India offered a $1.6bn oil discount, if it pays in crypto
Venezuela’s inflation could hit 100,000% by 2019 and they desperately need cash. Is the Petro the last roll of the monetary dice for President Maduro? It’s not difficult to understand why Nicolas Maduro is trying very hard to sell his Petro crypto coin. Launched in late 2017 with the aim of circumventing US trade sanctions while also attempting to ease the pressure on the ever-sliding Bolivar – Venezuela’s inflation rate rose from 4,000% last year to 18,000 % in April and some economists say it could hit 100,000 % by the end of the year – the Petro could be the last roll of the monetary dice for President Maduro. He claims the token, that supposedly is backed by the country’s oil assets, raised $5 billion after it went on public sale in March and, while domestically opposition politicians argue that is illegal and many in the crypto industry have said it is a national-level scam, Maduro seems to be doing all he can to use it to turn some quick profit. According to local news outlet Correo del Orinoco, the Venezuelan president has pushed the country’s financial authorities to register 16 new crypto exchanges and the aim is clear. Make it easier for the country’s citizens to purchase the world’s first state-backed crypto-currency. Maduro also seems to be extending the government’s crypto platform and, via an April 27 announcement, he reportedly told the Venezuelan people they could now invest in the country’s gold, via a Central Bank of Venezuela crypto-based “‘petro oro” initiative. Now news has emerged that Venezuela, the world’s second-largest crude oil producer, has tried to cut a deal with India, according to Quartz, by offering a 30% discount on petroleum sales if, yes you’ve guessed, payments are made using the Petro. Quartz says that India imported something like 8% of its oil needs from Venezuela in 2017, which would have cost $5.5 billion. So a 30% discount? That’s close to $1.6 billion. Temping indeed but … Delhi has just done a lot to try to squash trade in crypto-currencies. Earlier this month the Reserve Bank of India announced new measures banning banks under its control from investing in crypto-currency markets. This came after finance minister Arun Jaitley last year called cryptos “Ponzi schemes which can result in sudden and prolonged crash exposing investors.” In February he added to his criticism by telling Indian lawmakers to “take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.” Presumably, that would include purchasing oil worth $5 billion? The Reserve Bank of India might be now studying the feasibility of an Indian state digital currency but it is also far from supportive of the wider international crypto landscape. “Internationally, while the regulatory response to these tokens are not uniform, it is universally felt that they can seriously undermine the anti-money laundering … framework, adversely impact the market integrity and capital control,” said the bank earlier this month. What a dilemma to have. Make a quick $1.6 billion? Or stick to your principles. Can India dare go down Maduro’s crypto rabbit hole? Is this Delhi’s red pill, blue pill moment? So, what would you do? Dominic Moore Womens Jersey
ONGC shortlists Schlumberger, Halliburton, Baker for boosting output at 2 oilfields
Oil and Natural Gas Corp (ONGC) will hire international oil service companies for the first time to raise output from mature oilfields. India’s top oil and gas producer has shortlisted Schlumberger, Halliburton and GE subsidiary Baker Hughes for raising output from Kalol field in Gujarat and Geleki field in Assam, according to tender document floated by the company. Other oilfield service providers meeting pre-qualification criteria can also bid for the job by May 25, it said. The service providers will be paid a fee for raising output beyond an agreed baseline production. “To achieve the objective of production enhancement of oil and gas from mature fields, ONGC invites global oil and gas service providers having firm commitment to invest and processing capabilities to bid,” the document said. “The service provider will be required to invest in capital expenditure and operating expenditure to increase production from the existing ‘baseline’ production.” ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 percent by 2022. India currently imports over 80 percent of its oil needs. Originally, ONGC had on December 7, 2016, signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output. Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them last year on fears of courting controversy for handing fields on nomination basis. Thereafter, the company in June 2017 floated an expression of interest (EoI) from service providers for undertaking production enhancement. “Following are the names of vendors meeting the pre-qualification criteria (of EoI): Schlumberger Asia Services, Halliburton Offshore Services Inc, and Baker Hughes Singapore PTE Ltd,” the firm said in the document seeking final bids by May 25. The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to investing in capital expenditure and operating expenditure to increase production from the existing ‘baseline’ output. A tariff will be paid in USD per barrel of oil and USD per million British thermal unit for gas for any incremental hydrocarbon produced and saved over the baseline. The baseline shall be prepared by ONGC and vetted and certified by a third party of international repute. All the oil and gas produced will belong to ONGC and the service provider arrangement is being entered into to get the best technology available, sources said. Besides Schlumberger, Halliburton and Baker Hughes, ONGC was also in talks with Weatherford International. Sources said based on the experience of Kalol and Geleki, the PEC model may be extended to other onshore fields. David Bakhtiari Authentic Jersey
Is India’s oil addiction undermining its economy once more?
