Page 9 - DMEA Week 20 2020

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governments to consider financial aid for those state-owned companies exposed to the current market volatility.
Three of India’s High Courts are reportedly hearing five cases related to the settling of April crude oil contracts at negative rates, with the Multi-Commodity Exchange’s (MCX) inabil- ity to account for negative pricing at the core of three of the disputes.
Indonesia, meanwhile, is understood to be reviewing plans for bailout for 12 state-owned firms, including national oil company (NOC) Pertamina and power utility Perusahaan Listrik Negara (PLN). Pertamina is set to receive the assistance after having seen fuel sales collapse in the wake of the government’s COVID-19 quar- antine measures.
Amid the doom and gloom there are signs that the industry is adapting, however, with projects being green-lighted and acreages being released.
State-owned Coal India Ltd (CIL) has invited bids for two coal-bed methane (CBM) devel- opments, opening the acreages to local and international players. CIL is looking to sign rev- enue-sharing agreements for the blocks, which are expected to require $325.9mn worth of investment. Adani, Essar and Reliance Industries Ltd (RIL) are understood to have participated in a pre-bid meeting.
State-run Oil and Natural Gas Corp. (ONGC) has awarded production enhancement contracts (PECs) covering 49 marginal fields to seven bid- ders. The company had invited bids for PECs covering 64 onshore fields, which were split into 17 contract areas, in June 2019. While the winners must boost output beyond a pre-agreed- upon baseline volume, they will enjoy complete freedom when it comes to selling the production.
In Australia, meanwhile, the Queensland State government has launched its delayed bid round for more than 6,700 square km of land to developers. The auction had been suspended in March as the country ramped up social quar- antine measures in response to the COVID-19 pandemic. Twelve blocks have been opened to tender across the Bowen and Surat basins.
If you’d like to read more about the key events shaping Asia’s oil and gas sector then please click here for NewsBase’s AsianOil Monitor.
European refining pressure
In Europe, refiners continue to reel from the slump in fuel demand caused by COVID-19 travel restrictions.
European refining has had many ups and downs over the past decade, but current con- ditions could spark a wave of closures without ample state support.
Fuel demand in Italy, one of the hardest hit by the pandemic, plunged 45% year on year in April, according to new data, with a 35% decline expected in May. The country was the first in Europe to impose a nationwide lockdown in early March, but restrictions are now being grad- ually eased.
Italian refiners have responded by cutting runs, with Eni maintaining its plants at only 60% of capacity.
Elsewhere, Scotland-based refiner Ineos is reportedly seeking an emergency loan from the UK government for its joint venture with PetroChina. It may turn out to be a contentious issue in the public’s eye, as Ineos’ owner Sir Jim Ratcliffe is one of several UK billionaires to seek state support, despite having moved overseas for tax purposes.
Greece’s Hellenic Petroleum has bucked the trend, reporting a slight increase in core earnings for the first quarter. Rather than cutting runs, it boosted production in the quarter and sold more products overseas.
In Norway, state-owned Equinor has taken a final investment decision (FID) on a landmark project to capture, transport and store carbon in the North Sea. Pending approval from Norwe- gian authorities, Equinor and its partners Royal Dutch Shell and France’s Total are set to invest $670mn in the scheme’s first phase.
If you’d like to read more about the key events shaping Europe’s oil and gas sector then please click here for NewsBase’s EurOil Monitor.
In Italy, the first country to impose a nationwide lockdown in early March, Eni is running its refineries at 60% capacity after a collapse in fuel demand.
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