Centre proposes terms of reference for ONGC wells in Cauvery basin
At a time when Kadiramangalam village is witnessing a massive protest over leakage from wells belonging to the Oil and Natural Gas Corporation Limited (ONGC), the Ministry of Environment and Forest’s Expert Appraisal Committee (EAC) has recommended Standard Terms of Reference (ToR) to the ONGC’s proposal for the development and drilling of 110 oil and gas wells and establishment of a central processing facility in the Cauvery basin. Apart from the Standard ToR, the EAC has directed additional ToRs to be completed, including public hearings, to prepare Environment Impact Assessment (EIA) and Environmental Management Plan (EMP) reports, according to the minutes of the EAC meeting held last month. The ONGC has proposed to drill 110 wells in the Cauvery basin in Adichapuram, Kizhvelur, Kanjirangudi, Palk Bay Shallow, Periyapattinam, Perungulam, Tiruvarur, Mattur, Nannilam, Narimanam, Adiyakkamangalam, North Kovil Kalappal, Kuthalam, Kali, Madanam and Pandanallur. It has estimated the project cost to be Rs. 1.94 billion. The ONGC has submitted before the EAC that there are no national parks, wildlife sanctuaries, biosphere reserves, tiger/elephant reserves or any wildlife corridors within 10 km distance of the proposed drilling sites. “The Koduvaiyur river, the Odampokkiyar river, the Vellappar river, the Uppanar river, the Chittar river and the Vaigai river are located within 10 km distance of the drilling sites,” it said. The company said the total water requirement would be 25 cubic metres per day per well, “which will be sourced from nearby water source”. EAC directives Recommending the ToR, the first in a series of steps that would either lead to approval or rejection of the proposal, the EAC made it clear that no construction activity (other than for securing land) should be started without obtaining prior environmental clearance. While asking the company to earmark at least 2.5% of the total project cost towards social commitment, the committee said the ONGC should submit a five-year plan in this regard. The EAC has mandated that public hearing be conducted in all the districts where drilling sites are located. Anthony Brown Jersey
ONGC may not be required to pay premium for government stake in HPCL
Oil and Natural gas Corp (ONGC) need not pay a premium for government stake in Hindustan Petroleum (HPCL) since the latter is widely traded and fairy valued by the market and the transaction would involve no change in state control over the two companies, a senior executive at ONGC said. The government is planning to sell its entire 51.11% stake in the HPCL to ONGC, according to people familiar with the matter but hasn’t yet officially communicated its decision to companies. Stock markets are concerned about the price ONGC may have to pay for acquiring the refiner. The transaction would also influence the status of Mangalore Refinery and Petrochemical (MRPL), jointly promoted by ONGC and HPCL, the executive said. “After ONGC takes over HPCL, MRPL will be managed by HPCL. There is no logic for ONGC to have two companies in the same segment,” said the ONGC executive. “HPCL is rightly placed to handle MRPL since both operate refineries.” ONGC and HPCL own 71.63% and 16.96% respectively in MRPL, while the balance 11.42% is owned by the public. HPCL has in recent days pitched for taking control of MRPL. The terms of the ONGC-HPCL deal are still being finalised but speculations abound, including on how much premium ONGC may have to pay the government for HPCL shares. “HPCL is already fairly valued by the market. It has a very high free float and is very actively traded. In such a scenario, the question of premium just doesn’t arise,” the executive said. “Moreover, the point of control premium is not valid since the control of both companies would rest with the government after the transaction, as it does now,” he said. Of the public shareholding of 48.89% in HPCL, state-owned Life Insurance Corp owns just about 2% while the balance stake is owned by numerous foreign and domestic institutions and retail investors. To buttress his argument, the ONGC executive cited the sale of 10% stake in Indian Oil Corp in March 2014, when the government sold shares at 10% discount to then prevailing market price. Under its divestment programme, the government had then sold 5% stake each to ONGC and Oil India. The speculation about HPCL shares likely to be sold at a premium has sent stock up 16% in ten days. The stock is up 63% in a year. Paying a premium can drain away ONGC’s resources already needed for its planned capex of Rs 300 billion in 2017-18. The company has just about $2.5 billion of cash reserve, half of which would go into paying for the acquisition of KG Basin asset of GSPC. Acquisition of government’s 51.11% stake in HPCL would require ONGC to pay $4.7 billion at current market prices. Rougned Odor Authentic Jersey
About 60 blocks to be auctioned in second round of petro bids
