Page 4 - AsianOil Week 28 2021

AsianOil SOUTH ASIA AsianOil

India streamlines permit

process for legacy blocks

POLICY INDIA’S Directorate General of Hydrocarbons around a decline in oil and gas production that is
(DGH) has streamlined the upstream permit being driven by the state majors’ inability to replace
process for legacy fields by more than halving the their more mature fields. The country’s crude pro-
number of approvals their developers require. duction shrank by 5.2% year on year in 2020-2021
The DGH has reduced the number of required to 30.5mn tonnes (612,500 barrels per day) from
compliance processes from 37 to just 18 for fields 32.17mn tonnes (646,000 bpd) in 2019-2020. Nat-
awarded prior to the Open Acreage Licensing Pol- ural gas production slipped by slightly more than
icy (OALP) era, local news agency IANS reported 8% to 28.67bn cubic metres from 31.18 bcm.
on July 14. These rule changes apply to fields that While the government introduced new mar-
were awarded either during the nine New Explora- keting freedoms under OALP, state-run Oil
tion Licensing Policy (NELP) bid rounds or under and Natural Gas Corp. (ONGC) has long com-
the nomination system. plained that New Delhi has not done enough to
The DGH has also limited the number of sce- help improve the economics of legacy blocks.
narios where a developer will need prior DGH The government may have granted marketing
or government approval to just six. These include freedom to companies developing new fields but
either extending a block’s exploration phase or its production from pre-NELP and NELP blocks
production-sharing contract (PSC), preparing remains constrained by state-mandated prices.
abandonment plans, transferring a participating Reliance Industries Ltd (RIL) and BP’s deep-
interest to another company and the presenta- water KG-DWN-98/3 (KG-D6) block is one such
tion of annual audited accounts. block awarded under the NELP process where
The government hopes that by improving the production tailed off owing to development com-
ease of doing business in the upstream the oil and plexities. The companies, however, are ramping up
gas sector will be able to attract investment more output from new discoveries on the block that have
easily. India needs foreign investors if it is to turn access to more favourable OALP terms.™

Pakistan’s gas supply woes deepen

POLICY PAKISTAN could face a natural gas shortage in Nevertheless, the government’s decision to
September and October, after having reportedly cancel the tender has shaken the officials, who
cancelled a liquefied natural gas (LNG) tender warned that without those shipments the coun-
owing to high spot market prices. try could face a gas crisis akin to the one that
The government has refused to buy LNG for emerged in late June.
more than $13.79 per mmBtu ($381.43 per 1,000 Sui Southern Gas Company Ltd (SSGCL)
cubic metres), local daily The News International and Sui Northern Gas Pipelines Ltd
reported on July 12, citing unnamed senior offi- (SNGPL) slashed gas supplies between June
cials from the Petroleum Division. They added 22 and July 5 owing to the turnaround of
that state-owned Pakistan LNG Ltd (PLL) had a major gas field as well as an LNG termi-
cancelled a tender for eight spot LNG cargoes, nal being dry-docked, local daily Dawn
with four shipments to arrive in September and reported on June 29.
the rest in October. SSGCL had intended to reopen its com-
The average price for spot deliveries into pressed natural gas (CNG) stations in Sindh
East Asia in August was about $14 per mmBtu Province on June 28, after closing them on
($387.24 per 1,000 cubic metres), trade sources June 22 in response to annual maintenance
told Reuters at the start of this month. The mar- work at Kunnar Pasakhi Deep (KPD) gas
ket has cooled somewhat since then, however, field. But the utility opted to leave them
with the newswire’s sources noting that prices for shuttered in the face of a 160mn cubic
August delivery had fallen to $12.55 per mmBtu feet (4.53mn cubic metres) per day supply
($347.13 per 1,000 cubic metres). shortfall.
The News International’s Petroleum Division The dry-docking of the Engro LNG termi-
sources said the government would monitor nal, meanwhile, forced SNGPL to suspend gas
market trends and that PLL would be allowed to deliveries to the cement, CNG refuelling and
retender for LNG cargoes in the same delivery non-export industries in Punjab and Khyber
window once prices had retreated. Pakhtunkhwa until July 5.™

P4 www. NEWSBASE .com Week 28 15•July•2021