June 2003
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Mega gas plant production starts in Saudi
Arabia
Haradh Gas Plant, the second multi-billion-dollar project for
non-associated gas in Saudi Arabia, has started experimental
production and is almost ready to come on-stream, Saudi Aramco
said yesterday.
"Partial production of Haradh Gas Plant started on April 23, as
the first processing unit of the plant began operation," Nasser
Al Nafisi, head of Saudi Aramco public relations, told AFP in a
statement.The plant will be on stream with full capacity at the
end of July, five months ahead of schedule, Nafisi added.
The project, underway 280 kilometres (175 miles) southwest of
Dhahran, is part of Aramco's long-term programme of
non-associated gas exploration and development. It will increase
sales-gas supplies by 1.5 billion cubic feet (42.5 million cubic
metres) per day to the kingdom's Master Gas System (MGS),
bringing the company's combined sales-gas production to about
seven billion cubic feet (198.2 million cubic metres).
The plant is designed to process 1.6 billion cubic feet (45.3
million cubic metres) of non-associated feed gas daily,
increasing the total amount of feed gas to be processed by the
MGS to about nine billion cubic feet (254.8 million cubic metres).
The project will recover 145,000 barrels per day (bpd) of high
quality condensates, which will be transported to Abqaiq Plants
for treatment via a 230-kilometre (144-mile) pipeline.
Haradh is a twin of the Hawiyah Gas Plant, which was
commissioned in 2002 as Saudi Arabia's first non-associated gas
plant, adding 1.5 billion cubic feet of sales gas to the MGS and
boosting gas supplies by more than 30 per cent. The two plants
are located in Ghawar, the largest oilfield in the world, and
are expected to almost double the kingdom's sales gas
production.
Hawiyah also produces 160,000 barrels of hydrocarbon condensates
and 1,000 metric tonnes of sulfur each day. The project
transported gas by pipeline for the first time to the Riyadh
area to fuel three electric power plants, which previously
consumed crude oil.
Resorting to gas-fired systems has freed up a considerable
amount of crude for export and is
more environmentally friendly. Gas production is due to be
around 10 billion cubic feet (283.1 million cubic metres) per
day by 2010.
The MGS network, initially set up some 25 years ago, extends
from the Gulf to the Red Sea, and from the north to the south of
the kingdom.
Saudi Arabia's proven natural gas reserves grew in the past
decade to 224 trillion cubic feet (6.34 trillion cubic metres),
the fourth largest in the world.
Source : Khaleej Times - 25th May, 2003
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Construction contract for Sohar
refinery signed
The Government of Oman and
Japan's JGC Corporation yesterday signed an 'Early Works
Agreement' for the construction of the RO339.3 million Sohar
Refinery Project coming up at the heavy industrial zone adjacent
to the Sohar industrial port complex.
Minister of Oil and Gas Dr Mohammed bin Hamad Al Romhi and Kazua
Yamaga, senior managing director of the energy sales division of
JGC Corporation, signed the agreement here, which was witnessed
by the Japanese ambassador and a number of senior officials of
the Ministry of Oil and Gas and Sohar Refinery Company (SRC).
The Omani government - represented by the Ministry of Finance -
holds 80 per cent share in SRC, while the remaining stakes are
held by the Oman Oil Company.
Yesterday's signing of the agreement also allows the
construction of a refinery of international class at the new
heavy industrial zone being developed near the Sohar industrial
port complex. The facility will have a 116,400 barrels per day
(bpd) capacity crude unit and a residue fluid catalytic cracking
unit (RFCCU) with a capacity of 75,260bpd.
On-site construction is expected to start in the fourth quarter
of this year, while commercial start-up is slated for the second
quarter of 2006.
In effect, the project also opens up a new industry for
polypropylene in Oman. Operating in the 'maximum Olefin mode',
the refinery will maximize propylene production of nearly
327,000 tonnes per annum, which will serve as feedstock for a
polypropylene project. This is also being simultaneously
developed alongside.
