ONGC to pick stake in Gujarat State Petroleum Corp’s KG basin block
ONGC has signed a preliminary pact to acquire a stake and operate the KG Basin block of Gujarat State Petroleum Corp. (GSPC), which had announced a major natural gas discovery and spent $3 billion to develop it but hasn’t been able to start commercial production in the technically challenging field. “Yes, we have signed an MoU (memorandum of understanding) on October 4. This is a preliminary thing and we are looking into various possibilities. We have shared report (about gas reserves) of our consultant Gaffney Cline & associates with ONGC,” GSPC managing director JN Singh told ET. ONGC declined comment. GSPC had announced the gas discovery in the Deen Dayal block with much fanfare when Narendra Modi was Gujarat’s chief minister. Subsequently, the company faced unexpected hurdles such as extremely high temperature and pressure, which can damage equipment. This contributed to the rise in development expenditure, debt and delay in execution. Official sources said the pact provides for a panel of three experts to oversee the transaction. This includes Vijay Kelkar, former oil secretary, and P Shankar, former chief vigilance commissioner. The third slot is yet to be filled but sources said MA Pathan, a former chairman of Indian Oil Corp., may get the job. ONGC and GSPC currently have differences over the quantity of reserves in the KG block, the amount of capital and operating expenditure needed, the prices gas and condensate from the KG block can obtain, and the discount rate that should be used to calculate the net asset value, sources said. Singh said the commercial matters could easily be resolved between the two state-run firms. “As the minister had earlier pointed out, ONGC and GSPC are not India and Pakistan. We are both government bodies, and various possibilities are being looked into,” he told ET. The expert panel will take a final call on all the differences. In the MoU, the two companies have agreed to accept the expert panel’s recommendation on valuation and seek their respective boards’ approval, sources said. ONGC has appointed Ryder Scott, a consultancy, to independently assess the reserves in the GSPC’s block. The consultant’s assessment of the Deen Dayal West (DDW) field has to be presented to the expert panel by November 15and for other discoveries latest by December 31, sources said. The MoU is non-binding and valid for six months. It doesn’t mention the extent of stake ONGC may acquire but sources said it could be a majority holding. If a definitive agreement is signed, GSPC will offer ONGC suitable indemnity, sources said. GSPC’s stake in the KG block and future income from the block is hypothecated to lenders, sources said. The Comptroller and Auditor General (CAG) had criticized GSPC this year for the way it handled the block. The investments in the block drove up GSPC’s debt 180% in four years to Rs 19,700 crore by March 2015, the auditor said. The CAG had cited deficient implementation, cost overruns and inability to induct a strategic partner in time. GSPC owns an 80% participating interest in the KG block while Jubilant and Geo Global Resources have 10% each. One official said that in late August, the Prime Minister’s Office called a meeting with top executives of the two firms including ONGC chairman DK Sarraf to review progress in the matter and to make sure the MoU’s terms would be acceptable to both companies. GSPC joint managing director T Natrajan had earlier confirmed to ET about the meeting held on August 24 and the sharing of data with ONGC. “ONGC has the capability and resources to develop DDW field. They have also done their internal study,” he had said. “This is a high pressure and high temperature field. Further, DGH has made its assessment about it, which is in the public domain. Our technical consultant Xodus is also working on this.” A senior PMO official told ET that ONGC’s board would decide on buying a majority stake in GSPC. “Our role is only to facilitate talks and ONGC’s board is free and fully independent to decide on this deal,” said this official. Petroleum minister Dharmendra Pradhan had earlier told ET that the two companies were commercially discussing the matter for mutual benefit and that his advice to the firms was to use common facilities and make a joint strategy, just like global firms such as BP, BG, Chevron and Exxon do. Curtis McElhinney Authentic Jersey
GE Opens New Oil & Gas R&D Center in Oklahoma, Showcases Smart Sensing Drone, Advanced Labs and Emerging Digital Technology
