Delhi cuts tax on aviation fuel to boost travel to smaller cities
The Delhi government has reduced the tax on aviation fuel to 1 percent from 25 percent for flights operating to smaller towns and cities, Deputy Chief Minister Manish Sisodia said, in a move to reduce costs for airlines flying to remote areas from the Indian capital. The tax reduction is only for airlines operating under the federal government’s regional connectivity scheme, introduced last year to make flying more affordable, Sisodia said on Wednesday while presenting Delhi’s annual budget. India is the world’s fastest-growing aviation market but most of the air travel is between big cities. Under the regional connectivity scheme, the government will subsidise part of the cost for airlines to operate flights to smaller towns. Jet fuel is one of the biggest costs for airlines, especially for low-cost carriers such as IndiGo Airlines, owned by InterGlobe Aviation, SpiceJet and GoAir. Aditya Ghosh, president of IndiGo, India’s largest carrier, requested that the tax break be extended to all air travel out of Delhi, which is the airline’s biggest base. James Neal Womens Jersey
NTPC commissions 45 MW capacity at Rajasthan solar project
State-run power giant NTPC today announced commissioning of 45 MW solar capacity at Bhadla in Rajasthan taking the total installed capacity of the project to 160 MW. “The 45 MW of Bhadla solar power project of NTPC in Rajasthan has been commissioned today. With this, the installed capacity of Bhadla solar power project has become 160 MW and that of NTPC’s solar power projects has become 520 MW,” a senior official said. Last month, NTPC had commissioned 115 MW capacity out of the 260 MW Bhadla solar power project. NTPC has planned capacity addition of about 1,000 MW through renewable resources by 2017. The official further said that with commissioning of this additional solar capacity of 45 MW at Bhadla, the total installed capacity of NTPC Group has reached to 48,188 MW, NTPC has 10 solar PV projects. In Dadri it is of 5 MW, The Andaman & Nicobar project is of 5 MW, Ramagundam (10 MW), Talcher Kaniha (10 MW), Faridabad (5 MW), Unchahar (10 MW), Rajgarh (50 MW), Singrauli (15 MW), Anantapuram (250 MW) and Bhadla (160 MW). NTPC intends to become a 130-GW company up to 2032 with a with diversified fuel mix and a 600 billion units company in terms of generation. The company wants share of renewable energy (including hydro) to be 28 per cent. Last year in January, solar power tariff had dropped to a new low with Finland-based energy firm Fortum Finnsurya Energy quoting Rs 4.34 a unit to bag the mandate to set up a 70 MW solar plant under NTPC’s Bhadla solar park tender. Last month, lower capital expenditure and cheaper credit had pulled down solar tariff to a new low of Rs 2.97 per unit in an auction conducted for 750 MW capacity in Rewa Solar Park in Madhya Pradesh. In November 2015, the tariff had touched Rs 4.63 per unit following aggressive bidding by US-based SunEdison, the world’s biggest developer of renewable energy power plants. NTPC has total installed capacity of 48,188 MW from its 19 coal based, 7 gas-based, 10 solar PV, one hydro and 9 subsidiaries/Joint Venture power stations. Marquette King Jersey
Government to attract $62 billion investment from Indian and foreign companies
The government, along with Invest India, its investment promotion agency is talking to almost 300 companies, incuding Indian and foreign both, so that they can be convinced to invest $62 billion (over Rs 4 lakh crore) in India, while also creating over 17 lakh jobs. Chinese companies are already planning to invest around $32 billion in India, therefore nearly half the flows that the indian government is looking at are from China. This is also expected to slow down the massive flow of imports from the neighbouring country. One of the companies, the one that is on top of India’s list is Sany, with a possible investment of nearly $10 billion in the wind power space. Other than that, there are real estate and construction companies like Dalian Wanda Group, SAIC, Lifan Motors and Fosun Pharma. DIPP , in the recent past, has contacted over 150 companies for investments, some of which have little or no presence in the country, while some, like Cisco and H&M , have a foothold in India that can be strengthened. Because of the Chinese economy slowing down, Chinese investors are thinking of India as a possible investment destination that could reap profits. Craig Anderson Jersey
Rs 2,000 crore for energy; focus on solar panels
With a focus on solar energy, the Delhi government has allocated Rs 2,194 crore for the energy sector in its Budget for the coming fiscal year. Out of the total expenditure for the next fiscal, Rs 1,600 crore has been set aside for power subsidy to domestic consumers, deputy chief minister Manish Sisodia said on Wednesday while presenting the Budget. Under the subsidy scheme, in the last two years, domestic consumers consuming electricity up to 400 units per months are getting electricity at half rate. According to the Delhi economic survey tabled in the Delhi Assembly on Tuesday, power consumption in the national capital has recorded an annual growth of approximately 3.39 per cent. “Due to limitation of space in Delhi, a massive programme for developing rooftop solar power capacity has been launched. Delhi is targeting for 1,000 MW solar photovoltaic installations in 5 years and 2,000 MW till 2025,” Mr Sisodia said. The government has introduced generation-based incentive of Rs 2 per unit (kWh) for domestic consumers for installation of solar photovoltaic power plant. In another environment-friendly measure, it has made mandatory for all public buildings having rooftop area more than 500 square meters to install solar panels. Waste-to-energy plants with a total capacity of 52 MW have been approved at Okhla, Ghazipur and Bawana to overcome the problem of disposal of municipal solid waste. A waste-to-energy plant of 16 MW is already operational at Okhla. It is India’s largest integrated waste management project with a capacity to dispose and process 2000 tonnes garbage per day, Mr Sisodia said. Jean-Francois Jacques Jersey
