Govt officials seek zero import tax on LNG in Budget 2017 – document
India’s energy and environment ministries want the government to scrap an import tax on liquefied natural gas (LNG) and impose a levy on use of pet coke and furnace oil to promote cleaner fuel, they said in a presentation to Prime Minister Narendra Modi. India is the world’s third largest emitter of greenhouse gases and relies heavily on coal, gas and oil imports to meet its energy needs and fuel its economic expansion. Its energy consumption is bound to grow as it targets 8-9 percent economic growth from around 7 percent in 2016/17. To cut the country’s carbon footprint, New Delhi wants to raise the use of gas in its energy mix to 15 percent in three to four years from 6.5 percent now. LNG imports, which account for 44 percent of gas use in the country, are duty free only if shipped in for the power sector. At a meeting with Modi on Wednesday, top officials from the power, coal, mines, oil and gas, renewables and environment ministries made a series of demands and suggestions ahead of budget on Feb. 1, in a presentation seen by Reuters. The group asked for a tax on furnace oil/pet coke to promote use of biofuels. They also sought continuation of tax incentives and benefits for the renewable energy sector beyond March. In late October, Modi set up 10 groups of senior officials to “undertake a critical review” of the government’s work in a number of areas, including energy, transport and agriculture. India, the world’s third biggest oil consumer, has also tasked its state-run oil companies to set up ethanol plants at 12 locations within a year. Among other “key planned actions”, the group has asked for long-term loans and introduction of interest subsidies of 4 percent in six months for hydro projects with more than 100 megawatts (MW) of annual capacity. To curb diesel consumption, India wants to raise the number of electric vehicles on roads to 7 million by 2020 from just around 20,000 now. The group proposed the use of electric vehicles in public transport and for government vehicles within three years. The bulk of goods in India are transported by road in diesel-guzzling trucks because of higher rail freight costs that compensate for low passenger fares and account for about two-thirds of railways’ revenue. To further restrict diesel use, the panel proposed indexing passenger fares in railways to fuel costs, within a year. Ethan Westbrooks Womens Jersey
High Oil Prices May Spoil The Party For Indian Consumers and Economy
After being insulated from an increase in the domestic fuel prices, the ongoing upsurge in global crude oil prices could spoil the party for Indian consumers of petrol and diesel. India imports 80% of its crude oil requirements and any upward movement in oil prices casts an impact on domestic prices of petrol and diesel. Domestic oil companies announced an increase in prices of petrol and diesel by Rs 1.29 and 0.97 a litre in petrol and diesel respectively from Monday (January 2, 2017). Experts feel that more such hikes could follow if crude and product prices in the global oil market continue the upsurge. The sudden increase in oil prices in international market follows decision of oil cartel-OPEC to cut production. The volatility in oil prices can be witnessed from the fact that from levels of $26 a bbl in February, crude oil prices touched the highs of $55 in December, up 15% since OPEC decision on production cut. Every one dollar increase in global crude oil prices, the exchequer will have to shell out an additional Rs 9,126 crore every year. With high oil prices, India’s oil import bill for 2016-17 will be much above the estimated $66 Bn worked at an avg import price of $48bbl. India’s oil import bill was $64bn in 2015-16, $113 bn in 2014-15 and $143 bn in 2013-14. High oil import bill will therefore mean that the country will have to fight a higher Current Account Deficit. For consumers, high prices will mean paying more for their fuel and air ticket bills. High oil prices has a cascading effect on all sectors thereby triggering inflation. Low crude oil prices during 2015 and early months of 2016 had kept inflation under check thereby helping the government to trim CAD. Larry Fitzgerald Womens Jersey
Lebanese government approves key gas, oil drilling decrees
Lebanon’s new government has issued key decrees to prepare the way for oil and gas extraction off its coast, after more than two years of political deadlock had stymied previous efforts. The decrees, which came today, authorize regulators to divide the offshore areas into blocks for drilling and exploration and to issue tenders. Earlier this decade, geologists discovered a bonanza of gas reserves off the coasts of Lebanon and Israel, sparking a frenzy of development on the Israeli side to tap into the fields. Lebanon’s government, beset by infighting and corruption, made only marginal progress toward that goal. A portion of the reserves lies in territory disputed by the two countries. The Lebanese militant group Hezbollah has issued numerous threats warning Israel not to tap into Lebanon’s gas reserves. Josh Jones Womens Jersey
Sri Lanka to renegotiate oil tanks deal with India
