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Under the current system, the central govern- Partners and Brookfield Asset Management,
ment sets prices for local production every six Singapore’s sovereign wealth fund GIC, Can-
months using the weighted average price of gas ada’s Ontario Teachers’ Pension Plan Board,
in hubs in the US, Canada, the UK and Russia. South Korea’s NH Investment & Securities and
New Delhi slashed prices for conventional gas the Italian pipeline operator Snam. The deal is
production to $2.39 per mmBtu ($66.11 per expected to be closed in July.
1,000 cubic metres) for the six months from Rather than a simple sale and purchase trans-
April 1. State-run Oil and Natural Gas Corp. action, ADNOC will lease out its ownership
(ONGC), India’s largest gas producer, has com- interest in the assets for 20 years in exchange for
plained that such prices make it uneconomical a volume-based tariff. This marks the latest in
to develop a large portion of its existing reserves. a series of divestment deals by the national oil
In addition to the pricing reform, Pradhan producer, which needs funding to diversify its PTTEP has said
said the international energy price crash had business and shore up its cash reserves during it is looking
shored up the government’s commitment to the downturn. Last year, it also shed a 40% stake
privatising Bharat Petroleum Corp. Ltd (BPCL). in its oil pipeline network to US investors Black- to cash in on
The minister noted, however, that the timetable rock and KKR for $4bn.
of the state-run refiner’s privatisation had been In Mozambique, France’s Total and its part- the industry
handed to the Ministry of Finance. ners at the 13mn tonne per year (tpy) Mozam-
While some are looking to divest in the wake bique LNG export plant are inching towards downturn
of the price slump, others are using the oppor- closing a financing deal that will pave the way and expand
tunity to expand while assets are attractive. for a final investment decision (FID). Around
Following the recent announcement from Thai- 20 commercial banks are expected to take part. its upstream
land’s state-run PTT Exploration and Produc- Meanwhile, fuel prices have spiked in Zim-
tion (PTTEP) that it was looking to cash in on babwe, following the government’s removal of portfolio
the industry downturn and expand its upstream a fixed exchange rate in place since March. US
portfolio, Singapore’s Jadestone Energy has fol- dollar scarcity has exacerbated fuel shortages in
lowed suit, announcing an upstream acquisition Zimbabwe, which lacks any refining capacity of
of its own. its own and therefore imports all of its gasoline,
The Asia-Pacific focused independent has diesel and other petroleum products.
agreed to acquire a 90% operated stake in the
Lemang production-sharing contract (PSC) If you’d like to read more about the key events shaping
onshore Indonesia from Mandala Energy the downstream sector of Africa and the Middle East,
Lemang for $12mn.. then please click here for NewsBase’s DMEA Monitor.
If you’d like to read more about the key events shaping European asset sales at risk
Asia’s oil and gas sector then please click here for The European refining sector has not had an easy
NewsBase’s AsianOil Monitor. time over the years, amidst structural problems
with overcapacity and ever more efficient fuel
Downstream: UAE pipeline deal consumption.
At a time when investment in oil and gas is at The coronavirus (COVID-19) crisis and the
unprecedented lows, the UAE’s Abu Dhabi resulting collapse in fuel demand may prove
National Oil Co. (ADNOC) raised $10.1bn from to be the final straw for Swiss-based Gunvor,
the transfer of a near-half stake in its gas pipe- which is considering the closure of its 107,500
line business last week. The investors in ques- barrel per day (bpd) plant in the Belgian port of
tion were the US entities Global Infrastructure Antwerp.

Week 27 01•July•2020 www. NEWSBASE .com P7