ONGC Top Guns Face Travel Allowance Cut
The directors at Oil and Natural Gas Corp (ONGC) are set to lose the perk of claiming full travel allowance and comforts while working in Delhi that helped them claim piles of cash on top of their salaries. The directors are officially based at Dehradun, the company HQ, but mostly operate from Delhi and end up being on a perennial tour to Delhi, claiming daily allowance, residential and any other benefit available to a visiting top executive. An oil ministry decision will now end this. For directors, the headquarters will be changed to Delhi, said sources with direct knowledge of the matter. “The company’s headquarters will remain at Dehradun. The shift from Dehradun to Delhi is only with respect to directors’ base. This will help us save public money,” said a source. At present, most directors have company-paid accommodations in Delhi and Dehradun or another city, sources said. The houses, called transit accommodation, are in posh localities of Delhi with monthly lease of Rs 2 lakh or more. Another perk directors will lose is daily allowance of about Rs 1,800 or roughly Rs 50,000 per month. The food and transport is also paid for by ONGC. “As per terms and conditions of their appointment, the ‘headquarters’ of CMD and functional directors is Dehradun. However, in the terms and conditions of appointment of director (onshore) received from ministry of petroleum & natural gas on 27.09.2016, his headquarters has been mentioned as ‘New Delhi’,” ONGC said in response to ET’s email query. According to sources, similar communications are being sent to other directors and chairman as well. “During their stay at Delhi, chairman & managing director/directors are provided with transit accommodation instead of hotel. “However, during their visits to Dehradun, they avail ONGC guest house. CMD/directors are not claiming any DA for their stay at Delhi,” ONGC said. At present, ONGC has seven functional directors, including the chairman, two government nominee directors and three independent directors, according to its annual report. Linus Ullmark Jersey
No option but to run Gail pipeline through farmland: Union min
Union petroleum and gas minister Dharmendra Pradhan has reiterated that the gas pipeline in western districts of Tamil Nadu will go only through farmland and there is no other alternative to the pipeline along highways. In a letter to DMK Rajya Sabha MP Kanimozhi, the minister said the Centre would hold talks with the Tamil Nadu government and find a solution the problem. Gas Authority of India Limited (GAIL) is laying pipes from Kochi to Bengaluru through Coimbatore, Tirupur, Salem, Dharmapuri and Krishnagiri. Of the total 879km, the pipeline will be passing through 310km in Tamil Nadu. “You had raised the issue in the Rajya Sabha as a calling attention motion. I consulted the company officials on the project. The farmers will retain ownership of their land even after the pipes are laid,” said Pradhan. Adding, since the pipes are laid one metre below the ground, there is no danger to crops cultivated in the land. He said pipes could not be laid on highways as it was not possible to set up valve stations and maintenance stations. Farmers in the districts are apprehensive of losing their land. “Land will be acquired only on a temporary basis and only if there are trees or buildings which need to be uprooted or demolished. Suitable compensation will be paid based on the revenue loss as well as based on the Petroleum and Minerals Pipelines (Acquisition of Right of User Inland) Act, 1962,” said the minister. The Supreme Court on February 2, 2016 ordered the Tamil Nadu government to compensate the farmers as per the market rate as on January 1, 2016. “The court had ordered 10% of the land value and 30% on compassionate basis to the farmers for the use of the farmland. After laying of the pipes, the land will be returned to the farmers who can carry out normal cultivation activities on the land,” he said. Ben Hutton Womens Jersey
RIL should pay for illegally extracting gas: CPI(M)
Latching onto the observations of the AP Shah committee on compensation Reliance Industries Limited should pay to ONGC for producing the state-run firm’s gas, the CPI(M) today demanded the Centre “fully recover” cost of the volume of gas the private player “illegally” migrated to Krishna Godavari basin. “The RIL should return the cost of the gas that it was not entitled to and had illegally extracted for commercial gains. “The Politburo demands that on the basis of the Committee report, this amount that is legitimately due to the exchequer must be fully recovered from the RIL. Additionally, the RIL should be penalised for this illegal act, in accordance with our laws,” the CPI(M) said in a statement. The Justice AP Shah Committee report on the compensation from Reliance Industries Ltd regarding the Godavari-KG Basin natural gas fields was submitted on August 31. As much as 11.122 billion cubic metres of ONGC gas had migrated from its Godavari-PML and KG-DWN-98/2 blocks to adjoining KG-D6 of RIL between April 1, 2009 and March 31, 2015. At prevailing prices, the gas was worth Rs 11,000 crore. While ONGC’s reservoirs have almost emptied, RIL continues to produce gas from D1&D3 fields in KG-D6 block, some of it being of ONGC. Dexter Fowler Womens Jersey
