Russia’s Rosneft field to commence production this year
Rosneft’s Suzunskoye field, part of the Vankor cluster in Russia where Indian state firms are in talks to buy stake, will start producing this year. Oil India (OIL), Indian Oil ( IOC) and Bharat Petroresources signed a preliminary agreement with Rosneft last month for a potential partnership to develop the Suzunskoye, Tagulskoye and Lodochnoye fields located close to already-producing Vankor oil and gas field in the Siberian region. Energy-hungry India has been in talks with sanctions-hit Russia to stitch multiple deals that can help secure oil and gas supplies for the country at a time oil prices have collapsed, making assets cheaper and readily available. The Indian state firms, nudged by the government, have been seeking producing assets that come with lower risk for the buyer. Suzunskoye, with an initial recoverable reserve of 286 million metric tonne (mmt), will initiate production in 2016 while Tagulskoye will take a few more years, a company spokesperson said. The operational drilling has just started at the Tagulskoye field that has an initial recoverable reserve of 56 mmt, the spokesperson said. The company expects to build 39 well pads and 506 wells as part of the overall drilling project. Initial recoverable reserve at Lodochnoye field is 73 mmt. This field is several years away from production. By comparison, the producing field of Vankor, where Indian firms are in talks to buy nearly half equity stake, has initial recoverable reserve of 476 mmt. In 2015, Vankor produced 22 mmt of oil and 9.75 billion cubic meters of gas. Rosneft aims to leverage the existing infrastructure at Vankor to process and transport oil and gas from the three new neighbouring fields.A 99-km pipeline has already been laid to carry oil from Suzunskoye to Vankor. Rosneft also plans to build a 65-km pipeline to evacuate gas from Tagulskoye field to Vankor. Oil and Natural Gas Corp ( ONGC) has purchased 15% in Vankor and is in talks with Rosneft to raise it to 26%. The consortium of Oil India, Indian Oil and Bharat Petroresources have also entered into an initial agreement to buy 23.9%.
Fitch affirms ‘BBB-‘ rating on Indian Oil
Fitch has affirmed on Indian Oil Corporation Ltd (IOC) ‘BBB-‘ rating, indicating that expectations of default risk are currently low. “Fitch equalises IOC’s rating with that of its largest shareholder, the state of India (BBB-/Stable) due to their strong operational and strategic linkages,” the credit rating agency said in a statement. Government of India holds 58.6 per cent stake in IOC. The rating signifies that the capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. Fitch believes the linkages remain strong despite the deregulation of diesel prices in 2014. IOC however continues to retail kerosene at government-prescribed prices that are lower than market prices. “Fitch may reassess the linkage of IOC with the state, as per Fitch’s Parent and Subsidiary Linkage methodology, if the state oil marketing companies’ policy role weakens due to further deregulation of petroleum products,” it said. While assessing the linkages, Fitch will also consider the government’s commitment to maintaining market-based prices for already deregulated products when oil prices increase. The lower oil prices and deregulation of diesel have significantly improved IOC’s finances. Fitch assessed the company’s standalone credit profile at ‘BB+’ which indicates an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.
