ONGC hires consultant to assess reserves in GSPC KG gas block
State-owned ONGC has hired US-based consultant Ryder Scott to assess natural gas reserves in Gujarat State Petroleum Corp’s (GSPC) Deendayal block before deciding to buy a stake in it. Since the BJP-led government came to power at the Centre, the Gujarat government firm GSPC has been seeking to sell a majority stake in its KG-OSN-2001/3 (Deendayal) block in Bay of Bengal to ONGC to avoid defaulting on loans. ONGC initially was not keen to buy stake in the block as it felt the block had reserves far less than what GSPC was claiming and the asking price for the stake was not commensurate with the returns. “There is tremendous amount of pressure on ONGC to buy stake in GSPC block,” a source with direct knowledge of the matter said. “Being a commercial organisation, it cannot throw away money so it has now decided to get the reserves in the GSPC block validated.” Ryder Scott Petroleum Consultants has been asked to evaluate gas properties in the GSPC block and independently certify the reserves quantities, the source said. “The consultant will submit its report by November,” he said. GSPC was to begin gas production from the block in 2013 but after sinking in USD 3.6 billion it was found that gas reserves are one-tenth of 20 trillion cubic feet claimed in 2005 and that too is technically difficult to produce. In the process it has amassed Rs 19,576 crore of debt, on which interest cost was Rs 1,804.06 crore in 2014-15, according to the CAG. And against this its revenue was Rs 152.51 crore in 2014-15. Sources said GSPC has been doing trial production of a very small volume of gas from August 4, 2014 and has not yet reached commercial production and in absence of revenue commensurate with the debt servicing obligations it risks becoming a defaulter. To bail out of the situation, it offered to sell 50 per cent stake to ONGC, they said. Money from ONGC can repay a part of the debt and the remaining would become a joint liability of the two firms. M.J. Stewart Jersey
Not overlooking aircraft maintenance: Centre to High Court
The Centre has refuted in Delhi High Court the claim that civil aviation authorities are overlooking the alleged violation of aircraft maintenance schedules by airlines, endangering passenger safety. The Civil Aviation Ministry and the Director General for Civil Aviation’s (DGCA) denied that various private airlines operating in the country were “violating/circumventing the mandatory provisions for airworthiness and air safety”. The submission was made before a bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal during hearing of a PIL alleging that aviation authorities were overlooking the prescribed maintenance schedules and sought directions to them to ensure safety of passengers on aircraft flying in and out India. The counsel for the ministry submitted that till date they have not received any complaint regarding any deficiency in aircraft services. It further said that the petitioner, advocate Alok Kumar, was a frequent flyer, yet he was alleging there were no safety measures in the flights. The bench then asked the petitioner to give suggestions with regard to safety requirements in aircraft and listed the matter for further hearing on October 19. Matt Paradis Jersey
Aviation fuel demand rebounds
State-run oil marketing companies (OMCs) are seeing a rebound in demand for aviation turbine fuel (ATF), with airline companies flying high on improved operations and profitability. Data on ATF consumption with the Petroleum Planning and Analysis Cell of the government show a jump of nine per cent in 2015-16 to 6.2 million tonnes. In the four years between FY12 and FY15, the consumption had an annual compound growth of only one per cent. Indian Oil Corporation (IOC) saw a six to seven per cent rise in FY16, said a company official. It is the largest ATF supplier. Consumption and sales volumes for oil companies might differ slightly, due to imported ATF volumes; also, the data for FY16 is provisional. In recent years, airlines had scaled down operations. In October 2012, Kingfisher Airlines stopped plying. Financial woes also forced SpiceJet to scale down between 2014 and 2015, before a new investor stepped in and improved both operations and performance. “The improvement in FY16 was due to SpiceJet scaling up operations and the entry of new airlines AirAsia and Vistara,” the IOC official said. “We expect the volumes to grow at six-seven per cent for the next two to three years.” Josh Donaldson Womens Jersey
