ONGC, directors pulled up for plan to skip tendering
The Central Vigilance Commission (CVC) has asked Oil and Natural Gas Corp (ONGCBSE 0.00 %) and its directors to individually explain why the state firm had planned to hire rigs without tendering, taking a harsh view of the company’s plan that was dumped after media reports highlighted it. ONGC had planned to hire nine rigs through nomination, apparently to save time in the hiring process, in 2015, but didn’t go ahead after ET reported this. Oil rigs are large structures capable of drilling wells and extracting oil and natural gas, and come for a few lakh dollars a day on rent. A rig is the biggest cost component in producing oil or gas and a sub-optimal decision in hiring rigs can upset the production cost for an oil company. Following the report, the CVC sought explanation from ONGC. “The CVC has taken a harsh view of the matter,” said a source with direct knowledge of the matter. “ONGC’s initial explanation has cut no ice with the CVC. The company said it was just a plan that remained unexecuted. But CVC wants to know why ONGC drew such a plan in the first place.” This back and forth of CVC queries and ONGC’s explanation has consumed almost two years. The CVC has now sought explanation from each functional director who was part of the executive procurement committee that had decided in favour of hiring rigs through nomination in 2015. The oil ministry is also part of this investigation and has sought more information from ONGC on this. ONGC did not respond to ET’s email query till the time of going to press. State oil firms are supposed to use the nomination route only in exceptional circumstances. The plan to bypass tendering attracted attention because in 2015 rigs were easily and cheaply available as many companies abandoned or deferred drilling because oil prices had crashed in 2014. As a result, surplus rigs were available cheap. For Indian projects too, tenders for rigs in the past three years have attracted interests from several rig companies from across the globe and at rates that are substantially lower than the previous contracts. There is a cut-throat competition among rig owners to grab contracts. ONGC deploys dozens of rigs at any point in time on land and at sea. In 2017-18, it plans to make a capital spending of Rs 30,000 crore, most of which would go into its offshore projects off the eastern and western coast. Zach Brown Womens Jersey
ONGC is pumping in Rs 3104 Crore for drilling of wells and creation of surface facilities in Tripura
In line with Hydrocarbon Vision 2030 for North-East Region, ONGCBSE 0.06 % management has approved additional investment of Rs 3104 Crore for drilling of wells and creation of surface facilities to produce gas from Tripura gas fields. According to ONGC, the objective of the scheme is to produce & supply total gas of 5.1 MMSCMD to various consumers of state for another 20 years through drilling of 153 new wells and creation of new / augmentation of surface infrastructural facilities, laying of 282 km pipe lines of gas grid network & 600 km of well flow lines. ONGC Tripura Asset has also prepared 5 years (target) master plan of Exploration & Production activities planned for both Western & Eastern part of Tripura. This plan involves year wise drilling plan, identification of requirement of rig resources, surface facilities revamping, work-over inputs, technology inputs etc. Action plan is in place. A total of 221 wells have been drilled by ONGC in the state till April 2017 and 116 wells are found to be gas bearing which corresponds to the success ratio of 2:1. Presently around 76 wells are available for production with the gas production potential of around 4.3 -4.5 MMSCMD. ONGC‘s average sales in Tripura has increased from 1.7 MMSCMD (Million Metric Standard Cubic metre per day in 2012-13 to 3.92 MMSCMD In 2016-17, doubling the average gas sale rate and achieved Highest ever annual Gas production of 1427 MMSCM during 2016-17. Charles Clay Womens Jersey
Mjunction appointed to build a platform for e-bidding, e-evaluation of bids and e-allocation of oil & gas fields
Mjunction services limited, one of the country’s largest e-commerce companies and a 50:50 joint venture between Steel Authority of India Ltd and Tata Steel, has been appointed by the Directorate General of Hydrocarbons (DGH) to build a platform for e-bidding, e-evaluation of bids, and e-allocation of oil and gas fields. This will enable transparent allocation of natural resources, and help reduce. the country’s oil import bill by $8 billion annually, a statement issued by mjunction on Monday said. Commenting on the development, mjunction CEO Vinaya Varma said: “I am happy we have been entrusted with the responsibility of building this platform, in addition to managing e-auction of spectrum for the Government of India. We have built up strong competencies in design and conduct of large value e-auctions, and I want to thank DGH for this nationally important contract.” DGH is the nodal agency under the ministry of Petroleum and Natural Gas for allocation of oil and gas fields to interested bidders for exploration and production activities. Varma said that mjunction will customise its e-bidding software to provide facilities to electronically receive and evaluate bids and to automatically allocate oil and gas fields under the Hydrocarbon Exploration and Licensing Policy (HELP) framework, which was introduced in 2015. HELP replaced the 18-year-old New Exploration Licensing Policy (NELP), and is expected to remove its various limitations which led to inefficiencies in exploiting natural resources. Justin Falk Authentic Jersey
