Bangladesh protests against gas price rise
Bangladesh’s Left Democratic Alliance led a protest against the government’s raising of the price of natural gas, which took effect last week. Almost all the oppositions, including the country’s largest opposition Bangladesh Nationalist Party, supported the protest. Activists of the alliance blocked key intersections in the city and disrupted transport. Police temporarily detained some workers of the party. The state-run Bangladesh Energy Regulatory Commission last week raised natural gas prices by 32.8% on average for all users effective from July 1, the first day of the country’s fiscal year, the head of the Commission said. Khalequzz Zaman, the secretary general of the Bangladesh Socialist Party said that if the government did not withdraw the decision that would hurt the poorest most, its members will besiege the ministry of power, energy and mineral resources next Sunday. “After that we will continue different protests in the country,” Khalequz said at a protest meeting in the city. The business community was also protesting against the decision to raise the gas price, a critical input for the industry. Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that the gas bill will take up around 1.5% of the manufacturing cost after this hike, an almost 1% increase in production cost. “This may not sound much in terms of percentage, but for an industry struggling for every penny this will be another blow,” she told reporters. The readymade garment is the backbone of Bangladesh’s economy. Bangladesh’s textile industry earns about $30 billion annually by exporting ready made garments, which represents about 16% of the economy and employs over 4 million workers.
Three more CNG filling stations in Patna, Naubatpur by August
The Gas Authority of India Limited (GAIL) will set up three more CNG (compressed natural gas) filling stations in Patna and Naubatpur by August this year to cater to the residents who wish to opt for cleaner, environment-friendly fuel to run their vehicles. The new CNG stations will come up at petrol pumps near Zero Mile (Bypass Road), Saguna Mor and Naubatpur. The CNG stations will be set up under the Pradhan Mantri Urja Ganga Yojana and will be connected to the eastern and north-eastern states with the national gas grid. The GAIL aims to set up 10 CNG stations in city by March 2020. Deputy general manager (project) of GAIL (Patna), Rajneesh Kumar Goel, told this newspaper on Sunday that of the three new CNG stations, two will be mother stations and one at Zero Mile will be daughter booster station. Mother stations are directly connected to the pipelines. CNG is made available in Patna through Haldia-Jagdishpur gas pipeline. CNG daughter station does not have the connectivity of natural gas pipeline. At these stations, CNG is transported through mobile cascades (bunch of cylinders) and then dispensed to vehicles through CNG dispensers. Rajneesh said the estimated cost of setting up one CNG station is around Rs2.5 crore to 3 crore. “With the three more by August-end, Patna will have five CNG stations. Five more CNG stations will be opened by the end of March 2020,” he said. Currently, two CNG stations are functioning at Rukanpura (mother station) and Choti Pahari (daughter booster station). According to GAIL sources, the daily consumption of CNG at Rukanpura station is between 2,000 and 2,500kg while it is 1,500kg at Choti Pahari. The two stations had been launched in February this year. Rajneesh said around 1,500 CNG vehicles were running in the city and most of them were autorickshaws. He said 1500 more autorickshaws have been provided with the licence to run on CNG. According to GAIL sources, they are looking for private parties to set up in collaboration more CNG stations in the city. “It is difficult to get land for the CNG stations. However, we got some proposals that are under consideration,” the sources said.
Dharmendra Pradhan justifies hike in taxes on fuel
Justifying hike in the taxes on fuel in the Union Budget 2019-20, Union minister Dharmendra Pradhan Saturday said there is a requirement of funds for the overall development of the country. “There is a requirement of funds for the overall development of the country. As there is a decline in the price of fuel in the international market, Indian economy should take advantage of the situation,” the Petroleum and Natural Gas minister told reporters while replying a question on increase of the price of petrol and diesel. Meanwhile, the price of both petrol and diesel has increased in Bhubaneswar Saturday, a day after Union Finance Minister Nirmala Sitharaman raised taxes on fuel. While per litre petrol price in the state capital was Rs 69.41 Friday, it increased by Rs 2.53 to Rs 71.94 Saturday. Similarly, the price of diesel has gone up by Rs 2.65 per litre to Rs 71.51. The price of diesel in Bhubaneswar Friday was Rs 68.86 per litre. The Union finance minister Friday announced raise of excise duty and road and infrastructure cess on petrol and diesel by Rs 2 per litre each. The diesel price in Odisha is the second-costliest in the country after Telangana. This is because Odisha levies the second highest VAT at the rate of 26 per cent on diesel while the rate of VAT in Telangana is 27 percent.
