India Becoming Major Area of Aerospace Manufacturing Growth
India’s aerospace and defense manufacturing sector continues to grow and expand through partnerships, new factories and research facilities. In recent months, there has been a flurry of activity in the country helping to build another one of the world’s major aerospace hubs. A lot of what is driving expansion and growth of the aerospace and defense industry is the government’s “Make in India” initiative, a push for airframe manufacturers to increasingly use aerospace suppliers based in the country. The initiative also aims for a certain percentage of the aircraft to be produced in India. One company that is witnessing a rapidly expanding presence in the region, after recently establishing a new production facility in the country, is Aequs, a precision aerospace sheet metal fabrication, assembly and forging aerospace supplier for Airbus, Boeing, and other OEMs. Last year, Aequs became the first Indian-based aerospace manufacturer to expand to North America by acquiring Texas-based T&K Machine, and in February 2016 followed up with the acquisition of French landing gear and engine test manufacturing company, SIRA Group. Aravind Melligeri, chairman and CEO of Aequs, told the company is currently focused on growing its partnership with Airbus as well. “Aequs has a long standing relationship with Airbus and has produced detail machined parts for its single-aisle, long-range and large aircraft since 2009,” said Melligeri, who believes the company is well positioned to support Airbus’ India sourcing strategy. Recently, Srinivasan Dwarakanath, Airbus India CEO, commented the company intends to source components worth $2 billion over the next five years from India. Not to be outdone, Boeing also has continued to expand its footprint in the country in the form of the Boeing Research and Technology India Center, which is the Indian counterpart to its research and technology organization in the United States. In April, Boeing India held its third annual National Aeromodelling Competition, which attracted 215 teams and more than 670 engineering students who turned out to demonstrate their aerospace modeling skills. The competition also served to encourage young engineering professionals toward careers in aerospace. The world’s largest airframe manufacturer is also competing with Lockheed Martin to produce fighter jets in India and provide a fleet of 126 fighter jets under its Medium Multi-Role Combat Aircraft (MMRCA) program. In April, Boeing also awarded a contract to produce titanium forgings on the 777X to India’s Bharat Forge, which already supplies titanium flap-track forgings for the Boeing 737 and will also supply forgings on the 737 MAX. “As we see the [Aerospace and Defense] A&D industry in India growing and evolving, it has attracted major global players in the space to India. Stronger economic growth, more favorable offset policies, cost advantages, and a robust talent pool has served to increase the interest from global manufacturers. More importantly, these factors are fueling growth in the private sector whereas, traditionally, aerospace capabilities have been largely centered on the public organizations such as Hindustan Aeronautics Ltd. (HAL),” said Melligeri. Early in 2016, several large-scale projects and joint ventures also served to prove that production in both the commercial and military segments will strongly support the future of India’s aerospace manufacturing sector. For example, at the Invest Karnataka 2016 summit in February, Reliance Defense Limited announced plans to launch a global aerospace technology research center in Bengaluru. Reliance also signed a cooperation agreement with Ukrainian airframe manufacturer Antonov in March to produce dual version air transport aircraft capable of supporting both military and commercial operations in India. “Low-level tactical missions by this aircraft are aided by modern-day avionics and navigation systems powered by fly-by-wire systems in all weather round-the-clock operations. India has a requirement of over 200 medium-lift turbofan aircraft, which is the backbone of all tactical logistic Transport Support Roles (TSR) as well as Route Transport Roles (RTR) of the Air Force, Army and paramilitary forces,” Reliance said in a statement accompanying the announcement of its new partnership with Antonov. The two companies also believe a medium-category aircraft such as this can address the gap in regional air transport connectivity for India to support “350 unused airstrips currently available across the country.” One area where India will need to improve in terms of growth will be Air Traffic Management (ATM) ground infrastructure modernization. Domestic air traffic in India increased by 22.9 percent in January, the highest among all countries tracked by the International Air Transport Association’s (IATA) monthly air traffic report. By 2034, IATA projects India will account for 367 million air travelers. IATA has been critical of a proposed mandate from India’s Ministry of Civil Aviation (MOCA) included in the draft of its National Civil Aviation Policy (NCAP) released toward the end of 