NO POWER FOR FULL 24 HRS, SO THAT THERE’S ENOUGH FOR NEXT DAY
Chief Minister Siddaramaiah has a brilliant plan for farmers struggling with frequent power cuts: consolidate all the load-shedding hours into one day, and then release uninterrupted power the next. Which means that there will be no power for one whole day so that there is enough power the next day. He made this announcement at a review meeting for drought-relief measures in Vijayapura district on Thursday, saying he wanted to deliver on his promise of uninterrupted power supply for farmers. He asked officials to run a pilot in North Karnataka. “There should not be any disruption in the power supplied to farmers,” he told officials. “As promised, they must be provided with power for five to six hours. In fact, there is a system in Maharashtra in which power is saved for an entire day, and the additional hours are added to the very next day’s power supply. The same model can be adopted here and implemented on a pilot basis in Vijayapura,” he said. This suggestion, however, has caught the Energy Department off guard. Many find it impractical to replicate the model in Karnataka, considering its infrastructure and power capability. A senior engineer with Karnataka Power Transmission Corporation Ltd (KPTCL) said: “We can cut power for 24 hours, but it’s impossible to supply power for 24 hours straight without any interruption. There will be technical problems at feeder level that would scuttle the plan. While people may agree for power cuts, they may become rebellious if there are any power cuts during that 24-hour supply period.” Currently, on an average, every feeder trips at least 100-120 times in a month. “In a day, it trips at least 2-3 times due to heavy load and poor maintenance. All of us are aware of how efficient the maintenance system is in rural areas. As a result, management of the situation becomes difficult and it would have severe impact on water supply and lighting. You cannot expect people to finish off their work in 24 hours and sit idle for the next 24 hours,” said an independent power analyst from Bengaluru. DIFFERENT STATES A senior official from the Energy department said he was surprised at the suggestion. “We have no knowledge of CM’s direction. Karnataka and Maharashtra are radically different in the Energy sector. While farmers in Maharashtra pay for what they consume, in Karnataka it is provided free of cost. Average voltage across Maharashtra is more than 22 kV and above, while in Karnataka, it is still supplied through 11 kV network,” the official said, adding that they would seek a clearer picture on the announcement with CM’s office. To supply power for 24 hours straight, the state needs to be able to generate it. Energy can’t be stored; it has to be supplied as and when it is generated, explained an expert from the sector. “This being the case, how could one save power for 24 hours and utilise the same the very next day? While the Energy minister says there will not be any power cuts during summer, why is the CM looking to enforce 24-hour power cut at all? It is completely illogical.” Tony Perez Authentic Jersey
Haryana discom reports Rs201 crore profit in first half of 2016
One of the two state-owned power distribution companies in Haryana, Dakshin Haryana Bijli Vitaran Nigam Ltd, has become the first power utility to turn around under rescue scheme Ujjwal Discom Assurance Yojna (UDAY), rolled out in November 2015, raising hopes that fortunes of the entire electricity value chain including of coal mining and power generation will benefit from better electricity demand in coming days. An analysis of the financial health of the utility released by the power ministry on Thursday said the company has reported “remarkable achievement of turnaround” from a loss of Rs479 crore in 2015-16 to a profit of Rs201.35 crore in the first half of 2016-17. Turnaround of distressed state power distribution firms is crucial for the health of other segments of the electricity value chain which depends on power offtake. Better power demand from distribution firms will help generation companies, especially thermal power plants, to step up their capacity utilisation which is currently at about 60%. Coal demand, too has been sluggish in the past as loss making distribution firms were not able to cater to the actual energy demand. Monthly coal production recovered from a contraction and grew for the first time in three months in November, indicating improving power demand during winter. As per data from state-owned monopoly Coal India Ltd (CIL), monthly production grew 5.3% to 