Odisha to invite EoI soon from international air carriers
The state government would soon invite Expression of Interest (EoI) from international air operators to run flights from the Bhubaneswar airport to South East Asian hubs such as Singapore, Thailand and Malaysia. “To begin with, we are keen to have outbound flights from Bhubaneswar to the South East Asia countries.The objective of floating the EoI is to ascertain from the international carriers on the options they can offer for running international flights to and from the Bhubaneswar airport. The options can be on fare structure and frequency and timing of the proposed flights”, said a state official. He said, a couple of carriers had evinced interest to operate international flights to and from Bhubaneswar but refused to divulge their names. Global carriers like flydubai and Air Asia had submitted schedules to run commercial operations from Bhubaneswar. While flydubai will offer connectivity from Bhubaneswar to Dubai, Air Asia will run flights between Bhubaneswar and Kuala Lumpur. Apart from flydubai and Air Asia, Air Arabia and SilkAir have also evinced interest to start commercial operations. Pierre-Edouard Bellemare Womens Jersey
UP airports to be government priority
The Union government is going all out to operationalise airports in India’s most populous state Uttar Pradesh, with the move being politically significant since state Assembly elections there are just about a year away. The Delhi-NCR (National Capital Region) may also get a second airport apart from the IGI airport in the capital, with minister of state for civil aviation Mahesh Sharma saying “the case of constructing an airport in Jewar (near Greater Noida in UP near Delhi) had been sent to the ministry of defence for their NOC (no-objection certificate)”. He also said a “major effort was underway to operationalise numerous airports in Uttar Pradesh” and that the decision was the outcome of a review meeting that was held earlier in the day that he had chaired. The meeting was attended by Union civil aviation secretary R.N. Choubey, senior officers of the state-run Airports Authority of India, the director, Civil Aviation of the Uttar Pradesh government and district magistrates of the concerned districts in Uttar Pradesh. Mr Sharma informed that “Rs 400 crore assistance will be provided by the Centre for developing the airports in Agra, Allahabad, Kanpur and Bareilly” and “this would be done within a period of one-and-a-half months”. Jersey
Modi’s Regional Connectivity Gambit: Breathing Life Back Into India’s Ghost Airports
The Civil Aviation Ministry last week made public the Modi government’s plan to drastically boost regional air connectivity, an attempt that if successful will revive wasting and abandoned aviation infrastructure while proving to be a major shot in the arm for regional tourism and commerce. While the decision to cap regional air-fares is being sold and viewed in some quarters as a populist or aam-aadmi measure, according to experts and industry insiders The Wire spoke with, it will also be a test of how well the Modi government will be able to conquer the white elephants it has been saddled with and ultimately a test of the prime minister’s infrastructure-driven growth strategy. From 2009, by a number of estimates, the country’s central governments have spent over $50 million on eight airports that currently do not receive scheduled flights. The most well-known case is the Jaisalmer airport, which cost over $17 million to build but never operated any scheduled flights. “Across India, it’s easy to see the end results of the previous government’s plan to open 200 no-frill airports as a means of boosting regional connectivity. They [the airports] are all, for the most part, in various states of disuse. They were opened up due to political pressures, with various local parties thinking if you opened up an airport in a town, flights would automatically follow,” one aviation analyst who helped in drafting the document said. Michael Grabner Authentic Jersey
FDI in airlines may hit air pocket with Centre’s circular on ownership
