PIA cancels flights to northern cities over Indo-Pak tensions
Pakistan’s national flag carrier PIA today cancelled flights to northern Pakistani cities due to “air space restrictions” in the wake of Uri terrorist attack. Pakistan International Airlines (PIA) called off flights to Gilgit and Skardu in Gilgit-Baltistan region in Pakistan- occupied-Kashmir (PoK) and Chitral in Khyber-Pakhtunkhwa province. “As per directives of CAA (Civil Aviation Authority), the air space over Northern areas will remain closed on Wednesday. Inconvenience regretted,” PIA spokesperson Danyal Gilani said on Twitter. He did not give any reason for closure of air space but officials said that Pakistani warplanes might be in the air to keep vigil due to Indo-Pak tensions after the Uri attack. Eighteen soldiers were killed and over a dozen others injured as heavily armed militants stormed a battalion headquarters of the Indian Army in North Kashmir’s Uri town early Sunday. Four militants involved in the terror strike were killed by the Army. Taurean Prince Jersey
Bad days for national oil companies to continue, Fitch says
The National Oil Companies (NOCs) in South and South-East Asia unlikely to return to positive free cash generation in the next two years, said a Fitch Ratings report. Most of the NOCs reported poor financial result for the first half or first quarter ended on June 30 due to a fall in average oil and gas prices from a year ago. Revenue and EBITDA declined over this period for Malaysia’s Petroliam Nasional Berhad (PETRONAS); Thailand’s PTT Public Company Limited; and India’s Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited. “Revenue fell for Indonesia’s PT Pertamina (Persero), but it was the only NOC with higher EBITDA because its downstream businesses performed strongly due to state fuel pricing policies”, the report said. The rating agency predicts that the leverage of these companies to remain high in 2016 and in 2017, based on their earlier forecast of lower operating cash flows and high capex. It also expect the 2016 performance of these NOCs to remain weak under the agency’s average Brent price assumption of $42 per barrel of oil equivalent. To counter the weaker earnings, the NOCs have started reducing costs, but there is very limited room for further opex cuts, the report said. The rating agency mentioned that the ability to sustain lower capex will vary among these issuers. For instance, Thailand’s PTT has limited capex flexibility because it has the weakest reserve replacement ratio (RRR), which is a metric used by investors to judge the operating performance of an oil & gas companies, among Asian investment-grade NOCs. Muralidharan R, Director, APAC Energy & Utilities, Fitch Ratings, in a report titled ‘South & South-East Asia National Oil Cos Dashboard’, said that the NOCs’ exploration and production businesses will remain weak on the back of lower realised prices, although production volumes will remain largely stable. Further, on the prices front, Muralidharan said, “Oil prices improved in 2Q16 from a year earlier, which boosted performance. However, we do not expect the price growth to be sustained in 2H16.” Commenting on the Indonesia’s Pertamina, Malaysia’s PETRONAS and Thailand’s PTT, the report said that the standalone credit profiles of these companies will benefit from their integrated businesses- cash generation from mid- and downstream operations offset the weaker upstream segments. Energy price reforms in India, Thailand and Malaysia have been largely positive for NOCs, but implications of reforms in Indonesia are mixed for Pertamina. Its downstream margins may narrow in 2H16, given government-directed changes to retail prices have not so far adjusted for higher crude oil prices”, Muralidharan said. However, the rating agency expects NOCs to continue to have low rating headroom due to weak earnings from low prices which will put pressure on their standalone financial profiles in 2016. Ryan Groy Jersey
ONGC’s Kutch offshore block to start gas production after a year
In what may help India’s plan to move towards a gas-based economy, state-run Oil and Natural Gas Corp. Ltd’s (ONGC) Kutch offshore project is expected to start gas production after a year, said A.K. Dwivedi, director-exploration. This comes at a time when production is declining from ONGC’s assets. Its crude oil output fell to 6.34 million ton (MT) in the June quarter compared with 6.48 MT last year. Similarly, its gas production was down 5.6% to 5.49 billion cu. meters (bcm). “ONGC made gas discovery in exploratory well GK-28#10 (GK-28-L) in GK-28 PML in Kutch Offshore of Western Offshore Basin. This is the first gas pool discovered in Deccan basalts in entire Western Offshore and may prove significant in terms of adding much needed critical gas volumes to GK-28/GK-42 development project,” ONGC said in a 11 February statement. “We are assessing the potential of this project, this shall continue for a year after which we intend to begin production which shall primarily consist of gas,” said Dwivedi. India has set a target of natural gas contributing 15% to India’s energy mix from the current level of 6.5%. This will involve the public sector unit ramping up its production. However, domestic production is falling. India’s domestic gas production fell