Rs 1.75 lakh crore disinvestment target on track: Chief Economic Advisor
The target of mopping up Rs 1.75 lakh crore from disinvestments of some of the public sector companies, including LIC and BPCL during the current fiscal, is on track and groundwork is being prepared for the goal, Chief Economic Advisor Krishnamurthy Subramanian said on Monday. On the COVID-19 pandemic, Subramanian said the impact of the second wave is lesser than that of the first one. In an interactive session, organised by Federation of Telangana Chambers of Commerce and Industry, the CEA said robust GST collections, over Rs one lakh crore per month for eight months in a row shows that consumption is picking up indicating positive signal for growth. “There has to be a lot of work which is going on and this year there is actually a lot of emphasis on achieving these targets. Remember that Rs 1.75 lakh crore, a good part of it will be from LIC’s IPO (Initial Public Offering).Second is Bharat Petroleum (BPCL) privatisation. And these two together itself can account for a large part of (disinvestment target),” he said. The Centre budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the current fiscal year. The disinvestment plan includes strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others, and also legislative amendments required for LIC IPO would be brought in 2021-22, Finance Minister Nirmala Sitharaman had said in her budget speech. “I think this year very likely will be the year of which will be remembered for privatisation. We still have nine more months. I am quite confident that we will achieve the target (of Rs 1.75 lakh crore ),” the CEA said replying to a query. Earlier in his speech, he said every rupee spent by governments on “freebees” would contribute only Rs 0.98 to the country’s economy against Rs 4.50 when used on capital expenditure.
To fulfil Oil Ministry’s grand vision, ONGC must take a slick new avatar
The Ministry of Petroleum & Natural Gas would like the public sector energy giant ONGC to reassess its role with an ultimate aim of becoming a resource owner, functioning like a holding company. ONGC should focus on strategising, exploring and developing India’s energy space while monetising and divesting its resources and generating funds to reinvest, according to the Ministry. It wants ONGC to adopt a new business model by divesting non-core activities such as drilling, logging and field services to separate domain companies. ONGC’s performance as an oil and gas explorer has been reviewed by the Ministry on a regular basis for some time now. “In global post Covid-19 recovery phase, India is one of the most promising developing economies with a high growth potential and ONGC should take advantage of this opportunity,” an official involved with the process told BusinessLine. Clean energy “While developed countries may switch to renewables and other cleaner energy sources due to climate concerns, India still needs fossil fuels to meet its growing energy requirements. There is an urgent need to aggressively explore unappraised/unexplored sedimentary hydrocarbon areas in the next three years. Given the expected spurt in economic growth post Covid-19 recovery, there is high potential to attract investment, talent and resources in India,” the official added. Today, almost 80 per cent of India’s crude oil requirement are met through imports. Minister for Petroleum and Natural Gas Dharmendra Pradhan has been raising concerns at global platforms about the spike in global oil crude prices. In fact, on June 24, at a high level consultation meeting with OPEC Secretary General Mohammed Sanusi Barkindo, Pradhan flagged the rising crude oil prices and its impact on consumers and economic recovery. He emphasised that high crude prices are exerting significant inflationary pressure. “ONGC, being the flagship central public sector enterprise, has grown up manifold and has resources, (but) it has not explored aggressively. Further, the engagement of ONGC on a large number of small fields has reduced its flexibility and project implementation capability. Today 80 per cent of ONGC’s production comes from only 24 fields, while remaining 190 fields contribute only 20 per cent,” he said. An official added: “It is time ONGC refocussed on core activity by acquiring more data and explore more. It should also monetise the resources/facilities and generate funds. The company should de-risk itself by inviting partners and move to new areas for exploration and business. Basically, it should first consolidate activities geographically/basin wise to achieve speed, efficiency and cost effectiveness.” New business models There is a need to develop new business models for monetisation of stranded assets/discoveries/spare facilities. Business models such as Design, Finance, Built and Operate as well as Annuity & Securitisation based models for development are to be explored, the official added. “ONGC should now take the role of nurturing, handholding and expanding exploration and production activities in India by bringing small and medium-sized companies. This can be done by having partnership (technology/ finance/ consultancy/project execution/ management) with global players for difficult plays (HP-HT, ultra-deepwater exploration areas), new basinal areas (Gujarat Kutch, Bengal Basin) and for enhancing production from existing major fields,” the official explained.
Norway’s Equinor aims to triple UK hydrogen production capacity
Norwegian oil and gas firm Equinor said on Tuesday it had raised its hydrogen production goal in the United Kingdom to 1.8 gigawatts (GW), following a visit of Britain’s Business Secretary Kwasi Kwarteng to Oslo. Equinor said it planned to add 1.2 GW of low-carbon hydrogen production capacity mainly to supply Keadby Hydrogen, the world’s first major 100% hydrogen-fired power plant it is developing jointly with British utility SSE. Pending support from the British government, the plant could start operations before the end of the decade, it added. Equinor’s Chief Executive Anders Opedal, who took part in a meeting with Kwarteng and Norway’s Oil and Energy Minister Tina Bru, said its projects would help the UK achieve its climate goals. “Our low-carbon projects in the UK build on our own industrial experience and will play a major role in setting the UK’s industrial heartlands in a leading position,” Opedal said in a statement. Britain has a target to reach net-zero carbon emissions by 2050 and 5 GW of clean hydrogen capacity by 2030, and is providing financial support to a number of decarbonisation projects. Equinor is already planning to build a 0.6 GW capacity plant in north-eastern England to produce so-called “blue” hydrogen from natural gas, while capturing associated carbon dioxide (CO2) emissions. It is also involved in a project to develop CO2 transport and storage infrastructure in the region. Clean hydrogen, produced from water by using renewable electricity or from natural gas in combination with carbon capture and storage (CCS), is seen vital to decarbonise industries such as steel and chemicals. Today most hydrogen is produced from natural gas, while associated CO2 emissions are released into the atmosphere.