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Official suggests merger of Indian state oil firms
India’s finance minister has suggested consolidation of some
or all of the oil and gas companies controlled by the central
Arun Jaitley, union minister for finance and corporate affairs, introduced the idea while presenting the 2017-18 budget
to the parliament.
Most oil and gas companies active in India are “public sector
undertakings” (PSUs), in which the government owns varying
The largest are Oil & Natural Gas Corp. Ltd. and Oil India
Ltd., which are mainly producers; Indian Oil Corp. Ltd., Hindustan Petroleum Corp. Ltd., and Bharat Petroleum Corp. Ltd.,
which are mostly refiners; and GAIL (India) Ltd., a natural gas
and pipeline company.
Among Indian companies not owned by the government are
integrated Reliance Industries Ltd. and Essar Oil and independent producer Cairn India Ltd.
In his budget presentation, Jaitley listed among “key initiatives” the “creation of an integrated public-sector ‘oil major’ to
integrate the oil sector PSUs across the value chain and to enhance capacity of oil PSUs to bear higher risks, avail economies
of scale, take higher investment decisions, and create more
value for the stakeholders.”
Delek Group to acquire Ithaca Energy
Delek Group, Tel Aviv, has agreed to buy shares of North Sea
producer Ithaca Energy Inc., Aberdeen, that it doesn’t now own
for $555 million.
Ithaca has interests throughout the UK North Sea and soon
will start production from Stella oil and gas condensate field in
the Central Graben area of the Central North Sea (OGJ Online,
Aug. 2, 2016).
Ithaca’s production last year averaged 9,300 boe/d. The company expects average production this year of 19,000-22,000
boe/d, reflecting the Stella start-up.
The company also expects to complete development drilling
at Harrier field, which is near Stella, this year.
Ithaca is a partner with privately owned Dyas and Petrofac
in development of the Greater Stella Area production hub.
Through a subsidiary, Delek now owns 19.7% of Ithaca, the
board of which has approved the takeover.
BP sets 2017 capital spending at $16-17 billion
BP PLC reported it intends in 2017 to spend $16-17 billion,
which is equal if not slightly more than the $16 billion the firm
spent in 2016.
BP says it now anticipates breaking even by yearend at Brent
crude oil prices of around $60/bbl given the mostly second-half startups of its new upstream projects. At the end of third-quarter 2016, the firm said it remained “on track to rebalance
organic cash flows next year” at $50-55/bbl.
The British firm reported a fourth-quarter 2016 underlying
replacement cost profit of $400 million compared with $196
million for the same period in 2015 and $933 million for third-quarter 2016.
Compared with a year earlier, the quarter’s result benefited
from higher oil prices and much lower costs, offset by weaker
refining margins and higher turnarounds in the firm’s downstream segment.
The headline reported result for the full year was a profit
of $115 million compared with a loss of $6.5 billion for 2015.
The 2016 headline result included a total of $4 billion nonoperating charges taken through the year associated with resolution of the remaining legacy of the 2010 Deepwater Horizon
oil well blowout and spill. The headline profit excluding these
legacy charges was $4.1 billion for 2016 compared with $2 billion for 2015.
BP made $7.1 billion in pretax payments related to the Ma-condo spill through 2016, as processing of outstanding claims
accelerated. Total divestment revenues were $3.2 billion in the
Cash payments related to the spill in 2017 are expected at
$4. 5-5. 5 billion, before falling to around $2 billion in 2018 and
to a little more than $1 billion/year from 2019.
The firm reported a reserves replacement ratio of 109% for
ConocoPhillips to increase spending slightly in 2017
ConocoPhillips plans to increase spending this year, forecasting
capital expenditures of $5 billion compared with $4.9 billion during 2016, executives said Feb. 2 as they released an earnings report.