Government to offer incentives to companies keen on developing oil and gas blocks
The government will offer incentives to companies that take lead in proposing to develop oil and gas blocks of their choice leading to a government-monitored auction, according to the draft Open Acreage Licensing Policy (OALP). Besides encouraging companies to propose blocks for auction through the year, the open acreage policy will also keep alive the previous practice of the government carving out blocks and offering them to investors in an auction round. “The Directorate General Hydrocarbon (DGH) will also administer, when deemed necessary, rounds of awards of blocks carved out by the DGH, for contracting in addition to the option available to investors to make suo motu applications under OALP,” says the draft policy. Open acreage licensing is part of the Hydrocarbon Exploration Licensing Policy (HELP) unveiled last year. The DGH, an arm of the oil ministry, has now drafted the procedure to operationalise the OALP. The DGH maintains a national data repository that investors can access to study hydrocarbon data and determine their interest in specific blocks. Investors can then apply for a specific area for either reconnaissance contract that permits exploration for two years, or petroleum operations contract for 20 years, including an initial exploration phase of six years, according to the draft OALP. An investor’s expression of interest must be accompanied by a bank guarantee of $1 million for petroleum operations contract and half a million dollars for reconnaissance contract. The government will accept an expression of interest from investors in two six-monthly windows– ending in June and December — following which the interests will be evaluated, and if found fit will result in an open bidding overseen by the DGH. All bidders will be evaluated on technical and financial criteria. The maximum marks in technical evaluation available to an ordinary bidder is 90 under reconnaissance contract, but the investor submitting the expression of interest leading to this bid will get additional 10 marks, as per the draft OALP. Similarly, in petroleum operations contract, the one that first expressed interest gets five marks over and above the maximum 65 marks other bidders can aim for in technical evaluation. There is no incentive available in financial bids. The government will also incentivise investors transitioning from Reconnaissance to Petroleum Operations Contract. “Operator of the Reconnaissance Contract will be, in the event of failing to win that particular bid, allowed to match the financial and technical bid of the highest bidder,” as per the draft OALP. Jerome Bettis Jersey
Oil rules: If tax, other policies not fixed, India can’t attract investors
The government has done well to launch an open acreage licensing policy (OALP) which allows oilcos to bid for acreage that they feel has oil/gas potential rather than wait for the government auction—once they evince interest, the field will be opened up for bidding. Since existing oilcos have a pretty good idea of what areas have better potential, OALP will help better India’s energy prospects. The lack of clarity on many policy issues, however, is best exemplified by the fact that India’s most successful private sector oil producer—Cairn India has invested $8 billion already to produce 800 million barrels of oil till date—is fighting the government in court on a variety of issues ranging from a patently unfair tax suit to not getting an extension for its oil block in Rajasthan. And despite the fact that its production sharing contract (PSC) allows it freedom to market crude oil, Cairn is forced to sell its product at a 10-20% discount to PSUs and private refining firms. While it is well known that Cairn discovered oil in its Rajasthan block in 1999—it bought the field from Shell which thought it was a dud field—the company felt it had a lot more potential and sought permission to continue drilling even after the first seven years of the PSC were over; by law, exploration is not allowed after that. Cairn got permission, as a result of which its ‘gross proved and probable hydrocarbons initially in place’ have risen from 5.2 billion barrels of oil equivalent in 2009 to 7.8 billion today—since it cannot extract the extra oil in its original 25-year PSC, it sought an extension. Logically, since 70-75% of oil revenues anyway go back to the government by way of cesses, profit-petroleum and profit-share for ONGC, you’d think the government would give the clearances quickly—unless this is given, how is a board to approve a capex plan for further exploration and development? This has not been given for several years now, though there is talk the government may hike the profit-petroleum—by how much, though, is not clear. It’s interesting to note that while the government is planning to hike the profit-share, the UK cut its petroleum-revenue-tax last year—effectively reversing changes introduced in 2011—in an attempt to boost the investment climate; at 63%, the UK’s tax on oil revenues is lower than India’s 70%. In the case of Reliance Industries Limited, the most successful private firm in the gas segment, apart from the case it is fighting with the government on its costs being excessive, it is in court asking for freedom to price the gas it produces—according to the PSC, though, full marketing freedom is allowed. Unless the government is, through its actions, able to convince would-be investors of its bona fides, it is difficult to see why there would be a surge in investments—while overall investments are down a third over the past seven years, those by the private sector are down to a twelfth. Joey Bosa Womens Jersey