2015. The mandate would require operators registering new aircraft in India beginning April 1, 2017 to equip their aircraft with GPS-Aided GEO Augmented Navigation (GAGAN)-enabled Satellite Based Augmentation System (SBAS) receivers. GAGAN is India’s satellite-based navigation system. “The draft policy would mandate aircraft use of a particular type of technology — known as the Satellite-Based Augmentation System (SBAS) — that would bring no operational benefits beyond the existing avionics. The SBAS stipulation would therefore just add cost. And though India has made remarkable progress in many areas of air navigation, there are other aspects that would benefit from additional impetus, such as the implementation of approach procedures at instrument runways,” IATA said in an April report advocating a revision of the draft policy. Regardless of the country’s air navigation policy, India has certainly become a major aerospace hub. “India’s aerospace industry growth indicates that the country is rapidly building capabilities to emerge as a preferred destination to support the global A&D supply chain,” said Melligeri. “With the government opening up and providing enormous opportunities to the private sector, many global and domestic players are collaborating and having joint ventures for manufacturing of aero components, Maintenance, Repair and Overhaul (MRO) facilities for civil and military aviation sectors, besides overhaul and maintenance of aero engines. India is also fast emerging as a center for engineering and design
Air India no longer making loss: Aviation Minister
The beleagured airline has recorded profits for the first time in 10 years. Coming to the defence of the beleagured Air India, government on Tuesday said that the performance of Air India has improved and it is making profit for the first time in 10 years. “Air India’s all-time performance has increased. This year it is making profit, which is the first time in last 10 years. It is making an operative profit. Air India is doing good work,” Raju asserted. ‘Zero accident’ The government also rejected the perception about the state carrier being the “leader in emergency landings” and asserted that there has been “zero accident” due to poor maintenance. Civil Aviation Minister Ashok Gajpathi Raju told the Rajya Sabha that every safety proceedure is followed in the Air India as “no deficiency” would be allowed in flying Indian aircrafts. “It is unfair to say that Air India is the leader in emergency landings… I do not go into Air India bashing at all. It is unfair to say this,” Raju said while replying to questions in which opposition members voiced concern over emergency landings by the planes of the state carrier. “During the last two years and the current year, a total of 120 incidents of emergency landing due to medical emergency and technical reasons have been reported to the Directorate General of Civil Aviation (DGCA). Out of the 120 incidents, 102 were due to medical emergency and 18 due to technical reasons,” the minister said. Of the 120 incidents of emergency landing, 23 are attributed to Air India and the rest to other airlines, he said. “We follow every safety procedure for all airlines including Air India. We can’t risk people’s life. No deficiency will be allowed to in flying Indian aircrafts in the sky,” he said. Replying to a question by Congress leader Ambika Soni, the Civil Aviation Minister said all incidents due to technical reasons investigated by DGCA and Aircraft Accident Investigation Bureau (AAIB) and safety recommendations emanating from the investigation reports are followed up for implementation with the concerned agencies so as to prevent recurrence of similar incidents in future. He also asserted that Air India is making profit “for the first time in last 10 years” even as he stated that the aviation safety rating of India was downgraded during the UPA regime, a remark which drew sharp reaction from Congress members. Chris Wormley Authentic Jersey
The challenges facing India’s civil aviation sector
n 1994, the then Government of India repealed the Air Corporations Act, 1953 and replaced it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994 thus enabling private companies to operate scheduled services at domestic locations. This was part of the broader liberalisation reforms that started in 1991. Today, India has the fastest growing domestic aviation market in the world, as per the International Air Transport Association (IATA). India’s domestic air passenger demand grew by 28.1% (July 2015) as compared to the previous year. This growth is three times as compared to China’s (10.9%) growth and five times as compared to United States’ (5.9%) growth during the same period. Forecasted growth for India’s domestic traffic is expected to be around 15% for the current year. By all means, India seems to be on a cusp of a civil aviation revolution. Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region of South Asia. This time period, thus, is critical for the industry and requires serious governance and leadership to create global Indian institutions. The finance minister in his budget speech talked about the Government’ intention of drawing up an action plan for revival of 160 unserved and underserved airports which can be revived at an indicative cost of Rs 50 crore to Rs 100 crore each. Nanded airport is one such airport which is in dire need of Central Government’s attention. Nanded is a major Sikh pilgrimage centre and home to the Sach Khand Huzur Sahib Gurdwara, the place where Guru Govind Singh’s ashes were buried. This is also one of the Five Takhts of Sikhism and therefore most important from a pilgrimage perspective. Visitors from across India and world over arrive here in large numbers all through the year. There is an urgent need to develop this airport and ensure connectivity at least through the national career, the Air India. The Rs 50 – Rs 100 crore required to make Nanded Airport operational is only a fraction of the cost of Maharashtra’s CM international air travels. While the domestic demand for air travel has increased considerably in the last few years, the Government has done little to actually help it achieve its true potential. Government has not reduced the jet fuel prices in proportion to the fall in international crude oil prices. Services provided at all Indian airports except the major ones continue to be far below the global standards. The airport connectivity with the cities is extremely limited. However, no government’s failure comes even close to its failure in revamping the country’s national carrier, the Air India. Air India continues to bleed losses to the tune of Rs. 2,636 crore in 2015-16 and Rs 5,859 crore in the year 2014-15. Government has once again been forced to inject a sum of Rs. 22,280 crore in March 2016 to keep the airlines afloat. So far, the Indian government has pumped in more than Rs 30,000 crore in the airline. As of December 2015, the 85-year-old airline’s debt stood at over Rs 50,000 crore. Adding to this, it has been steadily losing market share to rivals from the 35% share in 2007 to 16% in early 2016. There was a time not too long ago when Air India set the global standard for customer service. Now, it seems to have fallen far behind its Middle Eastern and South Asian counterparts in terms of quality services and business excellence. Only about 2% of the Indian population currently travels by air. Airbus, the world’s second-largest aircraft-maker, believes India’s civil aviation industry will grow by over 9.5% in the next 20 years while US-headquartered Boeing expects a demand for 1,740 planes in India in the same time period. That’s an opportunity that Air India can’t afford to miss. The expansion of India’s aviation sector also brings with itself a number of security challenges including prevention of terrorism. The world watched in horror how Brussels airport was attacked by suicide bombers on 22nd March 2016. We can’t allow any such incidents in India. In this context, a recent report by a department related to the Parliamentary Standing Committee on Transport, Tourism and Culture raises deep concerns by suggesting that 27 functional airports in the country are protected by forces other than the Central Industrial Security Force (CISF). The report said it was “quite scary to know that the security of eight of our hyper-sensitive and 19 of our sensitive airports are not covered by the CISF that has now become the only specialised force for aviation security”. The report said that – “Explanations given to the committee for non-deployment of CISF at remaining airports were lack of funds”. In the present day world where the terrorists are always a step away from creating havoc and taking hundreds of innocent lives, the Government is best advised to not compromise with the security of Indian citizens and provide the CISF with necessary resources. The last few years have seen a significant improvement in photography and drone technology. A number of countries around the world are trying to minimise the threats posed by drones by regulating the usage of drone technology. Recently, a person was captured with a small sized drone flying around the Prime Minister’s house. Repetition of such an incidence can’t be tolerated under any circumstances. To this effect, I have introduced a private member bill which aims to ensure that advancement in photography and drone technology doesn’t make our skies more vulnerable. The number of drones is only going to rise in future and there is an urgent need for the Government to bring a pre-emptive legislation to ensure the safety of our skies. To summarise, triggered by the reforms that started almost 2 decades back, India’s civil aviation sector is ready to become one of the largest in the world. While the opportunities are immense, the vulnerability of our skies has also grown manifolds. The Government needs to come up with a
House panel for fixing upper limit for economy class airfares
