National
Easier loans for electric vehicles likely soon
NEW DELHI: Getting loans from banks for buying electric vehicles is likely to get easier as the government has decided to take measures to facilitate lending by banks for all varieties of these vehicles including e-rickshaws and e-autos.
Sources said prime minister’s office (PMO) has directed the department of financial services to take the necessary steps and has also asked the revenue department to offer attractive tax incentives- including faster depreciation on EVs-to encourage corporates to go electric rather than buy conventional petrol and diesel vehicles.
Officials said while the first measure will help people to buy EVs by making less down payment, the second initiative will convince companies to buy quality electric vehicles as the accelerated depreciation will bring major relief in the upfront cost of the vehicles by providing a tax break.
Moreover, along with its push to increase e-mobility in the country, the government has decided to accelerate other cleaner fuels for heavy vehicles on highways and personal vehicles in cities. The petroleum and natural gas ministry has been asked to set up LNG stations on highways and to increase the network of CNG stations in cities by March.
According to the minutes of the latest meeting chaired by PM’s principal secretary Nripendra Mishra, the department of industrial policy and promotion has been asked to give time-bound clearances from Petroleum and Explosives Safety Organisation for installation of additional electric vehicle charging stations and CNG dispensing units at existing fuel pumps. The petroleum ministry has been expanding the network of CNG stations across cities to make the fuel available.
Nayara Energy in talks with Delhi gas players for CNG services
Rosneft controlled Nayara Energy is in talks with domestic City Gas Distribution (CGD) operators to offer natural gas retailing services at its auto fuel retailing outlets. “We are in talks with Adani, IGL (Indrapastha Gas Limited) and MGL (Mahanagar Gas Limited) among others to offer compressed natural gas retailing at our petrol pumps. The new CGD geographies that are coming up are a diversification opportunity for retail outlets that have till now been offering just petrol and diesel,” a Nayara Energy official told BusinessLine at the sidelines of Petrotech – 2019.
“The gas sales will augment our petrol and diesel sales. Both auto fuel sales at Nayara have outpaced industry growth. Petrol sales have grown by 9 per cent while diesel sales are 12 per cent higher for the group,” the official said.
The Petroleum and Natural Gas Regulatory Board recently launched the tenth City Gas Distribution bidding round. After projects offered under this round are completed, about 53 per cent of India’s area covering 70 per cent of the country’s population will be connected with natural gas retailing facilities.
The successful winner in these areas on offer will have exclusive rights to the sale of Compressed Natural Gas and Piped Natural Gas for a certain period. The petrol and diesel retailers falling in this region will have to partner with the CGD operators if they want to sell natural gas at their outlets.
Nayara Energy is India’s fourth largest auto fuel retailer and the largest private fuel retailer by the number of retailing outlets. As of December 2018 end, Nayara had 5,033 petrol pumps out of total 6,577 private outlets.
BPCL to bring 1 MTPA natural gas from Mozambique to India
MUMBAI: State-run Bharat Petroleum Corporation Ltd (BPCL) will bring to India the much-awaited natural gas from its Rovuma basin in Mozambique in the next five years, said officials aware of the development.
BPCL will bring in 1 million metric tonnes per annum (mmtpa) of gas from the Rovuma field where its upstream arm, Bharat Petro Resources Ltd (BPRL) holds 10% stake.
“BPCL will sign a sales and purchase agreement with Mozambique LNG1 Company to bring the gas to India. BPRL holds 10% stake in Mozambique LNG1 company which was formed to market the gas,” said a company official aware of the development. Mozambique LNG1 Company is owned by the Mozambique Offshore Area 1 partners.
The Offshore Area 1 is operated by Anadarko Mozambique Area with a 26.5% stake. Other partners include National Oil Company Empresa Nacional de Hidrocarbonetos (15%), Mitsui E&P Mozambique Area 1 (20%), ONGC Videsh (16%), Bharat PetroResources (10%), PTTEP Mozambique Area 1 (8.5%), and Oil India (4%).
A final investment decision or FID for the block in Mozambique is expected to be ready by this April, said the chairman of Mozambique’s national oil company ENH on the sidelines of Petrotech. He said that the project would be financed in a debt-to-equity ratio of 60:40 but this ratio could evolve as the partners progress on the project.
An FID for the block allows the partners to unlock value in one of the world’s biggest gas discoveries, estimated at 75 trillion cubic feet. To put it in perspective, this would be more than the combined resources of all the gas fields in India.
“One of the Indian companies has already signed a share and purchase agreement for the gas. The first molecules will come to India by 2024,” ENH chairman Omar Mitha said adding that the location of Mozambique is strategic for Indian imports of natural gas and it does not have the geopolitical challenges of the Middle East.