Bangladesh Energy Division to seek approval on importing diesel from India
The Energy and Mineral Resources Division (EMRD) will seek cabinet approval on the Sale Purchase Agreement (SPA) between India and Bangladesh for importing of High Speed Diesel (HSD) through the proposed 131 kilometres Indo-Bangla friendship pipeline. “We will send a proposal to the cabinet committee very soon in this regard,” an official of Energy and Mineral Resources Division told the Dhaka Tribune Sunday. On April 10 this year, India’s state-owned Numaligarh Refinery Limited (NRL) and Bangladesh Petroleum Corporation (BPC) signed an initial for SPA, which includes construction of a 131 km long pipeline from Siliguri to Parbatipur, with a capacity of one million Metric Ton per annum (MMTPA). The pipeline is supposed to connect NRL terminal of West Bengal’s Siliguri and BPC depot in Parbatipur of Dinajpur. The agreement will be effective for 15 years. The estimated cost is Rs 3.63 billion and it will take two years for the commissioning of the pipeline after signing the SPA. India will finance the pipeline as grant-in-aid. “Bangladesh Petroleum Corporation will pay Numaligarh Refinery Limited a premium of $5.50 per barrel,” BPC Director (operations and Planning) Sayed Mohammad Mozammel Haque told the Dhaka Tribune. He added: “The price of oil imported from India will be fixed according to international market rate.” The route survey for the pipeline has been completed and the detailed feasibility report has been prepared by Engineers India Limited. On the other hand, the government is set to build a diesel-fired 150 megawatt power plant in Saidpur of Nilphamari. The fuel for the plant will be imported from Numaligarh. On July 19, the cabinet committee on economic affairs approved the proposal for setting up the power plant through financing under an export credit agency. On January 12, 2017, a Railway rake containing 2,281 MT of high speed diesel was dispatched from NRL’s marketing terminal in Siliguri to Parbitipur BPC depot. The consignment containing 42 wagons travelled over 516km (253km in India and 263km in Bangladesh), on the existing railway line via Rangapani, Singabad, Rohanpur, to reach Parbatipur. Earlier, India and Bangladesh entered into a new era of petroleum trade with a goodwill train flagged off by the Minister of State for Petroleum and Natural Gas (Independent Charge) Dharmendra Pradhan on March 17 2016 from NRL’s Siliguri marketing terminal to Bangladesh. Andrus Peat Jersey
ONGC, OIL push crude oil output up by 0.24%, natural gas by 4%
The country’s crude oil output rose 0.24 per cent and natural gas production was up 4.04 per cent in the June quarter of 2017 due to a push from state-run companies like Oil and Natural Gas Corporation (ONGC) and Oil India (OIL). Cumulative crude oil production by ONGC in Q1 was 5,640.77 Thousand Metric Ton (TMT), which is 0.22 per cent lower than the period’s target but 2.71 per cent higher than production during the year-ago period. OIL produced 839.86 TMT, about 5.22 per cent higher than the last year’s corresponding period. However, the production from private and joint venture (JV) fields dropped 6.23 per cent to 2,541.74 TMT y-o-y. The overall crude oil output in June 2017 was 0.6 per cent higher than June 2016, owing to a better performance by public sector undertakings. On the other hand, cumulative natural gas production during the April-June period rose 4.04 per cent to 8,057.72 million metric standard cubic meters (mmscm) y-o-y. During the quarter, ONGC produced 10.76 per cent higher than the year-ago period’s production, while OIL’s output fell 0.98 per cent compared to last year. Cumulative natural gas production by private and JV players in Q1 was 1,605.39 mmscm, 12.82 per cent lower than the production during the corresponding period of the last year. In June, the country’s natural gas production zoomed 6.05 per cent y-o-y. Closure of some wells in Rajasthan and Panna-Mukta majorly contributed to the drop in private sector’s crude oil production. Meanwhile, under performance of coal bed methane wells at Sohagpur West by Reliance Industries (RIL), closure of few wells in Raniganj East by Essar, delay in grant for petroleum mining lease in Hindustan Oil Exploration Company (HOEC) and closure of two wells in D1D3 field and one well in MA field in KG-DWN-98/3 by RIL are the major reasons behind the drop in natural gas production by private sector compared to the year-ago period. Refinery production in June 2017 was 20,057.80 TMT, 0.11 per cent higher than the target but 0.54 per cent lower y-o-y. Cumulative production in Q1 was 60,898.38 TMT, 1.04% higher than the output during the year-ago period. Chris Scott Jersey
$23 billion to be invested in KG Basin’s oil & gas fields: Dharmendra Pradhan