The Government will re-negotiate with India the agreement signed in 2002 with the hope of reacquiring at least 50 tanks for use by Sri Lanka, Petroleum Resources Development Minister Chandima Weerakkody said. Outlining his Ministry’s 2017 programme he said the refurbishment and upgrading of the Sapugaskanda Oil Refinery (SOR) will be launched this year at a cost between US$1.8 billion and US$2 billion. The minister said on the completion the SOR will increase its output to 100,000 barrels a day from less than 50,000 BPD at present and help reduce the annual oil import bill by cutting down on the import of refined petroleum products. He told a media conference that the ministry has retained Ernest and Young Ltd., to prepare a Business Plan’ for the tank farm and will also speak to all stakeholders on the matter. The tank farm in Trincomalee, built by the British during World War II, was leased to Lanka IOC in 2002 as part of a privatization deal, by the then UNP government, giving the Indians a presence in the port. The Ceylon Petroleum Corporation (CPC) had attempted to refurbish 30 tanks with the help of Lanka IOC but the project did not come off. The minister said three oil tanks each will be set up in Trincomalee and Hambantota to store petroleum products to prevent any shortage in the two future mega industrial zones. Commenting on the ongoing drought the minister said his Ministry would provide all assistance to the Power and Renewable Energy Ministry for an uniterrupted power supply. Year 2016 was extremely successful with the CPC recording a profit of Rs.85 billion, Petroleum Research Development Secretariat (PRDS) US$369 million and the Ceylon Petroleum Storage Terminals Ltd. (CPSTL) Rs.2.7 billion. Meanwhile, the minister said the unity government would continue in office until 2020, whatever the joint opposition, SLPP and Mahinda Rajapaksa loyalists said because it was strong enough to withstand any kind of political challenges coming its way. Nolan Ryan Womens Jersey
South Sudan plans to increase oil production as prices rise
South Sudan is planning to increase its oil production in the coming days as oil prices increase following last month’s Opec agreement to cap output, a top diplomat in South Sudan embassy told Gulf News. “We are planning to increase oil production as oil prices go up to increase our revenue and expand the ways of oil industry,” said Mayom Alier, Deputy Head of mission in South Sudan embassy in Abu Dhabi. He did not give a specific figure to what extent output is expected to rise but said they are trying to reach the levels of 500,000 barrels per day which the country was producing when the conflict began in 2013. The current oil production of South Sudan, which is heavily dependent on oil revenue, is about 130,000 barrels per day. The country’s oil output plummeted due to conflict following the rebellion of former vice president Riek Machar in 2013 and the escalation of fighting in the subsequent months. According to the diplomat, 98 per cent of the country’s budget is dependent on oil revenue and the drop in oil prices has heavily impacted its economy. “We suffered the most due to low oil prices. Rise in oil prices is a good news for us.” South Sudan has the third largest oil reserves in sub-Saharan Africa after Nigeria and Angola. The main oil companies operating in the country include China National Petroleum Corporation, India’s Oil and Natural Gas Corporation and Malaysia’s Petronas. The landlocked country does not have oil infrastructure and uses the pipeline in its northern neighbour Sudan to transport its crude oil to the international market. South Sudan is also trying to strengthen its trade ties with the UAE, but it is yet to sign protection of investment agreement and double taxation avoidance agreement with the emirates. “South Sudan offers investment opportunities in tourism, oil industry and in agriculture sectors for the UAE government to invest,” said Alier. “We have enormous resources that are yet to be tapped. As the UAE mulls investment in various countries, South Sudan could be a good option in future specially in areas of food security.” South Sudan, which gained independence from Sudan in 2011, opened its embassy in Abu Dhabi 2014. Opec (Organisation of the Petroleum Exporting Countries) and non-Opec members reached an agreement on November 30 to slash production by about 1.8 million barrels per day starting this week to stabilise oil prices. International benchmark, Brent surged by more than 20. Evgenii Dadonov Authentic Jersey
Oil business seen in strong position as Trump tackles tax reform
Big Oil could be in a unique position to protect its interests against a Republican proposal to tax imports, given that President-elect Donald Trump’s cabinet is studded with oil champions sensitive to the risk of higher gasoline prices. Trump’s emerging leadership includes Exxon Mobil Corp Chief Executive Officer Rex Tillerson as secretary of state, former Texas Governor Rick Perry as energy secretary and Oklahoma Attorney General Scott Pruitt as Environmental Protection Agency administrator. Trump himself has made no secret of his support for the energy sector. And in Congress, both Republicans and Democrats have close industry ties, including House tax panel chairman Kevin Brady, a Texas Republican whose district takes in the northern Houston suburbs. House Republicans want to adopt a sweeping tax reform that would sharply reduce tax rates for corporations and end the taxation of U.S. corporate overseas profits. But a provision known as border adjustability is stirring up controversy. Though intended to boost U.S. manufacturing by exempting export revenues from tax, the provision worries some industries because it would also tax imports. Because U.S. oil refiners import about half the crude oil they use to make gasoline, diesel and other products, analysts say the change could