Page 7 - AsianOil Week 29

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“Oil-producing countries have to ensure that crude remains relevant,” the executive told Bloomberg. “So, prices have to be kept in a reason- able range.”
Surana said rising US production had helped to reduce the dominance of the Mid- dle Eastern producers. He added that US sup- ply was likely to expand later this year once some of the Permian Basin’s infrastructure constraints had been removed.
To adapt to the shi ing supply landscape, Sur- ana said his company would focus on expanding capacity and modernising existing re neries over the next couple of years to be able to process a greater variety of crude.
Kotak Institutional Equity has warned in a report that the company could see its net profit for the quarter ending June 30 decline by 59.2% year on year to INR7.01bn ($101.5mn) on the back of weak gross refin- ing margins (GRMs).
In other news, HPCL is still refusing to rec- ognise majority shareholder Oil and Natural Gas Corp. (ONGC) as its parent company.
Despite ONGC paying INR369.15bn ($5.35bn) for the government’s 51.11% stake in HPCL in January 2018, the refiner has recognised the “President of India” as its promoter in every stock exchange ling since. is is despite Indian Min- ister of Petroleum and Natural Gas Dharmendra Pradhan having repeatedly referred to the com- pany as an ONGC subsidiary in written statements to Parliament.
PTI quoted unnamed industry sources as say- ing that the government had asked HPCL to add ONGC as its co-promoter earlier this year, but the re ner has delayed the move by requesting further clari cation. Industry watchers have been ba ed by Surana’s continued position as chairman, given that corporate governance structure requires a group to have a single chairman with its subsidiar- ies run by managing directors and CEOs.™
SOUTHEAST ASIA
Pertamina boosts upstream budget
FINANCE & INVESTMENT
INDONESIA’S state-owned Pertamina has increased its upstream budget for 2019 to $2.9bn from $2.6bn as it strives to reach a full-year pro- duction target of 922,000 barrels of oil equivalent per day (boepd).
Pertamina intends to invest $1.9bn in 98 new upstream developments, while the rest will go towards existing operations as well as exploration.
“Honestly, it isn’t an easy target to reach. e management supports us by increasing our budget to $2.9 billion,” e Jakarta Post quoted Pertamina upstream director Dharmawan Samsu as saying on July 18.
Pertamina EP will spearhead 47 projects, Per- tamina Hulu Energi (PHE) will lead 29 projects, Pertamina Hulu Indonesia (PHI) will develop 19 projects, Pertamina EP Cepu will have two projects and Pertamina EP Cepu ADK will be responsible for a single development.
Dharmawan added that Pertamina was exploring potential new areas, including around the giant Mahakam block. Pertamina took over Indonesia’s largest gas block from France’s Total and Japan’s Inpex in January 2018.
Despite Samsu’s cautionary comments around production, the company’s rst-half performance suggests it is on track to meet its 2019 target.
Crude oil production in the rst six months of the year amounted to 413,000 barrels per day (bpd), the company said on July 18. It also pro- duced 2.86bn cubic feet (80.9mn cubic metres) per day of natural gas, which equates to 521,000
boepd. First-half production equates to 934,000 boepd, up from full-year 2018’s realised produc- tion of 921,000 boepd.
Pertamina is looking to boost upstream activity to stem a steady decline in domestic crude production even as demand continues to climb. Oil output shrank by 3.5% year on year to 869,000 bpd in 2018, while consumption expanded by 5.2% to 1.79mn bpd, according to BP’s Statistical Review of World Energy 2019.
is has seen the government hand over a number of blocks of Pertamina as their licences expire, including Mahakam. The latest to be added to that list is the Corridor block in South Sumatra, with Pertamina’s 10% stake in the block set to rise to 30% when the current contract expires in 2023. Corridor is one of Indonesia’s largest gas producers,
US super-major ConocoPhillips will see its 54% interest drop to 46%, while Spain’s Repsol will see its 36% stake shrink to 24%. Deputy Energy Minister Armanda Tahar revealed the changes on July 22. e next contract will run for 20 years from December 20, 2023 and will use the gross-split mechanism.™
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