About $23 billion is planned to be invested in the oil and gas fields of the KG Basin, Oil Minister Dharmendra Pradhan told Parliament on Monday. “The operators of blocks /fields in KG basin under Production Sharing Contract (PSC) regime and nomination fields have submitted DoC (Declaration of Commerciality)/FDP (Field Development Plans) for the commercial oil and gas discoveries along with projected investment estimates,” Pradhan said, adding that the estimated investment from these plans were $22.9 billion. The new oil and gas production from these fields in the KG Basin is expected to reach up to 22.27 billion cubic meters of gas and 4.68 million metric tonnes of oil by 2021-22, Pradhan said. Last month, Reliance Industries and BP announced a $6 billion investment plan to develop three new fields in the KG Basin. The two companies plan to award contracts to develop the ‘R-Series’ deep water gas field that is expected to produce up to 12 million cubic meters of gas a day from 2020. They plan to submit development plan for two more projects by the end of 2017. Together, the three fields are expected to produce 30-35 million cubic meters of gas a day by 2022. Last year, ONGC unveiled a $5 billion investment plans for developing its fields in the KG Basin. Russell Wilson Authentic Jersey
Government mulls LPG-like subsidy transfer for PDS foodgrain
Food ministry is working on a pilot to emulate the direct cooking gas subsidy transfer scheme model for public distribution system (PDS) of subsidised foodgrains. The beneficiaries will get the subsidy amount in advance in their bank accounts and they will have to buy the foodgrains from any ration shop, which has got the electronic point of sale (e-PoS) devices. The food ministry recently sent three trainee IAS officers (assistants) to assess the ground situation in Ranchi where a pilot is likely to be rolled out. This initiative will ensure zero leakage of the subsidy and foodgrain as well. A government source said the beneficiaries’ failure to buy the foodgrains from the e-PoS enabled ration shop would result in no transfer of the subsidy for the next month. This will also ensure that beneficiaries under National Food Security Act don’t use the subsidy amount for anything else. “In case of cooking gas subsidy, the consumer has a connection from a particular LPG supplier and government transfers the subsidy through the supplier concerned. But in case of PDS, this mechanism is not possible. Therefore, the provision is being made that the beneficiary buys the foodgrains from ration shops and e-POS will ensure the authenticity,” said a source. At present, 81 crore identified beneficiaries get subsidised foodgrains at Rs 1-3 per kg from ration shops. This costs the exchequer about Rs 1.4 lakh crore annually. The other provision of direct cash transfer for subsidised foodgrains is being implemented in only three Union Territories of Chandigarh, Puducherry and Dadra & Nagar Haveli. In these cases, the entire subsidy amount is transferred to the beneficiaries’ account and they are free to buy the grains from anywhere. The new model is under serious consideration as an alternative to the nationwide roll-out of DBT, which, would throw up several questions for the government on whether it can continue to procure grains at MSP when it will have no mechanism to release them. Marcus Sherels Jersey
ONGC-HPCL merger to be completed this fiscal, Jaitley to head panel: Dharmendra Pradhan
Oil minister Dharmendra Pradhan on Monday announced that Oil and Natural Gas Corporation (ONGC) merger with Hindustan Petroleum Corp (HPCL) will be completed in the current financial year. He added the Cabinet Committee on Economic Affairs (CCEA) has approved the setting up of a special ministerial panel headed by Finance Minister Arun Jaitley which will oversee and expediate the merger process. “The proposed acquisition in the oil sector will create a vertically integrated public sector ‘Oil Major’ company having presence across the entire value chain. This will give ONGC an enhanced capacity to bear higher risks, take higher investment decisions and to neutralise the impact of global crude oil price volatility. The acquisition of HPCL by ONGC will result in significant synergies in terms of optimisation of logistics costs, R&D activities, economies of scale of purchase of crude oil and optimization in refinery operations,” Pradhan said in Parliament on Monday. He added for overseeing this transaction, CCEA approved setting up of an alternative mechanism, headed by the Finance Minister, which will help in taking quick decision with regard to the timing, price, terms and conditions and other related issues to the transactions. Also, the Department of Investment & Public Asset Management (DIPAM) has invited bids by August 10 from investment bankers and legal advisers who are expected to advise the government on the valuation of HPCL and ‘professionally guide during the negotiation with ONGC,’ according to an advertisement published on DIPAM site. According to senior ministry officials, the merger will not have an impact on HPCL’s cultural and corporate identity, which will remain distinct from ONGC. The deal which is expected to cost ONGC around Rs 30,000 crore, according to