ATF — cheaper but still dear
Earlier this year, in March, the country’s leading private sector airlines — IndiGo, Jet Airways, SpiceJet and GoAir — accused the public sector oil marketing companies — Indian Oil, HPCL and BPCL — of profiteering on aviation turbine fuel (ATF). These oil companies supply about 95 per cent of the ATF across India’s airports and reset the fuel’s price on the first day of each month. Urging disclosure of the “ambiguous” and opaque price discovery mechanism for ATF, the airlines alleged that the benefit of the sharp fall in crude oil prices since 2014 had not been passed on. The 12 per cent hike in ATF price in March was being paid under protest, the airlines said. Indian Oil, the largest ATF supplier, was quick to refute the allegations. There was no monopolistic situation in ATF supply and pricing, the oil major said, adding that airlines were free to import the product, and that it is inappropriate to compare ATF price in an oil importing country such as India with that in oil exporters. ATF price had reduced sharply since 2014, Indian Oil said, asking for good measure whether airfares had reduced commensurately. While the argument continues, the truth, as always, seems to lie somewhere in the middle. ATF prices have evidently come down over the past two years. At about ?47,200 a kilolitre in Delhi, the fuel is today about 32 per cent cheaper than it was in end June 2014 (about ?69,800). But the drop is much lower than the 60 per cent dip in the cost of the Indian crude oil basket over the same period — from $109 to $43.5 a barrel. Three factors account for this — the pricing mechanism, taxes and exchange rates. Germain Ifedi Authentic Jersey
CISF gears up to thwart terror strikes at Indian airports
The Central Industrial Task Force has deployed quick reaction teams (QRTs) at airports, trained its personnel and strengthened its capability to counter terror strikes. “We are gearing up to counter any attack in the manner of Istanbul or Brussels (terror attacks). Our people are already trained. We have deployed QRTs behind bullet-resistant (bullet-proof) ‘morchas’, so that if terror elements fire they will not be able to get us,” a senior CISF official said. After the Istanbul and Brussels incidents, the CISF has formulated strategies to thwart such attacks at Indian airports guarded by it. “With the recent attacks in Brussels and Istanbul, attacks from the city-side have become more prominent. So, we are devising ways and means to counter such attacks,” the official told PTI. “We have started checking at the ‘nakas’ now. Any suspicious vehicle going to airport will be stopped and checked with the help of sniffer dogs and electronic explosive detectors,” he said. In addition, QRTs have been deployed at the arrival and departure side of airports. “If they (QRTs) find any suspicious person coming out with weapon or attempting to fire, our teams have been instructed to fire back to counter the terrorist attack. We have the capability to fire back at them and neutralise them. We are going into that mode now,” he said. Coty Sensabaugh Womens Jersey
Punjab government’s move to increase length of Chandigarh airport runway draws a flak
Residents and city-based NGO Amritsar Vikas Manch have criticised the Punjab government’s decision to increase the length of Chandigarh airport runway to accommodate flights to the United Kingdom (UK). They were reacting to the statement of Vishavjit Khanna, secretary, Civil Aviation, Punjab, in which he stated that the government was trying its best to increase the length of the runway of Chandigarh airport to 10,500 feet so that long haul flights to destinations like UK may be started for the people of the state. A city resident Manmohan Singh said the SAD-BJP coalition government never evinced similar keenness to restart the withdrawn Amritsar – London – Toronto flights of Air India from Sri Guru Ram Das Jee International Airport. Amritsar airport is catering to international flights since 1960. At present five international airlines — Turkmenistan, Uzbekistan, Qatar, Malindo of Malaysia and Scoot of Singapore — are operating 42 international flights per week, along with Air India Express and Spice Jet, which have flights for Dubai from the holy city. Its popularity can be gauged from the fact that even now Air Inida’s Amritsar– Delhi – London indirect hub and spoke flight has won the distinction of being number one among its all international flights operating from Delhi in 2015-16. Rashaad Penny Jersey
