US President Donald Trump looks to increase energy exports to India
US plans to export more natural gas, clean coal and renewable resources and technologies to India to fuel the country’s growing energy demand and strengthen ties between the two countries, according to an Indo-US joint statement. “President Trump affirmed that the United States continues to remove barriers to energy development and investment in the United States and to US energy exports so that more natural gas, clean coal, and renewable resources and technologies are available to fuel India’s economic growth and inclusive development,” President Donald Trump said in after meeting Prime Minister Narendra Modi. The shale revolution has placed US in a strong position to export gas to countries like India that are low on fossil fuel resources but have a rapidly rising demand for oil. The two leaders have affirmed the continued importance of their strategic energy partnership and supported financing of energy projects, including clean coal projects, by Multilateral Development Banks to promote universal access to affordable and reliable energy. They looked forward to conclusion of contractual agreements between Westinghouse Electric Company and the Nuclear Power Corporation of India for six nuclear reactors in India and also related project financing, according to the statement. “The leaders called for a rational approach that balances environment and climate policy, global economic development, and energy security needs,” as per the joint statement. US plans to export more liquefied natural gas (LNG) to India and is negotiating for a higher price, Trump said in a separate press remark. “We’re also looking forward to exporting more American energy to India as your economy grows, including major long-term contracts to purchase American natural gas, which are right now being negotiated, and we will sign them. Trying to get the price up a little bit,” Trump said. India already has long-term gas import deal with US. State-run GAIL has a contract to buy 3.5 million tonnes per annum (mtpa) of LNG for 20 years from Cheniere Energy and has also booked capacity for another 2.3 mtpa at Dominion Energy’s Cove Point liquefaction plant. GAIL expects to receive supplies from early next year. Steven Kampfer Jersey
Petrofac sees higher bidding activity in core markets
British oilfield services company Petrofac Ltd on Tuesday said it expected an underlying net profit of $135-$145 million for the first-half of 2017 as higher bidding activity in its core markets led to a strong order book. Order book stood at $13 billion as of May 31, said the company, which designs, builds, operates and maintains oil and gas facilities. It recorded an order book value of $14.3 billion in 2016 as orders picked up in its core Middle Eastern markets. The company’s high exposure to the Middle East oil markets had resulted in good backlog coverage for 2017 as record production in the region drove up contract awards. “High level of tendering activity is evidence of greater confidence in our core markets and we continue to have a very good pipeline of bidding opportunities,” CEO Ayman Asfari said in a statement. Matthew Slater Authentic Jersey
Natural Gas May Be Included In GST, To Benefit ONGC
The GST Council may decide to include natural gas in the Goods and Services Tax (GST) regime as a measure to provide some relief to the oil and gas sector. Currently, crude oil, petrol, diesel, jet fuel or aviation turbine fuel (ATF) and natural gas are not included in the new indirect tax structure, which is set to kick in from July 1. This essentially means that various goods and services procured by the oil and gas industry will be subject to GST, but the sale and supply of oil, gas and petroleum products will continue to attract earlier taxes like excise duty and VAT. Unlike other industries which can take credit for any tax paid towards furtherance of business, no credits on input GST will be available to the oil and gas industry leading to huge additional indirect tax burden with stranded costs of about Rs. 250 billion. “GST was based on the premise that no one will suffer any loss because of its rollout – neither the government nor the industry. But here is an industry which will see revenue loss from July 1,” a senior official said. The oil ministry has taken up with the finance ministry for early inclusion of all the five exempted products in GST. “There is a recognition even in the finance ministry that the current situation is not right. They are also making efforts to get the GST Council to see reason,” he said. The GST Council, headed by Finance Minister Arun Jaitley and comprising of representatives of all states, is the highest decision-making body on the new tax regime. “There is an agreement that natural gas can be included in GST. Natural gas is largely an industrial product and so its inclusion will not be a problem,” he said. The Council is scheduled to meet on June 30, hours before the new regime is rolled out. So far, inclusion of natural gas in GST has not been listed on agenda, but there is a concentrated push for doing so. If natural gas is included, GST paid on inputs and services used for producing natural gas can be set off against taxes on its sale. This would cut the losses to the industry by one-fifth. The move will benefit companies like Oil and Natural Gas Corporation (ONGC) as well as gas retailers like IGL. “The oil ministry is urging the finance ministry to use its good offices to convince the GST Council on the issue,” the official said. Keeping the five hydrocarbons out of GST would adversely affect both upstream companies like ONGC as well as downstream companies like Indian Oil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation. He said bringing crude oil, natural gas, petrol, diesel and ATF under GST at one go will be difficult and so a beginning can be made with natural gas. Crude oil could be next. “Crude oil is also a totally industrial product that has no consumer interface and its inclusion in GST too should not be a problem,” he said. Quinton Spain Womens Jersey
Air India: Divestment of govt stake unlikely this financial year