50 million tonnes in November from a year ago, after a bearish trend in mining since August when output had shrunk by 10%. The power ministry analysis said that the Haryana utility still has to improve upon its performance in meeting the target of lowering losses on account of billing inefficiency and power theft. The UDAY scheme rolled out last November gave performance and efficiency improvement targets to loss making utilities in order to narrow their gap between cost of power supply and the price realised from consumers. Their accumulated debt up to September 2015 was allowed to be taken over by respective state governments to make available low cost credit. Haryana’s second distribution firm, Uttar Haryana Bijli Vitaran Nigam Ltd, however, continued to make losses in the first half of this year. It reported a loss of Rs1,233 crore in the first half against the loss of Rs336 crore in the full year of 2015-16, said the analysis. Carl Banks Womens Jersey
Turkish electricity prices soar as gas supplies struggle to meet winter demand
Turkey’s electricity prices rose to their highest in years, as natural gas consumption soared due to higher household demand amid cold weather, forcing state pipeline operator Botas to cut supplies to power plants and advise industries to reduce output. Turkey’s daily natural gas consumption has risen to above 200 million cubic metres in December, gas industry sources said, from around 175-180 million last month and in same period last year due to colder than average December weather. To help ease the situation, Botas has cut supply to gas-fired power plants in the public and private sector by 90 percent and advised some industrial firms to reduce non-critical production, energy sources said. The day-ahead electricity price at Turkey’s energy exchange (EPIAS) was 586 liras per megawatt hour and the December monthly average was near 225 liras, both at their highest levels for years, traders said. One trader said the figures were at an all-time high. “There are issues in meeting the rising consumption,” one energy industry source said even though gas flows to Turkey from foreign supplies such as Russia, Iran and Azerbaijan continued without hitch. The three make up nearly 85 percent of Ankara’s natural gas imports. The source said expected deliveries of liquefied natural gas (LNG) in a few days could help alleviate the supply squeeze. But electricity traders said power prices rallied to multi-year highs on concerns about supply and what they described as lack of planning for winter conditions. They said there was little communication from the state authorities on supply conditions, adding to worries. “It is obvious that there was neither any planning nor any coordination by the energy administration for these market conditions,” one trader said on condition of anonymity. “It began with Iran cutting supplies to Turkey. Market recovered from that but then came the colder average December, boosting household consumption,” the trader said. “The state’s response has been to keep cutting supplies and now power plants cannot operate.” On average, around 30 percent of Turkey’s power generation is from natural gas although it could rise above 50 percent during winter. It has nearly 80,000 megawatts (MW) of electricity production capacity but cuts in gas supply means those plants cannot operate, thereby reducing supplies. Iran cut flows of natural gas to Turkey by a third earlier this month due to harsh winter weather, but the flows were back to normal after several days. Latavius Murray Womens Jersey
Government asks Power Grid Corp to consider selling stakes in projects
Power Grid Corporation of India Ltd., a state-run electricity transmission company, should sell stakes in its projects to unlock capital for future expansion, according to the nation’s power ministry. The company should cut its balance sheet size to half by selling stakes in projects, power minister Piyush Goyal said in New Delhi on Wednesday. It should consider an infrastructure investment trust, or InvIT model to monetize assets, he said. Selling stakes in projects will help the company free-up capital and raise more debt for future projects at competitive rates, federal Power Secretary Pradeep Kumar Pujari said. “We want to avoid a situation where raising debt in the future becomes difficult,” Pujari said. An asset-sale plan has been on the government’s agenda. Finance Minister Arun Jaitley asked state-run companies to sell assets to unlock value and make investments in new projects in his budget speech in February. Goyal’s advise that Power Grid