Budget 2019: Oil could come to the rescue of Modi government again, predicts Economic Survey
Oil could again come to the rescue of the Modi government in its second term as the Economic Survey has outlined that oil prices could decline in the current fiscal. Oil prices largely favoured the first term of the Modi government which has kept the inflation in check. Increasing US shale oil prodcution and weakening global demand could push the crude oil prices downwards. India, which imports around 80 per cent of its oil, benefits from low crude oil prices. In Modi government’s first term, the government earned a windfall by taxing the oil on the back of benign international oil prices. However, it also came under criticism as the domestic prices kept on climbing because the government refused to lower the tax rate on oil at the time of rising crude oil prices.
China starts building middle part of East China-Russia gas pipeline
China has started to construct the middle part of the east line of a natural gas pipeline connecting Russia and northern China, state-backed China Central Television (CCTV) reported on Thursday * The 1,110-km pipeline starts from Changling in the northeastern province of Jilin and ends at Yongqing in Hebei province after going through the Inner Mongolia region, Liaoning province and the city of Tianjin, said CCTV * The project is part of the 3,968-km China-Russia natural gas pipeline with an annual transmission capacity of 38 billion cubic metres, aiming to meet increasing demand in populous Beijing-Tianjin-Hebei region * The middle part is expected to complete by October 2020
ONGC’s work not curtailed due to shortage of funds: Pradhan
Oil Minister Dharmendra Pradhan today defended Oil and Natural Gas Corporation’s financial position, saying that the company has maintained its activity level and no activity was put on hold last financial year (2018-2019) due to shortage of funds. He also said the acquisition of Hindustan Petroleum (HPCL) and Gujarat State Petroleum Corporation’s block by ONGC were made to add more value and growth to the business as well as due to the potential benefit from vertical integration and the synergies arising out of acquisition of a downstream oil refining and marketing company. Replying to a question in Parliament Pradhan also denied any negative impact on ONGC’s finances due to share-buy backs and double dividend payout. ALSO READ: Oil minister Pradhan invites Russian companies to invest in Indian gas infrastructure The company had last year acquired the government’s 51.1 per cent share in HPCL for Rs 36,915 crore. The acquisition was funded through internal accruals of Rs 12,034 crore and the balance Rs 24,881 crore through commercial borrowings. The company, had also acquired GSPC’s blocks for Rs 7,560 crore which was funded through borrowings. The acquisitions have hit the company’s cash reserves and working capital resulting in a leveraged balance sheet. ONGC’s cash reserve dropped to Rs 170 crore at the end of September 2018 from Rs 13,646 crore in September 2017 and Rs 1,000 crore in March 2018. The cash reserves grew to Rs 504 crore during the fourth quarter (January-March) of last financial year. ONGC’s working capital also became negative at Rs 27,000 crore as of March 31, 2018. The company’s balance sheet had Rs 25,000 crore of borrowings at the end of March 2018 due to HPCL acquisition, interim dividend pay outs and a Rs 4,022 crore share buyback program. It managed to bring down this liability to Rs 14,000 crore at the end of September 2018. However, the company’s short-term borrowings shot up again to Rs 21,594 crore by the end of March 2019. Pradhan while replying to a question in the upper house also denied aggravating ONGC’s precarious situation due to share-buy backs and double dividend payments. Pradhan informed ONGC declared a dividend of 140 per cent of paid up capital amounting to Rs 8,806 crore last financial year as compared to 132 per cent amounting to Rs 8,470 crore in the year before that. He added that ONGC bought back equity shares amounting to Rs 4,022 crore. However, a senor ONGC executive told ETEnergyWorld last month the upstream player could have brought down its short-term debt to Rs 11,000 crore as compared to Rs 21,594 crore posted in the fourth quarter if it had not been urged by the government to pay double dividend and share buy backs.
Energean to buy Edison’s oil and natural gas unit for $750 million
Israel-focused gas driller Energean said on Thursday it will buy Italian energy group Edison’s oil and natural gas unit for an initial consideration of $750 million. The acquisition would significantly expand Energean’s operations in the growing eastern Mediterranean gas hub, with a significant presence in Egypt’s offshore basin. Energean said it will likely pay an additional $100 million after gas production from the Cassiopea field in offshore Italy begins, which is expected in 2022. Reuters reported on Wednesday that Energean was the frontrunner to acquire these assets. Energean expects the expanded group to produce over 140 kilobarrels of oil equivalent per day (kboed/d) in 2021 when the Karish and Tanin development projects come onstream. The London-listed driller said Edison’s portfolio, which includes assets in Italy, Algeria, Croatia, the British and Norwegian North Sea as well as Greece, adds net working interest production of 69 kboed/d. Energean said it will finance the initial consideration for the deal through a short-term loan facility of $600 million and up to $265 million through equity financing.