lead to higher gasoline prices and potentially undermine economic growth. Integrated oil companies such as Exxon, Chevron Corp , BP Plc, Royal Dutch Shell Plc and ConocoPhillips could also be hit, depending on whether they are net importers. But the industry’s allies would likely move to soften any rough edges, analysts say. “I don’t see this mix of leadership figures in the House, Senate and the White House, doing something that has the effect of raising gasoline prices,” said Peter Cohn, an energy analyst with Height Securities, a Washington-based investment firm. The danger is that a move to protect the oil refiners could open the door to assistance for other industries, including retailers and automakers, which would also face higher costs if no longer able to deduct the cost of imports from their taxable income. Such a knock-on effect could prevent border adjustability from raising an expected $1 trillion in revenues to help pay for lower tax rates over the next decade. “We hope that raising these concerns early in the process will allow members of Congress to consider the issues carefully,” Chet Thompson, president of the American Fuel and Petrochemical Manufacturers trade group, said in a statement. Brady said earlier this month that his committee was sensitive to the impact on specific businesses and “listening very closely to how we can make sure we smooth that out.” Moreover, some economists dismiss industry worries about higher import costs, saying the dollar’s value would rise in response to such sweeping tax changes and ultimately reduce the cost of imports. Currency markets would adjust to higher oil prices by lowering the dollar value of crude, they predict. “This argument by the oil industry is, frankly, all wrong,” said Douglas Holtz-Eakin, former director of the nonpartisan Congressional Budget Office, who now heads the American Action Forum think tank. “Refiners are going to be basically held harmless. They’ll have a lower dollar price of oil. Net cost is the same. And they go about their business. I’m unsympathetic,” he added. Height Securities’ Cohn said Trump and his advisers could look for ways to soften any blow to refiners and their customers: “Trump doesn’t want to have refineries closing on his watch.” Oil already benefits from several tax code provisions in place for decades that would be eliminated under the House Republican plan. But they stand to gain more than they will lose. For instance, an existing tax deduction for domestic production lets oil producers shave down their corporate tax rate to 32 percent from the top headline rate of 35 percent. Under the congressional Republicans’ plan, the corporate rate would be cut to 20 percent; under Trump’s plan, to 15 percent. Similarly, companies that now write off intangible drilling costs or get a tax allowance for asset depletion would be able to immediately expense capital investments. Then there is a tax credit oil companies claim for fees from foreign countries. Congressional Republicans would eliminate foreign taxes altogether, while Trump would maintain taxation at a substantially lower rate. Derek Dorsett Authentic Jersey
RIL pumps offer diesel at lower price than PSUs to regain market share
Reliance Industries has slashed the price of fuel to snatch back market share lost to state pumps in the days after demonetisation, when the latter accepted old notes for some time and currently offer a discount on digital purchases. Filling stations run by Reliance Industries have begun offering diesel to customers at 1 discount to the price offered by pumps run by state companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum. “That (Reliance’s price discount) could have happened because of the incentive scheme provided by the PSUs,” Indian Oil Chairman B Ashok said. “Market-to-market, we would respond, if it is going to induce a fresh set of competitive pressure. Each market has its own tendencies, so we will respond accordingly.” State-run pumps are already feeling the heat in a little more than a week since Reliance’s diesel price discount began. “Reliance pumps have significantly gained share in the specific markets they operate in,” said Nitin Goyal, treasurer at All India Petroleum Dealers Association (AIPDA), a body of state pump dealers. At a meeting slated for January 7 in Bengaluru, the association will discuss, among other things, ways to neutralise Reliance’s move, Goyal said. To be sure, Reliance operates just 1,100 filling stations, mostly in Gujarat and some in southern states. But in the business of fuel sales, the slightest discount per litre can effectively wean away customers from a rival pump as the overall gains can be significant due to big volume play. Diesel sales are about three times that of petrol in the country. Reliance Industries declined comment. After the government banned old 500 and 1,000 notes in November, state-run pumps were allowed to accept the demonetised notes for fuel purchases for several days, drawing customers away from private pumps that couldn’t accept banned notes. The government also directed state pumps to offer 0.75% discount on fuel purchases, making diesel cheaper by about 40 paise. “But this comes as cashback after a few days. Reliance’s discount is bigger and upfront, making it more attractive for customers. Second, Reliance allows customers to use cash to load their prepaid cards while we have been instructed to allow only digital means. This again offers Reliance customers an advantage,” said Goyal of AIPDA. A staff at a Reliance-run pump said it imposed no ceiling on discounts, while state pumps offered a digital discount on a maximum purchase of 2,000 for a customer each time. A decade back, Reliance had grabbed about 14% in diesel sales in just a few years, using a mix of quality fuel, convenience, better service and loyalty programme. It had shuttered fuel retailing after oil spike brought back government price control. This time though Reliance has been slow to expand. Ron Parker Authentic Jersey