Cabinet clears IOC-OIL-BPCL’s Russian stake buy for $3.14 bn
The Cabinet today gave its nod to a consortium of IOC, Oil India and BPCL buying stakes in two Russian oilfields for a total of USD 3.14 billion. Indian Oil Corp, Oil India and a unit of Bharat Petroleum Corporation(BPCL) will buy 29.9 per cent stake in Taas-Yuryakh oilfield in East Siberia for USD 1.12 billion and another 23.9 per cent in Vankor oilfield for USD 2.02 billion. The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, approved the consortium buying 29.9 per cent stake in Taas-Yuryakh Neftegazodobycha LLC, which holds and operates two licences for the Srednebotuobinskoye oil and gas condensate field, one of the largest in the East Siberia. The stake is being acquired from LLC RN-Razvedka I Dobycha (RN Upstream), a wholly-owned subsidiary of Rosneft, Russian state firm, officials said. The licence for the central block is valid till 2041 and the northern block till 2032. The consortium will buy another 23.9 per cent in JSC Vankorneft, a subsidiary of Rosneft, which holds two licences for the Vankor oil fields in East Siberia valid till 2112. Officials said the Vankor asset has been valued at USD 8.45 billion as on May 31, 2015 on zero debt and working capital basis for arriving at the acquisition price. This is the same value at which ONGC Videsh, the overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC), bought 15 per cent stake in Vankor in December 2015. That deal closed on May 31 this year and the company has signed up for buying another 11 per cent in the same field. Taas currently produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021. Vankor, on the other hand, is past its peak, which was 161 million barrels (22 million tonnes) in 2014 and 2015. It currently produces 154 million barrels. Rosneft had last year sold 20 per cent stake in Taas to BP of UK for USD 750 million. The Russian firm will hold 50.1 per cent stake in the project after the deal. Benoit Pouliot Womens Jersey
Assam CM urges petrol cos to bail out tea gardens
Chief minister Sarbananda Sonowal has urged all petroleum companies to raise their production of natural gas to bail out nearly 1.5 lakh big and small tea gardens which have been crippled by short supply of gas, which fuels the tea-making factories. Tea and petroleum together form the state’s industrial backbone. The two industries are largely concentrated in upper Assam areas, which is BJP’s new-found electoral bastion. The tea industry has been the sole source of income for several lakh adivasis of Chotanagpur origin for over two centuries now. The adivasis were brought by the British as workers in tea gardens. These tea gardens depend on natural gas as an economical source of energy for running the factories, instead of electricity which is costlier. Read More: ? Petroleum consumption to grow by 6 per cent in India: Moody’s Sonowal said, “ONGC, OIL and GAIL must take immediate steps for ensuring adequate supply of gas to the tea gardens. Around 10 lakh people spread across 1.5 lakh big and small tea gardens are dependent on the tea industry. As the present period is the peak season for tea production in Assam, continued shortage in supply of gas will adversely affect the state economy as well.” Sonowal, accompanied by state industry minister Chandra Mohan Patowary and BJP MPs and MLAs from upper Assam, met additional secretary of petroleum ministry and top officials of ONGC, OIL and GAIL in New Delhi on Tuesday. “All the petroleum companies have been urged to raise their production and their full cooperation has been sought for augmenting tea and other industries in Assam. They are to find out the causes of leakages in gas supply chain and take steps for optimum utilization,” he said. Jonathan Quick Jersey
Petroleum ministry cautions against unauthorized advertisements for Government schemes
The Ministry of Petroleum and Natural Gas (MPNG) has today issued a caution that an entity with the name `Ujjwala RGGLV Yojana’ is claiming its appointment for LPG distributorship under Rajiv Gandhi Gramin LPG Yojana. The entity in question has issued an advertisement (sample copy enclosed) in a newspaper, according to the statement released by MPNG. The petroleum ministry has clarified that the entity in question is not authorized by the Ministry to appoint LPG distributorship, and has no role in PM Ujjwala Yojana either, added the ministry release. Demar Dotson Authentic Jersey
