Page 4 - AsianOil Week 47
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AsianOil SOUTH ASIA AsianOil
Fitch downbeat on Indian
NOCs’ credit outlook
PERFORMANCE INTERNATIONAL credit ratings agency Indonesia's oil deficit
Fitch Ratings said this week that it would 2,000
maintain its negative outlook on the majority 1,800
of Indian oil and gas issuers. The agency said 1,600
1,400
that while it expects the credit metrics of most 1,200
Asia-Pacific issuers either to improve slightly 1,000
or remain flat in 2021, Indian companies were ,000 bpd 800
a different story owing to their “strong state 600
linkages or because they are key subsidiaries 400
200
of national oil companies (NOCs)”. 0
Fitch said it expected only a gradual recov- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
ery in Indian oil and gas demand in 2021 and Production Consumption Data: BP
that declining domestic production amid
maturing oilfields remained a challenge. The country’s potential. This has meant the burden of
agency added that it expected production increasing production, and reducing the coun-
challenges to drive high capital expenditure try’s dependence on imports – which is already
at most of the Asia-Pacific’s NOCs in order above 80% – has fallen on state-run Oil and Nat-
to maintain domestic production levels while ural Gas Corp. (ONGC).
expanding investment in overseas plays. India Minister of Petroleum and Natural Gas
Moreover, there will likely be limited Dharmendra Pradhan, understanding the state
room for fiscal support as the government sectors’ limited financial resources for expan-
focuses on tackling the country’s soaring sive upstream projects, has called on the NOCs
coronavirus (COVID-19) caseload while to farm out their acreages to foreign investors
also trying to get the economy back on that have both the technological know-how and
track. Fitch has noted that it does not antici- resources need to speed up development and
pate India’s GDP returning to pre-pandemic boost the country’s oil and gas output.
levels until the first quarter of 2022. “The government will grant petroleum
India has long struggled to turn around mining lease rights but the companies
its upstream fortunes, with the COVID-19 should consider a farm-out (of a stake) to
pandemic compounding the issue. Domes- get global technology players,” Reuters
tic crude production shrank 6.05% year on quoted Pradhan as saying on November 17.
year in September to 2.49mn tonnes (608,000 Pradhan made the comments while signing
barrels per day). At the root of the problem over production-sharing contracts (PSCs) for 11
has been India’s difficulty in attracting interest blocks that were awarded to ONGC and state-
from the foreign majors, who have the skill, run Oil India Ltd (OIL) in the fifth Open Acre-
experience and financial resources to unlock the age Licensing Policy (OALP) bid round.
SSGCL’s suggested gas price
hike draws industry ire
POLICY PAKISTAN’S Sui Southern Gas Company Ltd SSGCL justified the increase by the fact that
(SSGCL) has encountered stiff opposition from it was facing a PKR28.24bn ($175.7mn) shortfall
local industry over its request that the government in revenue this year, owing to losses in its piped
hike wholesale natural gas prices by 10.6% for gas and imported liquefied natural gas (LNG)
financial year 2021-2022. businesses. It also pointed to issues such as the
The state-run utility has petitioned the Oil and Gas government’s outstanding gas development sur-
Regulatory Authority (OGRA) to raise the govern- charge (GDS) payments, which were applicable
ment-set gas price to PKR822.25 ($5.12) per mmBtu prior to 2017-2018, as well as unaccounted-for
($141.62 per 1,000 cubic metres) from PKR743.25 gas (UFG) losses in both the domestic and
($4.63) per mmBtu ($128.07 per 1,000 cubic metres). imported sides of its business.
P4 www. NEWSBASE .com Week 47 26•November•2020
