India Seeking Merger Model for Possible State Oil Champion
India is open to discussing a merger of some of its state-run oil producers and refiners to create a larger, stronger national firm, according to the country’s oil minister. The government is seeking the appropriate model for combining India’s state-run oil companies and hasn’t decided on any plan, Dharmendra Pradhan said in New Delhi on Monday. The combined market capitalization of India’s top eight state-owned oil and gas companies is about $80 billion, ranking a combined entity ninth among global oil firms, according to data compiled by Bloomberg. “I am open to a discussion on merging oil companies,” Pradhan said. “There are two schools of thought. Whether we have a single entity or we have entities like we have today. We should find out a way of what should be the future model.” India is set to emerge as the world’s third-largest oil consumer by the end of this year and will be the center of global growth through 2040, according to the International Energy Agency. Its upstream production is dominated by Oil and Natural Gas Corp., which operates independently of its biggest refiner, Indian Oil Corp. Shares of Indian Oil rose as much as 1.5 percent and traded up 1.3 percent to 549 rupees, the highest on record, in Mumbai as of 9:43 a.m. The benchmark S&P BSE Sensex rose 0.5 percent. The Press Trust of India reported Sunday that the government is deliberating on the issue of merging the companies, citing Pradhan. India had considered a similar proposal about a decade ago, but didn’t pursue any consolidation, R.S. Sharma, a former chairman of ONGC, said Monday. Menelik Watson Womens Jersey
BP Aims to Increase Gas From India’s KG-D6 Fourfold by 2022
BP Plc is working with its partner Reliance Industries Ltd. to increase natural gas production from the deepwater D6 block in the Krishna Godavari basin as much as fourfold by 2022, according to the chief of the British company’s India unit. The companies aim to produce 30 million to 35 million metric standard cubic meters a day of gas from the block on India’s east coast after they develop three new fields, Sashi Mukundan, head of BP’s India unit, said Monday in New Delhi. Gas production from KG-D6 averaged about 8.7 million cubic meters a day in the April to June quarter, said in a July 15 presentation. The companies are preparing to restart work in four offshore oil and gas blocks as they seek to revive development activity stalled for seven years by disputes with the government. Reliance and BP intend to withdraw from multiple arbitration proceedings against the government related to KG-D6 people with knowledge of the plan said in May. Reliance spokesman Tushar Pania declined to comment Monday on the production target. The effort to resolve disputes with the government “has created confidence for us to move forward,” Mukundan said. BP and Reliance are looking to develop three discoveries in three different fields and invest “several billion dollars,” he said. Production from the KG-D6 block, discovered in 2002, has tumbled since hitting a peak in 2010 of around 62 million cubic meters a day. The companies continued with offshore exploration activities there, while pausing development drilling because of disputes with the government over gas prices and cost recovery. Patrick Robinson Jersey
LNG buyers encouraged to rework deals amid global glut
India’s liquefied natural gas buyers are being encouraged to renegotiate long-term contracts after spot prices tumbled amid a global glut. “We have asked the companies to renegotiate the LNG deals wherever there is a possibility,” oil minister Dharmendra Pradhan said in an interview Monday in New Delhi. “I am hopeful our companies will successfully steer the negotiations.” India wants to turn an oversupply of LNG to its favour as it seeks greater use of natural gas in its energy mix and seeks to reduce the dependence on crude oil imports. India is among the first countries in Asia to renegotiate a long-term deal after the glut pushed down prices. Petronet LNG Ltd in December reworked a 25-year contract with Qatar’s RasGas Co., resulting in prices dropping by almost half. Elsewhere in the region, Japan is probing resale restrictions in most of its LNG contracts that may lead to the renegotiation of more than $600 billion worth of deals that run until almost the middle of the century. The chairman of China National Petroleum Corp., the country’s biggest energy company, said in March that it’s looking for opportunities to rework the pricing method on its LNG supply contract with Qatar. Energy basket The price of spot LNG to Asia has fallen by more than 25% during the past year. India’s LNG imports surged 59% to 8.13 million metric tons in the first five months of the year, while domestic output slipped 8%, according to data compiled by Bloomberg Intelligence. Aligning LNG contracts to current market rates can make natural gas more affordable to Indian customers as the government plans to increase regasification capacity to 55 million tons within five years, from about 21 million now, Pradhan said. “We want to increase the gas component in our energy