Experts have described as ‘contradictory’ and ‘confusing’ a circular issued by the Centre stating substantial ownership and effective control (SOEC) of airlines should vest with Indian nationals as it runs contradictory to its decision to raise foreign direct investment (FDI) limit in airlines to 100 per cent. The Department of Industrial Policy and Promotion (DIPP) had issued the circular retaining the clause which said substantial ownership and effective control (SOEC) should vest with Indian nationals. “Hundred per cent FDI with substantial ownership and control lying with Indian nationals is contradictory, baffling and has created needless confusion,” said Amber Dubey, Partner and India Head of Aerospace and Defence, KPMG. While the DIPP circular mentions that 100 per cent FDI equity is permitted for scheduled domestic airlines and regional air transport services, it also adds that “there is no change in the Other Conditions mentioned in the FDI policy for this sector.” The other conditions for the civil aviation sector, in the FDI policy (2016), clearly mention that an air operator permit will be granted to a company only if it is registered in India, the Chairman and two-thirds of its directors are Indian citizens and substantial ownership and effective control is vested in Indian nationals. “Either the government has to change the conditions (of the FDI policy) or amend some rules,” said Devraj Singh, Executive Director – Tax and Regulatory Services, EY. “Unfortunately or fortunately, they have deliberately mentioned that other conditions will remain the same.” There was no clarity on the ownership clause for foreign airlines among both the civil aviation ministry and the DIPP. “Please ask the civil aviation ministry about the other conditions. As far as we are concerned, the conditions remain the same,” a senior DIPP official said. James Van Riemsdyk Authentic Jersey
KGLNG gets green nod for Rs 1,270-cr expansion project in AP
Krishna Godavari LNG Terminal Pvt (KGLNG) has got green nod for development of an offshore LNG floating storage and re-gasification unit at Kakinada Deep Water Port in Andhra Pradesh at a cost of 12.70 billion. Due to shortage of domestic supply of natural gas, the net gas supply made available to Andhra Pradesh is very low. KGLNG’s proposed project is aimed to boost natural gas supply for various industries like fertiliser in the state. “Based on the recommendations of theExpert Appraisal Committee (EAC), the Environment Ministry has given clearance to KGLNG’s proposal,” a senior government official said. The clearance is subject to certain conditions, including obtaining prior permission from the Standing Committee of the National Board for Wildlife, the official added. As per the proposal, KGLNG — a special purpose vehicle of US-based VGS Group Inc — will set up offshore LNG floating storage and re-gasification unit (FSRU) in two phases with a handling capacity of 3.60 million tons per annum (mtpa) in phase-I and ultimate capacity of 7.20 mtpa in phase-II to meet natural gas demand in the state and project region. The total cost of the project is Rs 12.70 billion while that of phase-I will be Rs 8.70 billion that will be commissioned in 1 year after obtaining due clearance. The phase-II project, which will cost Rs 4 billion, will be commissioned in 24 months after the commissioning of phase-I. Among other conditions specified, KGLNG has been asked to obtain the ‘consent to establish’ from the State Pollution Control Board and comply with the conditions of the AP Coastal Zone Management Authority. It has also been told to operate the terminal for 270 days in a year. Cam Newton Jersey
LPG costlier by Rs 14 in Assam after subsidy withdrawal
Assam government has withdrawn the partial subsidy of Rs 14 on domestic LPG cylinders and hiked the price of petrol by 76 paise per litre and diesel by Rs 1.67 a litre. The state government has also increased VAT to 6 per cent from 5 per cent on 127 household goods with immediate effect. According to a Gazette notification, the government withdrew “the partial exemption granted to the oil companies on sale of Liquefied Petroleum Gas (LPG) for domestic use within Assam” with immediate effect. When contacted, Assam Commissioner and Secretary (Finance) Ravi Kota told PTI that the withdrawal of the subsidy will result in increase in prices of LPG cylinders by Rs 14 each. This decision was taken at the last Cabinet meeting and has come into effect from yesterday, he added. “…the price of petrol will increase by 76 paise and diesel by Rs 1.67 per litre,” Kota explained. The government has also increased VAT on 127 items under Second Schedule to 6 per cent from 5 per cent earlier. The Second Schedule items include most of the day-to-day household goods such as agricultural implements, all types of yarns, all kitchen utensils, bamboo items, all types of cycles and their parts, bulk drugs, coffee beans and seeds, coir