A parliamentary panel recommended for fixing of an upper limit for the economy class airfares to curb the exorbitant air fares during the peak tourist seasons. The panel, headed by Trinamool Congress Rajya Sabha MP Kanwar Deep Singh, also recommended to the ministry to ensure that airlines pass on the benefit of the 50 per cent reduction in jet fuel price to the consumers by way of slashing fares. The Committee also noticed the airfares are exorbitant during the peak tourist seasons which are also causing hindrance to passenger flow in the country. The Committee also recommends that, in view of the predatory charges levied by the airlines during peak times, the Government should fix an upper limit especially in the economy class of airfares so that there should not be unhealthy practice of raising fares exorbitantly by the airliners, the Department-Related Parliamentary Standing Committee on Transport, Tourism and Culture said in its 231st report, tabled in Parliament on Friday. Suggesting the Government for launching more flight to the Middle East (where a large number of Indian expats live) especially during the summer holidays to accommodate the peak season demand, the panel said that the Prime Minister in one of his visits to Middle East has already asked the Ministry of Civil Aviation to do something about such prices. Prime Minister had last August expressed concern over predatory pricing by the domestic carriers after he reportedly received a representation that airfares are high during the Onam festival that is celebrated in Kerala. The Committee received numerous complaints about high air fares and high charges levied by airlines and airports operators making it very expensive for the air travelers, the report said. The Committee received comments from the Ministry of Civil Aviation in this matter…Predatory pricing of airfare is hurting not only the individual passenger but country’s economy as well. The explanation given by the Ministry of Civil Aviation is purely technical suggesting that they are unable to do anything under existing laws, it said. Jordan Berry Womens Jersey
Flyers at receiving end as govt, opposition spar over aviation policies
Opposition members in the Lok Sabha have lashed out at private airlines for not passing on benefits of falling fuel prices to passengers while the ruling BJP members blamed the Congress-led UPA government for the financial problems faced by state-run Air India . Bharatiya Janata Party’s Jagdambika Pal also demanded that to do away with air traffic congestion over the Delhi airport especially at peak hours, a new airport should be built to cater to the national capital region, while some members called for a new aviation policy. Congress leader KC Venugopal said airlines have not passed on the benefits of fall in fuel prices to passengers and they were looting the passengers. Initiating the discussion on Demands for Grants for the ministries of civil aviation and tourism, he said the price of Aviation Turbine Fuel has come down resulting in huge benefits to airlines but at the same time common people and passengers continued to suffer. He claimed even Air India has benefitted from fall in ATF prices and demanded from the government what actions it proposed on high air fares. The Congress member was soon supported by lawmakers from other parties. Trinamool Congress member Saugata Roy urged the the government to rein in the rising airfares. “I feel that the government should have a role in having some regulations,” he said. He also said it is high time the government frames a new aviation policy. Among others, P.D. Rai of Sikkim Democratic Front alleged that most airports are managed in PPP project and private sector partners were found wanting in their role. Among others, expelled Rashtriya Janata Dal member Rajesh Ranjan, RJD’s Jay Prakash Narayan Yadav and Janata Dal-United’s Kaushalendra Kumar also spoke. “I want to know from the minister when will Air India be back on its feet?” Kumar asked. Venugopal criticised the government for reducing budgetary allocation to Air India, a charge denied by BJP and other NDA members. The Congress member requested the central government to expedite Kerala government’s proposal to launch Air Kerala to help citizens of the state going to the Gulf countries. BJP member Dushyant Singh said the financial mess in Air India was started by the erstwhile UPA dispensation, and denied that fund allocation to the national carrier has been reduced by the Narendra Modi government. Singh flayed Congress government for the merger of Indian Airlines and Air India. Christian Okoye Authentic Jersey
AAI chalks out Rs 15,000-crore plan for upgradation of airports over 4 years
In its biggest-ever investment outlay, Airports Authority of India (AAI) has chalked out a plan to invest Rs 15,000 crore over the next four years in the development and upgradation of airports. The outlay will include cost for installing solar capacities at several airports dotting the country. The plan was approved last month by the civil aviation ministry, which has also created a four-member team to monitor the targets set in the plan. “The ministry has ordered formation of a committee with representation from the finance ministry to monitor it,” said a senior civil aviation ministry official, who did not want to be identified. The panel will have AAI’s chairman and member (finance) and one joint secretary each from aviation and finance ministries as its members. Last time, Airports Authority of India