India’s Big Plan for Growth

As one of the most populous nations on earth, India has the opportunity to be at the centre of global growth and demand over the next 30 years, but it needs a coordinated approach in order to truly benefit.

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This article outlines some of the plans that are being considered;

India plans to form a giant national oil company by combining other state-owned firms, finance minister Arun Jaitley said on Wednesday, as New Delhi wants to expand its foreign presence to meet growing domestic fuel demand.

The problem is that India has a number of separate state-owned companies but individually, they do not have the necessary market capital that allows borrowing of the sums of money necessary for mega-investments.

India has about a dozen state-run oil and gas companies – including Indian Oil Corp, Oil and Natural Gas Corp , Hindustan Petroleum Corp and others – but alone they do not have the financial power to rival global oil majors in bids for overseas exploration and production assets.

Combining them “will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for shareholders,”

The potential for India, Indian companies and Western contractors/ suppliers/ engineers is massive. I hope it succeeds.

 

Egypt Emerging as an Energy Power

This is an interesting development for the North African region;

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Major international oil companies say they plan to step up their investments in Egypt, expecting to find more oil and gas now that ENI’s giant Zohr gas discovery has put its Mediterranean waters on the map.

A good few years ago I worked briefly on proposals for an LNG facility in Egypt which is now running (www.egyptianlng.com) but that was some while ago. Since then there hasn’t been much mention of Egypt on the international oil and gas market until now – as this article outlines.

Once a net gas exporter, Egypt has turned into a major importer in recent years as growing domestic demand outstripped production, but the discovery of the 850 billion-cubic metre Zohr field in 2015 is expected to change that.

The development goes further than reducing Egypt’s cost of importing gas and provides the potential for the Country to become a major player in the international gas markets of the future – refer to my last blog post as to why this is important for Europe – which is a good thing for North Africa as a whole.

 

 

 

Another EU Screw Up

Looks like Russia has outwitted the EU yet again.

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Gazprom’s bid to tap into a pipeline meant to wean Europe off Russian gas threatens to undermine a pillar of European energy policy and slow plans to develop rival deposits in the east Mediterranean.

This article outlines how Russia plans to make use of the new Trans Adriatic Pipeline (TAP) – which was intended as a means to reduce Europe’s reliance on Russian gas.

Unfortunately, EU ‘experts’ failed to spot a flaw in the plan to allow any company to bid to fill capacity in the expanded pipeline. Gazprom’s Alexander Medvedev said recently that the company was considering pumping gas through TAP;

“That would be very bad,” one EU official said. “It would be totally contrary to everything we have agreed with partners.”

Having prevented Russia from expanding gas exports via the South Stream project it’s not surprising that they see TAP as an alternative route into Europe’s lucrative gas market. But as usual with the EU, they haven’t grasped the full impact of their meddling;

EU sources said Russian gas flows via TAP may jar with the terms set by its financial backers, such as the European Investment Bank. The bank said it is carrying out due diligence.

At most, officials say they could extend an exemption from EU anti-trust rules to TAP in order to keep Gazprom out, but Brussels would require the firms and governments concerned to initiate the move.

And as usual, the EU’s solution is more regulation and red tape to cover up their failures.

 

 

Plan for new connector is not joined up thinking

Two interesting stories about the European gas market have emerged recently.

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The first, points to an EU funded plan to build the “Balticconnector”, between Finland and Estonia, to help reduce the Baltic states’ dependence on Russian gas imports.

This article states that the EU is funding 75% of the Project – the maximum allowed. What’s interesting here is that this implies that there is no business case for the project – i.e. there’s no profit in it – otherwise an energy provider or gas company would be funding the project. So clearly it is politically motivated.

This is further proven by the fact that;

The pipeline will be constructed by Finnish Baltic Connector Oy, a project company set up by the Finnish government, and Estonian Elering AS, operator of the country’s gas and power grid.

And that

The Finnish government decided to go ahead with the pipeline last year, despite its majority state-owned gas utility Gasum pulling out due falling domestic demand.

I wonder how the people of Europe feel about their money being used for political purposes?

Particularly as a second article talks about the TurkStream gas project that will consist of two gas pipelines supplying Russian gas for use by Turkey and for delivery to Europe. Thereby increasing Europe’s dependence on Russian gas.

Maybe the EU should stop meddling in things it has no control over.