products, edible oils, paper, plastic footwear, printed material, readymade garments and renewable energy devices. Some other important items, whose prices will go up due to the new tax structure, include skimmed milk powder, all spices, tractors, vanaspati, vegetable oil, embroidery or zari articles, processed meat, poultry, fish, processed or preserved vegetables and fruits, golditems, glass bangles, hand made soap, pure ghee, sweets, baby feeding bottles and nipples, dry fruits, soya nuggets, jute and jute products. Prices of medical diagnostic kits, x-ray films and other diagnostic films, medical equipments, devices and implants, spectacles, spare parts of motor vehicles, medicines, honey, glucose, sugar and CFL bulb have also been raised by revising the VAT rates northward. Chris Jones Authentic Jersey
Brent oil falls below $50 as Nigeria ups production
Oil prices retreated in Asia Tuesday, with Brent easing below $50 on news of increased production from Nigeria following the repair of infrastructure damaged in militant attacks. Bloomberg News reported Tuesday that Nigeria, Africa’s biggest oil producer, pumped an average 1.53 million barrels a day last month, up around 90,000 a day from May. The Nigerian state minister for petroleum resources, Emmanuel Kachikwu, said last month that a ceasefire with rebel forces had allowed the Nigerian government to repair the damaged oil pipelines, Bloomberg reported. At around 0325 GMT, US benchmark West Texas Intermediate for August delivery was down 67 cents, or 1.37 percent, to $48.32 and Brent crude for September eased 42 cents, or 0.84 percent, to $49.68 a barrel. “Oil prices are pulling back on easing supply disruption concerns, as markets reacted to news that Nigerian production has increased last month,” IG Markets analyst Bernard Aw told AFP. “Nonetheless, oil prices remained relatively stable around the $50 mark. This will be welcomed by the oil sector.” Despite the increase in production, a recent resumption of attacks on Nigerian oil pipelines has underscored the volatility of the situation in the country. Crude prices had edged up on Monday after Nigerian oil militant group Niger Delta Avengers on Sunday claimed five attacks on the country’s oil and gas infrastructure in a revival of their sabotage campaign after a recent lull. The Avengers are fighting in the Niger Delta region for a bigger share of crude revenue and greater political autonomy. British bank Barclays said prices will also remain under pressure from the impact of Britain’s vote to leave the European Union, which is yet to fully unfold. “The dire warnings about the effect on global financial markets and risk appetite from a UK vote to leave the EU are yet to manifest themselves in commodity markets, which in general have performed robustly over the past week,” it said in a market analysis. “Whether this proves to be the calm before the storm depends on the extent of negative contagion,” it added. “The deterioration in the global economic outlook, financial market uncertainty and potential ripple effects on key areas of oil demand growth are likely to exacerbate already-lacklustre industrial demand growth trends.” James Develin Womens Jersey
Indian Oil Corporation refuses stake sale offer in Nagarjuna oil project
Indian Oil Corporation has rejected an offer to buy a stake in a project of the financially-stressed Nagarjuna Oil Refinery and help resurrect it, arguing that the project’s technical configuration and financial burden were a hurdle, according to company executives and officials. Indian Oil took the decision recently following a due diligence on the proposed refinery. At a recent meeting, Indian Oil executives conveyed this to officials of the Prime Minister’s Office (PMO), sources said. More than six months back, the government had suggested Indian Oil, Bharat Petroleum and Hindustan Petroleum consider buying a stake in the Nagarjuna refinery project. All three were hesitant but Indian Oil undertook a due diligence. It had considered investing in the project in Tamil Nadu more than a decade back. Nagarjuna Oil Refinery, which is setting up the refinery, is controlled by Nagarjuna group that owns about 35% of the firm. The group, led by KS Raju, also has fertilizer units. “There has been no construction activity at the project site for almost four years since the time cyclone hit the place, while the financial burden has been mounting,” said a source. The project suffered damage in December 2011 cyclone and hasn’t been able to overcome its