had spent so much was on upgrading 35 non-metro airports at an estimated investment of Rs 12,500 crore. Of the Rs 15,000 crore, a whoppingRs 13,000 crore would be invested on upgrade, expansion and extension of 39 airports and about Rs 2,000 crore is to be spent over revival and upgrade of airports in smaller cities. The rest is to be spent over installation of solar power capacity at various airports. s part of the plan, airports, including Chennai, Guwahati, Patna, Srinagar, Jammu, Lucknow and others, will get new terminals and airports like Jaipur, Amritsar, Raipur, Ahmedabad among others will see runway upgrades. The official added that aviation minister Ashok Gajapati Raju convened the meeting where the plan was approved. “The minister’s (Raju) biggest concern was completion of upgrade and expansion projects of airports, as he wants Airports Authority of India to be ready to cater to the needs of the rising number of passengers in the country,” said the official. He added that the minister wants the committee to ensure that the airport upgrade projects adhere to the timelines. Meanwhile, the government is also working on a proposal to investRs 6,000 crore this fiscal year to revive and develop 75 regional airports, which currently see little activity. Warren Sapp Jersey
Tell us in 2 days how you plan to phase out diesel taxis: SC to Delhi government
The Supreme Court today gave a two- day deadline to AAP government for filing a detailed plan on phasing out diesel run taxis from the national capital, which faced protests and blockades by diesel cab operators causing hardship to regular commuters for the second consecutive day. A bench comprising Chief Justice T S Thakur and Justice F M I Kalifulla granted the time after the counsel appearing for Delhi government said that meetings with the representatives of stake holders will be held today and tomorrow after which it can submit a plan as directed by the court. Earlier in the day, the government had moved the apex court seeking time to phase out diesel taxis from the national capital after which the court had directed it to submit a plan, as how it propose to do so by 4 pm. The bench has said that whenever such decisions are taken, inconvenience is bound to be caused to the people and asked the Delhi government to submit a suitable detailed and workable plan. During the brief hearing, senior advocate Chander Uday Singh, appearing for the Delhi Government, had said that in the wake of Supreme Court’s order around 30,000 diesel taxis have stopped plying in the national capital which is causing inconvenience to the common people and creating a law and order situation. He sought some time for phasing out the vehicle in a time -bound manner saying the government is committed to tackle the problem of pollution. The bench also asked the Delhi Government to specify as to whether it stop the registration of diesel vehicles saying that it was the order given in December and the deadline was extended everytime. The counsel said that due to the apex court’s order, a human problem has been created and the government needs time to tackle the problem by phasing out the vehicles in phased manner or for making some alternate arrangement. The Supreme Court had on April 30 refused to extend the deadline fixed for conversion of diesel taxis into less- polluting CNG mode. The court had on December 16 last year considered the contention of senior advocate Harish Salve, who is assisting the court as amicus curiae, that all diesel taxis be moved to CNG fuel within a reasonable time but not later than March 1, 2016. “We, therefore, direct that all taxis including those operating under aggregators like OLA and UBER in the NCT of Delhi, plying under city permits shall move to CNG not later than March, 1,” it had said and later extended it to April 30. William Carrier Jersey
India Oilfield Services Market Forecast and Opportunities, 2020
Oilfield Services involve a wide range of services that facilitate oil and gas exploration and production (E&P). These services are provided to smoothen the drilling process, thereby eliminating the waste produced during drilling and enhancing the oil recovery process by providing repair and maintenance of bore wells. In India, Gujarat, Rajasthan and Assam account for maximum demand for oilfield services due to large scale oil and gas exploration and production activities being undertaken in these states. Government’s decision of auctioning 69 idle oil and gas fields of state-owned ONGC and Oil India to private companies on new revenue sharing model is expected to boost oil and gas E&P over the next five years, which in turn would fuel growth in the country’s oilfield services market through 2020. According to TechSci Research report, “India Oilfield Services Market Forecast & Opportunities, 2020”, the country’s oilfield services market is projected to surpass US $ 7.8 billion by 2020, on account of anticipated increase in oil and gas E&P activities. Onshore oilfield services segment holds majority share in India’s oilfield services market; however, the offshore oilfield services is forecast to exhibit higher growth during 2015 – 2020. Comprising