Cairn India crude oil & gas production falls 8% in Q4
Cairn India reported an 8 per cent fall in oil and gas production for the fourth quarter of fiscal 2015-16 at 17.93 million barrels of oil equivalent as compared to 19.4 barrels of oil equivalent in the same quarter last year. The company’s production for the full 2015-16 fiscal also fell 4 per cent to 74.56 million barrels of oil equivalent as compared to 77.26 million barrels of oil equivalent in the previous fiscal. “Gross production from Rajasthan declined by 4 per cent compared to the fourth quarter of fiscal 2014-15, mainly due to the natural decline and under-performance of the Bhagyam reservoir,” the company said in an official statement. Bhagyam is one of Cairn’s largest discoveries in Rajasthan. The Mangala reservoir is its largest discovery in the State. The company’s average gross production on a daily basis was 9 per cent during the fourth quarter at 197,039 barrels of oil equivalent per day. Average daily gross production from Rajasthan was 4 per cent lower at 167,650 barrels of oil equivalent per day. The company said in a statement that lower volumes from Bhagyam were partly offset by ‘infill wells’ in Aishwariya, better reservoir management initiatives across the field and a ramp up of production. “Gross production from the Development Area DA1 and DA2 averaged at 150,918 barrels of oil equivalent per day and 16,732 barrels of oil equivalent per day respectively,” Cairn said. DA1 comprises Mangala, Bhagyam and Aishwariya oilfields in Rajasthan while other discoveries are in DA2. For the full 2015-16 fiscal, average daily gross production was 203,703 barrels of oil equivalent per day, 4 per cent lower than the previous fiscal due to lower production from Rajasthan and offshore assets. “Rajasthan production declined 3 per cent due to reservoir underperformance at Bhagyam. However, an excellent performance by Mangala EOR and contribution from Aishwariya infill program partly made-up for the decline,” Cairn said. <
RIL-BP may withdraw arbitration proceedings against Centre: Report
The arbitration case involving Reliance Industries (RIL)-BP Plc against the government may see an end, as the companies are said to be considering dropping the case. Both the companies are in talks with the government to drop the arbitration, the report added, citing an official from the oil ministry. In fact, they had met oil minister Dharmendra Pradhan in the first week of April, the newspaper reported. The move will help the companies sell the gas produced from their allotted fields on the free pricing model that was announced in the new gas-pricing policy announced by the Centre on March 11. “The fact that the consortium is keen to discuss the issue with us indicates its willingness to drop the arbitration relating to government’s power to fix gas price,” a government official told the newspaper. Meanwhile, the companies have also signalled their intention to invest $10 billion to recover 2.5 trillion cubic feet of gas from deep sea fields. They wish to sell this at the free market pricing mechanism. The official quoted above told the newspaper that it may take about a year for companies to finalise the field development plan, sign equipment and services contracts and commence work. “The recent reforms announced by the Government of India will provide the much-needed impetus to the Indian oil and gas industry. Together with our partners, we are working with the government to progress activities in our blocks,” BP said in a statement. According to the announcement, to avail the new liberal pricing, companies who have filed the arbitration or litigation must conclude or withdraw the same. The gas-pricing dispute – A case file. In 2014, RIL initiated an arbitration to implement the pricing determined by the United Progressive Alliance (UPA) government, which had set a price double than $4.2 mmBtu. However, the policy could not be implemented on the back of the model code of conduct being in place ahead of the Lok Sabha elections. The Bharatiya Janata Party-led government modified the formula and set the price at $3.06 mmBtu for April-September 2016.
Pul’s sends proposal to centre on tourism and civil aviation
Chief Minister Kalikho Pul called on Minister of State for Culture, Tourism and Civil Aviation Dr Mahesh Sharma on Thursday to discuss on ways to develop tourism in the state. Unveiling his plan, the CM proposed to develop the circuit from the entry points along Assam-Arunachal border upto the tourist destination. CM informed that state government is making efforts to make easily available inner-line permits (ILP) and the restricted area permit (RAP). For that to achieve, he informed that entry check gate at the state’s border will have provision to issue the permits “on-arrival”. Pul further informed that proposed tourist circuits would provide wayside amenities at every 50-60 km points with all facilities to assist the travellers. The CM requested to expedite the process of connecting and improving helicopter services for all the district headquarters. Pul requested the minister for one-time waiver of all pending dues for helicopter service in Arunachal, to which the minister agreed to consider it.