by 4.7% to 31.14 bcm in financial year 2015-16 from 32.69 bcm a year ago. According to the 2015-16 annual report of ONGC, the public sector unit’s oil and gas production accounts for 70% of country’s hydrocarbon output. India has 26 sedimentary basins covering an area of 3.14 million sq. km. out of which 7 basins have established commercial productions in progress. India has total reserves of 763.476 MT of crude oil and 1,488.73 bcm of natural gas. “We are working on it (project) through cluster development and currently there are appraisal drillings going on,” added Dwivedi. Experts believe that given India’s target for clean fuel sources, natural gas production has to be exponentially increased. “To reach the target of 15%, current production has to be more than doubled. While it is early to judge the contribution of the project to India’s energy mix, it is surely a step in the right direction,” said R.S. Sharma, former chairman and managing director, ONGC. According to ONGC’s Perspective Plan 2030, it plans to produce 130 MT of oil and natural gas with 70 MT coming from its domestic production and the rest from its overseas subsidiary, ONGC Videsh Ltd. New England Patriots Jersey
RGU wins funds to draw up training programme for Indian oil and gas workers
The UK Government has awarded Robert Gordon University (RGU) funding to identify and close skills gaps in India’s energy sector. As part of the six month project, RGU will come up with a programme for training workers in India, a country which is looking to become more energy independent. Today’s announcement from RGU comes a week after Indian Petroleum and Natural Gas Minister Dharmendra Pradhan and his delegation visited the university. Also last week, RGU revealed plans to carry out a similar project in Mexico. The university secured funding for both initiatives from the government’s £1.3billion Prosperity Fund, which was set up to promote economic reform and development in “partner countries”. Indian authorities are currently planning to develop a deep water block in the Krishna-Godavari Basin, which lies off the country’s east coast. Professor Paul de Leeuw, director of RGU’s Oil and Gas Institute, said: “India has an ambitious and exciting agenda for its oil and gas industry, which will require significant investment in local skills development to ensure the country can meet its growing energy demand. “We are delighted to undertake this important project, which will help build the foundations upon which India can grow its skill base to fully exploit and benefit from its hydrocarbon reserves, strengthen its economy, drive innovation and provide increased employability prospects for its people.” Pat Elflein Jersey
India wants to add UAE, Saudi oil for strategic reserve
ndia is talking to the United Arab Emirates (UAE) and Saudi Arabia to fill half of the 1.5 million tons (mt) of the Mangalore strategic storage, along with Iranian crude, Minister for Petroleum and Natural Gas said on Wednesday. Dharmendra Pradhan told a news conference India is exploring two to three other models for sourcing oil to fill the remainder of the storage. During Saudi Arabia Energy Minister Kahlid A. Al-Falih’s visit to New Delhi in October, India plans to discuss the filling of the Mangalore strategic storage, and investments in refinery and petrochemical projects. Globally, most of the biggest crude oil consuming countries have a strategic storage capacity of at least 50 days, but India currently stands less than 10 days. In 2005, the Oil Ministry had set up Indian Strategic Petroleum Reserves Ltd (ISPRL) to build strategic storages in India. Under phase I of development, the company has built a total of 5.33 mt of storage capacity in three locations – Vizag (1.33 mt), Mangalore (1.5 mt) and Padur (2.5 mt). Only Vizag is currently operational. Kevin Faulk Womens Jersey
Cabinet approves 40% funding for gas pipeline project, city gas distribution in east India
In what may boost the infrastructure development of eastern India and help the country move towards a gas-based economy, the government has decided to provide a viability gap funding of 40% to GAIL (India) Ltd to construct the Jagdishpur-Haldia and Bokaro-Dhamra gas pipeline project. The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved grant of around Rs.51.76 billion for the project which has an estimated cost of Rs.129.40 billion. The project will encompass five states—Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha—and connect them to the national gas grid. “The gas pipeline that seemed a distant reality was taken up by the Cabinet today and the government has worked on its economic framework,” said minister for petroleum and natural gas Dharmendra Pradhan in New Delhi while addressing a press conference. He added that this is for the first time after a long gap that the government plans to invest in oil infrastructure. As part of the National Democratic Alliance government’s plans to move towards clean energy sources, Pradhan has set a target of natural gas contributing 15% to India’s energy mix. The country is also planning a natural gas hub for market pricing discovery, as reported by InfraCircle on 14 September. The 2,539km long pipeline will also cater to the three urea production units, which the government is