three vital type of services i.e. cementing, direction drilling, hydro fracturing services, drilling services segment accounts for the largest share in the oilfield services market, followed by drilling & completion fluids services, wireline services, pressure pumping services and coiled tubing services. “India Oilfield Services Market Forecast & Opportunities, 2020” discusses the following aspects of oilfield services in India: – India Oilfield Services Market Size, Share & Forecast – Segmental Analysis – By Application (Onshore & Offshore); By Type (Oilfield Drilling, Oilfield Drilling & Completion Fluids, Oilfield Wireline, Oilfield Pressure Pumping Services, Oilfield Coiled Tubing, Oilfield OTGS, etc.) – Policy & Regulatory Landscape – Changing Market Trends & Emerging Opportunities – Competitive Landscape & Strategic Recommendations Brett Hundley Jersey
India: LNG shipbuilding plans cross a milestone
One of the biggest elements of Prime Minister Narendra Modi’s Make in India initiative crossed a milestone recently when state-run natural gas company GAIL (India) Ltd received initial bids from two consortiums for hiring at least nine liquefied natural gas (LNG) carriers on a long-term basis for transporting gas from the US. The supply of 2.3 million tons per annum (mtpa) of LNG from the Cove Point terminal in the US will begin in December 2017. The delivery of 3.5 mtpa LNG from the Sabine Pass terminal, also in the US, will start in March 2018. While two bids may look a tad disappointing for a tender worth $7 billion, the fact remains that the consortium partners comprise most of the world’s top LNG shipowners. A consortium of Mitsui O.S.K. Lines Ltd (MOL)-Nippon Yusen Kabushiki Kaisha Ltd (NYK Line) and Mitsui and Co. Ltd and another group comprising Mitsubishi Corp.-Kawasaki Kisen Kaisha Ltd (K Line)-GasLog Ltd and Foresight Ltd have applied for one of the most keenly watched shipping tenders globally. That makes it a total of seven fleet owners that have participated in the tender in two separate consortiums. Given the huge investments involved in constructing nine LNG carriers, with an option for an additional two, and the risks inherent in building three of the nine tankers on firm order locally for the first time, it is not a small number at all. That it took GAIL a second attempt to receive the two bids (the first tender issued in August 2014 had to be scrapped in February 2015 because nobody showed up) speaks volumes of the complexity involved in the auction. GAIL will not order the ships directly at shipyards—both overseas and Indian. It plans to charter the carriers from global fleet owners who will have to construct three of the nine LNG tankers in India as part of the Make in India plan, aimed at attracting foreign investment and turn India into a manufacturing hub. Prospective bidders were required to quote for lots of three vessels (one lot consisting of three carriers) with a provision that under each lot, one of the vessels has to be built in an Indian yard. Bidders could quote for one or more lots of three ships each. GAIL may hire one or two extra tankers to fulfil its capacity requirement. Hence, in addition to the quote for lot(s), it was mandatory for bidders to quote for at least one additional ship from an Indian shipyard. A bidder offering two additional ships has to necessarily quote for one additional vessel from an Indian shipyard and the other from an overseas shipyard. In case one additional vessel is required, it will be built at an Indian shipyard. If two additional vessels are required, the first vessel has to be from an Indian shipyard and the second vessel from an overseas yard. Both the bidding groups have applied for one lot each of three LNG carriers. Besides, the MOL-NYK-Mitsui consortium has submitted techno-commercial bids for two additional ships (taking the total offer to five ships). Plus, it has expressed willingness to offer a sixth ship (this is not in line with the tender conditions). The Mitsubishi-K Line-GasLog-Foresight consortium has applied for one lot of three tankers and an additional ship to comply with the tender requirements. The five ships offered by the first consortium (excluding the sixth one on offer that may not fit the tender rules) and the four quoted by the second will take the total tankers on offer to nine. This clearly shows none of the two consortia were keen on making an investment for nine ships. It also means that there will be more than one successful bidder. Critics who still harbour doubts over India’s capability to build LNG ships should recall what China did to enter the LNG shipbuilding/LNG ship owning business during the early years of the past decade. When none of the global yards were willing to part with the technology to build LNG carriers, Shanghai-based Hudong-Zhonghua Shipbuilding (Group) Co. Ltd, a unit of state-run China State Shipbuilding Corp., was directed to start constructing LNG ships with design developed locally and financed by Chinese lenders. The LNG containment system used on the ships was licensed from French firm Gaztransport et Technigaz SA (GTT). China LNG Shipping (Holdings) Co. Ltd (CLNG) was set