Noida Metro races to set world record
The civil works on the Noida-Greater Noida Metro track is about 40% complete. Announcing this on Saturday, Delhi Metro Rail Corporation (DMRC) officials said the Metro corridor was likely to roll by the end of next year and also set a world record as no Metro line has been commissioned in a span of two and a half years. Earlier on Saturday, Dr Mangu Singh, MD, Delhi Metro Rail Corporation (DMRC), conducted an inspection of the corridor and expressed satisfaction with the pace of work, which began in May last year. Singh’s inspection of the corridor started at 9am and continued till 1pm. During the four hours, he carried out a detailed scrutiny of the track quizzing DMRC officials. Singh also issued directions for procurement of two additional cranes to expedite work on the track. Now a total of six cranes will be deployed for work on the link. The MD also visited the facilities – rest room, training room and cafe – put in place for the labour working on the track and shared space with them. According to DMRC officials, work on the Metro line is progressing at a fast pace. Till now, out of a total 1,800 U-girders, 90 U-girders have already been cast. Piling work on stations is also being carried simultaneously at all 21 stations along the track. Piling work has been completed in 19 ot the 21 stations. Currently, concourse casting is being done at those stations which have completed piling work. Concourse casting has also been completed at seven stations and platforms will be cast next. The first station to be completed will be the Sector 72 Metro station in Noida, which is likely to be in place by the end of May. The second station to follow will be the Delta station in Greater Noida, officials said. Officials further told TOI that they had also completed 70% work on the depot in Greater Noida. The depot will cater to the requirements of the corridor and is to be used for maintenance and servicing of the Metro coaches that will run on the route. The depot will be environment-friendly and its boundary wall and building will be equipped with solar panels. The electricity generated by the panels will be used by the depot for lighting its building. Coming up across 50 acres of land in Greater Noida, it will also house a ‘Metro security park’. The MoU between DMRC and Noida & Greater Noida Authorities was signed in October 2014 and the construction is being executed by CEC-SAM India JV. Once the track, costing Rs 5,533 crore, is in place it would not only provide a fast link between the two townships but also bring these places closer to the national capital.
After Bihar liquor ban, alcohol sellers flourish on India-Nepal border
The complete ban on alcohol in India’s Bihar state seems to have come as a boon for small traders in Nepal who sell low-quality alcohol. Reports here say there has been a sudden rise in small huts along the India-Nepal border to target alcohol customers from Bihar. Authorities from India’s border districts have sought help and cooperation from their Nepali counterparts to check the possible smuggling of alcohol and increase in surveillance along the border. Bihar imposed a complete ban on sale of alcohol from April 1. At a recent meeting in Forbesganj in Bihar, Indian authorities sought help from their Nepali counterparts to curb the movement of people seeking alcohol from Nepal. Toyam Rai, chief district officer of Sunsari district who led the Nepali team, said that due to the open international border, there was high chance of smuggling of alcohol from Nepal to India, and so the Indian authorities asked Nepal to cooperate in preventing the smuggling. Himanshu Sharma, district magistrate of Araria in Bihar, local police chiefs and others also participated as part of the Indian side in the meeting. Reports said mostly people from the working class come to the Nepali side to buy alcohol. But when there is a holiday, businessmen and youth also cross the border. Local hoteliers say there has been a 2-3 fold rise in sale of alcohol in the past one week, since the ban in Bihar. Nepali traders have now increased the prices of local alcohol, but reports said the quality was quite poor due to the sudden rise in demand. “With the ban on alcohol in Bihar, the Indian authorities have asked us to curb the smuggling of alcohol from Nepal. They are also concerned that after the ban, criminals may sneak into Nepal that will further invite security complications,” said Sunsari Superintendent of Police Sandip Bhandari. “With this new unfolding situation, we may face new security threats along the border,” said Rai. “We have assured the Indian side about the security arrangements on the border.”