From about the beginning of 2017, even skeptics had to admit, India looked to be recovering from a growth slowdown. Most dramatically, in the last two quarters for which data is available, investment in physical capital — which had long been too low for growth to recover — increased by 12 percent and 10 percent, respectively. In the first two months of 2018, exports grew by over 9 percent. For once, optimism seemed warranted: Decent growth and macroeconomic stability seemed likely to bolster optimism, encourage more investment and launch a virtuous cycle. Unfortunately, while growth is indeed reviving, the macro-economy isn’t looking all that robust. Most worryingly, the rupee is just about the worst-performing currency in Asia this year; some analysts believe that it will, before the end of the year, be cheaper against the dollar than ever before. Others may not be as gloomy but, across the board, they’ve lowered their forecasts for India’s currency. What’s going on? Well, in part, the problem is a familiar one: India’s dependence on imported oil. The health of the Indian economy tends to rest on two great, uncontrollable factors — the level of monsoon rains and the price of oil. India’s enjoyed a nice run of low prices and lower import bills for the past several years, as crude prices crashed from over $100 a barrel to near $40 a barrel. But now that they’ve climbed back to $75 a barrel and may go higher, India’s again facing worries about inflation, government spending, and the current account deficit. Back when crude oil prices were at their peak, India was being talked about as one of the “fragile five” economies most at risk from a tightening of the U.S. Federal Reserve’s monetary policies. The country’s current account deficit stood at an uncomfortably high 4.8 percent of GDP. There were even murmurs that India might have to seek relief from the International Monetary Fund, until the government, spooked into action, imposed a sharp series of import controls — particularly on gold, for which India has a ravenous appetite. Then, luckily, crude oil prices began to crash in the middle of 2014. So did the current account deficit, falling to 0.7 percent of GDP in 2016-17. Now things are heading in the opposite direction: Kotak Institutional Equities worries that during 2018-19, India’s current account deficit could be as high 2.9 percent of GDP. In itself, that wouldn’t be a crisis. India has more than enough dollar reserves; capital inflows show no signs of stopping. But, the trend has been ugly enough for the rupee to crash and for worries about inflation to return. The central bank committee that sets monetary policy for India released the minutes of its last meeting recently and most members seem to think that the Reserve Bank of India might need to act soon. In other words, the incipient recovery might be choked off by higher rates even before it properly begins. It’s a frustrating rerun: Once again, India’s insatiable thirst for imports seems destined to hold it back. But, that’s really only half the story. While the cost of imports is rising, exports, in a well-run economy, should be rising to compensate. Instead, India has consistently under-performed as an exporter. After the healthy start to 2018, export growth turned negative in March. Four years ago, India exported $310 billion worth of goods a year. Now, it exports $302 billion a year — the lowest, as a percentage of GDP, in a decade and a half. And anemic world trade isn’t to blame. Four years ago, Vietnam’s exports were $150 billion; in 2017, at $213 billion, they were worth 43 percent more. India’s failure isn’t the inability to wean itself off imported crude. It’s that it has failed to compete in world markets so it can pay for the oil it needs. India has wasted the easy years since 2014 when it should have reformed its export processes, cut red tape, backed its manufacturers and pushed them to go out and create new markets. Instead, export processes are by and large just as complex and inefficient as they were four years ago. Tax incentives for exporters have been withdrawn, tax refunds withheld and the entire orientation of India’s economy turned inward. Instead of building up exports, India has decided to try and ward off imports; the government has raised tariffs across the board, for the first time in a generation. There’s still time to reverse things. If the rupee does in fact hit record lows, India shouldn’t mourn. It should see the new level as a boost for its exporters, an unhoped-for reduction in the price of Indian goods. The government should follow up by slashing red tape and the tariffs that keep Indian companies from integrating with global supply chains. India’s import dependence need not be a chronic disease. There is a cure: exports. Kevin Long Womens Jersey