impact since. The company has been engaged with multiple potential investors but hasn’t clinched a deal yet and arrange necessary finance to complete the project. The 6 million tonne refinery, spread over 2,100 acre and including a captive port and power plant, was originally scheduled for commissioning in April 2014 at a cost of Rs 11,500 crore. Capacity was to be eventually doubled. The project has design and foundation in place already. “Undoing design and foundation is very complicated,” an Indian Oil executive said. “Had the configuration suited us, we could have accepted the project.” “Even with concessions, it could have been a challenge to resurrect the project,” he said. Part of the refinery would comprise older units relocated from Germany, which further diminished its attraction. The refinery is configured to produce Euro-III and IV standards fuel, which essentially means it can’t sell in the domestic market after April 2020, the government-set deadline after which only Euro VI fuel can be sold. To upgrade to Euro VI would require more investment. Moreover, Indian Oil and other state firms are themselves engaged in capacity expansion. Brandon Saad Authentic Jersey
Petrobras’ Indian partners fight delay in troubled Brazil oil project
Petrobras has warned its Indian partners in a huge offshore project to not expect oil from the site until 2022, according to sources, a fresh sign of how low oil prices and the state-owned company’s corruption scandal and mountain of debt are dragging on Brazil’s energy industry. The previously unreported, four-year delay in the “super-giant” discovery off the northeastern coast of the Brazilian state of Sergipe is forcing India’s Oil and Natural Gas Corp and IBV Brasil Petroleo Ltd to seek ways to speed up the Petrobras-led project which has cost them $2.1 billion with no return in sight. The delay and pressure from the Indian partners is just one of many challenges for new Petrobras Chief Executive Pedro Parente, named by Brazil’s interim-President Michel Temer in late May amid an ongoing financial crisis. In the face of a massive bribery and kickback scandal and Petrobras’ $126 billion of debt, Parente has pledged to run the company in a more market-friendly way but has declined to comment on individual projects. He has also promised a revamped investment plan by the end of October – though it is unclear whether it will address the Sergipe offshore standoff. In April, Petrobras told IBV, a 50-50 joint venture between state-owned Bharat PetroleumBSE -0.81 % Corp and privately held Videocon IndustriesBSE -0.33 % Inc, that there will be no oil output from Sergipe “until at least 2022,” an IBV executive told Reuters. A year ago, Petrobras’ promised first oil by 2018. Hoping to speed up development, IBV told Reuters it has offered to arrange up to $10 billion in loans from Indian and other international development banks to finance the Sergipe development – Brazil’s biggest oil prospect outside the prolific subsalt region near Rio de Janeiro where Brazil is pinning hopes of energy independence. “It’s a common and simple loan structure, if Petrobras is willing to provide future output as collateral, it won’t have to pay a penny until oil starts flowing, something we could can probably do by 2020,” the IBV executive said. “But we get the feeling that Petrobras has yet to accept its new, more restricted circumstances,” the executive added. Petrobras told Reuters it has yet to receive a formal proposal from its Indian partners to finance the project. Asked about the delays, Petrobras said in a statement it has invested about $3.5 billion on exploration in the Sergipe blocks it owns with ONGC and IBV. It expects to complete a development plan for the areas by 2020 but has no date for the first production of oil. All development decisions have been made in conjunction with its partners, Petrobras said, and delays have been the result of “considerable” deepwater technical challenges, efforts to reduce costs and a lack of infrastructure to transport the area’s natural gas. After investing $2.1 billion in the offshore finds since 2007, the Indian partners are getting impatient. “We can’t put off a return forever,” the IBV executive, whose company has spent $1.6 billion in Sergipe, told Reuters. “We’ve been investing for nearly a decade. They now say we’ll have to wait at least four years more. In our experience with Petrobras, it will probably be longer.” An ONGC executive, who also declined to be named, said the partners hope the new Parente