ONGC, Cairn India demand lowering of cess on crude
Ahead of the Budget, state-owned oil producer ONGC and private sector Cairn India have asked the government to cut cess on crude oil saying the switchover from fixed to ad valorem rates had turned things from bad to worse. The producers want the government to cut the cess to 8 per cent of the price they realise on sale of domestically produced crude oil. In the previous Budget, Finance Minister Arun Jaitley had converted Rs 4,500 per tonne fixed cess on crude oil to 20 per cent ad valorem. “The 20 per cent cess rate provided benefit for a temporary period only up to moderate crude prices,” their association PetroFed last month wrote to Revenue Secretary Hasmukh Adhia. With the oil cartel OPEC deciding the cut production, global oil rates have started moving up. “As a result the domestic producers of crude oil are again feeling the pinch with 20 per cent ad valorem cess and are in fact in a much worse off than before,” PetroFed wrote. It said there was an urgent need to reconsider the issue and provide the much needed relief to the domestic oil producers. “On behalf of industry, we would once again like to submit for an expeditious correction in the levy of cess on domestic crude oil production from 20 per cent to 8 per cent of the realised price of crude oil,” it said. PetroFed said reducing the cess rate would help to expeditiously increase oil production, meeting vision of ‘Make-in-India’ and enhance energy security. The Oil Industry (Development) Act, 1974 provides for collection of cess as a duty of excise on indigenous crude oil. Cess incurred by producers is not recoverable from refineries and thus forms part of cost of production of crude oil. The cess was levied at Rs 60 per tonne in July 1974 and subsequently revised from time to time. During 2005-06, when crude oil prices had increased from an average of USD 40 per barrel to USD 60 per barrel, OID Cess was increased from Rs 1,800 to Rs 2,500 per tonne from March 1, 2006. Again, when the crude oil prices increased to over USD 100 per barrel, the rate of cess was increased by the government to Rs 4,500 per tonne (USD 10 per barrel) with effect from March 17, 2012, PetroFed wrote. It said the government had effectively linked the cess rate to prevailing crude oil prices in the past. Most of crude oil produced in India comes from pre-NELP and nomination blocks and is liable for payment of cess. While New Exploration Licensing Policy (NELP) blocks like Reliance Industries’ KG-D6 area are exempt from payment of cess, pre-NELP discovered blocks like Panna/Mukta and Tapti and Ravva pay a fixed rate of cess of Rs 900 per tonne. Dominik Hasek Jersey
OVL 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. Al Horford Womens Jersey
More CNG pumps to come up by year-end
Vehicle riders and housing societies in the city can expect availability of compressed natural gas (CNG) within close proximity of their residence. CNG supplier Maharashtra Natural Gas Limited (MNGL) has chalked out an extensive plan for the year to start more CNG pumps and widen the reach of piped gas connections at housing societies across Pune and Pimpri Chinchwad. As part of expansion plan, MNGL has approached the Pune Municipal Corporation (PMC) seeking vacant spaces in eight areas to set up refilling units. It is also exploring options to hire more than 20 to 25 plots of private land to set up refilling stations. By the end of 2017, the company plans to take up the number of CNG pumps beyond 50. Darren Fells Authentic Jersey
Mahanagar Gas Limited Launches CNG Kits For Two-Wheelers in Mumbai
Continuing in its endeavor to protect the environment through its eco-friendly fuel, Mahanagar Gas Limited (MGL) in association with M/s Eco Fuel (Indian Partners of Lovato, Italy) launched CNG fueled two-wheelers on January 1. Union Minister of State (Independent Charge) for Petroleum and Natural Gas Dharmendra Pradhan launched the company’s initiative in Mumbai, in the presence of Vinod Tawde, Minister for Education, Youth, Sports & Cultural Affairs and Guardian Minister of Mumbai Suburban, Government of Maharashtra. Dharmendra Pradhan also launched e-wallet payments for CNG filling stations, thus supporting the government’s objective of making India a cashless economy. Other dignitaries including MP Poonam Mahajan, MLA Adv Trupti Prakash Sawant, Rajesh Pandey, Director – MNGL, B.C Tripathi, Chairman & Managing Director – GAIL (India) Limited and Rajeev Mathur, Managing Director – MGL also attended the event. The CNG kit for two wheelers comprises of two CNG cylinders of 1.2 kg each, which can run up to 120 to 