ONGC Videsh qualifies to bid for Iran oil, gas projects
ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), has won rights to bid for oil and gas development projects in Iran. OVL is among the 29 international oil companies from more than a dozen countries that Iran has pre-qualified to bid in the upcoming tender for oil and gas projects, according to the list put out by National Iranian Oil Co (NIOC). Others on the list include Royal Dutch Shell Plc, China National Petroleum Corp (CNPC), Total SA of France, Russia’s Gazprom and Eni of Italy. Iran, the holder of world’s fourth-largest oil reserves and OPEC’s third-largest oil producer, is hoping to attract as much as USD 150 billion in foreign investment in its oil, gas and petrochemicals sectors over the next few years. The list of pre-qualified firms also included Malaysia’s Petronas, Russia’s Lukoil, China’s CNOOC and Sinopec, Inpex of Japan, KOGAS of Korea. Most of these companies have been involved in Iran’s oil industry projects before the US- tailored sanctions were imposed against the country in 2011. Newcomers include Wintershall from Germany, Maersk from Finland, DNO from Norway and CEPSA from Spain, according to the NIOC list. US oil services provider Schlumberger Ltd was also among those identified, according to the NIOC website. OVL is already present in Iran. In 2008, it had discovered the Farzad-B gas field in the Farsi block in Persian Gulf. The discovery has an in-place gas reserve of 21.7 trillion cubic feet, of which 12.5 tcf are recoverable. “We are in negotiations with Iran for development rights of Farzad-B field,” a senior company official said. “Discussions on continuing a development plan that we submitted to Iranian authorities. We are hoping negotiations will continue soon.” Gas produced from the field can either be converted into LNG by freezing at sub-zero temperature and shipping in cryogenic ships to India or transported through a pipeline — via overland passing through Pakistan or sub-sea. The official said the OVL will definitely look at participating in the bid round that Iran will hold using a new, less restrictive Iran Petroleum Contract (IPC) model. The IPC model ends a buy-back system dating back more than 20 years under which Iran did not allow foreign firms to book reserves or take equity stakes in Iranian companies. Under a buyback deal, the host government agreed to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces. But now, NIOC will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output. Also, different stages of exploration, development and production will be offered to contractors as an integrated package, with the emphasis laid on enhanced and improved recovery. The new IPC is said to be more flexible terms that take into account oil price fluctuations and investment risks. Jaromir Jagr Womens Jersey
HPCL to invest Rs 12 billion in city gas distribution business
Hindustan Petroleum Corp. Ltd (HPCL) plans to invest Rs 12 billion in city gas distribution (CGD) to expand network and build infrastructure, a company official said.“We would be investing Rs 12 billion in the next three to five years in various city gas distribution networks that we have. We are bullish on this segment and plan to expand our reach to more cities than we are in now,” the official said on condition of anonymity. HPCL has three city gas distribution joint ventures: Aavantika Gas Ltd, Bhagyanagar Gas Ltd and Godavari Gas Ltd.Aavantika Gas, its joint venture with GAIL (India) Ltd in Madhya Pradesh, supplies piped natural gas (PNG) to consumers in domestic, industrial and commercial sectors and compressed natural gas (CNG) for automobiles in Indore, Ujjain and Gwalior. Jim Otto Authentic Jersey
Indian Oil to deploy unique digital assistant app for field force as part of Digital India initiative
In support of the Digital India initiative, Indian Oil Corporation Ltd. (IndianOil) had deployed a new technology initiative, a ChatBot, at the recently concluded PETROTECH-2016, the 12th International Oil & Gas Conference and Exhibition at Delhi held under the aegis of the Ministry of Petroleum & Natural Gas. The ChatBot was deployed as a downloadable app. to serve as a digital assistant to the delegates, providing them with all the information on conference sessions, exhibition, speakers, special events, facilities and other useful information digitally on their mobile phones or on the event website. ChatBot is an intelligent conversation tool between humans and machines, where people can ask questions in the natural language and the bot, using its natural language capabilities and artificial intelligence technology, understands the context and replies to the query by fetching relevant information from the database at the backend. The initiative was taken in partnership with M/s. Microsoft. In view of the huge success of ChatBot at the PETROTECH-2016 Conference, IndianOil is planning to deploy this technology for its internal stakeholders with an aim to assess its usefulness to the field force in their day-to-day working. Earl Thomas Jersey