As discussions around Air India pick up steam in the government, the process of actually divesting the national carrier will be a long drawn one and will require multiple cabinet approvals, Business Standard has learnt. Senior government officials who are part of the deliberations said at least two approvals of the Union Cabinet, led by Prime Minister Narendra Modi, could be necessary, and that any dilution of the centre’s 100 per cent stake is highly unlikely this fiscal. If and when privatization is finally decided upon, the first cabinet approval will be an ‘in-principle approval’. That will set the stage for Finance and Civil Aviation ministries to start the process of valuation of the debt-ridden airline, decide upon the eligibility of buyers and identify prospective suitors, decide upon the method of sale, take decisions on what to do with the airline’s assets and its Rs 46,570 crore debt, dealing with employee unions, and hiring financial and legal advisors for the sale. Once this process is complete the matter will be taken up by cabinet again, to give its final approval. Sources said that the draft cabinet note, which is being circulated among the ministries, is only for the first ‘in-principle’ approval. “Privatising Air India is a difficult and long-winded process. The way it is being portrayed in certain sections of media is that a decision is imminent and the sale will happen quickly after a one-time approval by the cabinet. It is more complex than that and we may need to approach the cabinet multiple times,” said a senior official. “Right now, we are just the initial stages of these deliberations, and are still dealing with a number of issues before any approval is sought,” the person said. As reported by Business Standard earlier, the Civil Aviation Ministry is still said to be considering the option of retaining ownership of the national carrier, and running it after retiring debt. As part of inter-ministerial discussions, a number of options have been discussed and retaining ownership is one. The options being discussed are either reviving the airline, going for privatization, or reducing the airline’s debt by selling off the assets. Other issues being deliberated upon deal with the issue of the airline’s lenders’ willingness to convert debt into equity, and whether to sell its subsidiaries separately – Air India Engineering Services Limited (AIESL), Air India Transport Services Limited and Hotel Corporation of India (owner of Centaur Hotels). The other issues being discussed, as per the official, include whether go for some sort of a retrenchment by laying off workers through employee voluntary retirement scheme, fleet management, and whether foreign companies should be allowed to buy stake in the national carrier, though no decision has been finalised yet. India allows foreign institutions to own stakes of up to 100 per cent in local airlines, but overseas airlines can own up to a 49 per cent stake. MacKenzie Weegar Womens Jersey
Surjewala upset over Jewar airport
Haryana Congress MLA Randeep Singh Surjewala has taken strong exception to the recent decision of the Central government to set up an international airport at Jewar in Uttar Pradesh, saying that the interests of Haryana were being sacrificed at the “altar of political expediency”. Mr. Surjewala, who represents Kaithal in the Haryana Legislative Assembly, said that the United Progressive Alliance (UPA) government had granted in-principle approval for a green field airport in the State in 2013-14. The present BJP government in Haryana, he said, had failed to protect the State’s claim. He added that the Centre had made a unilateral announcement about setting up an international airport at Jewar, ignoring Haryana’s claim for one at Jhajjar, Meham or Karnal. Fred VanVleet Authentic Jersey
I would love AirAsia to own 100 per cent in Indian arm: Tony Fernandes, CEO, Air Asia Group
AirAsia Group CEO Tony Fernandes had always wanted AirAsia India to fly to foreign cities early and had argued against the norm stipulating minimum five years and 20 aircrafts for domestic airlines to fly abroad. Last year, India scrapped that scheme to allow all airlines to fly abroad provided they deploy at least 20 aircraft for domestic operations. Fernandes now says flying abroad is not a rush for him any longer because his airline can do a lot in India, and would “love to” own 100 per cent in AirAsia India, a 49:51joint venture with the Tata Group. In an interview with ET at the Paris Air Show, Fernandes says AirAsia is already the lowest-cost airline in India and that he wants to make flying affordable for an ordinary taxi driver in the country. Edited excerpts: How has been your experience in India? My story of India is that when a taxi driver picked me from Delhi airport and told me that it took him four days to reach Delhi from Madras (Chennai). I was shocked. I asked him how much he can pay to fly. And he gave me a price. We are about two-thirds of the way to make that man fly. India is a country that I do not want to screw up. There has been so much opposition to us. Some of them are of our own doing. But I am happy with the way we are going and India is not a simple country, it is a complicated one, and that is further complicated due to intense competition. You mentioned about some mistakes of your own doing. Can you elaborate? I think there’s only one, which I do not want to talk about because it is quite well documented. We have done well. We have waited for the law to change. We are clear, and have a clear path moving ahead. There was so much opposition to us and we have been involved in issues, where we were not even involved, like the issue with the Tatas. They have been great partners. They have stuck with us and we have also stuck with them. Tyler Higbee Womens Jersey
Now, Airports Authority of India revises bidding norms for Jaipur, Ahmedabad airports
The Airports Authority of India (AAI) has reworked the bidding parameters for awarding operation and maintenance works of Ahmedabad and Jaipur aerodromes to private players amid the process hanging fire for over a year. Seeking to attract more bidders, the contracts would now be awarded for 15 years instead of the 10-year time frame while the same entity could be awarded the two projects. Along with putting in place revised parameters for bidders, the AAI has again extended the deadline for submitting the bids for Operation and Maintenance (O&M) of Ahmedabad and Jaipur airports. With the deadline being extended for the sixth time in nearly one year, the process for awarding the contracts would be further delayed. Jerian Grant Womens Jersey