should reduce its balance sheet size by half is an endorsement of that plan. Power Grid, which owns and operates more than 85 percent of India’s inter-state power transmission capacity, plans to invest 1 trillion rupees ($6.8 billion) in the next four years to build new projects, it said in November. It had fixed assets worth 1.58 trillion rupees as of Sept. 30, including plant machinery, transmission projects, telecom equipment, buildings and land. The company’s debt-equity ratio was 71:29 as of Sept. 30, compared with a 70:30 ratio recommended by power regulator Central Electricity Regulatory Commission, which determines transmission charges based on capital and operating costs. “The minister has advised but there is no decision yet,” Power Grid Chairman I.S. Jha said about the asset-sale idea. “We are in a regulated business, which will need to be considered. Only then we can proceed with this.” Kerryon Johnson Jersey
Dilip Shanghvi’s Sun Oil buys out Niko stake in Hazira field
Billionaire Dilip Shanghvi’s Sun Oil and Natural Gas has bought a 33.3% stake in the Hazira oil and gas field from Canada’s Niko Resources Ltd and is in talks to buy the rest from Gujarat State Petroleum Corp. Ltd (GSPC), two officials aware of the development said. The deal value, however, could not be ascertained. Niko has operated the field for 22 years. Sun Oil and Natural Gas is a unit of Shanghvi’s Sun Petrochemicals Pvt. Ltd while GSPC is 87% owned by the Gujarat government. The Hazira field is part of 16 hydrocarbon assets in Gujarat’s Cambay basin where GSPC holds stakes. Niko Resources has sold its stake to Sun Oil and Natural Gas. If GSPC decides to sell its stake to Sun too, then Sun will be the 100% operator of the field,” said an official aware of the development, one of the two cited earlier. He spoke on condition of anonymity as he is not allowed to speak to reporters. Niko Resources and Sun Oil and Natural Gas did not reply to questions emailed on Monday. On 22 November, Mint had reported that Sun Oil was in talks with Niko Resources and GSPC to acquire their stakes. Currently, the Hazira field produces 1,300-1,400 barrels of oil per day (bopd) and 7-9 million standard cubic feet of gas per day . Niko is also a 10% partner in Reliance Industries Ltd’s (RIL) and BP Plc’s D6 block in the Krishna-Godavari (KG) basin. It has been facing financial headwinds owing to which on 9 November it said it would sell its stake. Last November, Niko relinquished its 10% stake in another block, NEC-25, off the Odisha coast, to its existing partners RIL (60%) and BP. An official from GSPC, the second person, said the company will be able to decide on selling its stake in a few days. “Sun Oil and Natural Gas has bid for our stake in the Hazira field. However, we are yet to open the technical bids and decide on who should the field go to,” the official added. GSPC has hired consulting firm EY to re-evaluate its onshore exploration and production assets as part of a business restructuring exercise. In addition to Hazira, GSPC has also signed agreements to sell stakes in some other assets including the Deen Dayal field, GSPC’s primary asset, located off the Niko Clarifies Article in Indian Press Niko Resources Ltd. (“Niko” or the “Company”) (NKO.TO) provides the following clarification with respect to various articles that appeared earlier today in the Indian press regarding the Company stake sale in Hazira Field. The Company has signed an asset purchase agreement with Sun Petrochemicals Pvt. Ltd. for divesting its 33.33% operating interest in Hazira Field. The sale is subject to various approvals including from the Government of India and Niko’s joint operating partner in the Hazira Field, Gujarat State Petroleum Corporation Limited. Niko does not consider the operations from Hazira Field to be material as Hazira Field was nearing the end of its life and an abandonment program was being planned for the near future. Marcus Martin Jersey
Producers’ output-cut pact was year’s defining moment for oil sector