Providing a present and future glimpse of promising new technologies in the pipeline for the Oil & Gas industry, GE (NYSE:GE) today held the grand opening of its new Oil & Gas Technology Center in Oklahoma City. The new Center will become a central hub for GE scientists and engineers to closely collaborate with the Oil & Gas industry on cutting-edge digital and hardware solutions to advance the industry. Lorenzo Simonelli, President and CEO, GE Oil & Gas said, “We believe a strong commitment to R&D will help our oil and gas customers find new efficiencies to work through tough market conditions and lead to transformational opportunities for the industry to thrive long-term. The new technology center in Oklahoma City will accelerate innovation; it’s where we can bring the full power of digital solutions and technology from across GE’s industrial businesses to advance the Oil & Gas industry.” At the Center opening, GE unveiled a prototype drone, nicknamed “Raven,” engineered to detect emissions precisely and cost-effectively, to help customers reduce environmental impact and improve operational efficiency in the Oil & Gas industry. Southwestern Energy Company successfully piloted the technology to detect emissions from oilfield equipment at well sites in Arkansas in July. Vic Abate, Senior Vice President and Chief Technology Officer, GE said, “At our new research center in Oklahoma City, customers benefit from the collective global brain of technologists from our 10 GE global research centers around the world, as well as our 50,000 global GE engineers who span multiple industry sectors. We call it the GE Store, and it allows us to bring innovation from other GE industries such as Aviation, Power, Healthcare and Transportation to transform and strengthen the Oil & Gas sector.” About GE’s Oil & Gas Technology Center GE’s new Oil & Gas Technology Center is five stories, with 125,000 sq. ft. of lab and office space that includes: • 400-foot and 60-foot deep test wells • Two 30-ton overhead cranes for moving large testing equipment • An entire floor dedicated to customer collaboration with embassy offices Michael Ming, General Manager of GE’s Global Research Oil and Gas Technology Center, said, “To the greatest extent possible, we are bringing the oilfield and our customers directly into our lab space. When you couple that with the world-leading scientists and engineers based here in Oklahoma City and at GE’s other global research centers around the world, you have a winning formula for driving transformational technologies the industry will need.” Ming noted the research focus at the new Center will span across all areas of oil & gas from production solutions and well construction systems to oilfield facilities and systems and reservoir performance. Although the new Center just recently opened, temporary offices were established more than two years ago in the City Place Tower in downtown Oklahoma City. With 120 employees today, the Center can accommodate as many as 230 people. GE’s new Oil & Gas Technology Center has established several programs and partnerships with industry and academia, including Oklahoma State University and the University of Oklahoma and has R&D agreements in place with many of the leading operators in North America. John Hannah Womens Jersey
ONGC, OIL in a spot over dipping gas prices
Per dollar decrease in gas price will have an impact of Rs 42 billion on its gross revenue, according to ONGC. With the domestic natural gas price dipping by 51 per cent in 24 months to $2.5 per million metric British thermal unit (mmBtu), downstream companies like Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) are now batting for a floor pricing of at least $4.2 per unit, claiming that at current price there will be no margins for producers. According to ONGC, at current volume, per dollar decrease in gas price will have an impact of Rs 42 billion on its gross revenue. On the other hand for OIL India, the loss on revenue is to the tune of Rs 3.50 billion. ONGC has already requested the government to set a floor pricing or protection pricing insulating it from further drop in international prices. “We have requested the government to set a floor pricing, which is at least equal to the pricing in 2010, which is $4.2 per mmBtu. One dollar decrease in gas price will have an impact of Rs 42 billion on our gross revenue and Rs 24 billion post tax per annum,” said A K Srinivasan, director (finance) of ONGC. According to Srinivasan, the average cost of production for the company comes to about $3.5 per unit, which will zoom to $ 5 per unit, if returns are also taken into account. It was in June 2010 that the government increased the prices of natural gas to $4.2 per unit, which continued till November 2014 till a formulae suggested by a panel led by C Rangaranjan. Echoing his words, OIL chairman and managing director Utpal Bora said, “At current prices of $2.5 per unit, we are left with zero margins and you need profits to invest in our future projects.” However, government was not keen on responding to the demands by the companies. Addressing the media on Wednesday, petroleum minister Dharmendra Pradhan hinted that rather than thinking about protection pricing, companies should focus on more innovations. “When Rangarajan formulae was adopted by us in 2014, these market fluctuations were taken into account. The pricing will continue as per that formula only,” Pradhan added. Since November 2014, domestic natural gas price has dropped four times from $5.1 per unit to $2.5 per unit now. After the Rangarajan formulae was implemented, the prices were first fixed in at $5.1 per unit on gross calorific value basis on November 2016, this got revised again on April 2015 to $4.7 per unit. The prices again dropped in October 2015 to $3.8 per unit and further to $3.1 per unit on April 2016. This again dropped for the fourth time, in tandem with the international prices on October 2016 to $2.5 per unit. As per the current formulae, prices are revised after every six