130 km per kg at an approximate cost of Rs 0.60 per km. In the initial phase, the scooters shall be retrofitted with a CNG kit manufactured by Lovato. Presently two kit manufacturers namely M/s ITUK & M/s Lovato have got two-wheeler CNG kits approved by ARAI, Pune and ICAT Gurgaon respectively. Lovato has got approval for 18 scooter models of various OEMs present in the market. Considering the huge potential of this segment, other kit manufacturers are also planning to launch their two-wheeler kits. Salient features of a two-wheeler CNG kit: • CNG Cylinders: Two, each having capacity to 5 litres • One fill CNG quantity: 1.2 Kg (0.6 kg in each cylinder) • Mileage on CNG: Average 90 km/kg and 110 km per fill • Per KM operating cost: Approximately 60 paise per km The following two-wheelers can run on CNG fuels: Hero Duet with 110.9 Engine cm3 TVS Jupiter with 109.7 Engine cm3 Hero Maestro with 109 Engine cm3 TVS Scooty Zest with 109.7 Engine cm3 Hero Pleasure with 102 Engine cm3 TVS Wego with 109.7 Engine cm3 Honda Activa 125 with 124.9 Engine cm3 Vespa with 124.49 Engine cm3 Honda Dio with 109.2 Engine cm3 Yamaha Alpha with 113 Engine cm3 Mahindra Duro DZ with 124.6 Engine cm3 Yamaha Fascino with 113 Engine cm3 Mahindra Gusto with 109.6 Engine cm3 Yamaha Ray with 113 Engine cm3 Mahindra Gusto 125 with 124.6 Engine cm3 Suzuki Access with 124 Engine cm3 Suzuki LET’S with 112.8 Engine cm3 Suzuki Swish with 124 Engine cm3 Easy availability and accessibility of CNG stations should keep filling time to the minimal, except some pockets in the day that will take more time due to shift changes of the autos and taxis. The average distance between CNG stations across in the given zone is as follows: Western: 1.52 KM; Central: 1.47 km; Navi Mumbai: 3.2 km; Kalyan, Dombivali, Ambernath and Badlapur (KDAB): 4.5 km. The present infrastructure has the capacity of dispensing more than 2.7 million kgs of CNG per day which can fuel over 1 million vehicles in its operational area. Additionally, MGL has also launched MGL Connect Mobile App (available on Google Play Store) which will assist consumers find the nearest CNG station in MMR and nearby areas for convenient refueling. MGL also promotes the opening of CNG stations from third parties on availability of plots and other pre-requisite permissions. Joe Kocur Womens Jersey
All eyes on imported gas to meet Pakistan’s energy requirements
Despite extensive drilling by oil and gas E&P companies that resulted in over 90 new discoveries in just three years, the much-talked about IP, TAPI and LNG projects are considered the thirst-quenching streams for the energy starved nation. Now with the concerted efforts of the present government, the decades old projects-Iran-Pakistan (IP), Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipelines and import of Liquefied Natural Gas (LNG) – are almost in practical phase. Last year has already seen LNG’s import, while work on TAPI began in December, 2015. Similarly, the IP project will hopefully commence this year after amendment in the gas sale-purchase agreement with Iran. Critics believe it or not, there is light at the end of the tunnel as setting sun of 2017 will see end to this crippling legacy of the previous years when energy shortages started to hit the country slowly and steadily. In Pakistan, the gas supply-demand gap has reached 4 Billion Cubic Feet per Day (BCFD) as total gas demand of the country is 8 BCFD against total supply of 4 BCFD. Needless to say, in winter, the demand rapidly increases. “The country has no option other than to import gas whether it is LNG or through IP and TAPI pipeline projects as its existing reserves are depleting and there is no major find since long,” Secretary Ministry of Petroleum and Natural Resources said while addressing a seminar titled “Transparency in public sector: An appraisal.” The present government, he said, was eyeing on imported gas besides accelerating local oil and gas exploration and production (E&P) activities to meet the ever-growing energy needs in the country. Commenting on IP project, official sources in the Ministry revealed that the government was in the process of negotiating amendments in the Gas Sale Purchase Agreement (GSPA) with Iran for early implementation of the much-delayed project, which was conceived in mid-1950s. “A draft amendment has been shared with Iran, and it has agreed to negotiate on it along with some other amendments in the GSPA, following which construction work on the pipeline is expected to commence soon in collaboration with China,” the sources aware of the project updates said. Sharing details of the project, the