reviving at present, and they will act as the anchor customers of gas, required in the production of fertilisers, from these pipelines. The units are at Barauni in Bihar, Sindri in Jharkhand and Gorakhpur in Uttar Pradesh. The Cabinet had on 13 July approved the revival of these units with an overall investment of Rs. 180 billion through the special purpose vehicle route. The pipeline will also service refineries at Haldia (West Bengal), Barauni and Paradip (Odisha). The ministry estimates that the pipeline, which is being constructed by GAIL under three phases, should be completed in about two-and-a-half years. Experts say the decision opens up the window for future viability funding in the pipeline circuit. “It portrays the positive attitude of the government. It surely is looking at expanding its pursuits,” said R.S. Butola, former head of Indian Oil Corp. Ltd. Pradhan also said that gas pipeline will also aid the food processing units in 25 industrial towns which require gas. “Though foreign direct investment (FDI) has been allowed in food processing business, lack of infrastructure and facilities was hurting,” added Pradhan. The government had allowed 100% FDI in marketing of food products produced and manufactured in India in the general budget of 2016-17. In a related decision, the CCEA also approved development of city gas distribution (CGD) pipeline in eight cities—Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneshwar and Cuttack—which have a combined population of 12.5 million. Pradhan said that a total of Rs.190 billion will be spent on the CGD project. This shall help provide piped natural gas in east India which till date was available in other parts of the country, added Pradhan. As per the Petroleum Planning Analysis Cell, part of the ministry of petroleum and natural gas, India’s gas pipeline grid length is 16,250km. The country’s domestic gas production fell by 4.7% to 31.14 billion cu. metres (bcm) in financial year 2015-16 from 32.69 bcm in the previous year. Janoris Jenkins Womens Jersey
20 airports ready for regional flights: AAI chief
As the Centre finalises the contours for the ambitious ‘Regional Air Connectivity’ scheme, the Airports Authority of India today said as many as 20 un-utilised airports were ready to start operations for regional flights. Another 30 airports can be made ready for operations under the Regional Connectivity Scheme (RCS) by making “some investments”, AAI Chairman Guruprasad Mohapatra said. Under the scheme, announced in the new civil aviation policy, the ministry has proposed capping fares at Rs 2,500 for one-hour flights on un-served and under-served routes besides various financial concessions for airlines. Speaking to reporters here, Mohapatra said 20 unutilised airports owned by AAI were ready from where flights under RCS can take off. He said the government plans to have no-frills airports for regional air services and AAI was studying the design parameters for such aerodromes. RCS refers to operation of an air transport service between any two airports, of which at least one has been declared by the Central government as un-served or under-served, according to the draft rules. There are 394 un-served and 16 under-served airports in the country. Under-served aerodromes are those which have less than seven flights a week. Under the new civil aviation policy, the Airports Authority of India would be the nodal agency for implementation of RCS. Mohapatra said cost of setting up an airport depends on the size. “Today the construction cost is about Rs 1,00,000-1,10,000 per sq metre of the terminal building,” he said. About Juhu airport in Mumbai that is at present used for helicopter operations, he said AAI has appointed a consultant to study the feasibility of using the runway for non-scheduled flight operations. The AAI chief added that since runway extension from one side was not possible due to land constraints, various other options including extending the runway into the sea, were being explored. Rod Carew Womens Jersey
NTPC bullish on power demand, to add 24 GW at Rs 1.6 lakh cr
Amid global economic uncertainty, state-owned NTPC remains sanguine about domestic electricity demand and has planned a total capacity addition of 24 GW entailing an investment of Rs 1.6 lakh crore. “Various projects of the company having an aggregate capacity of around 24 GW are under implementation at 23 locations across the country,” NTPC CMD Gurdeep Singh said while addressing the company AGM today. Singh said, “This (24 GW) includes 4,050 MW being undertaken by joint venture and subsidiary companies. This translates into a capex of about Rs 1,60,000 crore.” The installed capacity of the NTPC group today stands at 47,228 MW, which includes 800 MW of hydro and 360 MW of solar generation capacity. The company has planned an all-time high stand-alone capex of Rs 25,960 crore exceeding the MoU target of 23,000 crore (with the power ministry) and the NTPC group capex stood at Rs 32,091 crore last fiscal. Singh is of the view that the national trends suggest a promising future for NTPC despite the overall atmosphere of uncertainty in the global business scenario. “India is the fastest growing major economy in the world with a huge potential appetite for power consumption… On September 9, 2016, actual