ONGC stake sale: Subsidy burden gone, Centre eyes disinvestment
The government is understood to be re-evaluating the sale of a 5% stake in ONGC now that the oil and gas explorer will not bear any part of the subsidy burden arising out of under-recoveries from the sale of fuels. Officials privy to the developments told FE the sale could take place as soon as “the third quarter of the current financial year”. The disinvestment already has the approval of the Cabinet. At current prices, the stake sale could fetch the government in excess of Rs. 110 billion. On Monday, the ONGC stock lost 3.84% to close at R250.50 on the BSE. The Sensex fell 373.94 points to close at 28,294. 28. Between April and now, the ONGC stock has rallied 21% against a 13% gain clocked by the benchmark gauge. Should the sale go through, the government’s shareholding in the upstream oil company would fall to 63.93% from the current 68.93% and it will have moved closer to its FY17 disinvestment target of raising Rs. 565 billion. While Rs. 360 billion is sought be mopped up through stake sales in public sector undertakings, another Rs. 205 billion is to be raised from strategic disinvestment. The Maharatna has been on the government’s disinvestment radar for some time now. In late 2014, roadshows were held in some cities overseas but the proposed issue did not receive an enthusiastic response from investors who were concerned about the quantum of subsidy to be borne by the company. This time around too the government is treading carefully, not wishing to miss the disinvestment target yet again. The government has so far raised Rs. 31.83 billion in 2016-17 via disinvestments in NHPC and the sale of shares in Indian Oil and NTPC to their employees. The department of investment and public asset management will be looking to come up with at least one big-ticket offer for sale or IPO although a slew of buybacks is expected to bring in a chunk of non-debt capital receipts of an estimated Rs. 130 billion. More than a dozen companies have been asked to buy back shares to the extent they can by an amount equivalent to 25% of the aggregate of their fully paid-up share capital and free reserves. At the end of March 2015, CPSEs had surplus cash of about Rs. 2550 billion. Allen Bailey Jersey
Rahul Deep Singh appointed Hazira LNG MD
The Hazira Group of Companies, on Tuesday, announced the appointment of Rahul Deep Singh as Managing Director of Hazira LNG Pvt Ltd (HLPL) and Hazira Ports Pvt Ltd (HPPL). Nitin Shukla, MD and CEO of HLPL and HPPL, will superannuate on September 30 after 15 years of service in the Hazira Group of companies. In a statement here, Shukla said that since the commissioning of Hazira LNG in 2005, the terminal has rapidly expanded from an initial regasification capacity of 2 million tonnes per annum (mtpa) to 3 mtpa in 2008 and then further to 5 mtpa in 2013. Singh said LNG imports now account for about 45 per cent of the country’s gas demand. Hazira is a partnership between Shell Gas B.V and Total Gaz Electricité Holdings France. Both the shareholders represent two of the largest private LNG suppliers in the world. Shell and Total have a shareholding of 74 per cent and 26 per cent, respectively in each of the companies that comprise the Hazira LNG Terminal and Port project and are collectively known as Hazira Group of Companies (HGC). Wayne Simmonds Authentic Jersey
ONGC board vertically split on claiming gas compensation
The Board of ONGC is split on the issue of claiming compensation for Rs 110 billion worth of natural gas spewing from its KG basin block into adjoining fields of Reliance Industries. Justice A P Shah Committee on the issue of gas migrating from idling ONGC blocks to RIL’s producing gas fields, last month opined that the compensation for “unjust enrichment” by the Mukesh Ambani-run firm should go to the government and not the state-owned firm. It was of the opinion that the gas belongs to the government and so it alone deserves to be compensated. While ONGC had in May 2014 not hesitated from filing a case against RIL in the Delhi High Court and making the government a party to it, it is now vertically split on the issue. Sources said the section of the board which was responsible for the company in the first place taking up the issue of RIL producing ONGC’s gas wants the company to strongly contest the Shah committee recommendation. It feels that the Delhi High Court had given the company an option of approaching the court again if it is unsatisfied with any part of the dispute resolution. And so the company should approach the High Court again, they feel. The other section however feels it is not wise to fight with the government and