Vedanta to invest $245 mn in 10 oil, gas blocks
Vedanta on Wednesday said it will invest percent 245 million for finding oil and natural gas over the next 3-4 years in the 10 areas it won in the latest licensing round. The firm won 10 blocks – 7 onshore and 3 offshore, in the Open Acreage Licensing Policy (OALP) Round-II and III, winners of which were announced on Tuesday. Vedanta had won 41 out of the 55 blocks in OALP-1 bid round and committed to investing percent 551 million. “Vedanta Ltd has been successfully awarded 10 exploration blocks in sedimentary basins throughout India pursuant to the OALP at a total bid cost of a percent 245 million,” the firm said in a statement. The company will enter into 10 revenue sharing contracts (RSCs) with the government. “Following the signing of the RSCs, a license permitting exploration, development and production operations of all types of hydrocarbons will be granted pursuant to the terms of the relevant RSC in relation to each Block,” it said. The exploration period shall consist of two phases — the initial exploration phase and the subsequent exploration phase. In total, the exploration period will be a duration of six years for all Blocks, subject to any extension granted. The development and production period of each contract will be a maximum of 20 years from the date of grant of the petroleum mining lease following the discovery of previously unknown deposits of hydrocarbons and approval of the relevant field development plan, subject to any extension granted. “The group believes that the transaction complements its existing strategy to focus on production growth. These blocks awarded under OALP bid round II & III, complement the 41 blocks secured in OALP bid round I. The OALP bid rounds provide an opportunity for the Group to acquire new acreages from additional sedimentary basins of India and utilize synergies from the Blocks already secured,” the statement said. The objective of licensing the Blocks is to acquire fresh seismic data and drill exploration wells to establish resources and reserves of oil and/or gas. “The bid cost of a percent 245 million represents the company’s total committed capital expenditure on the Blocks during the exploration phase and will be met by using the Group’s existing cash resources. It is expected that this capital expenditure will occur over a period of approximately three to four years,” it said.
Government neither divesting nor privatising ONGC: Dharmendra Pradhan
State-run ONGC will neither be disinvested nor privatised but only oilfields discovered by it are being monetised through a transparent bidding process to ensure the country’s energy security, Petroleum Minister Dharmendra Pradhan said in the Rajya Sabha on Wednesday. During Question Hour, he also said that synergy between ONGC and HPCL is fully a corporate decision. “There are two challenges with regard to natural resources. One is to keep an estimate on how much we have and the other one is to monetise it. Disinvestment or privatisation of ONGC is not happening,” Pradhan said. In a transparent bidding process, the government is keeping some of the discovered oilfields of ONGC on a public domain based on a criteria which will produce more and pay higher to the government, he said. “We are just monetising. ONGC can also reinvest and other government firms can also do so. Technology companies across the globe can also invest,” he said. At a time when India is importing 80 per cent of its crude oil requirement, there is a need to monetise natural resources, he added. The minister said the government is not privatising the ONGC but adopting a new model wherein both public and private players can participate in oil production. To a query on ONGC and HPCL, the minister said, “Earlier, ONGC was into production alone. Bringing synergy between ONGC and HPCL, we are able to establish ourselves as one of the top 20 companies in the world. Its market appreciation has increased. It is fully a corporate decision taken in the interest of the country.” Government’s decisions are not done secretly. In the last Budget, the finance minister had talked about taking measures to ensure energy security in the country. All these measures are in that direction, he added. Replying to another query on future of OVL, Pradhan said the company has completed 60 years. “OVL has invested USD 28 billion. OVL profitability is satisfactory. Under the Modi government, the investment approach has changed. Earlier, we used to invest in discovery and at developing stage. Now, many states have started giving equity in producing stage. Our OVL is taking lead in that. OVL has a golden future,” he added.
TN not to permit any hydrocarbon exploration in state
Tamil Nadu’s ruling AIADMK government will not give permission for hydrocarbon exploration in the state, especially in the Cauvery delta region, Law Minister C. Ve. Shanmugam said on Wednesday. Shanmugam told the assembly that the government has not granted permission for any hydrocarbon exploration projects in the state, or will agree to any proposal that would destroy the farmlands in the Cauvery delta region. Permission was not even given to public sector Oil and Natural Gas Corporation Ltd (ONGC), he added. Stressing that the AIADMK government will not grant permission to project that is against nature, Shamugam said state government’s permission is needed for the projects even though the Central government might have given the nod. The central government can, however, grant permission for off-shore projects, he said. According to Shanmugam, it was only the DMK government which gave permission for hydrocarbon projects. As the DMK said that their government had given permission only for carrying out a feasibility study and not for exploration, Shanmugam said the AIADMK government did not even give permission for feasibility studies.