sources said Inter-Governmental Framework Declaration was signed between the two countries on May 24, 2009, while GSPA had been agreed on June 2009. Subsequently, Pakistan issued sovereign guarantee on May 28, 2010. The project consultant was appointed on April 11, 2011, while the design, feasibility, route survey and other formalities of the project were completed on September 8, 2012. The 56-inch diameter pipeline will start from South Pars gas field in Iran and end at Nawabshah, covering a distance of around 1,931 km with 1,150 km portion in Iran and 781 km in Pakistan. The 750 mmcfd gas flow in the IP pipeline is projected to help generate around 4, 000 MW electricity ALSO, along with creating job opportunities in backward areas of Balochistan and Sindh, the sources said. Commenting on TAPI project, the sources said Prime Minister Nawaz Sharif along with other regional leaders performed the groundbreaking of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project in Turkmenistan in December last. The groundbreaking ceremony took place near the city of Mary in the southeastern part of the central Asian country, close to the giant Galkynysh gas field which is meant to provide gas for the 1,814-kilometre (1,127-mile) link. The $10 billion pipeline, from Turkmenistan via Herat, Kandhar, Chaman, Quetta and Dera Gazi Khan to Multan and onwards to India, is expected to be operational by 2019. A state-owned company of Turkmenistan is the consortium for the TAPI and overseeing coordination in the construction, financing, ownership and operation of the project. As per the agreement, it was prerequisite for Pakistan, India and Afghanistan to have five per cent shares each in the project. Turkmengaz, leader of the consortium, would have 51 per cent shares, with the rest marked for partner countries It is pertinent to mention here that Pakistan is already working on laying a 42-inch diameter 700-kilometer gas pipeline from Gwadar to Nawabshah, and a 1122-kilometer north-south (Karchi-Lahore) gas pipeline that can be used for supply the both regassified LNG and imported gas under IP and TAPI. On LNG import, the official sources said this year Pakistan signed a 15 year agreement with Qatar to import up to 3.75 million tonnes of LNG a year, which was being highly appreciated by the business community as the previous governments had been reluctant to take any practical step in this regard. After arrival of LNG, industries, gas-based power units, CNG sector, fertilizer plants and especially domestic consumers started receiving uninterrupted supply, which is not less than of any miracle by any mean. A LNG-terminal is already operational at the Port Qasim, while two more each at Gwadar and Karachi are also being set up on priority basis to handle increased cargoes of the imported commodity for onward injection in the transmission network of gas companies – Sui Northern Gas Pipeline Limited and Sui Southern Gas Company Limited. With the present government firmly resolved and making all-out efforts to bring these projects to maximum fruition, the sources expressed high hopes that gas shortfall problem would be solved to maximum extent within remaining period of the government. Dion Lewis Jersey
Iran and India eye a refinery deal in northern Brazil
Talks between Brazil, Iran and India could result in the construction of an oil refinery and petrochemical plant in one of the South American nation’s poorest states, according to politicians, a diplomat and other people close to the talks. The state of Maranhao, on Brazil’s northern Atlantic coast, is offering a 5,000-acre site for the project, according to a senior official in the state’s government, who requested not to be named because he doesn’t want to jeopardize the talks. The area already has a deep water port for tankers and its location would provide relatively easy access to the Pacific and Asia via the Panama Canal. Despite extensive oil reserves, Brazil lacks refining capacity. The project would help Brazil address its dependence on refined fuel imports and could provide a boost to the local economy, Jose Reinaldo Tavares, a federal lawmaker, said in an interview. The project would require investment of at least $2.5 billion, according to the legislator, who recently travelled to Tehran and New Delhi as part of an official delegation from Maranhão. Iranian oil officials have visited the proposed site twice already, a local Maranhao official said. Mohammad Ali Ghanezadeh, Iran’s ambassador to Brazil, said in an interview that his government is “very much interested” and “ready to put money and energy” into the project. He added that the main obstacle to the deal are U.S. banking sanctions. Engineers India Ltd, a New Delhi-based design and engineering company, is participating in the discussions but its involvement will depend on financing conditions, according to people in India and Brazil familiar with the talks. Ryan Succop Jersey