The Anadarko-operated Mozambique LNG project will be Mozambique’s first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 12.88 MTPA. The LNG trains will initially require around $18-20 billion, of which $14 billion will be raised in loans.
“BPCL has aggressive plans to expand in the natural gas segment. So they will use the Mozambique gas and may market it too,” the first official quoted above added.
In 2017-18, BPCL formed a wholly owned gas subsidiary Bharat Gas Resources Ltd with a view to focus on natural gas as a separate business.
BPCL may also revive its plan to build a 1-to-3 mmtpa imported liquefied natural gas (LNG) terminal to cater to the rising domestic demand for the clean fuel. This could be expandable to 5 mmtpa later.
Given the government’s focus on increasing the share of gas in India’s overall energy mix and the development of infrastructure in terms of LNG terminals and pipeline connectivity, the demand for LNG is positive over the medium to long term, encouraging companies including BPCL, Indian Oil Corp. and Hindustan Petroleum Corp. Ltd to expand their natural gas businesses. All three are promoting city gas distribution, setting up LNG terminals and marketing natural gas.
Besides, a Supreme Court ban on polluting fuels for industrial use has also fuelled LNG demand. During April-October 2018, natural gas consumption rose 17.1%. During the same period, LNG imports increased 12.7% due to higher demand and lower domestic production.
Around 100 oil and gas fields could go up for private auction
The National Democratic Alliance (NDA) government is considering a proposal by a high-level committee to take away 97 oil and gas fields being explored by the Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Ltd (OIL) and auction them to private sector energy companies, two government officials aware of the development said.
The committee comprising top civil servants, including cabinet secretary PK Sinha and headed by NITI Aayog vice chairman Rajiv Kumar, has proposed “complete marketing and pricing freedom” to potential investors, one of the two officials said on condition of anonymity. These are part of 149 marginal fields that contribute about 5% of the country’s total oil and gas production.
The committee has, however, allowed ONGC and OIL to retain 52 of the total 149 marginal oil and gas fields on the condition that they deliver results in terms of production and financial performance within a definite time frame, the first official added.
According to the committee’s report, ONGC and OIL are on notice for these 52 fields.
They may lose these fields if they fail to perform, officials said.
“In these retained fields, NOCs [national oil companies] need to adhere to approved production profile. If they fail, even these fields shall be considered for taking back and privatisation by the government,” the six-member committee said in its report, which was seen by HT.
The committee submitted its report, “Enhancing Domestic Oil & Gas Exploration and Production”, to the government last month. Other members of the committee are oil secretary MM Kutty, department of economic affairs secretary Subhash Chandra Garg, ONGC chairman Shashi Shankar and NITI Aayog CEO Amitabh Kant.
Out of the 52 fields, ONGC currently holds 49 fields and OIL three. Queries sent to the oil ministry, ONGC and OIL did not elicit any response.
The panel also suggested that ONGC and OIL forge joint ventures (JV) with private entities in 66 lucrative oil and gas producing fields to enhance output from these blocks.
“It is necessary that recovery maximisation regime is adopted by NOCs and if need be, choose field specific implementation model including JV to make it possible to recover the additional oil expeditiously,” the committee said in its report. These 66 fields contribute about 95% of India’s total oil (from 35.7 MMT in 2017-18) and gas (32,648 MMSCM) production.
The committee, in its report, has expressed concerns over surging oil and gas consumption, which are resulting in higher energy imports (82.8% of total oil consumption and 45.3% in the case of gas). Total value of imports was ~4,79,377 crore in 2017-18.
“Higher imports are a direct consequence of steady decline in domestic production,” it said.
The report has pointed to two major dampeners for private investments — “poor geology” of Indian sedimentary basins and policy focus on maximising revenue from oil and gas fields.
“The policy and the fiscal regime would have to adequately compensate for relatively inferior oil/gas prospects and the difficult geology. Hitherto instead of compensating for the poor geology, Indian policy has focused on maximising government revenues,” it said.
“It has been highlighted by the oil and gas sector experts in the meeting with the Hon’ble Prime Minister that our existing policy framework, fiscal and approval regimes would have to be made more attractive for both FDI [foreign direct investment] and domestic investments,” it said.
A former board member of ONGC said, “This is nothing but asset stripping. Both ONGC and OIL are listed entities and this move will adversely impact the interests of the minority shareholders”.
“Ideally, the government should wait and see the outcome of 69 blocks already privatised before taking this step. Privatisation is not the only solution. Performance of private companies is also not that encouraging. The proposal should not be hurried, especially when the government’s current tenure is about to end,” the direct-level official said requesting anonymity.