basket,” Pradhan said. “We are building a gas grid around the country to increase the use of gas.” Pradhan on Monday also highlighted the country’s supply deals from Russia, the US, Australia and Canada. Global supply GAIL India Ltd is seeking to defer a 20-year contract to buy liquefied natural gas from Gazprom PJSC until the Russian company’s Shtokman project begins production, according to officials at the South Asian country’s biggest gas transporter, who asked not to be identified citing company policy. Petronet signed an agreement with Exxon Mobil Corp. in August 2009 to buy 1.5 million metric tons annually for 20 years from Australia’s Gorgon project, with supplies expected to begin by the end of this year. GAIL also has an agreement to buy 3.5 million tons a year for two decades from Cheniere Energy Inc.’s Sabine Pass terminal, with the supplies expected to start in March 2018. It has also booked 2.3 million tons a year from the Cove Point LNG liquefaction terminal in Maryland, which is set to commence deliveries in December 2017. Indian Oil Corp. Ltd bought a 10% stake in Petroliam Nasional Bhd’s Canadian natural gas fields and a planned export project, which will give the Indian state oil refiner the right to 1.2 million metric tons of LNG per year for two decades. India is becoming more reliant on imported oil and gas as domestic production lags demand growth. The country will be about 90% reliant on imports by 2040, up from 70% in 2014, the International Energy Agency said in its most-recent annual World Energy Outlook. The cost of those oil and gas shipments will reach nearly $480 billion by 2040, up from $110 billion today, it said. Richard Sherman Womens Jersey
CAG red-flags $1.6 billion excess cost recovery by RIL
Government auditor CAG has red- flagged $1.6 billion of excess cost recovered by Reliance Industries in the KG-D6 gas block and took note of state-owned ONGC’s gas flowing into the eastern offshore fields of the Mukesh Ambani-led firm. The Comptroller and Auditor General of India(CAG), in a report tabled in Parliament, said 831.88 sq km of KG-D6 area needs to be taken away from RIL as per the contract and cost of discoveries it had relinquished should not be allowed to be recovered from sale of oil and gas from the block. Also, cost recovery for doing discovery conformity test should be looked into, it said. CAG said November 2015 report of independent expert DeGolyer & MacNaughton (D&M) submitted on reservoir continuity between the KG-D6 and contiguous ONGC operated blocks has pointed out that gas has migrated from the blocks owned by state-owned firm to the private company operated fields. “The report indicates that as on March 31, 2015, of the gas initially in place, 44.32 per cent in Godavari PML and 34.71 per cent in KG-DWN-98/2 (both of ONGC) had migrated” to KG-D6, it said. “The report projected a higher proportion of gas migration and its production through RIL operated KG-DWN- 98/3 (KG-D6) block by end of 2019.” The government has appointed one member committee under Justice AP Shah to consider the report and recommend future action. “In case if the Ministry of Petroleum and Natural Gas accepts D&M report conclusion that RIL did draw gas from ONGC’s contiguous fields, and directs RIL to compensate ONGC for the same, it may affect the financials of KG-DWN-98/3 including cost petroleum, profit petroleum, royalty and taxes over its entire period of operation (since April 2009 when production of gas commenced from the block),” CAG said. It said many of the issue it had pointed out in the previous audits (2006-12) of the block still persist. “The total financial impact of excess cost recovery during 2012-14 on account of the earlier identified audit findings was $1.547 billion (Rs 93.0722 billion). “For the period 2012-14, additional issues of excess cost recovery claimed by the operator (RIL) were noticed, financial effect of which was USD 46.35 million,” it said. CAG had in its previous reports slammed Oil Ministry and its technical arm DGH for not exercising enough control and vigil over KG-D6 block, leading to instance of excess cost recovery. As per the Production Sharing Contract (PSC), an operator is allowed to recover all his cost before sharing profit with the government, a provision which CAG says encourages companies to inflate cost to delay profit sharing. CAG in its report tabled in Parliament today said RIL refused to connect to production system four wells it had drilled on the D1 and D3 gas field in KG-D6 block on the pretext that they would not produce adequate incremental volume to justify the additional capex spend. “Though these wells have not contributed to production from the D1-D3 field, the Operator has recovered $102.94 million up to the FY2013-14 towards their cost,” CAG said. Also, the ministry had ordered RIL to relinquish 6,198.88 sq km out of total KG-D6 area of 7645 sq km as per the contract that allowed retaining only area were discoveries are made. “However, contrary to Ministry’s directives, the Operator relinquished only an area of 5,367 sq km retaining an excess area of 831.88 sq km. The Operator also paid Petroleum Exploration License (PEL) fees of Rs 3.32 million relating to the excess retained area,” CAG said, adding that the relinquishment of the additional area retained needs to be ensured by the ministry. CAG said $63.78 million RIL got through marketing margin should be included in price of gas for calculation of royalty payable to government and profit sharing. Also, Aker of Norway, which supplies a floating oil production vessel (FPSO), was paid additional benefit of $10.13 million. DeForest Buckner Authentic Jersey