Iran-Pakistan gas pipeline must be top priority
Economist and former finance minister Dr Hafiz Pasha believes that Iran-Pakistan (IP) gas pipeline project is the most viable and feasible energy project for Pakistan and needs to be completed at the earliest. In an Interview with IRNA, Dr Pasha said that the gas pipeline project should be the top priority in Iran-Pakistan relations. “This project has to be revived at the earliest, because it is most viable and feasible project for Pakistan,” he noted. Pasha said that as compared to other energy projects including Turk¬menistan-Afghanistan-Pakistan-India (TAPI), CASA-1000 and Qatar LNG, the IP gas pipeline is the most suitable project. “Price of the IP is very attractive and it should be the first priority for Pakistan,” he stressed. Expressing his views Pasha said that Pakistan should also try to sign bilateral trade agreement with Iran with special focus on the exports of rice and textile products from Iran and import of oil products and other things from Iran. “So far we don’t have any such agreement with Iran,” he noted. “We should take immediate steps to enhance our trade with Iran after removal of sanctions from the Islamic Republic,” he said, adding after the lifting sanctions, new opportunities are emerging in Iran and being first neighbour of Iran, Pakistan should take advantage of this situation. The economist added that strong economic and trade ties are in the interest of both Iran and Pakistan. He said that the current volume of trade between Iran and Pakistan is less than its potential and capacity of the neighbouring countries. “But I again insist that the IP gas pipeline should be the top priority in Iran-Pak ties, we are importing LNG from Qatar which is quite far away and expensive,” he said. The former minister went on to say that IP is more important for Pakistan because of its proximity and the price is very reasonable. Iran-Pakistan (IP) gas pipeline project, once known as the ‘Peace Pipeline’, is about 1,900-kilometre long pipeline which will transfer natural gas from Iran to Pakistan when completed. Tre Madden Authentic Jersey
Oil showing positive bias, but attempt to freeze output may hit Iran, Iraq roadblock
WTI and Brent crude traded with a positive bias in the past fortnight, rising around 7.5 and 6.5 per cent, while MCX oil prices gained around 8 per cent in the same time frame. Comments from the Saudi Energy Minister about possible action to stabilise prices triggered a round of buying and the International Energy Agency forecast crude markets to tighten in the second half of 2016. Saudi Energy Minister Khalid al-Falihsaid Opec members and non-members would discuss the market situation, including any action that may be required to stabilise prices, during an informal meeting on September 26-28 in Algeria. Oil rallied with few stops over the past two weeks, going from a bear to bull market, as it reversed a loss of more than 20 per cent in early August on speculation that Saudi Arabia and the rest of the Opec nations will agree to a production freeze with Russia and other non-Opec members. However, Iran, the third-largest producer in the Opec, had earlier this year refused to join such an attempt by the group and non-Opec members led by Russia to stabilise production. Tehran has been boosting oil output since the lifting of the western sanctions in January. News of its potential support for a production freeze helped halt an abrupt slump in crude prices. Iraq’s Prime Minister said the country had not yet reached its full oil market share, suggesting his government would not restrain crude output as part of any possible Opec agreement to lift prices. Despite rebounding this year, oil still trades at less than half of mid-2014 levels, with the market still worried about a glut that spurred the biggest price rout in a generation. The selloff has battered the economies of Venezuela, Iraq and Nigeria, which are more anxious to boost crude prices than major Opec producers. On the other side of the globe, China’s July diesel and gasoline exports soared 181.8 per cent and 145.2 per cent, respectively, from the levels reported for the same month last year, putting pressure on refined product margins. Iraq planned to increase exports of Kirkuk crude by 150,000 bpd from its northern fields while Nigerian rebels who regularly attacked oil facilities in the country earlier this year said they were ready for a ceasefire. US drillers added 10 oil rigs in the week to August 19, the eighth straight week of rig additions, as crude rebounded toward the $50 a barrel mark that makes drilling viable. Johnny Oduya Authentic Jersey