the company having proved its point that gas did indeed migrate to RIL fields, should accept the recommendations, they said. But the former group however feels the premise on which Shah committee has based its recommendation was flawed as by the logic even RIL is not an owner of the gas in its KG-D6 block and it should just be paid a fixed rate of return on investment and not be given pricing and marketing freedom. The Oil Ministry has asked its technical arm DGH to quantify the amount of compensation that RIL has to pay. The Shah Committee stated, “The Government of India, and not ONGC, is entitled to claim restitution from RIL for the unjust benefit it received and unfairly retained. ONGC has no locus standi to bring a tortuous claim against RIL for trespass/conversion since it does not have any ownership rights or possessory interest in the natural gas.” The Shah Committee in its report noted and accepted the independent consultant D&M Report findings that connectivity between the reservoirs in KG-DWN-98/3 (or KG-D6) block of RIL and ONGC’s KG-DWN-98/2 and Godavari PML blocks is established. Since April 1, 2009, when RIL began production from KG- D6, to March 31, 2015, 7.009 and 4.116 billion cubic meters of gas had migrated from Godavari PML and D1 discovery of KG- DWN-98/2 block respectively to KG-D6. Of this 5.968 and 3.015 bcm of gas was produced from Godavari PML and D1 discovery of KG-DWN-98/2 block respectively, through KG-D6. The report further said by January 1, 2017, 7.519 and 4.377 bcm of gas would have migrated from Godavari PML and D1 discovery of KG-DWN-98/2 block respectively to RIL’s KG-D6. Of this, 6.549 and 3.395 BCM of gas would have been produced from Godavari PML and D1 discovery of KG-DWN-98/2 block respectively through KG-D6. Latavius Murray Authentic Jersey
Reliance Industries, ONGC face 18% cut in natural gas price
India will probably cut the price of natural gas by about 18 per cent in a setback for explorers, a survey by Bloomberg News shows. The government-set price will track a global decline and fall to less than $2.5 per million British thermal units for October through March from $3.06 currently, according to the average of 12 industry estimates. India reviews the rate half-yearly, using a formula capturing international trends. The announcement is due this week. Such a reduction would take the price to less than half the $5.05 per million British thermal units the government set when it first rolled out the formula in 2014. That could put pressure on the margins of explorers such as Oil and Natural Gas Corp. and Mukesh Ambani’s Reliance Industries Ltd., while benefiting users including fertilizer companies and power generators. “We’re highly concerned about the fall in prices,” said Ashu Sagar, the secretary general at the Association of Oil and Gas Operators, whose members include the biggest explorers and gas producers. “The formula now doesn’t offer any floor.” India has struggled to follow US and Europe in giving natural gas a greater role for electricity production in place of polluting coal power. Lower prices threaten to hamper the investment needed to turn around flagging output of the fuel. “The government needs to encourage domestic production by ensuring a fair minimum price,” said Sachin Mehta, an analyst at Centrum Broking in Mumbai. A higher tariff of about $6.6 per million British thermal units is available for gas recovered from some deep-sea fields, under a policy change from March that prompted companies to revive plans to tap difficult deposits. That price is also due to be revised from October 1. “Gas prices are determined by an approved formula linked to some international market rates – if prices of those markets have fallen, it will reflect on domestic prices,” Oil Secretary Kapil Dev Tripathi said on September 21. Tushar Pania, a spokesman for Reliance Industries, didn’t respond to an e-mail seeking comment on the upcoming revision of gas prices. State-run ONGC, the biggest explorer in India, estimates that each dollar decrease in gas prices curtails annual revenue by 42 billion rupees ($630 million) and profit by 24 billion rupees. ONGC Chairman Dinesh Kumar Sarraf said the government may step in if parts of the exploration industry become unviable because the natural gas price falls too far. “We’re fully confident that if certain things are not viable, the government would help the industry and us,” Sarraf said in an interview, citing the step earlier this year to allow higher prices for deep-sea fields as an example. The current gas-price formula is based on US, Canadian, UK and Russian rates. Sagar from the trade association said the government needs to reassess the formula as it’s based on prices from countries where there is an oversupply of gas, unlike in India Brian Dawkins Authentic Jersey