The defining moment for the oil sector came towards the end of the year with the deal between OPEC and non-OPEC countries on cutting production, which immediately boosted crude prices, while in a move designed to increase domestic production, India unveiled a new revenue-sharing regime for producers looking to explore hydrocarbons. As the world’s third-largest oil consumer, which imports over 80 per cent of its requirements, India was naturally concerned about producers talking of cutting output to halt the continuous fall in crude prices that had gone on for nearly two years. Earlier this month, oil producers outside the Organisation of the Petroleum Exporting Countries (OPEC), led by Russia, agreed to reduce output by 558,000 barrels per day (bpd). This came in the wake of the 13-nation OPEC cartel’s November 30 decision to cut output by 1.2 million bpd for six months effective from January 1. This is the first time since 2001 that OPEC and some of its rivals have reached a deal to jointly reduce output to tackle the global oil glut. As a result, the Indian basket of crude oils gained more than $3 a barrel at $54.42 per barrel over the weekend of December 11-12, even as global prices surged to an 18-month high. The price on Wednesday, December 21, was $53.47. OPEC Secretary General Mohammed Sanusi Barkindo, who was here earlier this month, was conveyed India’s viewpoint by Petroleum Minister Dharmendra Pradhan that the interests of consuming countries should be kept in mind when the cartel decides on issues of output cut and pricing. Oil prices have fallen by more than 50 percent in less than two years, from levels of over $120 a barrel. “The fall in oil prices in the last two years came as a timely relief for the Indian economy and consumers, which has helped us increase the penetration of cleaner fuel,” Pradhan said, inaugurating the 12th Petrotech conference here earlier this month. “For the sustainability of the oil markets, we must strike a balance of interest between producers and consumers. In June last year at an OPEC event, I had submitted the viewpoint of India,” he said. Meanwhile, the government last month received 134 e-bids from 42 companies for exploring small oil and gas fields under the Discovered Small Fields Bid Round 2016. The government had put up 67 small oil and gas fields for auction under the new Hydrocarbon Exploration and Licensing Policy (HELP) approved in March, which is based on a revenue-sharing model as opposed to cost-and-output-based norms earlier. The new model will replace the controversial production-sharing contract (PSC) that has governed the bidding under nine earlier NELP rounds. The PSC regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India’s official auditor, who said it encouraged companies to keep inflating costs so as to postpone sharing of profits. Now under HELP, eventual operators will be issued a single licence for exploration of conventional and non-conventional hydrocarbons and will have the freedom to sell oil and gas at “arms length” market prices. The year also witnessed renewed emphasis on taking the country towards a gas-based economy. The government announced it plans to double India’s natural gas consumption from the current 120 million standard cubic metres a day (mscmd) to 240 mscmd in five years in a bid to boost India’s low gas consumption of six per cent in the energy mix, as compared to a world average of 24 per cent. “The biggest bottleneck in boosting India’s low gas consumption was the issue of who will decide the pricing. So the biggest policy measure in this sector has been the deregulation of gas pricing by our government,” Pradhan said here earlier this month. On the back of a major fall in global prices, the government, in October, cut the price to be paid to producers of natural gas by 18 per cent to $2.5 per million British thermal unit (mbtu) on gross calorific value (GCV). On net calorific value basis, the price is $2.78. The rate compares to an average cost of production of about $3.59 per mbtu for state-run explorer ONGC and $3.06 for Oil India. The Petroleum Ministry also announced a sharp reduction in cap price for undeveloped gas finds in difficult zones like deep-sea, high-temperature, high-pressure areas. The cap for October 1, 2016, to March 31, 2017, for gas from difficult areas will be $5.3 per mbtu, down from $6.61 in the preceding six-month period. A caveat to this decision said the gas price for difficult areas will not apply to Reliance Industries” (RIL) discoveries in their KG-D6 block unless the company withdrew its legal suit over gas pricing. Besides seeking arbitration on the gas price, RIL has sought arbitration over the government disallowing costs of $2.3 billion on grounds of shortfall in production by the company. While the demand-supply situation has been a factor in falling oil prices, the other is financial market equations. The oil market in recent years has been sustained by cheap dollars flowing out in response to US Federal Reserve’s quantitative easing programme. This situation, however, looks set to change as we move towards the new year, with the Federal Reserve increasing its key interest rate by 25 basis points in December, in the first rate hike in 2016 and just the second in a decade. Jack Doyle Authentic Jersey