RIL focuses on domestic market for refined products
Mukesh Ambani-led Reliance Industries (RIL) is looking to increase focus on the domestic market for its refined products, a company official said on Friday. “We will focus more on India, where we see scope for growth. We will also focus on the East for exports,” said an RIL official, who did not wish to be named. On July 15, in its results press statement, RIL said its exports of refined products from India were at Rs 286.10 billion during the April-June 2016 quarter, compared to Rs 323.52 billion in the same period a year ago. In terms of volume, exports of refined products were at 9.8 million metric tons (MMT) during the April-June 2016 quarter, compared to 8.5 MMT in the corresponding period a year ago. RIL expects growth in India’s diesel and gasoline consumption for the next 10-15 years, as the country’s economy and disposable income increase. For the financial year 2015-2016, India’s industry sales for petrol rose 15 per cent, to 21.84 million tons (MT), and sales for diesel rose eight per cent to 74.63 MT, according to data available with the Petroleum Planning and Analysis Cell. Ratings agency India Ratings & Research (Ind-Ra), in its outlook for FY17, said, “Growth was driven by strong pick-up in automobile sales, particularly passenger vehicles. Ind-Ra expects petrol consumption to further increase by eight to 10 per cent in FY17, driven by strong passenger vehicle sales.” Diesel consumption, the rating agency said, is likely to grow by five to six per cent on improved sales of commercial vehicles, however, offset to some extent by lower consumption of diesel in power backup. RIL is also in the process of reopening its 1,400 retail outlets, which were earlier mothballed. So far, the company has restarted operations at more than 1,000 such outlets. The company official added the expected growth will help support the company’s gross refining margins (GRMs). In the April-June 2016 quarter, RIL reported GRMs of $11.5 per barrel, higher than the $10.4 per barrel seen in the same period a year ago. For its liquefied petroleum gas (LPG) business, the official said, “We are looking at all options in India, including LPG. Our market is small, as our customers do not get subsidised. We reach areas where the public sector companies do not reach, and with subsidy coming down, our products will become more economical.” FUEL PROSPECTS • In 2015-16, India’s industry sales for petrol rose 15 per cent to 21.84 MT, and sales for diesel rose eight per cent to 74.63 MT • Ratings agency Ind-Ra expects petrol consumption to increase by eight-10 per cent in FY17 • Diesel consumption set to grow five-six per cent, says Ind-Ra Joshua Garnett Authentic Jersey
CBM pricing tweak
The government plans to come out with a new pricing formula for coal bed methane as part of the Hydrocarbon Exploration Licensing Policy (HELP). “A new pricing and marketing policy for the CBM would soon be made to make it attractive for investors,” a senior oil ministry official said. In 2014, the new domestic natural gas pricing guidelines also covered CBM blocks. This resulted in CBM gas beyond this date to be priced at natural gas rates, which is now about $3.06 per mBtu on gross calorific value (GCV) basis. According to latest estimates by the ministry the gas price could drop to a low of about $2.25 or $2.50 per mmBtu from October 1. CBM is natural gas trapped within coal formations and commercially unviable for mining. It is extracted by drilling holes into the seams. Officials said the ministry plans to hold consultations with stakeholder on pricing and marketing of CBM before coming out with a specific policy as part of HELP. The government is still in the process of working out the nuances of HELP contracts, and a fresh round of hydrocarbons auctions will be conducted under this regime. The sector also has differential pricing, which would be addressed, officials said. The existing pricing regime has created a divide in the industry with two firms – Essar Oil and GEECL – being able to sell CBM gas at pre-approved (high) prices of $6 and $15/mBtu, respectively. However, RIL and ONGC, which are gearing up to start production, would have to follow the natural gas pricing formula. Phillip Danault Authentic Jersey