Gaganning for aircraft glory
The Centre is soon expected to issue the notification to make GAGAN (GPS Aided GEO Augmented Navigation), the indigenously developed navigation system, mandatory for new aircraft registered in the country from January 1, 2019. This would enable the country to break free from the over-dependence on the international tech regime led by the Global Positioning System (GPS) of the US and Global Navigation Satellite System of Russia. It will also plug the gap in covering equatorial region. Sources in the Civil Aviation Ministry confirmed that GAGAN, jointly developed by Indian Space Research Organisation (ISRO) and the Airports Authority of India, is ready for full optimisation and has obtained an international certification for approach and precision landing operations (APV1/1.5) over the subcontinent. The Director General of Civil Aviation has conducted rigorous ground tests for two years meeting the prescribed international civil aviation requirements, said ISRO Chairman AS Kiran Kumar, adding that GAGAN-compliance would very soon be made mandatory for aircraft. “Any GAGAN-enabled receiver will provide accurate positional information which can be relied upon,” he said. India is only the fourth country in the world to have the capability to provide certified satellite-based augmentation services over its Flight Information Region, thus elevating it to the group of elite nations that can provide a platform for transition to satellite-based navigation. Patrik Nemeth Jersey
Govt divided over Air India future
The civil aviation ministry will prefer to sell off Air India’s subsidiaries to partially clear the national carrier’s huge debts rather than go in for an immediate privatisation. The ministry has objected to Niti Aayog’s proposal to sell off Air India as there will be no takers given the huge debt of Rs 52,000 crore. All the options to restructure Air India’s debt for a turnaround, including the Niti’s Aayog’s suggestion on privatisation, are expected to be taken up by the cabinet this month. According to the civil aviation ministry, hiving off some of Air India’s subsidiaries such as the engineering and ground handling units could raise cash; this and the restructuring of debt could nurse the airline back to health. ×”Trying to sell something which has few takers is bad strategy… and spending money to sell something is even worse,” said top civil aviation ministry officials. At the preliminary inter-ministerial meetings, the ministry has questioned the proposal to write off debts or restructure them just to make the carrier attractive to a private buyer. If such a step is indeed taken, the government can itself run the airline as Air India has started making profits, instead of bringing in a private party. Air India had made an operating profit of Rs 105 crore in the last fiscal. “We are saying that if the cost of privatisation is the government having to write off debt, then is it worth it?” officials said. Till now, the finance ministry has staved off any loan write-off plans, while the lenders are not too keen to restructure without seeing some money on the table. Officials consequently feel selling off subsidiaries could be a better way to earncash that could be brought to the table while negotiating a debt recast with lenders. Some of Air India’s subsidiaries are ground handling arm Air India Air Transport Services, Hotel Corporation of India (which owns Centaur at Delhi and Lake View in Srinagar), the charter business as well as engineering arm Air India Engineering Services. Officials feel the sale of the subsidiaries or even the sale of strategic stakes in them could fetch between Rs 20,000 crore and Rs 25,000 crore. Derrius Guice Authentic Jersey
ONGC gets green nod for exploratory drilling in KG basin
State-owned Oil and Natural Gas Corporation (ONGC) has received environmental clearance for drilling five wells to explore shale gas and oil in the KG basin of Andhra Pradesh at an estimated cost of Rs 217 crore. ONGC has been operating in the Krishna Godavari (KG) basin for the past more than 35 years. The exploratory efforts so far have led to the discovery of 65 small-to-medium sized hydrocarbon fields with about 356 million tonnes (oil and oil equivalent gas) of initial in-place on-land reserves. The current production of oil and gas is 750-800 tonnes per day and 2.5-3 million cubic metres of gas, respectively, from various facilities in this area. Since the KG basin holds significant promise for additional reserve accretion, the petroleum ministry is keen on continuing the exploratory activity. Against this backdrop, the ONGC proposal for further exploration of shale gas and oil in the KG basin was examined by the environment ministry. “The proposal was first vetted by the expert appraisal committee. Based on its recommendation, the environment ministry has given the final environment clearance to ONGC for exploratory drilling of five wells in the KG Basin,” a senior government official said. The approval has been given subject to certain conditions, the official noted. According to the proposal, the ONGC plans to drill wells in the on-land PML blocks in West Godavari, Bantumilli extension, Suryaraopeta, Mahadevapatnam and Mandapeta in Krishna, West Godavari and East Godavari districts to assess the hydrocarbon potential of shale. The project is estimated to cost Rs 217 crore. About 5-6 acres of land to drill each well will be required and the duration of drilling will be 90-120 days per well. All these wells will be drilled with water-base mud only, it added. The exploratory wells are drilled to assess presence of shale gas, which also provide leads for initiating further exploration programmes to exploit huge potential of shale gas resources for ensuring energy security of the country. India’s known oil and gas reserves form a mere 0.8 per cent of the world reserves of petroleum. ONGC is the largest producer of oil and gas in the country, contributing 72.4 per cent of the crude oil and 48.5 per cent of the natural gas production. At present, over 78 per cent of India’s oil requirements are being met through imports. Marcus Williams Jersey