up in Hong Kong, as an equal joint venture between two state-owned firms, China Ocean Shipping (Group) Company and China Merchants Group, for planning, coordinating and arranging all the investments and management works related to LNG transportation projects in China. The JV has invested around $1 billion in six LNG carriers so far. China later brought in BP Shipping Ltd, a unit of London-based oil and gas firm BP Plc, as a 40% shareholder in China LNG Shipping (International) Co. Ltd (CLSICO), a Hong Kong-based JV 60% owned by CLNG, to manage the six LNG tankers. BP is one of the partners in the North West Shelf project in Australia that supplies 3.7 mt LNG a year to Guangdong Dapeng LNG Co. Ltd, China’s first LNG import project, for 25 years beginning May 2006. BP Shipping exited the ship management JV in August 2013 by selling its 40% stake to China’s national oil firm China National Offshore Oil Corp. (CNOOC). Hudong now has an order book for 13 LNG tankers and two more Chinese yards have started constructing LNG carriers. In India, Shipping Corp. of India Ltd (SCI) and GAIL, both state-owned, have a step-in right to take at least 26% and 10% stakes, respectively, in each of the nine LNG carriers. Besides, the local shipbuilder winning the contract to build the three LNG tankers has the option of acquiring another 5-13% stake in each of the three carriers. This means Indian entities can hold as much as a 49% stake in the three locally built LNG tankers to spread financial risks. Unlike China, India has been lucky in getting a global shipyard to
Indian firms to hold stakes in Middle-East oilfields & Gulf companies to invest here: Dharmendra Pradhan
Indian energy firms will hold stakes in oil and gas fields in the Middle-East while companies from the Gulf will invest in oil and gas infrastructure, refineries and petrochemicals at home, as commercial ties with the world’s biggest oil-exporting region evolve into a strategic relationship, Oil Minister Dharmendra Pradhan said. He said the Gulf countries are enthusiastic about strengthening ties with India and have stopped levying the ‘Asian Premium’, a controversial practice of charging a higher rate for crude oil sold to Asia, compared with other buyers in more prosperous regions. “Today we are talking to (Middle East countries) that we don’t just want prices, but on the basis of strategic relationship we should also get equity in exploration and production projects. Their investment if it comes in the oil industry infrastructure, petrochemicals, refinery, downstream, then our country’s consumers and oil companies will develop. There will be more competition. Who will gain? Our consumers,” Pradhan told ET in an interview. “This kind of discussion is going on under the leadership of our prime minister. This is at a very advanced stage in many verticals,” the minister said. He said countries in the Middle East had responded positively to Prime Minister Narendra Modi’s initiatives and given certain assurances. On the domestic front, Pradhan said initiatives to resolve exploration issues along with steps to promote biofuels will reduce India’s import dependence by 10% compared with earlier projections. He said the country would meet its target of 5% ethanol blending in petrol for the first time since the measure was introduced. “The prime minister has given us the target to reduce import dependency by 10%. First we found it challenging, but now we find it achievable.” He said ONGC and Gujarat State Petroleum Corp were holding commercial talks to use common facilities in the KG Basin, the region where the two companies, apart from Reliance Industries, have discovered gas in challenging fields. The minister said his advice is that companies should follow the best practices of oil majors, which share infrastructure to cut costs even if they compete with each other in the market. Pradhan said India’s overhaul of its exploration policy had evoked a positive response globally. He said the International Energy Agency’s director general had written to the government appreciating the policy changes. He said global majors look at the oil price situation before investing, and tend to cut expenditure when prices fall, unlike state firms like ONGC and Saudi Aramco, which have not cut capex. He said the changes in gas price policy for difficult fields will lead to higher production. “These fields will start production in three to four years.” “In challenging fields, ultra-deep water fields, there are three primary stakeholders: ONGC, GSPC and RIL-BP joint venture. All have said publicly that they will increase investment as the price makes it viable. It’s a big statement,” the minister said. He said the government was keen to create an environment that supports investments instead of creating disputes. “We want to take all stakeholders in confidence. Arbitration is a legal right. Arbitration situation shouldn’t come. We want to undertake reforms to ensure that. We don’t want disputes and arbitration, but we’ve got legacy issues. How to sort these out, we are working towards that.” He said the way to resolve such issues was to undertake reforms. Greg Maddux Authentic Jersey