Oil losses mount as world markets hit by Brexit woe
Oil prices fell further in Asian trade today, tracking losses across equities and currency markets as fresh fears about the impact of Britain’s exit from the EU sent investors fleeing high-risk assets. A warning from the Bank of England that there was evidence risks from the June 23 Brexit vote “have begun to crystallise” sent shudders through world markets, with the pound diving to levels not seen since mid-1985 and stock markets diving. The uncertainty unleashed by Europe’s second biggest economy leaving the European Union battered the oil market this week, with Brent diving 4.3% and West Texas Intermediate shedding 4.9% yesterday. The contracts today extended the losses. At 0330 GMT Brent was down 30 cents, or 0.63%, at $47.66, while WTI eased 33 cents, or 0.71%, to $46.27. The two are well down from the levels above $52 touched at the start of last month. “Uncertainties and concerns over how Brexit will influence the market is expected to last for a long time, increasing volatility in oil prices,” Will Yun, commodities analyst at Hyundai Futures in Seoul, told Bloomberg News. “Even when we see a decline in stockpiles in the US, it’s not strong enough to push prices up unless there are some major production cuts.” Adding to the downward pressure is news that oil cartel OPEC had boosted output in June, adding to an already painful global oversupply. Ernie Stautner Jersey
India may offer opportunities for Houston’s oil services companies
Some Houston companies are poised to benefit as India begins doling out $27 billion in new contracts in an effort to cut fuel imports. Spending plans are ratcheting up and projects are restarting after the government in March announced pricing freedom for natural gas from deep-sea fields that begin production this year. Coming as the cost of rigs and services has halved, that’s prompted India’s largest explorer Oil and Natural Gas Corp. to launch its biggest development campaign yet. Reliance Industries Ltd. is preparing to restart work at four offshore oil and gas blocks. The flurry of activity is providing some respite to services companies, including Houston-based Schlumberger and Halliburton, and Technip, whose U.S. headquarters are here. Service firms were stung last year when explorers slashed more than $100 billion in spending as oil collapsed. Investments in India are growing to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 percent over six years as increased consumption puts the nation on track to become the world’s third-largest oil consumer. “In India, there are two to three major identified projects and they are probably bigger than anything else going on in rest of the world,” Technip India’s Managing Director Bhaskar Patel said in an interview. “India is a place where there is work available.” India’s hydrocarbon resources still remain highly undeveloped and the government’s new liberal approach is nudging companies to invest in tapping them. The measures are expected to boost gas output by 35 million standard cubic meters a day and unshackle projects worth 1.8 trillion rupees ($27 billion), Oil Minister Dharmendra Pradhan had said when the policy changes were announced. About 90 percent of the new spending would go to companies that provide services from drilling to testing and the laying of infrastructure. Halliburton is positioned to participate in “the country’s ambitious plans to increase its domestic production,” the company said in an emailed response to questions. “India plays a crucial role for sustained development in the region for Halliburton.” The Indian government’s initiatives will increase the pace of exploration, ONGC Chairman Dinesh Kumar Sarraf said. ONGC will contract deepwater drill ships and dozens of jack-up rigs for a $5 billion development program in the Krishna-Godavari Basin, he said. The company intends to spend 11 trillion rupees by 2030 to raise output. Reliance has held meetings with oilfield-services companies to restart work at four offshore oil and gas blocks, including one of India’s biggest natural gas discoveries, people with knowledge of the plan said in May. It plans to drill 21 wells in four offshore areas, including the deepwater KG-D6 block in the Bay of Bengal, the people said. India’s exploration binge still won’t be enough to compensate for canceled projects around the world as oil prices settle below 50-a-barrel of crude from more than $100 two years ago. Worldwide, the oil and gas industry will cut $1 trillion from planned spending on exploration and development because of the price slump, consultant Wood Mackenzie Ltd. said this month. Investing during the current down-cycle ensures lower costs for explorers as well as future returns over four or five years once oil recovers, Technip India’s Patel said. ONGC has reduced the cost of its Krishna-Godavari basin block by almost a third from earlier estimates of about $7 billion as prices slide for the contract rate for rigs and oilfield equipment and services. Offshore jack-up rigs, which used to cost $80,000 to $90,000 a day, are now available for less than $50,000, ONGC’s Sarraf said. “We could say there is 20 percent to 50 percent reduction in the cost of goods and services.” Despite the price competition, service providers are finding that an India strategy is critical given the scarcity of spending elsewhere. Finnish company Wartsila OYJ’s Indian unit sees opportunity here given the tough global environment. “In the exploration segments, if projects are coming up of course it’s an opportunity for us,” Kimmo Kohtamaki, president and managing director of Wartsila India, said. “We have matching products and no one else is investing. Everyone is laying off, it’s a tough market.” Fred Lynn Jersey