Oil & Gas: Best Performance In 7 Years
The one sector that has remained unscathed by the government’s cash ban is oil and gas. The BSE Oil & Gas Index, which was trading with gains of 24.6 percent until November 8, is now up 24.9 percent year-to-date. And the index is set to make its biggest annual gain since 2009. On the other hand, Brent crude surged 48.5 percent this year. Oil and gas exploration companies like ONGC and Oil India benefitted from rising crude oil prices and lower subsidy burden. Brent crude prices will average $55 a barrel in 2017, according to the median of analyst estimates compiled by Bloomberg, compared to $44.8 in 2016. The BSE Oil & Gas Index is trading at an EV/EBITDA ratio of 6.03 for 2017, which is the lowest in more than 13 years, suggesting room for further upside. Like the P/E ratio, the EV/EBITDA ratio is a measure of how expensive a stock is. The ratio measures the price (in the form of enterprise value) an investor pays for the benefit of the company’s cash flow (in the form of EBITDA). Al Woods Authentic Jersey
GAS 2 LAST
The share of gas-based power in total generation plunged to 4 per cent in fiscal 2016 compared with 12 per cent in 2011, because of inadequate domestic supply and unviable LNG prices, it said. Prasad Koparkar, Senior Director, Crisil Research said: “Despite a subsidy-based revival scheme, plant load factors (PLFs) at gas-based power generation facilities are languishing at 20-25 per cent. Even those that received subsidy could operate at only at half their target PLFs (50 per cent in the first half of current fiscal).” This was because spot prices of electricity have fallen below Rs 3 per unit, while gas-based power costs Rs 4.7 per unit after subsidy. “Therefore, further policy support, in line with the tax and duty exemptions provided to renewables, and mandatory scheduling of gas-based power, would be critical to boost gas usage in the power sector,” he said. Another key sector with significant potential is city gas distribution (CGD). Allocation of domestic gas leads to cost savings up to 30 per cent, boosting its use in the transport sector. However, lack of curbs on furnace oil — a cheaper but more polluting fuel ? have resulted in industries continuing to use it. Vladimir Ducasse Authentic Jersey
Essar Oil to double petrol pumps to 5,600 in 18 months
Essar Oil, India’s largest private fuel retailer, plans to double the number of petrol pumps it has in the country to 5,600 in 12-18 months, the firm’s Chairman Prashant Ruia said. The company, which operates a 20 million tons a year oil refinery at Vadinar in Gujarat, will invest Rs 12 billion in upgrade of certain units of the refinery to help boost margins by USD 1.5 per barrel. “Essar Oil has the largest private sector retail fuel network in India with over 2,800 operational outlets across the length and breadth of the country and over 2,800 at various stages of implementation to capitalise on the rising demand of transportation fuel”, Ruia said in its latest annual report. The sales from retail operations grew by 127 per cent from 590,000 tons in financial year 2014-15 to 1.34 million tons in 2015-16. “This growth was mainly on account of expansion of company’s retail network as well as the opportunity presented to the private players in the retail segment by deregulation of diesel prices, thereby linking the price of diesel to the global market,” the annual report said. Ruia said Essar Oil has set new benchmark in the private sector retail sale network in just about two years. “You may recall that Essar Oil was the first private sector company in India to open a retail fuel outlet back in 2003. Since then, the company kept its network operation despite the turbulent times right up till 2014, close to the complete de-regulation,” Ruia said. In October this year, the promoters signed pact to sell 98 per cent stake in Essar Oil to Russia’s Rosneft and its partners for about USD 13 billion. “In line with Essar’s philosophy to incubate, nurture, and scale up ideas to landmark valuations, the promoters decided to sell 98 per cent of your company stake to world’s leading oil and gas companies,” he said, adding that the deal will close within the current fiscal. Essar Oil CEO L K Gupta said the company is targeting to earn around USD 1.50 (per barrel of crude) incremental Gross Refinery Margin (GRM) as an outcome of its Rs 16 billion of investment in low cost and high margin. A.J. Green Authentic Jersey