ONGC bids for 37 oil blocks, Cairn 55 in 1st OALP round
ONGC today bid for 37 oil and gas blocks while Cairn India put in bids for all the 55 areas on offer in India’s maiden auction of oil and gas acreage under the newly formulated open acreage licensing policy. As many as 110 bids had been received, the Directorate General of Hydrocarbon (DGH) tweeted. Bidding in the auction of 55 exploration blocks on offer for prospecting of oil and gas as under the open acreage licensing policy (OALP) closed today. Oil and Natural Gas Corp bid for 26 blocks on its own and another 11 with partners. Cairn India, which is now known as Vedanta Ltd, bid for all the 55 blocks, sources privy to the development said. Cairn put in very aggressive bids for 13 blocks and a little less so for another 9. The remaining bids were mostly routine, they said. State-owned Oil India Ltd (OIL) is the other major bidder in the round that also saw participation of other PSU oil firms like Indian Oil Corp (IOC), GAIL and Bharat Petroleum Corp Ltd (BPCL) mostly as consortium partners. DGH, the upstream technical arm of the ministry of petroleum and natural gas, began opening of offers received under the OALP bid round being held under the new Hydrocarbon Exploration and Licensing Policy (HELP). India had in July last year allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km of unexplored area in the country under exploration. Under this policy, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence. The EoIs can be put in at anytime of the year but they are accumulated twice annually. As many as 55 blocks were sought for prospecting of oil and gas by prospective bidders, mostly by state-owned explorers Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) and private sector Cairn India by the end of the first EoI cycle on November 15, 2017, they said. The blocks or areas that receive EoIs at the end of a cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage. The 55 blocks have a total area of 59,282 sq km. This compares to about 1,02,000 sq km being under exploration currently, they said. Blocks would be awarded to the company which offers highest share of oil and gas to the government and commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells. Increased exploration would lead to more oil and gas production, helping the world’s third largest oil importer to cut import dependence. Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030. Import dependence has increased since 2015 when Modi had set the target. India currently imports 81 per cent of its oil needs. Sources said ONGC and Cairn India had put in 41 out of 57 bids received in November last year. Private player Hindustan Oil Exploration Co (HOEC) bid for one area in a round. Of the 57 EOIs put only 55 blocks were cleared for bidding after eliminating areas that are under no-go zone or overlapping with existing mining lease. The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue sharing model where companies offering maximum share of oil and gas to government are awarded the block. Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round. So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospectivity. Tyson Jackson Jersey
ONGC sets $2.64 billion capex for drilling oil, gas wells in 2018/19
India’s top explorer Oil and Natural Gas Corp said on Wednesday it plans to invest 176.15 billion rupees ($2.64 billion) on drilling in 2018/19, a growth of about 24 percent over the last fiscal year. ONGC aims to drill 535 oil and gas wells in this fiscal year to March 2019, compared with 503 well drilled in the previous year, the company said in a statement. Clark Griswold Authentic Jersey
LR to class first ever FSRU ordered for Indian waters
LR recently signed a contract to class the first ever floating storage regasification unit (FSRU) to be ordered for Indian waters. Stationed at Jafrabad port and operational 24 hours a day, 365 days a year, it will be built to LR’s Rules for the Classification of Offshore Units by Hyundai Heavy Industries (HHI) for SWAN LNG Pvt. Ltd. (SLPL). It is due for delivery in December 2019. The new 180,000m³ FSRU project will help meet the demand for LNG in the region, natural gas is projected to make up 20% of India’s total energy consumption by 2030. The Indian gas market is expected to be one of the fastest growing in the world over the next two decades, the country is the fourth largest energy consumer in the world (after the US, China and Russia). FRSUs are an attractive alternative for meeting the growing demand for regasification because they are significantly cheaper to operate than onshore plants and also highly versatile. SLPL’s Bhavik Merchant said: “Our FRSU based LNG Terminal at Jafrabad will help India’s push to increase the proportion of gas in its energy mix to power its economic expansion. SLPL is pleased to be working with Lloyd’s Register on this prestigious project as they have a wealth of expertise in large gas projects and we have been impressed by their desire to constantly improve the overall quality during construction to ensure uninterrupted operation.” LR’s Marine & Offshore Area Manager for South Asia, Middle East and Africa, Piet Mast, commented: “LR is delighted to be working with SLPL on this first of its kind project in India, this success is owed to the real global collaboration of all LR teams involved. LR is expanding its scope of work in this area with a number of other FSRU and gas related opportunities in India, Sri Lanka and Bangladesh.” Jeff Heath Womens Jersey
Foreign airlines will be first to offer in-flight connectivity
Foreign carriers such as Singapore Airlines and Lufthansa are soon likely to offer mobile connectivity on board flights in Indian airspace after the government’s go-ahead. But local airlines may go slow on rolling out the service because of the cost involved, said industry executives. “It’s a welcome decision. Lufthansa doesn’t offer call services but we do offer data services,” said Wolfgang Will, a senior director at the German airline. “Right now, an aircraft has to fly out of Indian airspace for connectivity to be activated. After this approval, there is a possibility of providing passengers with the services within the Indian airspace too. We shall definitely look at it.” Singapore Airlines offers in-flight connectivity on Airbus A380, A350 and Boeing 777-300ER aircraft through SITA ONAIR and Panasonic. “Coverage for in-flight connectivity services are dependent on the approvals obtained by service providers,” said a spokesperson at the airline. Getting approvals will now likely be easy following decision of the Telecom Commission, the highest decision-making body in the telecom department, to allow the service. “Great that India has finally taken this grand decision after 15 long years when technology was first demonstrated,” said Mark Martin, founder of Dubai-based Martin Consulting. “But it remains to be seen at what price it will come to consumers. These are satellite calls. It will obviously be akin to roaming rates. It will be interesting to see how the consumer can absorb it,” he added. Globally, rates offered by airlines vary as per route, aircraft and class. Will of Lufthansa said the entry rates for flights are EUR10 (about Rs 800). Emirates has plans ranging from $4.99 to $10.99 (Rs 335-736), according to its website. The rates are cheaper if the passenger is a member of the frequent flyer club. There are offers, too. Singapore Airlines, for example, has an ongoing offer for 24-hour Wi-Fi connectivity at SGD23-SGD25 (Rs 1,147-1,247), according to its website. Back home, Indian carriers have yet to decide whether and when they will offer the services. “It is a welcome move by the Telecom Commission as it would mean more convenience to air travellers. We will study recommendations in details and in due course determine economics of offering on domestic and/or international routes,” said a spokesperson at Vistara, the joint venture carrier between Singapore Airlines and Tata Sons. The airline plans to start international flights in the second half of this year. “We have not applied our mind on it yet. We need to work out on the implementation and cost of it first,” said Rahul Bhatia, the interim CEO and a founder of IndiGo. Kenyan Drake Authentic Jersey
Iran ready for Pak-Turkmen gas swap, views TAPI plan as unlikely
Iran is ready to participate in a gas swap between Pakistan and Turkmenistan as it thinks that the ambitious, multi-billion dollar TAPI gas pipeline that includes India is unlikely to become operational, a top Iranian official has said. The USD 10 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project will help ease energy shortages in South Asia. Hamid Reza Araqi, the CEO of the National Iranian Gas Company (NIGC) expressed Iran’s readiness to participate in the Turkmen gas swap to Pakistan. “It is unlikely that the Turkmen gas pipeline to Pakistan will be constructed, and Iran is ready for this swap,” Iranian news agency FARS quoted Araqi as saying. “I see it unlikely for the TAPI pipeline to become operational,” he said. Given Iran’s location in the centre of the region, “we can join every gas pipeline that passes around the country,” he said. Araqi, who is also the deputy petroleum minister for gas affairs, added that Iran is the best pathway for gas transmission from Turkmenistan to Pakistan, adding, “We are able to receive Turkmen gas and