New Year begins with crude shock for consumers as all fuels become costlier
The New Year started on a crude note for consumers as fuels across the board became costlier due to an uptick in global oil prices in the wake of a global production cut deal among major oil exporters, including Opec and Russia. State-run fuel retailers raised petrol price by Rs 1.29 a litre, the third in a month. Diesel rate was hiked by 97 paise a litre, marking the second increase in a fortnight. The actual price, however, at the pumps will be higher since the revised prices are excluding local levies. The price of subsidised LPG cylinder was also raised by Rs 2 in line with a decision to raise prices every month till the price attains parity with market rates. Jet fuel also became costlier by 8.6%, or Rs 4,161 per kilolitre (kl), to Rs 52,540.63 per kl in Delhi. While airlines are loathe to pass on reduction in the price of fuel — which accounts for 40-50% of operational costs — they are quick to raise fares on costlier fuel. Jet fuel rates were reduced by 3.7% last month. Global benchmark oil, Brent, which has nearly 30% weightage on India’s crude bill, has risen 52% in 2016, especially pushed by the production cut deal. after in this year, substantially oil prices Brent rose 52 percent this year and WTI climbed around 45 percent, the largest annual gains since 2009, when the benchmarks rose 78 percent and 71 percent respectively. As a result, India’s crude purchase cost has risen to $54.55 a barrel from an average of $44.46 in November. Vernon Hargreaves III Jersey
Petronet signs pact to set up $950 mn LNG project in B’desh
India’s largest LNG importer Petronet has signed an agreement to set up a USD 950 million liquefied natural gas import project in Bangldesh. Petronet signed a MoU with with Petrobangla to set up a 7.5 million tonnes a year project to receive and regasify LNG on Kutubdia Island in Cox’s Bazar and lay a 26-km pipline to connect it to the consumption markets. “We intend to start marine survey work this month and are targeting 2020 for completion of the project,” Petronet LNG CEO and Managing Director Prabhat Singh told here. Singh signed the memorandum of understanding with Petrobangla secretary Syed Ashfaquzzaman on December 30. The project envisions future expansion and can be used to supply LNG through small barges and LNG trucks to users which are not connected by gas grid. While what has now been signed is just a preliminary agreement, a formal pact will be signed once a joint venture is agreed between Petronet and Petrobangla. “We are keen that Petrobangla becomes part of the joint venture (building the LNG) project and are willing to offer them up to 26 per cent stake. But they are not keen to invest due to fund constraints. So we would like them to keep a nominal interest of say 5 per cent or so,” he said. Petronet, he said, is not looking at partnership with Petrobangla for funds but only for project securitisation. “We want an assurance that they will buy the gas we import,” he said. Singh said his company is also keen to rope in state gas utility GAIL India Ltd in the project at some point of time to help implement the pipeline that is to be laid to connect the import facility with consuming markets. And others like Indian Oil Corp (IOC) too can join if city gas projects are to be developed, he said. “GAIL may be wanting to sell LNG into Bangladesh and then there is this pipeline. So, it will be a great fit if they join the project,” he said. Bangladesh has a lot of unmet demand. Gas demand is projected to more than double to 45 million tonnes from current 20 million tonnes in next 20 years. “The LNG projects planned will not be able to meet all of this demand,” he said. Petronet’s import terminal is expected to be completed within four years. Excelerate Energy is looking at setting up a floating terminal at Moheshkhali. Ethan Pocic Authentic Jersey
Outlook for Energy
