Page 7 - LatAmOil Week 20 2020

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Asian state aid
The oil price crash has sideswiped Asia’s energy markets, sparking legal battles and forcing gov- ernments 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.
Downstream petchem progress
In this week’s Downstream Middle East & Africa (DMEA), we look at how the next supply war could play out in the LNG arena.
Market leader Qatar is on a major push to increase its liquefaction capacity from 77mn tonnes per year currently to 126mn tpy by 2027. But in the shorter term, with producers vying for market share, it may have to choose between curbing LNG output or getting entangled in a supply war that hurts gas prices.
Qatar Petroleum has the edge over its rivals given the low cost of its LNG production. But it too has reportedly had to make cuts to spending to steer through the crisis.
In Saudi Arabia, Advanced Global Invest- ment (AGIC) is pushing ahead with a $1.8bn propane dehydrogenation and polypropylene project in Jubail. It has selected US firm Fluor as a project management consultant – the latest in a number of foreign companies to secure contracts relating to the project.
Saudi Arabia is eager to build up its petro- chemicals business to monetise domestic gas and establish a greater economic hedge against low oil prices. But conditions are far from ideal, as evidenced by the financial difficulties Saudi petrochemical giant SABIC is going through.
If you’d like to read more about the key events shaping the downstream sector of Africa and the Middle East, then please click here for NewsBase’s DMEA Monitor.
India’s ONGC has awarded production enhancement contracts covering 49 marginal fields to seven bidders
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