Cairn Energy calls for return of $51m from India
Cairn Energy has called for an immediate payout of $51m from its embattled India subsidiary as its $1.6bn legal struggle with the Indian authorities nears its final chapter. The two year dispute has saddled the loss-making oil producer with spiralling legal costs, and foiled Cairn’s plans to sell off its remaining 10pc stake in Cairn India worth around $800m. The company told investors on Wednesday that the Indian government has now submitted its full claim for retrospective taxes and that $51m of previously restricted dividends have been released. It has requested that the sum is returned immediately. Simon Thomson, Cairn’s chief executive, said he remained confident that the outcome of the dispute, due next January, will be in Cairn’s favour. “As far as international arbitration goes we’re very pleased with the rate of progress that is being made,” he said. “The dividend may not be a huge sum but it is a help in strengthening our finances and it shows progress. It’s $1bn in total that we hope to reclaim so that would be significant.” Cairn is planning to sell off its remaining 10pc stake in Cairn India worth around $656m. The Indian government first began an investigation into Cairn India in 2014. A year later the authorities made a retrospective tax claim in relation to asset transfers made in 2006 when Cairn India was established. The claim demands that the UK-based oil explorer pay $1.6bn plus interest and penalties arising from unpaid tax owed by Cairn’s India operations in 2007. Cairn has consistently disputed the claim and is calling for $1.1bn in compensation. The fresh progress was announced alongside narrowing losses for the Edinburgh-based oil company, which is hoping for a North Sea production boom. Cairn reported a pre-tax loss of $95m last year compared to a loss of $515.5m in 2015 due to low oil prices and heavy spending on a string of new projects that are almost ready to begin generating revenue. Cairn holds a 20pc stake in Premier Oil’s Catcher oil project and a 29.5pc share of Enquest’s Kraken development. Both of these should deliver their first oil later this year and boost Cairn’s production by 25,000 barrels of oil a day. Cairn is also growing its presence in the Irish sea by taking a 30pc stake in Providence Resources’ Frontier exploration licence in the Porcupine basin through its subsidiary Capricorn Ireland. The subsidiary is also taking a 70pc working interest in the Europa Oil & Gas, also in the Irish Sea. Both oil minnows enjoyed a share price surge as a result of their respective deals. Providence Resources share price climbed over 7pc on AIM to 16.35p, while Europa jumped over 13pc higher to 5.38p. Mr Thomas said Cairn is also planning to push on with its “exciting” exploration and appraisal drilling programme in Senegal. Earlier in the week Cairn said that its latest successful well appraisal concluded ahead of schedule and under budget, taking the total number of wells to seven. Jake Bean Jersey
India Says Gas Field Decision on Iran
India’s oil minister says a final deal with Iran to develop the Farzad-B gas field in the Persian Gulf is currently “in Iran’s court”. The lifting of international sanctions against Tehran in January 2016 and the easing of financial and trade curbs gave a fresh lifeline to negotiations on developing the Farzad-B project. But the two sides have made little inroads in negotiations as Iran says India’s proposal to develop the offshore field is not attractive enough. “We have given it our proposal; now it’s time to react. They have to answer,” Oil Minister Dharmendra Pradhan told Reuters at the CERAWeek energy conference in Houston, Texas. A consortium headed by ONGC Videsh, the overseas investment arm of ONGC, discovered the field in the Farsi offshore block in 2008. However, the consortium could not obtain the permission to develop the field due to tighter international sanctions imposed on Iran due to nuclear program dispute. As a gesture of goodwill, Iran has so far excluded Farzad-B from a list of several dozen oil and gas projects that it plans to put out to tender under a new model of contracts. But it could no longer be the case should the negotiations fail. An oil official said in late November that Iran was keeping all its options open for tendering the Farzad-B Gas Field because negotiations with India over the coveted gas project had not produced anything of substance. “We are in the last round of talks with India’s Oil and Natural Gas Corporation over the Farzad-B project and should the two sides fail to come to an agreement, the project will be put out to an international tender,” Mohammad Meshkinfam, managing director of Pars Oil and Gas Company, said, adding that ONGC’s proposed master plan to develop the field “is not financially viable”. The National Iranian Oil Company is expected to announce its decision on India’s proposal soon. Rashod Hill Womens Jersey