Outlook for Energy is Exxon Mobil’s global view of energy demand and supply through 2040. In 2040, oil use will be slightly lower and natural gas slightly higher with a total of 58% of the global energy mix. Natural Gas demand rises the most, largely to help meet increasing needs for electricity and to support rising industrial demand. North America is about to become an important energy player in this new energy paradigm. Introduction: Exxon Mobil’s 2040 outlook is an important study and a stark reminder that the “global energy mix” will be basically the same for Oil and Gas, looking as far as 2040, with only a few differences. Since the Industrial Revolution started, Oil and Natural gas have played an instrumental role in economic transformation and mobility in our industrialized and “modern” World. Oil was so fundamental in the 20th Century, that we regard it often as the “Age of Oil”. Today, Oil and Natural gas are still playing a pivotal role in the current global energy mix. Today, approximately 35% of primary energy used globally is assured by oil-based fuels, and natural gas represents a further 22% of total world energy mix. In 2040, oil use will be slightly lower and natural gas slightly higher with a total of 58% combined. Which means that oil will remain the world’s primary energy source through 2040. Why is this important? Because energy is fundamental to modern life. It is critical to human progress and to improving living standards for billions of people across the globe. Deion Sanders Jersey
Lined up for 2017 Kochi. Reloaded
In the pipeline LNG deadline revised 2016 too proved to be a non-starter year for the LNG pipeline project from Kochi to Mangaluru. However, a major development connected to the project did happen last year. The oil and natural gas regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has revised the deadline for laying the Kochi-Koottanad-Bengaluru-Mangaluru natural gas pipeline network to February 2019. But now GAIL now says that it is committed to complete the project by the second half of 2018, ahead of the revised timeline. In a letter to Gas Authority of India Limited (GAIL), which is tasked with the laying of the pipeline, dated December 8, PNGRB stated that the new schedule was announced considering the recommendation of Ministry of Petroleum and Natural Gas. The initial deadline for completion of the project was June 2015. GAIL had resumed work on the Phase-II of Kochi-Koottanad-Bengaluru-Mangaluru Pipeline in the state in October 2016. The IL&FS Engineering Services, which bagged the contract for the pipeline laying work, divided the entire 503-km pipeline project into four parts. Kochi Refinery Expansion Kochi Refinery expansion is part of BPCL’s D200 billion integrated refinery expansion project, which also includes a D50 billion petrochemical project to produce specialty chemicals. The work on its 15.5-million ton refinery expansion in Kochi is almost completed and the commissioning will take place in the fourth quarter. The Refinery may look at further increasing its capacity to 22 million tons (MT). “With land acquisition becoming one of the biggest hurdles in new projects, we may look at further increasing the Kochi capacity to 22 MT at a later stage as we have enough land there even after the ongoing D1650 billion work,” said a top official of BPCL. Infopark Kochi Infopark Kochi’s ambitious second phase on 167 acres turned operational with the commissioning of the Cognizant campus. Once completed, the D25 billion project will have 8 million sq.ft. space, generating 80,000 jobs. Infopark Kochi, started the year 2016 by throwing open the first IT building on six acres with a total built-up area of 0.33 million sq.ft. at Koratty in Thrissur district. Another development is that World Trade Centre, Kochi with state-of-the-art infrastructure developed by Brigade Group with Kochi Infopark, was launched on the Infopark campus. The foundation stone for IBS Software campus on nearly five acres with a built-up area of 0.6 million sq.ft. was laid at Infopark. Kerala Startup Mission Year 2016 was significant for the startups in Kerala. The startup village in Kalamassery was taken over by Kerala Startup Mission. Now the government entity is trying hard to make an impact in the startup ecosystem in the country. Larger drydock for Cochin Shipyard The Cochin Shipyard is all set to receive an investment to the tune of D18 billion for the construction of a larger drydock at the yard and another D9.70 billion for the upcoming International Ship Repair Facility (ISRF) on the Cochin Port premises. The Shipyard had already received environmental clearance for both these projects. The proposed initial public offering (IPO) – stock market sale of 3,39,84,000 equity shares of Rs 10 each amounting to an equity capital of D339.84 million of the yard – to raise funds for both the projects. Even though the timeline for the IPO is not yet declared, the PSU major is all set to enter into the stock market in 2017. Zack Martin Jersey