months and calculated on the basis of a weighted average of rates in countries like the US, Canada and Russia, based on the 12-month trailing average price with a lag of three months. However, the companies are upbeat about the future of gas price. “The prices are bound to come up. Once it increases, we will be reaping benefits as well,” Srinivasan added. According to Fitch Ratings, the cut in prices will not have a significant impact on OIL standalone credit profile of ‘BBB-‘, although the company’s upstream gas operations will incur losses. “We expect that the price of $2.50 per mmBtu to be just sufficient to cover the costs of bringing the gas to the surface and that OIL will incur cash losses due to taxes and levies. Fitch estimates are duction in gas price by $0.5 per mmBtu will result in about a INR2.5bn fall in EBITDA over the next six months for OIL,” Fitch Ratings added. Gas accounts for about 40 per cent of the company’s total oil and gas production in terms of barrels of oil equivalent. Jack Johnson Jersey
BP India gets license to sell jet fuel in India, says company
The Indian arm of British oil giant BP Plc has received a license from the government to sell jet fuel in India, its country head said on Thursday. “India is a huge market … Obviously we are a very large player globally in the aviation business, so it makes sense for us to be here,” said Sashi Mukundan, regional president and India country head for BP. Mukundan said BP will soon start local sales of aviation turbine fuel (ATF). He declined to elaborate on whether BP will sell fuel on its own or tie up with an Indian partner. Danny Etling Womens Jersey
DGCA unearths major scam; maintenance violations found in personal, charter planes
The Directorate General of Civil Aviation (DGCA) has unearthed a major scam that would have certain top industrialists, corporates and chief ministers worry about the airworthiness or safety of the private or charter aircraft they fly in. After investigations revealed several aircraft maintena-nce violations, the DGCA, last week, suspended the licences of three aircraft maintenance engineers of Indamer Aviation Pvt Ltd, an aircraft maintenance and repair overhaul (MRO) firm. It also initiated action against the director and CEO of Indamer and four other officials belonging to the said MRO and two aircraft charter firms. Indamer did not respond to calls. “The general aviation industry has about 250 aircraft that belong to private individuals, charter firms and flying clubs, and Indamer carries out MRO work for about 70 of these. The violations, some of which were blatant, could not have been carried out for without the tacit support of the top management and even some DGCA officials,” claimed an industry insider. The MRO, which is headquartered in Juhu airport’s hangar no 1, occupies another hangar in Mumbai airport and has a nationwide presence with operations in Delhi, Ahmedabad and Chennai. Amo-ng its board of directors is Kanu Gohain, a former director general of civil aviation. The DGCA probe revealed that signatures of engineers were forged in a number of documents, including the entries made in the flight report books, all of which bring to question the quality of work carried out by the MRO.A flight report book contains serially numbered pages on which an operator has to mandatorily document in indelible ink the engineering record of the life of the aircraft concerned, its engines, propellors, etc. It should have full particulars of all the accidents, overhauls, replacements, repairs and modifications, along with the date, location and signature of the aircraft maintenance engineer who certified the work. Among the violations found was that under the same date, Indamer’s base maintenance manager, an aircraft maintenance engineer, had signed and certified the work carried out on two Sikorsky S76C helicopters, one belonging to the state government (VT-CMM) and the other to Eon Aviation (VT-DBH). “Though on that day, one helicopter was in Surat and the other in Raipur, the manager has signed the flight report books of both the aircraft,” said a source. Both places are located about 1,000 kms apart and are not linked by direct flights. Adrian Kempe Womens Jersey
Avoid emergency landings in Pakistan: Indian airlines issue advisory
Indian carriers have asked their pilots operating flights that overfly Pakistan to avoid landing there in an emergency situation. Unless there is an “extreme emergency”, like fire on board, airlines have ‘informally’ told pilots to opt for Muscat or UAE flight information region on westbound flights, or head to Delhi, Mumbai or Ahmedabad on India-bound flights. “Flight despatchers are asking that Pakistani airports be avoided for emergency landings if possible. These instructions have not come in writing but verbally. Making an emergency landing in Pakistan is the last resort for us in an extreme emergency,” said a senior pilot with a leading Indian carrier who regularly operates international flights. Confirming this, a senior commander of another big Indian airline said that such ‘informal’ instructions have been issued in the past too whenever relations with Pakistan have deteriorated, like after the Kandahar hijacking, 9/11 and 26/11. Sources said that for west-bound flights, the closest ‘preferable’ emergency landing airports are in Muscat and UAE, like Dubai, Sharjah or Abu Dhabi. “Iran and Afghanistan, though the immediate neighbours of Pakistan, are considered ‘less of an alternative’,” said a route planner with a leading Indian carrier. In case of the common occurrence of pressurisation failure, for instance, overhead oxygen masks drop.These have oxygen to allow passengers to breathe for 1015 minutes. That is sufficient time for aircraft to descend from their cruising altitude, which is about 30,000ft, to 10,000ft, where oxygen is available and can be pumped into the plane through the AC ducts and “Ram air”. Such planes can then keep flying at the lower altitude to make their way to an alternative airport. Almost all flights from northcentral and east India to and from Gulf, Europe and America fly over Pakistan. While even in aviation ties, the Narendra Modi government has been showing utmost restraint, Pakistan has been constantly imposing restrictions on its airspace and increasing the scope of the same, which has now required Indian carriers overflying it to make changes on some of their international flights. Peter Budaj Womens Jersey
Andhra Pradesh government to ink MoU for improving regional connectivity with AAI
After securing nod for setting up three new airports in Andhra Pradesh, the state government will soon sign an agreement with the Centre and the Airports Authority of India (AAI) for enhancing air connectivity under the Regional Connectivity Scheme (RCS) envisaged in National Civil Aviation Policy 2016. The Union Civil Aviation Ministry recently accorded in principle approval to the state government for setting up a greenfield international airport at Bhogapuram, 40-km from Visakhapatnam, and two low-cost domestic airports at Dagadarti in SPS Nellore district and Orvakallu in Kurnool district. The Andhra Pradesh government has floated Bhogapuram International Airport Company Limited (BIACL) as a special purpose vehicle for development of these airports. “The BIACL will enter into a memorandum of understanding (MoU) with the Government of India and the Airports Authority of India for enhancing regional connectivity through fiscal support, infrastructure development and also for establishing an integrated eco-system that will lead to significant growth of civil aviation sector,” Principal Secretary (Energy, Infrastructure and Investment) Ajay Jain has said. He said these developments, in turn, will promote tourism, increase employment and lead to a balanced regional growth. “The primary objective of the RCS is to facilitate and stimulate regional air connectivity by making it affordable through concessions from both central and state governments to reduce the cost of airline operations on regional routes. “Besides, financial support will also be extended by means of Viability Gap Funding to meet the gap, if any, between the cost of airline operations and expected revenues on such routes,” Jain said. While the international airport at Bhogapuram would be developed on a 5311-acre site in public-private partnership mode, those in SPS Nellore and Kurnool districts would be developed as low-cost airports by BIACL. “Tenders have been floated for selection of developers of these three airports and will be finalised soon,” the Principal Secretary added. Y.A. Tittle Authentic Jersey
DGCA studying proposal on providing Wi-Fi in flights: Jayant Sinha
The Civil aviation regulator DGCA is examining a proposal to introduce Wi-Fi service onboard flights to adequately address all the related issues, Union Minister Jayant Sinha said today. Civil Aviation Ministry, in August, had said that security issues were being sorted out for allowing use of Wi-Fi facility in the Indian airspace. “The Directorate General of Civil Aviation (DGCA) is studying the matter to make sure that all considerations are adequately addressed and as soon as that is done, we will issue a statement,” the Minister of State for Civil Aviation said on the sidelines of e India Economic Summit here. Asked about the possible timeline, he said “I don’t have a timeline. The matter is under consideration”. Once approved, the Wi-Fi facility would be available for domestic as well as foreign carriers flying in Indian skies. Currently, Wi-Fi services and phone calls are not allowed on flights flying over the Indian airspace. Globally, many airlines are already offering Wi-Fi for passengers, but they currently have to switch off the facility when they enter the Indian airspace. The Ministry has been pursuing the proposal of permitting use of Wi-Fi in flights on-board for quite some time and various security issues were holding up a final decision on the matter. On August 24, Civil Aviation Secretary R N Choubey had said the ministries of Civil Aviation, Telecommunications and Home Affairs have been working on allowing Wi-Fi use in flights. Generally, Wi-Fi facility for fliers can be provided either through air-to-ground technology or satellite connectivity and the latter will be expensive. Availability of Wi-Fi is also expected to provide local airlines with an additional source of revenues amid stiff competition in the Indian aviation market, which has been witnessing one of the highest passenger traffic growth rates in the world. Jeff Driskel Womens Jersey