Government mulling standards for noise levels due to aircraft ops
The government is planning to come up with standards to curb noise pollution due to aircraft operations and ensure that noise levels are maintained within permissible levels. The proposal, which has been in the works for some time, comes against the backdrop of concerns expressed in some quarters, including by resident welfare associations, about noise pollution being created by aircraft operations. To assess the situation at airports, various studies have been carried out by agencies and discussions have been going on between different government departments over the last few years. The Environment Ministry is working on a proposal for bringing in standards on noise levels pertaining to aircraft operations and measures for maintaining noise within the permissible limits, a senior official said. Multiple rounds of discussions have already taken place among various agencies including the Environment Ministry, Directorate General of Civil Aviation (DGCA) and Central Pollution Control Board (CPCB), the official said. Back in September 2013, a study on noise levels from aircraft operations at the Delhi international airport was conducted by DGCA through a foreign entity. Besides, CPCB has done studies on few other airports, the official said. In December 2014, the regulator had issued a CAR (Civil Aviation Requirement) on ‘noise management of aircraft operations at airports’. The issue of noise pollution from aircraft operations has been simmering for sometime and some entities had also moved court and tribunals in this regard. Earlier this week, the National Green Tribunal, while hearing a bunch of pleas, asked why night curfew is not implemented for flights to and from airports across the country. According to a DGCA official, the general view has been that it would not be practical to put in place restrictions for night operations on aircraft in the country. Such a move could result in foreign carriers choosing other countries rather than India as their hub for operations. Many overseas airlines operate flights at night as that helps them in reaching their destinations in the morning hours, the official said.
Fuel in tanks of Indian aircraft exempt from customs duty
Revenue department said fuel in tanks of aircraft of all Indian airlines entering the country are exempt from customs duty. As per a notification of 1994, fuel in the tank of an aircraft of Indian Airlines or Indian Air Force is exempt from customs and additional duty “when imported into India”. Responding to representations from the industry on the notification, the Central Board of Excise and Customs (CBEC) said exemption is available to all Indian airlines. “The matter has been examined by the Board and it is observed that in reference (to the notification) exemption is not limited to the ‘Indian Airlines’ (now called as ‘National Aviation Company of India Limited’). “It is available to any Indian airline, in other words, to all Indian airlines,” it said. As per the 1994 notification, the duty exemption is given when the quantity of the fuel is equal to the quantity of the same type of fuel which was taken out of India in the tanks. Also, the rate of duty of customs or Central Excise leviable on such fuel should be same at the time of the arrivals and departures of such aircraft.
High Court seeks DIAL, AAI reply on entry fee on commercial vehicles
Delhi High Court has sought the responses of Airport Authority of India (AAI) and Delhi International Airport Ltd (DIAL) on a cab firm’s plea against the entry fee of Rs 150 levied upon all commercial vehicles entering the IGI airport to ferry passengers. Magic Sewa, an app-based cab company, has also alleged that DIAL and AAI were giving “preferential treatment” to some taxi operators at IGI airport by allowing them to enter and pick-up passengers while denying the same privilege to others. A bench of Chief Justice G Rohini and Justice Jayant Nath asked AAI and DIAL to file their replies in two weeks to Magic Sewa’s plea before the single judge who is hearing the matter and disposed of its appeal against the single judge’s decision not to grant any interim relief. The division bench also advanced the next date of hearing in the matter before the single judge to May 17 from July 22. The single judge had on February 24 declined to grant any interim relief to Magic Sewa which had sought stay on the Rs 150 entry fee. On the alleged exclusivity being granted to the three other cab companies — Easy, Meru and Mega Taxi — to enter the airport and pick-up passengers while denying this benefit to others, Magic Sewa claimed this privilege was being granted as the three operators had paid huge sums of money for it. During the hearing before the division bench, AAI said that tenders were floated for grant of special privilege and the three companies are being charged huge amounts for it. Magic Sewa has claimed that grant of such special rights “kills competition” and was “anti-people and consumer”. “Apparently, the cost incurred by the said cab companies is passed on to hapless domestic and international passengers in one form or another. Besides, these privileged cab companies also charge from passengers the maximum rate notified by respondent 3 (Delhi government) under the law which at present stands at Rs 23 per km. “In today’s market, competition is so high among cab companies that the average cost works out to less than Rs 15 per km. By granting special rights to select companies to the exclusion of other similarly placed companies to park taxis at and pick up passengers from the airport kills competition and is anti-people/consumers,” Magic Sewa has said.