SCI to resume sailing to Iran, transport oil cargo for HPCL
After a four-year hiatus, Shipping Corporation of India (SCI) will resume sailing to Iran to ferry ‘transport crude oil’ from the Persian Gulf nation for state refiners. SCI, which was in 2012 forced to stop transporting crude oil due to unavailability of insurance cover for its ships following tightening of international sanctions against Iran, will resume sailing, initially to ferry crude oil for Hindustan Petroleum Corp Ltd (HPCL). This follows lifting of sanctions against Iran in January. The largest domestic shipping line will ferry the first cargo of crude oil from Iran something this month. “State-run HPCL has approached SCI for deputation of a vessel for importing crude oil. In-principle, it has agreed to it,” Shipping Secretary Rajive Kumar said. However, the exact date has to be fixed for transporting the oil cargo, Kumar said. Other state refiners Mangalore Refinery and Petrochemicals Ltd (MRPL) and Bharat Petroleum Corp Ltd (BPCL) too have contracted SCI for shipping oil from Iran. After SCI and other ship owners stopped ferrying Iranian oil, the Persian Gulf nation offered free delivery of oil to customers in India in its own vessels. This was aimed at keeping its key customers during the tough sanctions period. But with the lifting of sanctions, Iran has stopped free shipping and has since April started charing concessional rates. Essar Oil, which along with MRPL are the biggest buyers of Iranian oil, has already started making its own arrangements for shipping oil from Iran. The premier shipping line which owns and operates around one-third of the Indian tonnage, and services both national and international trades, has stopped sailing to Iran in 2012 as insurance cover for oil and cargo could not be obtained in the wake of sanctions targeting Iran’s nuclear programme. After lifting of sanctions in January, International Group of Protection and Indemnity (P&I) Clubs which insure the tanker market have been able to obtain cover from some markets, an official said. The largest domestic ship liner has a fleet of 69 vessels of which 17 are bulk carriers, 16 crude oil tankers and 14 product tankers and is planning expansion of its fleet. A Parliamentary panel has recently recommended that SCI buy fuel-efficient ships, replacing the old stock. “If the international market situations are viable, they may go for purchasing new fuel-efficient vessels in place of the old ones,” Parliamentary Standing Committee on Transport, headed by Kanwar Deep Singh, has said. The SCI was established in 1961, by the amalgamation of Eastern Shipping Corporation and Western Shipping Corporation. It owns and operates around one-third of the Indian tonnage, and has operating interests in practically all areas of the shipping business and servicing. Apart from being the largest shipping company in India, SCI exclusively operates in break-bulk services, international container services, liquid/dry bulk services, offshore services, passenger services. Dontari Poe Authentic Jersey
Petronet LNG plans Rs 50 billion terminal in Bangladesh
India’s biggest gas importer Petronet LNG Ltd has plans to set up a Rs 50 billion LNG import terminal at Kutubdia islands in Bangladesh as it looks to build terminals to feed demand in neighbouring countries. “We have proposed to construct a 5 million tons per annum capacity liquefied natural gas (LNG) import terminal at Kutubdia islands off Cox’s Bazar,” Petronet Managing Director & CEO Prabhat Singh told PTI here. The terminal will be besides 3.5 MT terminal at Bangladesh is looking to set up, for which Petronet is one of the firms that has been shortlisted. “Bangladesh has huge unmet gas demand particularly to power generation. So during the recent visit of Petroleum Minister Dharmendra Pradhan to Dhaka, we proposed to set up a 5 million tons capacity terminal on government-to-government basis,” he said. Besides Bangladesh, Petronet has also proposed to set up 1 MT LNG terminal in Sri Lanka to meet local demand. Singh said Kutubdia islands has a natural harbor with good draft and a natural breakwater, idle for setting up LNG terminal. The proposed terminal is besides the one Bangladesh is looking to set up at Matar Bari in Moheshkhali Island of Cox’s Bazar district or Anwara, Chittagong. The terminal, to be set up on the build-own-operate basis, will supply gas to power plants. Petronet is one of the five global energy firms shortlisted for setting up this LNG import terminal. The others shortlisted include Anglo-Dutch super-major Shell, China’s Huanqiu Contracting & Engineering, Tractebel Engineering of Belgium and Japan’s Mitsui. Bangladesh is looking at importing gas to ease its energy crisis in southeastern Chittagong region, which was once almost self-reliant in natural gas but started facing a supply crisis in 2006 as output diminished from the Sangu gas field. The country’s sole offshore gas well, Sangu-11, was permanently closed in October 2013. As a result, some plants are running below the capacity and a few have been shut due to non-availability of gas. Sources said the LNG terminal will supply gas to a proposed 1,000 MW combined cycle power plant as well as the existing power plants in Raozan and Sikalbaha through a planned pipeline. Brandon Sutter Authentic Jersey
