Page 9 - AsianOil Week 14

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SOUTH ASIA AsianOil
IOC approved on January 30 an esti- mated investment of INR137.79bn ($1.8bn) for the refinery’s expansion as well as the addition of downstream polymer units. The expansion is scheduled to be commissioned by April 2023.
L&T Hydrocarbon Engineering is cur- rently carrying out EPCC work for Hindu- stan Petroleum Corporation Ltd (HPCL) at the Visakh refinery. HPCL is upgrading the facility to process 15mn bpd (300,000 bpd) – from 8.3mn tpy (166,000 bpd) – and produce and distribute Bharat Stage-VI (BS- VI) compliant fuel. L&T Hydrocarbon Engi- neering won the contract to set up a 3.55mn tpy residue upgrade facility (RUF) at the refinery in October 2019.
The Barauni EPCC award comes as IOC has begun reducing refinery runs in the face of plummeting domestic oil product demand.
Bloomberg quoted unnamed refinery officials this week as saying that oil demand had shrunk by as much as 70% during the country’s ongoing lockdown. The news- wire’s sources said that if India’s three-week lockdown ended on April 15, as is currently planned, then oil consumption for the month was likely to average about 50% less than seen in the same month of 2019.
“Our demand is running at 30-40% of nor- mal, varying from product to product,” IOC chairman Sanjiv Singh told Bloomberg on April 8. “We will get a boost when things start opening up, but probably not to the [pre-coronavirus] COVID-19 level. That may still take some time.”
Reuters quoted an unnamed IOC official on April 7 as saying that IOC’s 11 refineries were operating at about 50% of capacity. The source added: “It is better to shut the plant than operate below 30-35% capacity ... refin- ery is a critical plant.”™
SOUTHEAST ASIA
Pertamina to boost crude production by 1.8% this year
PROJECTS & COMPANIES
INDONESIA’S state-run Pertamina has said it intends to increase its crude oil production by 1.8% this year, doubling down on its previous statement that the oil price crash would not affect its drilling plans for 2020.
“[Pertamina] will strive to maintain oil and gas production levels as per our work programme and budget [targets]” of delivering 923,000 barrels of oil equivalent per day (boepd), The Jakarta Post quoted the company’s upstream director, Dhar- mawan Samsu, as saying on April 4.
The state-owned company’s production rate hit 919,000 boepd in the first quarter, up 1.4% year on year but 0.4% less that its target.
The company produced 421,000 barrels per day of crude and 2.89bn cubic feet (81.84mn cubic metres) per day of gas. Pertamina is aim- ing to produce 430,000 bpd of crude and 2.88 bcf (81.56 mcm) per day of gas this year. The compa- ny’s overseas assets accounted for 156,000 boepd of the first quarter total, mainly owing to rising output from its Algerian operations.
“Pertamina strives to maintain upstream investments in fulfilling national oil demand but
with several adjustments based on our priorities to ensure project economics,” Dharmawan said. Pertamina president director Nicke Wid- wayati said in mid-March that the company would increase its upstream investment in order
to continue aggressively drilling wells.
The company intends to expand its capital expenditure by 84% y/y in 2020 to $7.8bn, up from $4.2bn in 2019. Wid- wayati said: “The biggest investment is in the upstream sector, amounting to $3.7bn, so that Pertamina can continue to increase oil and gas production in order to reach the
target of 1mn barrels [per day].”
Rystad Energy’s vice-president of upstream
research, Eugene Chiam, told the Petroleum Economist earlier this month that Southeast Asia’s leading national oil companies (NOCs) were more focused on their respective coun- tries’ energy security concerns. Chiam added that regional NOCs’ various cost-cutting drives in the wake of the 2014 oil price crash meant they had greater room to manoeuvre during the cur- rent low oil price environment.™
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