Oman's Tender Board selected the consortium of Japan's JGC/Chiyoda
early this year for the contract to construct the Sohar Refinery
at RO339.334 million ($875.48 million). JGC also undertook the
front-end engineering design for the project. ABB Lummus are the
project management consultants.
The company intends to seek financial close by the third quarter
of 2003 through a combination of commercial debt and export
credit agency support.
The refinery will operate as a toll-processing unit and the
development of the company will be closely linked to Oman
Refinery Company, which owns the feedstock and the refined
products at SRC.
The feedstock consisting of a blend of long residue from ORC's
Mina Al Fahal refinery and crude oil. This feedstock will be
delivered to SRC via a pipeline from Mina Al Fahal.
Minister Romhi said the Sohar Refinery would complement the Mina
Al Fahal plant in the production of petroleum products for the
growing domestic market.
However, ORC will export the refined products in excess of local
needs through a 10-year off-take agreement it has with BP. To
begin with up to 90 per cent of SRC's output of refined products
will be exported to international markets.
Dr Romhi said the polypropylene plant, being developed
separately by Oman Oil Company and ABB Lummus Global and LG
International, would be closely integrated with SRC for its
feedstock besides the utilities such as cooling water,
fire-fighting water, compressed air, etc.
Source : Times of Oman -
20th May, 2003
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$100 m Pipeline to link Mina Al Fahal & Sohar
Refineries
ILF wins contract to design 260 km Pipeline
The Government is forging
ahead with plans to establish a multi-million dollar pipeline
link between Oman Refinery Company's Mina Al Fahal facility and
the new Sohar Refinery.
The pipeline, involving an estimated investment of $80- 100
million, will meet the feed- stock requirements of the Sohar
Refinery currently being developed at the Sohar Industrial Port
Complex at a cost of around $1 billion.
When operational in early 2006, the new refinery will not only
secure the country's future demand for high-value refined
pipeline products, but also herald a new era of exports of
refined petroleum products from the Sultanate.
"The pipeline will serve as the vital lifeline to Soar Refinery
transporting a blend of oil residue from Oman Refinery and crude
oil from Petroleum Development Oman (PDO), for processing at
Sohar" an official of Oman Refinery Company (ORC) said. .
Leading engineering consultant ILF & Partner has been selected
by ORC to undertake the engineering design and route
optimization studies for the pipeline project.
The firm led a field of international consultants, including
Mott MacDonald, Tebodin, Granherne and Electrowatt to win the
prestigious contract.
Envisaged is a 24-inch diameter pipeline that will run 260
kilometers along the Batinah coast from ORC's Mina Al Fahal
facility to Sohar. According to officials, the buried pipeline
will be large enough to transport 116,000 barrels/day (bbl/d) of
mixed feedstock, which corresponds to the processing capacity of
Sohar Refinery.
Long residue, which is a byproduct of the Mina al Fahal
refinery, will account for roughly 35 per cent of the feedstock.
ORC's entire output of 40,000 bbl/d of long residue, presently
being exported, would be ear-marked for the Sohar refinery. The
long residue will be blended with 76,000 bbl/d of crude oil from
the nearby PDO tank -farm and pumped to the Sohar refinery.
As part of its consultancy contract, ILF & Partner will also
design a pumping station at Mina al Fahal, and if necessary, .an
additional booster pump along the pipeline route, to ensure the
smooth flow of the feedstock to Sohar, The firm will also design
an advanced pipeline control system complete with SCADA, telecom
and leak detection capabilities.
The Japanese consortium of JGC and Chiyoda has already initiated
work on the Sohar Refinery. In January the consortium was
awarded a contract valued at $879 million for the
engineering-procurement-construction (EPC) of the refinery. The
project is one of several petrochemical and industrial ventures
at Sohar promoted by the government of Oman as part of its
economic diversification and industrialization objectives.