OIL-IOC deal spoils OVL’s Vankor deal negotiations
OIL-IOC-BCPL combine’s USD 2.02 billion deal to acquire 23.9 per cent stake in Russia’s Vankor oilfield has spoilt ONGC Videsh Ltd’s chance of negotiating down the price for additional 11 per cent it is buying in the same field. OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), had in September last year bought 15 per cent stake in Russia’s second biggest oilfield of Vankor for USD 1.268 billion. In March this year, Rosneft agreed to sell another 11 per cent to OVL. Simultaneously, it struck a deal to sell 23.9 per cent in Vankor to a consortium of Oil India Ltd (OIL),Indian Oil Corp (IOC) and a unit of Bharat Petroleum Corp Ltd (BPCL). Sources said the board of OVL wanted the price of the additional 11 per cent stake to be renegotiated downwards. Going by the September 2015 agreement, OVL would have to pay about USD 930 million for the additional stake. But the company board was of the opinion that since it was picking up a sizeable stake in the field operated by US-sanctioned company, the asking price has to be renegotiated. But as OVL sought renegotiations, the OIL-IOC-BPCL consortium last month signed definitive agreements for buying 23.9 per cent stake in Vankor for USD 2.02 billion OIL-IOC-BPCL consortium has also agreed to pay interest to Rosneft till such time the deal is closed and all payments made, which is likely by September 30. Sources said Rosneft is now arguing that when the buyer of larger 23.9 per cent stake is willing to pay a price in line with the September 2015 deal, there remains no scope for negotiating it with a buyer who is picking up less than half, about 11 per cent. The 23.9 per cent stake would be split in the ratio 33.5-33.5-33 between IOC, OIL and Bharat PetroResources Ltd (a subsidiary of Bharat Petroleum Corp Ltd) — IOC and OIL will take 8 per cent stake each while the remaining 7.8 per cent stake would go to BRPL. Darren Fells Womens Jersey
Organic food tops shopping list in most homes during monsoon
The demand for organic food has shot up during the monsoon, as most are careful about hygiene during this season. When it comes to fresh produce, the organic market has become popular. Clean and fresh fruits, and hygienically packed vegetables and even spices and lentils are the biggest draws. The sales boom for this market confirms the rise in demand. While Navi Mumbai does have its share of consumers looking for organic products, there are not enough stores to meet the demand. An online grocery portal based in Koparkhairane has been flooded with orders. “Since our produce is more hygienically sorted and packed, customers prefer to buy online,” said a sales attendant. At most markets, the organic sections are separated and, of course, a tad more expensive. “I don’t mind paying a bit more if the veggies are cleanly grown and packed,” said Malini Deshmukh, a resident of Vashi. There are a number of producers who sell organic products at malls, and apart from the season’s best they also sell an assortment of herbs, salad greens and exotic vegetables. “We cater to a different section, they expect quality and they know it will be higher priced,” said an attendant. Here apart from fresh organic produce, one can also buy packed dried spices, whole and powdered, grains, lentils and cooking oils. Often consumers avoid products from the market because of hygiene issues. “Much of it is wet when it arrives. We have a hard time keeping them dry,” said Shiram Jaiswal, a vendor from Sanpada. Bobby Massie Authentic Jersey
Lifestyle International plans expansion as ecommerce threat fades
Lifestyle International, the Bengaluru-based retailer, has set a target of becoming a billion-dollar (nearly Rs 6,750 crore) turnover company by March 2017 by adding more stores, a top official said. “This will be the most aggressive expansion for the company post 2010. Our expansion plan is firm, we have been on track. But sometimes malls get delayed,” said Kabir Lumba MD Lifestyle International. The company clocked a turnover of Rs 5,700 crore during the last financial year. Lifestyle International operates stores under Lifestyle, Max and Home Center formats across major cities. The company plans to open around 25-30 Max stores, 10-12 Lifestyle stores and 3-4 Home Center forums in tier I and II cities including Bengaluru, Delhi, Agra, Indore, Lucknow and Howrah. “We started getting into tier II towns sometime back and we are seeing healthy traction across all regions for both tier I and tier II cities,” said Lumba. The company currently has around 230 stores across Lifestyle, Max and Home Centre formats in India. The Indian retail sector is seeing huge competition from e-commerce giants like Amazon, Flipkart, Myntra and Snapdeal. “Overall there is greater confidence among retailers. Earlier, there was threat from ecommerce platforms in terms of discounting, impacting footfalls. But this is diminishing now and is positive for retail industry,” said Devangshu Dutta CEO Third Eyesight, a retail consultancy firm. Globally, India is among the top 10 retail markets. According to a recent report by Confederation of Indian Industry (CII) and consulting firm The Boston Consulting Group, the retail sector in the country will double to levels of $1.1-1.2 trillion by 2020 from $630 billion in 2015. Paul Goldschmidt Womens Jersey
