India eyes direct purchase of six refuelling aircraft
India is now planning “a direct strategic purchase” of six flight refuelling aircraft (FRA) or tankers to enhance the reach of its fighter jets, bombers and surveillance aircraft after the bid to acquire them through global tenders failed twice over the last decade. Consequently, the defence ministry (MoD)+ has scrapped the proposed Rs 9,000 crore contract for acquisition of six Airbus-330 MRTT (multi-role tanker transport) aircraft, which was hanging fire for several years due to high costs as well as old CBI cases and change in the manufacturer’s name from EADS Cassidian to Airbus Group. “Airbus was told towards end-June that the RFP (request for proposal or tender), under which the A-330 MRTT was selected as L-1 (lowest bidder), has been withdrawn. A decision will now be taken for direct acquisition of FRA, a critical operational necessity for IAF+ ,” said a top MoD source. Alejandro Villanueva Authentic Jersey
Centre defers forest clearance for Navi Mumbai airport, again
The forest advisory committee (FAC) of the Union environment and the forest and climate change ministry have again deferred Stage-II forest clearance for the Navi Mumbai International Airport (NMIA) as they found deficiencies in the compensatory afforestation scheme, official documents revealed. The NMIA project requires diversion of 250 hectares of forest land, comprising dense mangroves. Additionally, the City and Industrial Development Corporation (Cidco) also needs 22.5 hectares of forest for rehabilitating project-affected persons (PAPs) for which they have applied for a separate clearance. D.J. Fluker Jersey
CBI arrests Aurangabad airport director for accepting bribe
The anti-corruption division of the Central Bureau of Investigation (CBI) on Sunday arrested Aurangabad airport director Alok Varshney for accepting bribe of Rs. 10,000 as the first instalment out of a total demand of alleged bribe of Rs. 50,000. The agency carried out searches last night at the official quarter and office of Aurangabad airport director and at present searches is continuing. The CBI authorities remained tight lipped about the entire operation but confirmed that the action was based on the basis of corruption related complaint against Varshney. CBI sources said that the seized documents and other material and articles would be scanned. Kenneth Acker Jersey
Spinners oppose plan for gas price hike
Top spinners urged the government to increase gas price in phases, not in one go, as the sector is facing challenges due to the import of cheaper yarn and fabrics from India and China. A proposed 130 percent hike in gas prices for captive power plants, which the spinners use for continued power generation, will badly hurt the sector, said A Matin Chowdhury, managing director of Malek Spinning Mills. The proposed hike is abnormally high and it will be difficult for the spinners to absorb price shocks in the current volatile situation, Chowdhury added. The hike will take the price of gas to Tk 19.26 per cubic metre from Tk 8.36 now. The government had already raised the price of gas for captive power plants as recently as September last year from Tk 4.36 per cubic metre to the current rate. Bangladesh Energy Regulatory Commission will hold a public hearing on the gas price hike proposed by Titas Gas Transmission and Distribution Company Ltd on August 7-8. The sector has also been facing a downward price pressure of yarn and fabrics, volatile cotton markets and the negative impact of the Gulshan terror attack on the garment sector, Chowdhury told reporters on Thursday. Recently, the Indian government announced a package worth $900 million for employment generation and promotion of export in the textile and apparel sector, according to Chowdhury. The package has been launched to improve labour working conditions, give a 25 percent investment subsidy and an income tax waiver to garment makers, he added. India has disbursed $3.5 billion in funds for factory upgrades between 2000 and 2014. These initiatives by the Indian government and higher gas prices for the captive power plants will erode our competitiveness as many local knitters and woven garment makers will rely on cheaper Indian yarn and fabrics,” Chowdhury said at the Bangladesh Textile Mills Association office. “The local spinners would not be able to supply yarn at lower prices for the Indian subsidies,” he said. As a result, the massive investment to the tune of nearly $5 billion has been made in the sector over the years will be in big trouble. One of the major difficulties is that the spinners and weavers cannot pass on additional prices to consumers as the value of products depends on foreign retailers, he added. Captive power generators account for 17 percent of total gas consumption, according to data from Petrobangla, the national oil, gas and mineral exploration company. Primary textiles account for 4 percent of the electricity generated by captive power plants. “We are selling our products at minimum prices only to keep our businesses afloat. The profit margin declined in the spinning and weaving sectors,” said Tapan Chowdhury, president of BTMA. “The primary textile sector could grow to its current position because of subsequent government support in gas prices and other policies. We need further support for the growth of the local business.” Currently, the spinners can supply 90 percent of raw materials to the local consumers and weavers can meet 45 percent demand of the local users, he said. New investment would not come in the sector if the gas price is hiked abnormally, he added. Darren Woodson Authentic Jersey
