Russia announces 5% oil output cut in March, OPEC+ to keep its production targets unchanged

Russia shocked oil markets last week by announcing a voluntary production cut of 5,00,000 barrels per day (bpd) starting in March. But the OPEC+ group currently doesn’t plan to change the course in its oil production targets, two delegates from the OPEC+ alliance told Reuters. According to the Kremlin, Russia discussed its plan to cut production with some members of the OPEC+ alliance, in which it is a key member leading the group of non-OPEC producers. Russia, however, had not formally consulted with OPEC+ on its plans before announcing the decision, a Russian government source told Reuters.

Last week, OPEC+ kept its production targets unchanged in a widely expected ‘wait-and-see’ approach to supply just ahead of the EU ban on Russian diesel and other petroleum products. Supply from Russia, demand in China, the state of the economies in the coming months, and the trend in interest rate hikes in the US and other major mature economies will be the key decision drivers for OPEC+ this year. As will be the price of oil on the markets—the group led by Saudi Arabia and Russia is unlikely to leave oil trading below $80 per barrel.   

European Commission proposes mass EU exit from Energy Treaty to accelerate climate action

The European Commission proposed a joint EU exit from the 1998 Energy Charter Treaty (ECT), over fears its protections for fossil fuel investments will slow down climate action. The treaty was designed to protect companies in the energy industry by allowing them to sue governments on policies affecting their investments. But in recent years it has been used to challenge policies that require fossil fuel plants to shut down. At present, France, Germany, the Netherlands, Poland and Spain have announced plans to quit the ECT, increasing pressure on Brussels to coordinate an EU-wide withdrawal. However, Switzerland won’t follow EU out of the ECT since it is not an EU member state. This has sparked fears that fossil fuel companies will restructure their investments through Switzerland in order to keep suing governments over climate action.

India predicts 500% increase in domestic natural gas demand, plans for expansion of oil and gas sectors 

India intends to increase oil refining volumes to 450 million tonnes a year by the end of the decade, from about 250 million tonnes, and will also boost liquefied natural gas import capacity. Natural gas should account for 15% of India’s electricity generation by 2030 from about 6% now, while the country’s share of global oil demand will ultimately more than double to 11%.

India’s gas demand is expected to rise 500% due to the rapid pace of development, while its share of global oil demand would more than double. A recent OPEC report expects India to be the largest contributor to incremental demand, with the country expected to add some 6.3 million bpd until 2045. Right now, India relies on imports for some 85% of its energy needs, with India and China being the largest importers of oil and gas in the world. Going ahead, India will remove significant restrictions on exploration, reducing “no-go” areas for E&P companies. India also plans to expand its refining capacity, along with its LNG import capacity by 2030. 

India aims to achieve 1,017 MT coal production in FY 2023-24

India’s coal production target has been fixed at 1,017 million tonnes for the financial year 2023-24. The target has been divided among state-owned Coal India Limited (CIL), which has been tasked with producing 780 million tonnes (MT), Singareni Collieries Company Ltd (SCCL) with 75 MT, and 162 MT for captive and commercial mines. Coal minister Pralhad Joshi said the steps were being taken by the Centre to augment the coal output in the country by engaging mine developers and operators. To achieve this goal, a thorough review was conducted by Coal Secretary Amrit Lal Meena with all coal companies. The review revealed that 290 mines are currently operational in CIL, with 97 of them producing more than one MT per year. It is anticipated that CIL will exceed the 700 MT goal set for the current fiscal year and, as a result, will reach 780 MT for the year 2023–2024. More than 80% of domestic coal production is attributed to CIL.

The Adani Group offers coal cargoes at discount to boost liquidity

The Adani Group is offering coal cargoes at a discount, suggesting that the group’s traders are eager to sell the coal quickly and potentially boost the liquidity at Adani Group, according to people familiar with the matter. The group’s traders are offering to sell several coal shipments from Australia and Indonesia at discounts of about 4% relative to Asia’s price benchmarks. While Adani hasn’t spelled out its motivation for offering discounts and it’s not the only producer doing so, the move suggests the firm is eager to offload the cargoes swiftly. The Indian conglomerate has had a difficult few weeks after short-seller Hindenburg Research, in a report, accused the group of gross market manipulations, leading to a massive wipe-out of the market capitalizations of the group’s listed units.

Energy crisis: South Africa’s chronic power outages trigger National State of Disaster 

After months of rolling blackouts and a raging energy crisis, South African President Cyril Ramaphosa declared a national state of disaster. The power cuts by state-run utility Eksom are daily and are reportedly the worst in its history, and are expected to cut into the country’s economic growth by 2 percentage points. The country has suffered some form of chronic power outages for the past 15 years. This energy crisis is largely brought on by supply shortages due to aging coal-fired power plants. Eksom has 14 coal-fired power stations responsible for supplying 80% of South Africa’s power. Many are old, most have not been maintained properly, and the company is in deep debt. South Africa has grand plans to retire 12GW of its coal-fired power fleet within the next seven years, but the country’s newest plants, Kusile and Medupi were fired up last year and were plagued with severe cost overruns and are still not operating at full capacity.

French giant TotalEnergies halts investment in Adani’s $50-billion hydrogen project

French giant TotalEnergies put on hold a planned investment in Adani Group’s $50-billion hydrogen project. This move comes after US short-seller Hindenburg Research in a report, accused the group of gross market manipulations. The partnership with the French giant to take a 25% stake in the hydrogen venture of the Adani Group and invest $50 billion over 10 years in a green hydrogen ecosystem that includes an initial production capacity of 1 million tonnes before 2030 was announced in June last year. But TotalEnergies has not yet signed a contract. TotalEnergies is one of the biggest foreign investors in Adani’s business empire and had previously taken stakes in the group’s renewable energy venture, Adani Green Energy Ltd, and city gas unit Adani Total Gas Ltd.

New coal blending order by govt will raise DISCOMs’ cost by Rs11,000 crore 

The government directive mandating power producers to increase the blending of imported coal to 6% of their requirement until September will add up to Rs11,000 crore towards power purchase cost for distribution companies in the first half of FY24, according to a report by Crisil Market Intelligence & Analytics. At the present blending rate of 5.4% applicable this fiscal, the distribution companies or DISCOMs will incur an additional cost of Rs42,000 crore on their power purchase bills this fiscal as this has pushed up the variable cost of power for utilities by Rs0.226 per unit. The latest directive is aimed at averting a power crisis from coal shortage this summer due to domestic supply issues.  

Power ministry asks utilities to not retire aging thermal power plants till 2030

Due to a surge in electricity demand, India asked utilities to not retire aging thermal power plants till 2030, just over two years after committing to eventually phase down the use of the fuel. “It is advised to all power utilities not to retire any thermal (power generation) units till 2030 and ensure availability of units after carrying out renovation and modernisation activities if required,” the Central Electricity Authority (CEA) said in a notice dated Jan 20 sent to officials in the federal power ministry. The CEA, which acts as an advisor to the ministry, has asked to increase the lifetime of such units considering the expected demand scenario.

About The Author

Editorial Team

A team of handpicked and dedicated writers committed to fact check each climate-related statement. Go to the roots and intent of each policy implemented, internationally and at home to help you understand climate better

See author's posts