energy demand met in India was all-time highest at 3,539 MU and NTPC (with group entities) contributed 866 MU (million units),” he said. “Thus, green shoots are visible as far as upswing in power demand goes and this is in line with our long held expectations of growth.” NTPC has commissioned 10,125 MW in the Twelfth Five Year Plan (2012-17) so far and aims to commission around 4,500 MW more during 2016-17. He also said that under UDAY scheme for revival of debt-laden discoms, bonds worth about Rs 1.66 lakh crore have been issued, relieving the balancesheets of state utilities and thereby enabling higher capacity utilisation by generators. He further informed shareholders that with about 7 billion metric tonnes of geological reserves estimated at its 10 coal blocks, NTPC expects to produce about 107 million tonnes of coal per annum. He also told that the mining operations have commenced in Pakri Barwadih and the company has progressed well in other coal blocks too. The company has moved forward on coal freight rationalisation, thereby reducing coal transportation cost. With improved domestic coal supplies, NTPC has been able to minimise import of coal. With these steps, it has been able to reduce the tariff by 14 paise (4.3%) in the first quarter of 2016-17 from a year ago. Kevin Hayes Jersey
Government looks to change rules to boost piped gas consumption
The government looks to overhaul its city gas distribution policy to clear major hurdles holding back expansion of piped cooking gas in the country. The government has started work on reviewing rules, which companies say need to be changed to encourage them to take up gas distribution in cities and set up gas stations on highways without time-consuming procedures and unnecessary costs. The government aims to treble its domestic piped gas consumer base to one crore by 2019, a target set by Prime Minister Narendra Modi who presided over a deeper penetration of piped gas in Gujarat during his term as chief minister of the state. But at the current pace — the country added barely 3 lakh new domestic piped gas consumers in 2015-16 — the target is unlikely to be met, oil ministry officials said. At the beginning of the current fiscal year, the number of domestic piped gas consumers stood at 31.6 lakh. This has driven the oil ministry to set up two committees, with members from small and big city gas companies and Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator. One committee will look at making the bidding process more effective by suggesting a replacement of the current process where fewer cities attract bid in auctions and all bids offer the same tariff, the key competing criterion. The other panel will suggest ways to deal with key obstacles city gas companies face such as high restoration charges levied by local authorities, and delays in obtaining permissions. The panels are to submit their reports by the end of this month, following which the oil ministry will initiate changes. “The current bidding parameters are not working well. So the panel will look at other possible parameters,” said an oil ministry official. In the sixth round of city gas distribution auction at the beginning of 2016, 14 of the total 34 geographical areas, or districts, received no bid while six attracted just one bid each. Similarly, last year, of the 20 districts, eight got no bid and two got just a single bid each. A scan of some bids in previous auctions shows all gas companies offered Rs 0.01 per unit as network tariff bid and also as charges for compressing natural gas, the two key price bid criteria, forcing the regulator to pick winners on the basis of the bid bond value. Bidders submit a bank guarantee that’s forfeited if the winner does not take on the job in time. Some gas companies have suggested switching to viability gap funding model with the company seeking the lowest support getting the contract. Besides this, another key impediment is the way areas are defined for auction: A geographically large district with mainly rural population makes a project less attractive. Some gas companies consider the minimum targets on laying pipelines and connecting households also challenging. Missing targets result in companies losing their bank guarantees. The government is also separately figuring out a framework to allow gas pumps on highways that can make it easier for gas-run vehicles to go to other cities. Nick Perry Womens Jersey
ONGC plan to increase oil production
In line with North East Hydrocarbon Vision-2030, ONGC’s management is concentrating on augmentation of oil and gas production from the region. In this connection, the newest asset of ONGC was visited by director (onshore) VP Mahawar recently. Mahawar inaugurated two 400 m3-capacity tanks and one bachelor accommodation named after river Dayang. Mahawar appreciated the efforts of the asset team headed by ED asset manager RK Vij to increase the production up to 400 tpd (tons/day). Expressing satisfaction over the progress of the asset in a very short period of time, he said, “The two new tanks will improve the process of management at Borholla GGS. The new accommodation facility will improve the quality of life of ONGC field personnel working near the Assam-Nagaland Border,” said a press statement. Latrell Sprewell Authentic Jersey