GST to be simple with 1 pc additional tax removal, say experts
With the government dropping the contentious 1 per cent additional inter-state tax, the proposed national sales tax or the GST stands simplified with aberrations removed, said tax experts. Ahead of Rajya Sabha considering the biggest indirect tax reform measure since independence, the government has met a key opposition demand of scrapping 1 per cent additional tax on inter-state movement of goods. It has also agreed to compensate states for any revenue losses for five years. “The tax process/system under GST would stand simplified with the government’s decision to do away with 1 per cent additional tax on interstate supplies. “…tax would have resulted in a cascading tax on interstate supplies, resulting in an otherwise not so pure GST and would have also driven companies to consider the same while making warehousing/logistics decisions,” said Mahesh Jaising, Partner, BMR & Associates LLP. The Goods and Services Tax (GST) seeks to replace a slew of Centre taxes and levies in 29 states, transforming the nation into a customs union. Analysts believe the GST could boost India’s economic growth by up to 2 percentage points. Sachin Menon Partner and Head, Indirect Tax at KPMG, said the changes made in the GST Bill shows the commitment of the government to introduce GST. “Hope our representatives put the nation first, behave responsibly to pass the GST bill,” he said. The Bill is listed for consideration in the Upper House this week. PwC Partner (Indirect Tax) Anita Rastogi said the proposed 1 per cent tax was not in line with the key concepts of GST, as the levy would have been a cost in the entire supply chain at various supply incidences. “Hence its removal is a welcome decision”. Nitish Sharma, partner, Nangia & Co said the doing away with additional tax is favourable step towards removing impediment in the credit chain and would certainly simplify the tax process. Tre Flowers Jersey
Post Qatar success, India tries to rework Australia LNG maths
Emboldened by its successful renegotiation of LNG deal with Qatar, India is trying to do an encore and looking at lowering the price of liquefied natural gas it plans to buy from Australia’s Gorgon project. Petronet LNG, a private firm whose chairman is the oil secretary, had in August 2009 signed a 20-year deal to buy 1.44 million tons per annum of liquefied natural gas (LNG) at a price equivalent of 14.5 per cent of the prevailing oil rates. The indexation agreed was one of the highest in the world, feels the Oil Ministry and the current company management. “When LNG deals are being done at 12 per cent or 12.5 per cent indexation, the Gorgon deal is certainly on the higher side,” a top source said. At the ministry’s instance and that of its promoters, Petronet has written to Exxon Mobil, the seller of Gorgon LNG, for reworking the price. “Oil prices have fallen from over USD 100 per barrel that translated into a price of USD 14.5 per million British thermal unit for Gorgon LNG. But even through rates are less than half of that, still as a matter of principle, the indexation should be lowered,” the source said. LNG in spot or current market is available at USD 5-6 per mmBtu where as Gorgon LNG at current formula will cost USD 6.5 per mmBtu at on oil price of USD 45 per barrel. After adding 5 per cent Customs duty, shipping cost and that of converting liquid gas back into its gaseous state, the landed price of the Australian gas will be close to USD 9 at the Kochi port where it is supposed to be delivered. State-owned gas utility GAIL India, one of the four PSU promoters of Petronet, had way back in 2013 sought review of the Gorgon LNG price formula. Its then Director (marketing) Prabhat Singh, who now is the Managing Director and CEO of Petronet LNG, had in June 2013 written a letter seeking reduction in price of Gorgon LNG. Sources said the case of renegotiating the Gorgon deal has strengthened after Petronet last year successfully got RasGas of Qatar to lower the rate for 7.5 mt per annum LNG it supplies under a 25-year long term contract since 2004. The price of imported LNG under this agreement had been linked to crude oil (Japanese Customs Cleared Crude or JCC) and had a concept of floor and ceiling indexed to last 5-year average. The rate thus arrived was higher than spot LNG. Petronet sought renegotiation of the deal and RasGas agreed to modify the pricing formula to link it with last 3-month average rate of Brent crude oil, they said, adding that at the revised formula, the country will save Rs 80 billion over the remainder of the contract, that is up to 2028. GAIL, Indian Oil, Bharat Petroleum and Oil and Natural Gas Corp (ONGC) hold 12.5 per cent each in Petronet. Petronet was to get Gorgon LNG by the end of 2015, but supplies have been deferred by a year. Frank Clark Jersey
