Page 10 - AsianOil Week 13 2021

AsianOil SOUTH ASIA AsianOil

and Oil India Ltd (OIL) prior to the introduction gas prices, arguing that the current structure
of the now defunct New Exploration and Licens- does not reflect market realities.
ing Policy (NELP). New Delhi sets domestic gas prices every six
At the same time, the government cut the months using the weighted average price of gas
price ceiling for gas produced from challeng- in hubs in the US, Canada, the UK and Russia.
ing fields, such as deepwater permits, from These tariffs are also set at a three-month lag to
$4.06 per mmBtu ($112.30 per 1,000 cubic prevailing market rates in those hubs and come
metres) to $3.62 per mmBtu ($100.13 per with a built-in $0.50 per mmBtu ($13.83 per
1,000 cubic metres). These rates are applied 1,000 cubic metres) discount to the international
to blocks that require greater investment to average.
develop and were awarded under NELP bid- ONGC has complained that this approach is
ding rounds. illogical because it uses an average price set in
While NELP has since been replaced by gas-rich hubs to determine rates in a gas-poor
OALP, which offers complete pricing and mar- market.
keting freedom, all of the country’s gas produc- Current gas rates are likely to see ONGC post
tion comes from blocks that were either directly a INR60bn ($817.2mn) loss on its gas business
awarded to the state majors or via the NELP in financial year 2020-2021, unnamed industry
system. sources told news agency PTI on April 1. They
The new pricing is a blow to the country’s added that the major had told the government
state-run developers, which produce the major- that the break-even price for new gas discoveries
ity of the country’s gas from conventional per- was $5-9 per mmBtu ($138.3-248.94 per 1,000
mits. ONGC has consistently lobbied for higher cubic metres).™

SOUTHEAST ASIA

Pertamina extinguishes refinery blaze

PROJECTS & INDONESIA’S state-owned Pertamina has site temperatures and monitor the affected areas
COMPANIES announced that its firefighters have successfully before preparing to resume refinery operations.
extinguished a fire that raged for two days at the The executive added: “Hopefully, the Balongan
company’s Balongan refinery. oil refinery can operate again after a thorough
Pertamina’s senior vice president of corpo- inspection is carried out.”
rate communications, Agus Suprijanto, said on Pertamina’s logistics and infrastructure direc-
March 31 that the company’s firefighters had tor, Mulyono, said on March 29 that an estimated
extinguished the blaze at the T-301H, T-301E 400,000 barrels of oil production would be lost
and T-301G oil tanks. during four to five days of refining inactivity
The fire broke out at the 125,000 barrel per at Balongan. Mulyono said the Cilacap and
day refinery following an explosion on March Trans-Pacific Petrochemical Indotama (TPPI)
29, with operations shut down as firefighters bat- refineries would ramp up their production to
tled to contain the blaze. Almost 1,000 residents 300,000 barrels and 500,000 barrels respectively
being evacuated from the area, with the incident to cover the shortfall.
understood to have affected five villages in the However, the executive said national fuel
Indramayu Regency. stockpiles were not at risk and that the country
“To prevent the fire from spreading we’ve could easily meet local demand while repairs
shut down operations ... and are putting our were carried out.
efforts into handling the blaze,” Pertamina Mulyono said there were 10.5mn barrels of
president director Nicke Widyawati said that gasoline (27-28 days’ worth of demand), 8.8mn
day. She added that the cause of the fire was still barrels of diesel (20 days) and 3.2mn barrels of
unknown. jet fuel (74 days) in storage. Mulyono added: “We
With the fires extinguished, however, Supri- ask the public not to panic because the stock is
janto said Pertamina would proceed to reduce overflowing.”™

P10 www. NEWSBASE .com Week 13 01•April•2021