HPCL’s current market valuation, will be given the final nod by the Union Cabinet only after a clear process for the merger is determined. The recent flurry of activity to integrate government-owned Oil Marketing Companies (OMCs) with oil and gas exploration companies follows Finance Minister Arun Jaitely’s announcement during the 2017-2018 budget speech on the government’s plan to create an integrated public sector ‘Oil Major’ rivalling international and domestic private sector oil and gas companies. Ambit Capital, an equity research firm in its recent report stated that the merger would not bring much synergy benefits to the two companies and on the contrary will result in the weakening of high-performance culture at the target company. Also, ratings agency ICRA, in its note released last week on the merger, stated that the transaction could affect the financial strength of ONGC for future large acquisitions and capex programmes. It added that ONGC may face several challenges related to integration and probable delay in decision-making due to multiple hierarchies as a result of the merger. The government, after the ONGC-HPCL merger, reportedly plans to embark upon divesting its 66 percent stake in upstream oil and gas company Oil India to Indian Oil Corporation (IOC) India’s largest fuel retailer. Justin Reid Jersey
IGL To Lay City Gas Distribution Network In A Part Of District Gurugram
Indraprastha Gas Limited (IGL), The supplier of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in Delhi, Noida and Greater Noida said in Wednesday that it has received permission from the state government of Haryana to lay City Gas Distribution (CGD) network in a part of Distt. Gurugram. IGL is the entity authorized by Ministry of Petroleum & Natural Gas, Govt. of India for Gurugram since 2004 and had been pursuing with the state government of Haryana for the permission to lay, build and operate CGD network in Gurugram. As per letter issued by Director of Industries & Commerce, Govt. of Haryana on 13th July 2017, IGL has been permitted to lay city gas distribution network in Gurugram in the area lying between west side of Sohna Road and National Highway – 8 of Gurugram. The state government of Haryana has also decided to allocate 10 nos. of plot sites for setting up CNG stations for which IGL has been asked to identify the areas and approach HUDA/HSIDC for allotment of sites as per policy of the government. IGL has already been authorized to set up CGD network in adjoining district of Rewari also, where the project work is in progress and trail run of CNG sales has already started. Commenting on the development, E. S. Ranganathan, Managing Director, IGL said, “We are thankful to the state government of Haryana for having granted permission to us for laying pipeline network in a part of district Gurugram”. Highlighting the preparedness of IGL to meet the desired targets of setting up 10 CNG stations and providing 10,000 PNG connections, he assured that the entire IGL team is already in action to make sure that that the targets are achieved. “IGL is in the process of drawing up an investment plan amounting to capital expenditure of Rs 75 cr to Rs 100 cr in a year in this area”, he added. IGL is already the largest CNG distribution company in the country having set up 425 CNG stations in less than two decades. The company has a track record of having successfully rolled out CGD projects in Delhi, Noida, Greater Noida and Ghaziabad. In the city of Rewari in Haryana, where the CGD project work is in progress, IGL has already achieved the project milestones for the first year within ten months of start of project work. Company Profile The role of IGL in checking the vehicular pollution in the National Capital Region is well acknowledged both at national as well as international forums. IGL has well laid out its city gas distribution infrastructure in Delhi, Noida, Greater Noida and Ghaziabad which consists of over 10000 Kms of pipeline network. IGL is meeting fuel requirements of over 9.5 lakh vehicles running on CNG in NCR through a network of 425 CNG stations. IGL is supplying PNG to nearly 7.5 lakh households in Delhi and NCR towns. Patrick Chung Womens Jersey
CCEA approves government stake sale of HPCL to ONGC: Oil Minister Dharmendra Pradhan in Lok Sabha
The Cabinet Committee on Economic Affairs (CCEA) has given in-principle approval for the sale of the government’s 51.11 per cent stake along with the management control of HPCL to the ONGC, Oil Minister Dharmendra Pradhan said today. Hindustan Petroleum Corporation Ltd (HPCL) will continue as a public sector undertaking after Oil and Natural Gas Corporation Ltd (ONGC) acquires its stake, the minister said in the Lok Sabha. “The proposed acquisition in the oil sector will create a vertically integrated public sector oil major company having presence across the entire value chain. “This will give ONGC an enhanced capacity to bear higher risks, take higher investment decisions and to neutralise impact of global crude oil price volatility,” Pradhan said. The minister was making a statement in the House regarding the sale of the government’s existing stake of total paid up equity shareholding in HPCL to ONGC. Marcus Gilbert Jersey