Bundelkhand sitting on natural gas deposits? Methane, helium gases leaking from tube-wells in four districts
Backward region of Bundelkhand seems to be sitting on huge deposits of natural gases, as methane and helium gases have been leaking from tube-wells at a stretch of 150 km spread over four districts. After recharging of tube-wells following good rainfall, the villagers have laid down pipelines and are using the gas as fuel for cooking. Though it could prove disastrous, janpad panchayat representatives said they have informed the administration. But, Sagar district collector Vikesh Narwal is clueless about it. “I joined six months ago .I will find out about it,” he told TOI. However, Arun Kumar Shandilya, a professor of applied geology in Dr Hari Singh Gaur University, Sagar, has been raising the issue for past over two decades. “It is happening in more than 50 tube-wells over a stretch of 150 km in Vidisha, Sagar, Damoh and Panna districts. I have already intimated the Union ministry of petroleum and natural gas, Oil And Natural Gas Corporation (ONGC), director general, hydrocarbons, and Geological Survey of India (GSI) about it,” he told TOI. Shandilya first got the samples of gases tested with ONGC and later at National Geophysical Research Institute (NGRI), Hyderabad. Clayton Keller Authentic Jersey
Oilex Ltd reaffirms commitment to Cambay Block project
Oilex Ltd reaffirmed its commitment to unlocking the multi TCF in-place tight gas potential at its onshore Cambay Block project in India. In its quarterly results highlights for the June, the resources exploration group said it was close to executing a detailed strategy to take the Cambay project forward. It said the results to date supported a vertical well with the dual objective of targeting recovery of core from the Eocene siltstone and developing the un-depleted OS-II reservoir zone. Gas sales from Cambay-77H continued with an average gas production rate for the quarter of 26 boepd (net 12 boepd) and with an average associated condensate & oil rate of 6 bpd (net 3 bpd). Negotiations continued with the group’s joint venture partner to address payment of outstanding cash calls, contributions to programmed activities and approval of the annual budget resulting in delays to planned activities. The joint venture and Indian authorities approved the work programme & budget for the Bhandut Field for the Indian financial year starting April 2016. Test Gas Production at the group’s Bhandut-3 well, which commenced in April, 87 boepd (the 35 boepd) and with an average associated condensate rate of 18 bpd (net 7 bpd). During the quarter, the joint venture partner released US$302,000 towards payment of outstanding cash calls for the Indian financial year. During the quarter Oilex reached a settlement with Zeta Resources Limited that ended legal proceedings between the parties. The cash balance stood at US$5.2mln. Rob Gronkowski Authentic Jersey
Government open to deliberating on merger of oil firms: Dharmendra Pradhan
Government is open to deliberating on the issue of mega merger of state-owned oil firms for creating a behemoth, Union Minister Dharmendra Pradhan said. “The government plans to deliberate on the issue of merging the E&P companies and oil marketing firms in the public sector,” the Minister for Petroleum and Natural Gas told PTI. The state-owned oil companies are IOC,BPCL, HPCL, ONGC and OIL. He said with crude oil prices falling, the profits and margins of state-owned E&P (exploration and production) firms ONGC and Oil India were getting eroded. “Both ONGC and OIL are taking a hit on profits. The issue had been recently flagged by a director of one of the PSUs that it was in interest of the E&P firms to get merged with the oil marketing companies. “There is nothing wrong in discussing the issue within the ministry,” he said. Regarding the mega refinery on the west coast, he said the process of land acquisition is yet to begin. The proposed west coast mega refinery would come up in Maharashtra with a capacity of 60 million tons (in two phases). Pradhan said an SPV involving IOC, BPCL and HPCL has been formed for the project. “The exact equity pattern, quantum of land required and the total investment required is to be decided by the promoters,” Pradhan said. To a query, the minister said he did not foresee any problem regarding land acquisition for the project. Asked about the government’s response to private sector Reliance seeking subsidy for LPG distribution, Pradhan said, “We are giving subsidised LPG through PSUs only because they are assigned to do that. Subsidy is involved in the issue”. Pradhan said he would be going to the UK for a roadshow in September as the Indian PSUs had bid for small fields (oil and gas) in that country. Brent Burns Authentic Jersey