deliver it to Pakistan.” He said Iran had conveyed its readiness to Turkmenistan to export their gas to Pakistan but was yet to receive any response from them. Turkmenistan, which sits on the world’s fourth-largest gas reserves, started building its section of the pipeline in December 2015. The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for 30 years and is planned to become operational this year. The project will bring clean fuel to the growing economies of India and Pakistan. It will provide energy-hungry India gas to run its power plants. India has concerns relating to the safety of the pipeline and safe transit of gas through restive areas in Afghanistan and Pakistan. Under the pipeline project, Pakistan and India will be provided 1.325 bcfd gas each and Afghanistan will be getting a share of 0.5 billion cubic feet per day (bcfd) gas. Marquez Valdes-Scantling Authentic Jersey
BPCL to shut Bina oil refinery from mid-September for 45 days
Bharat Petroleum Corp Ltd will shut its 120,000 barrels per day (bpd) joint venture Bina refinery from mid-September for 45 days to expand its capacity by 30 percent, its head of refineries said on Tuesday. During the shutdown, the company will carry out modifications at various units to raise capacity of the plant to 156,000 bpd, R. Ramachandran told Reuters. “The refinery will be stable and start operating at (an annual rate of) 7.8 million tonnes (156,000 bpd) before the end of this calendar year,” Ramachandran said. The expansion is also aimed at producing cleaner fuels. The Bina refinery is operated by Bharat Oman Refineries Ltd (BORL), a 50-50 joint venture between Oman Oil Co and state-run Bharat Petroleum Corp. Derek Dorsett Authentic Jersey
Retrospective’ amendment to Rajasthan production pact puts Cairn India in a spot
Cairn India’s 25-year contract for exploration and production of oil and gas from Barmer block RJ-ON-90/1 is due for renewal on May 14, 2020, but it has to, as per a new policy, apply for a 10-year extension within this month, sources said. A ‘retrospective’ amendment to the contract for the prolific Rajasthan oil block has put its operator Cairn India in a spot, as it has to shell out more to the government to retain it for another 10 years. Cairn India’s 25-year contract for exploration and production of oil and gas from Barmer block RJ-ON-90/1 is due for renewal on May 14, 2020, but it has to, as per a new policy, apply for a 10-year extension within this month, sources said. The company feels the May 1995 Production Sharing Contract (PSC) for the block provided for an automatic 10-year extension on same commercial terms if there are oil and gas left to be produced. But now the government has midway retrospectively changed fiscal terms in the name of extension is unjust to it, they said. The government had in March last year approved a new policy for extension of PSCs that provided for an extension beyond the initial 25-year contract period only if companies operating the fields agree to increase the state’s share of profit by 10 percent. State-owned Oil and Natural Gas Corporation (ONGC), which as a government nominee picked up 30 percent stake in the Rajasthan block in 1995, also was of the opinion that PSC provides for an extension on same terms. ONGC had first in May 2015, then again on at least two occasions in 2016, concurred with Cairn’s interpretation of the PSC for extension of the Rajasthan contract by 10 years on same terms. “ONGC had obtained an external legal opinion from B Sen, an eminent senior counsel of Supreme Court of India on the interpretation of RJ-ON-90/1 PSC. B Sen opined that as per Article 2.1 of PSC, terms and conditions of PSC can be negotiated only in the case where the contract is to be extended beyond 35 years (25 initial years plus 10-year extension),” the company had written to the Oil Ministry on May 25, 2015. It had stated that the company being the licensee/lessee as well as joint venture partner in RJ-ON-90/1 block “felt that to protect ONGC’s interest as well as to enable a continued participation in exploration and production activities in RJ-ON-90/1 block, it would be prudent to seek extension of the contract with same terms and conditions as per the existing contract”. ONGC board, which has two senior government officials as members, had on April 28, 2015, approved seeking “a 10-year extension to the duration/tenure of the PSC for the RJ-ON-90/1 block on existing terms and conditions from the Government of India”. After Cairn, now known as Vedanta, in February 2014 asked the Oil Ministry for extension of PSC by 10 years, ONGC concurred with the proposal, sources said, adding that the company feels the new conditions for increased profit share is unfair. Antonio Gates Jersey