regime will speed up development plans “so that we can monetize and unlock the potential at the earliest.” The company did recently relinquish its stake in one of two proposed production areas in the Sergipe block that it owns a quarter of to partner Petrobras. SHARED BLAME FOR DELAYS In nine years, ONGC has invested $500 million exploring with Petrobras off the coast of Sergipe. It has spent another $2 billion elsewhere in Brazil and produces about 12,000 barrels a day in the country, a small amount considering the outlay so far. The expected prize, though, is Sergipe. The BM-SEAL-11 block, 40 percent controlled by IBV, holds more than 3 billion barrels of oil and equivalent natural gas, enough to supply all the world’s petroleum needs for more than a month. There are no public estimates for the two adjacent blocks, one fully owned by Petrobras and the other owned 25 percent by ONGC, but people involved with them say the volumes of oil and gas are very large. The Sergipe project’s problems have also been compounded by IBV and ONGC’s own failures. Two sources involved with the Indians in Sergipe exploration said IBV and ONGC often missed deadlines to pay their share of costs, only paying after Petrobras threatened legal action. The Indians confirmed the delays, which they blamed on partner Videocon, which has cash flow problems and may sell its IBV stake. Videocon executives were not available for comment. Venugopal Dhoot, chairman of Videocon told the Business Standard Newspaper in June that his company was considering the sale of its oil and gas assets to pay debt. Both IBV and ONGC also declined to invoke clauses in the blocks’ contracts allowing them to move ahead with development on their own if Petrobras demurred. “Unfortunately, everybody in Brazil is afraid to challenge Petrobras, even if they have a case. They know Petrobras, and perhaps the government, will retaliate,” said John Forman, a geologist and former director of Brazil oil regulator ANP. “Court fights can drag on for years, so you lose even if you win.” Whatever the reason for delay, Brazil may be the biggest loser. While ONGC and IBV bought their Sergipe stakes in 2007 from existing leaseholders Petrobras and Encana, Brazil’s oil regulator ANP has allowed partner Petrobras to delay a start to production by extending exploration rights in the areas repeatedly. Had the ANP enforced tighter deadlines, designed to prevent companies from hoarding assets without developing them, Sergipe might be producing, or near first production, today and providing revenue for Brazil’s cash-strapped Treasury, Forman said. The tendency to give Petrobras such wide latitude underlines Brazil’s conflicted priorities as it tries to revive both its economy and largest company,
KGLNG gets green nod for Rs 1,270-cr expansion project in AP
Krishna Godavari LNG Terminal Pvt (KGLNG) has got green nod for development of an offshore LNG floating storage and re-gasification unit at Kakinada Deep Water Port in Andhra Pradesh at a cost of 1,270 crore. Due to shortage of domestic supply of natural gas, the net gas supply made available to Andhra Pradesh is very low. KGLNG’s proposed project is aimed to boost natural gas supply for various industries like fertiliser in the state. “Based on the recommendations of the Expert Appraisal Committee (EAC), the Environment Ministry has given clearance to KGLNG’s proposal,” a senior government official said. The clearance is subject to certain conditions, including obtaining prior permission from the Standing Committee of the National Board for Wildlife, the official added. As per the proposal, KGLNG — a special purpose vehicle of US-based VGS Group Inc — will set up offshore LNG floating storage and re-gasification unit (FSRU) in two phases with a handling capacity of 3.60 million tonnes per annum (mtpa) in phase-I and ultimate capacity of 7.20 mtpa in phase-II to meet natural gas demand in the state and project region. The total cost of the project is Rs 1,270 crore while that of phase-I will be Rs 870 crore that will be commissioned in 1 year after obtaining due clearance. The phase-II project, which will cost Rs 400 crore, will be commissioned in 24 months after the commissioning of phase-I. Among other conditions specified, KGLNG has been asked to obtain the ‘consent to establish’ from the State Pollution Control Board and comply with the conditions of the AP Coastal Zone Management Authority. It has also been told to operate the terminal for 270 days in a year. Joe Pavelski Womens Jersey