While BP will lift the Sohar Refinery's exportable output of
refined products, propylene a key byproduct - will be used as
feedstock for the Oman Polypropylene Project (OPP) being
developed alongside the refinery at a cost of around $200
million. OPP, jointly owned by Oman Oil Company, ABB Limmus and
South Korea's LG International, will produce 340,000 tonnes of
polypropylene annually.
The international consultancy had earlier handled the project
management of the key Sohar and Salalah -pipelines built by Oman
Gas Company at an estimated cost of $300 million. Furthermore,
the company is supervising the construction of the
Mahdha-Buraimi pipeline, through which Omani gas will be
exported to the UAE.
Other ongoing contracts include the design and supervision of a
gas pressure reduction terminal at the Sohar Industrial Port
Complex, and a SCADA system in that will monitor the health of
Oman Gas Company's elaborate gas transmission system.
Source : Oman Daily
Observer- 23rd April, 2003
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Oman
Refinery seeks bids for pipeline project
Oman Refinery Company has
invited bids for the design of a 200-km pipeline linking the
crude oil exporting terminal at Minal Al Fahal in Muscat to the
planned Sohar Refinery project.
Specialist companies for front-end engineering and design (FEED)
have up to mid-February to send in their bids. A company
spokesman said: "This project
is on fast track because we expect to invite bids for the
pipeline construction before June this year."
He said Holland's Tebodin, Granherne & Company of the United
States and Parsons Oman Engineering Company have already
submitted bids for the design work. British firm Mott McDonald
completed the conceptual study of the pipeline last month. The
pipeline will be able to transport up to 100,000 barrels per day
of mixture of crude oil and long residue as a feedstock to the
Sohar Refinery.
Last month Oman last awarded a Japanese consortium of JGC Corp
and Chiyoda Corp a contract worth $879 million to build the
75,000 barrel per day Sohar refinery in the northeast of the
country.
Government officials said the construction of the pipeline was
expected to cost around $175 million. International companies,
which are already associated with the energy projects, are
expected to win the contract to build the pipeline. The
shortlist may well include firms like Dodsal, SK Engineering and
Chiyod, according to official sources.
South Korea's SK Engineering has already won a $99.5 million
contract to manage and operate Sohar refinery while Indian firm
Dodsal has built a gas pipeline to Salalah.
The Sohar refinery project, which is expected to start
production in mid-2006, will feed the Oman Polypropylene Plant (OPP)
with raw material. The OPP project, a joint venture of state-run
Oman Oil Company, South Korea's LG Engineering and ABB Lummus of
Holland, is expected to cost $200 million.
Source : Khaleej
Times- 9th Feb, 2003
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Iran's South Pars Gas Field Phases 2, 3 On Stream-Oil
Minister
Phases two and three of Iran's South Pars gas field are now on
stream, bringing an estimated $1.5 billion in revenues to the
Persian Gulf state, Iran's Oil Minister Bijan Namdar Zanganeh
said on state-run television Thursday.
"Around 20 gas wells have been dug in the two phases from which
55 million cubic meters of natural gas are being injected into
the national gas network," said Zanganeh. He said the gas
produced by the two phases would be worth about $2 million a day
if calculated at 3-4 cents a cubic meter, the low end of its
potential price range. Analysts say the upper end of the price
range would be around 9 cents/cm.
There are also around 85,000 barrels of gas condensates being
produced at the two phases which will bring around $2.5 million
in revenues if sold at their average price of $25 a barrel, he
added. The development of the two phases involved the
construction of two offshore platforms and four 105-kilometer
pipelines.
A giant onshore gas processing refinery linked to these two
phases is operational in the Pars special economic zone at
Assaluyeh, in the southern province of Bushehr.
The two phases will also produce around 1 million tons of
liquefied petroleum gas a year, with a projected annual revenue
of $250 million, he said. A consortium comprising TotalFinaElf
SA, Gazprom OAO and Petronas Gas BHD was in charge of the $2
billion buyback development project.
Source : Dow Jones -
7th Feb, 2003
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