NHAI awards Rs 895 crore road project in Rajasthan to L&T
The National Highways Authority of India (NHAI) has awarded a Rs 895 crore project in Rajasthan to Larsen & Toubro. “The NHAI has issued Letter of Award (LOA) for development of 4-laning of Bar-Bilara-Jodhpur section in Rajasthan under phase IV of National Highways Development Projects (NHDP) to Larsen & Toubro,” NHAI said in a statement. The 111 km section connects the western Rajasthan and border area (Jodhpur-Jaisalmer-Barmer) to eastern part of the state – Ajmer and Jaipur. The stretch will be four-laned at a cost of Rs 895 crore, it said. “This is a major strategic route connecting Jodhpur as an important feeder route during war time. Four-laning of the section will permit smooth flow of military traffic as well as heavy commercial and domestic traffic. It will also facilitate transportation of mining and agriculture product,” the statement said. The project will have two bypasses, one at Bar (3.25 km)and another at Bilara (6.70 km), 4 flyovers, 3 pedestrian under passes, 4 major bridges and one railway over bridge. The project would be executed on EPC (engineering, procurement and construction) mode and is scheduled for completion in 30 months from the date of commencement. Bobby Wagner Jersey
Bhiwadi may get India’s first cargo airport
The ministry of civil aviation is likely to select Bhiwadi, a town in Rajasthan near New DELHI, as the spot for the country’s first cargo airport and make Jewar in Greater Noida the second passenger airport in the National Capital Region. “It would make sense to make Bhiwadi the first cargo airport in the region. We are discussing it as a possibility,” said a senior official, who did not want to be identified. “One will have to cross Delhi airport to reach Bhiwadi. So, what is the point of shifting the airport beyond the existing airport? An airport in Jewar would complement the existing airport and help decongest the existing airport,” the official added. The ministry is looking at two options to build second airport – one is Bhiwadi and the other Jewar in Greater Noida, Uttar Pradesh. While an airport at Bhiwadi had been planned as part of the Delhi-Mumbai Industrial Corridor and has received a no-objection certificate from the government, the previous Mayawati government had proposed an airport in Jewar years ago.
Indian ecommerce sector sees 50% drop in funding
Fund raising in the Indian ecommerce sector declined 50% in the April-June quarter over the same period of last fiscal, investment bank and securities firm Jefferies Group said on Tuesday. “Private funding in the Indian ecommerce sector has declined 50% on yearly and quarterly basis, confirming the downward trend over the months,” the American firm said in a report. Barring leading hotel rooms’ aggregator Oyo, which raised $100-million in April, there were fewer large transactions, indicating a slowdown in private funding in the emerging sector. Data shows fund raising declined sharply to $500 million in the quarter (Q1) under review from $1 billion in the like period over the last two fiscal years, Jefferies said. Oyo raised its equity fund from SoftBank, GreenOaks Capital, Lightspeed Venture Partners and Sequoia Capital. Observing that challenges were greater for larger firms looking for raising $100 million, Jefferies equity analyst Arya Sen said the revenue growth for Just Dial would be key for fund raising for start-ups and entrepreneurs. “In response to the slowdown in funding, there has been a shift in focus to profitability by the larger e-tailers over the last 6-9 months from growth and general merchandise volume (GMV),” Sen recalled. “Though most ecommerce firms are targeting to break even over the next 12-24 months by reducing discount, change in mix towards profitable categories and customers, change in strategy and loss of market share to the global e-tailer Amazon have slowed growth for many,” the report pointed out. Funding into travel suggests that high burn will continue for MakeMytrip despite an overall slowdown in the category. “Funding into travel space has remained strong with Goibigo, Oyo, Stayzilla and Fab Hotels raising money in the last five months,” the report noted. Global multinational internet and media group Napsers is reported to have committed $250 million to Goibibo. Jefferies expects 15% revenue growth for Just Dial, with contribution from JD Omni, though its management indicated a gradual return to 20% revenue growth in this fiscal (FY 2017). “Traction from JD will be key to look out for Just Dial guidance of 25,000 customers by this fiscal end and 10% revenue growth contribution from Omni,” the report added. Ramik Wilson Authentic Jersey