The second round of bidding for discovered small and marginal fields (DSF) in the petroleum sector is set to take place in October. “We are eyeing start-ups and small national and international companies. About 60 blocks will be on offer for the II round,” said an official. According to sources, the Directorate General of Hydrocarbons (DGH) has shortlisted these blocks, now before the ministry of petroleum and natural gas for clearance. India is the third largest consumer of petroleum products, after America and China. The country’s share of global demand is expected to grow from the current 5.5 per cent to nine per cent by 2035. The DSF rounds and the Open Acreage Licensing (OAL) policy round are considered vital for reducing of import, in the schedule approved by the ministry. In the first round of DSF, blocks were awarded to 30 companies — 23 onshore and seven offshore ones. “The success of DSF Bid Round 2016 in the face of global economic slowdown and low oil prices manifests the benefits of the new E&P (exploration and production) regime for investors,” went a DGH presentation at the recent World Petroleum Congress in Istanbul. Highlights of DSF-I Number of e-bids: 134 Number of participants: 47 Contract areas awarded: 30 • 23 –Onshore • 7–Offshore New entrants to E&P industry: 13 India has 26 sedimentary basins over 3.14 million sq km. Crude oil and natural gas are being produced in seven basins. In the new rounds, 2.7 million sq km will be on offer, comprising 1.5 million sq km of onshore and 1.2 million sq km of offshore areas. In the new Hydrocarbon Exploration Licensing Policy, these are to be offered on a revenue-sharing model, providing pricing and marketing freedom to operators. On June 28, the government had launched a National Data Repository (NDR) for investors keen on the OAL round. In the NDR, sedimentary basins are divided into zones, with corresponding data. “We are getting a lot of demand for NDR with the launch of OAL. A lot of national and international players are keen. NDR is based on seismic and well data, and investors can identify areas with potential through this,” said another official. Investors will also have the option to go for a petroleum operations contract or reconnaissance contract. The latter will be valid for three years and the former will allow eight years for exploration and 20 years for development and production. There will also be an option to migrate from a reconnaissance contract to a petroleum operations contract after three years. Da’Shawn Hand Authentic Jersey
West Coast Refinery’s Complex To Cost Rs. 2700 billion: Dharmendra Pradhan
The world’s biggest oil refinery-cum-petrochemical complex planned in Ratnagiri district of Maharashtra will cost Rs. 2700 billion and take 60 months to build, Oil Minister Dharmendra Pradhan said on Monday. State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) are building the integrated complex with a refining capacity of 60 million tonnes per annum at Babulwadi, Taluka Rajapur, Ratnagiri district. “The proposed refinery will produce gasoline (petrol) and diesel suitable for BS-VI (equivalent to Euro-VI emission norms). The refinery will be designed with flexibility in processing wide varieties of crude as well as flexibility in product mix,” the minister said in a written reply to a question in the Lok Sabha. The three firms on June 14 signed a joint venture agreement to form a company, West Coast Refinery and Petrochemical Ltd for implementation of the project. “Order of magnitude of cost estimated for the project is Rs. 2700 billion and the share of IOC, BPCL and HPCL is in ratio of 50:25:25 respectively,” he said. The refinery will produce petrol, diesel, LPG, ATF and feedstock for making petrochemicals that are basic building blocks in plastic, chemical and textile industries. Pradhan said the project will take 60 months to complete from the date of approval and receipt of all statutory clearances. In addition, oil PSUs have also planned to increase the refining capacity in the country by 35 million tonnes (MT) in next few years to meet the domestic demand of petroleum products, he said without giving details. India, the world’s third largest energy consumer after US and China, has a refining capacity of 232.066 MT, which exceeded the demand of 194.2 MT in 2016-17. According to the International Energy Agency (IEA), this demand is expected to reach 458 MT by 2040. Besides the West Coast Refinery and brownfield expansion, a new 9 MT unit is planned at Barmer in Rajasthan. Fifteen million tonnes a year is the biggest refinery any public sector unit has set up in one stage. IOC recently started its 15 MT unit at Paradip in Odisha. Reliance Industries holds the distinction of building the biggest refinery in India till now. It built its first refinery at Jamnagar in Gujarat with a capacity of 27 MT, which was subsequently expanded to 33 MT. It has built another unit adjacent to it for exports, with a capacity of 29 MT. Lance McCullers Womens Jersey