Initiatives taken to take forward Biodiesel programme
The Petroleum Minister Dharmendra Pradhan informed the Lok Sabha in a written reply that the Ministry of Petroleum and Natural Gas had announced a Bio-diesel Purchase Policy in October 2005, under which, Oil Marketing Companies (OMCs) would purchase bio-diesel at a uniform price as may be decided by the OMCs from time to time, for blending with High Speed Diesel (HSD) to the extent of 5% at identified 20 purchase centres across the country. However, OMCs could not procure biodiesel upto August, 2015 as biodiesel producers were not coming forward to supply their biodiesel at the prices decided by OMCs from time to time. On 10.8.2015, the Government allowed the sale of Bio-diesel (B100) by private manufacturers to bulk consumers like Railways, State Transport Corporations and other bulk consumers. Also, retailing of bio-diesel blended diesel by Public Sector Oil Marketing Companies (OMCs) has started on the same day. As a result, the biodiesel procurement by Public Sector OMCs has started. As on 1st July, 2016, 13.2 million litre Biodiesel (B100) has been procured by Public Sector OMCs. During the current Financial Year also, OMCs have finalised a quantity of 40.1 million litres of biodiesel for the period of April – September, 2016. Besides, Ministry of Petroleum and Natural Gas has taken following recent initiatives to take forward the biodiesel programme : A Steering Committee has been constituted in the Ministry to take forward the bio-fuel programme of the country. A separate Biofuel Cell has been constituted in Ministry of Petroleum and Natural Gas for dedicated focus on Biofuels. The Cell, besides being a technical repository on Biofuels, also monitors biodiesel procurement and blending by OMCs. Bureau of Indian Standards (BIS) has revised the standalone Biodiesel (B100) specification and also developed specification for biodiesel blend from B6- B20. L. P. Ladouceur Womens Jersey
Gazpromneft-Aero to increase monthly refuelling volumes in India by 40%
Gazpromneft-Aero, the operator of Gazprom Neft’s aviation refuelling business, is to increase its average monthly refuelling volumes in India by more than 40% — to 1,200 tons per month — in the period from July 2016 to July 2017. This growth will be achieved through new long-term agreements with Aeroflot and Volga-Dnepr airlines for “into the wing” refuelling in India’s major tourist and business centres: Delhi, Hyderabad, Goa, Mumbai, Calicut, Chennai, Trivandrum and Varanasi. The Gazpromneft-Aero aviation refuelling network in India is currently one of the company’s largest international networks. Refuelling is carried out under an aviation fuel supply agreement signed by Gazpromneft-Aero and Hindustan Petroleum, a major Indian national fuel supplier. This partnership began in 2010 and has strengthened over the years. Under the agreement, Gazpromneft-Aero provides guaranteed refuelling to its Russian and international customers at airports in India, in line with international safety and service standards. Over the past six years, Gazpromneft-Aero’s total refuelling volumes to its own customers via Hindustan Petroleum has amounted to more than 70,000 tons. Vladimir Egorov, CEO of Gazpromneft-Aero, said: “The expansion of our geography and increase in refuelling volumes in India demonstrates the growing trust of our long-term partner and, consequently, the strengthening of Gazpromneft-Aero’s position in the global aviation fuel supply market. We plan to develop our cooperation further with Hindustan Petroleum, a global fortune 500 company. It offers an attractive opportunity for Gazpromneft-Aero to expand its presence in the promising Indian market, which is the largest growing aviation market in the world with traffic growth of more than 20 %. Our partners, HP Aviation, have a major presence in India and are currently fulfilling the aviation refuelling requirements at 37 airports. We are confident that Russian and international airlines will benefit from the advantages of the formula pricing system, enabling our customers to refuel aircrafts both in Russia and abroad.” Gazpromneft-Aero is a Gazprom Neft subsidiary. The Company has been refuelling aircraft and conducting “into the wing” aviation fuel sales since January 1, 2008. Gazpromneft-Aero has been a strategic partner of the International Air Transport Association (IATA) in the field of aviation fuel supply since December 2008. Gazpromneft-Aero is the leader on the Russian aviation fuel market in terms of retail sales. In its operations, the company uses technologies that comply with the highest safety level for refuelling operations: Green. Hindustan Petroleum (formerly Esso and Caltex prior to 1974) has been providing aviation refuelling services at various airports in India for more than half a century. Hindustan Petroleum (HPCL) is a Government of India Enterprise with a Navratna Status, and a Forbes 2000 and Global Fortune 500 company. The company provides fuelling services to the aviation industry through its Aviation business unit, “HP Aviation”. The network covers all the major airports in India and is expanding continuously. The company’s Aviation Turbine Fuel fuelling service meets and exceeds the stringent international regulations for handling jet fuel. The company’s accolades and accreditation demonstrate its commitment to quality service in its operations, infrastructure and skilled manpower. Chris Boswell Womens Jersey
How oil crash, failing job market are ruining India’s Gulf stream of cash
The government plans to evacuate thousands of Indian workers who have lost their jobs in Saudi Arabia and cannot afford to pay for a flight home. External Affairs Minister Sushma Swaraj said Monday the government is trying to arrange exit documents for those workers who wish to return to India. The workers were mostly employed by Saudi construction companies and were laid off amid a slowdown in the industry caused by low global oil prices. About 10,000 Indian workers in Saudi Arabia have lost their jobs. The plight of the laid-off workers was raised by lawmakers in India’s Parliament on Monday. Indians are among millions of poor Asians working in the Gulf states, where human rights groups say many suffer exploitation and abuses including non-payment of wages, with no channels for redress. In March, a special report in Hindustan Times had warned that the Gulf dream was becoming a nightmare for thousands of Indians who work in the region or are dependent on remittances. A recap of our report: Falling oil prices and a flood of cheap labour from other countries is turning sour the dreams of millions of Indians in the oil-rich Gulf and threatening to choke the stream of remittances their families depend on. Money or dignity: The dilemma of Indians in the Gulf Fewer Indian workers are travelling to the Gulf, stung by practices such as nitaqat (employing local people), cheap migrant labour from countries such as Bangladesh, stricter crackdown on illegal workers and a slump in the once-booming construction sector. Raging conflict in neighbouring countries such as Yemen, Libya, and Iraq is also contributing to the problem. And the worst may not be over yet for the seven-million strong Indian diaspora and their families in states such as Kerala that draw a major chunk of revenue from remittances, say experts. Devon Kennard Womens Jersey
Price of subsidised LPG cylinder hiked by Rs 2
State-run oil companies raised the price of subsidised cooking gas by Rs 2 per cylinder, the second such increase in a month. The step will further cut subsidy that has already shrunk sharply due to lower oil prices. Raising LPG prices by small amounts in quick succession follows the government’s recent move to allow oil companies to raise the price of kerosene by 25 paise every month for 10 months, another bid at reducing the subsidy burden on the government. Oil price collapse has brought down total fuel subsidy to Rs 27,571 crore in 2015-16 from Rs 76,285 crore in 2014-15. Subsidised cooking gas prices have crawled up at a time when price of commercial LPG has fallen, reducing the gap between the two to about Rs 64 per cylinder. In Delhi, a subsidised 14.2-kg cylinder will now cost Rs 423.09, compared with Rs 487 for non-subsidised LPG. Pernell McPhee Jersey
Oil consumption growth likely to spike this fiscal year
Oil consumption growth in the current fiscal year will likely exceed 10.9% of the previous year, if the current consumption trend continues, an oil ministry arm has said. A 7.8% jump in the consumption of petroleum products in the country in April-June, compared to 5.2% in the year-ago period, has prompted this prediction from the Petroleum Planning and Analysis Cell (PPAC). “Typically, April-June is sluggish in performance than the rest of the year. Going by the trend, it’s likely petroleum products consumption growth for 2016-17 could be better than that of last year,” the PPAC said in its monthly review. A higher fuel consumption signifies faster clip of economic growth for the country, currently growing at 7.6% annually. In April-June, the biggest consumption growth was recorded in petrol (10%), liquefied petroleum gas (7.8%), fuel oil (22.9%), bitumen (13.9%) and aviation turbine fuel (12.1%). For diesel, the most consumed petrol product in India, it rose 4.7%. Kerosene dived 7.7% following a general shift towards cooking gas and increased power availability. In June, diesel consumption grew 1.5%, the slowest month-on-month pace since July 2015, mainly because people anticipated favourable prices in May and July and shifted some offtake away from June, according to PPAC. Domestic prices follow international trends and are revised fortnightly, prompting dealers to temper order sizes on price change anticipation. Higher power availability and good monsoon, that affects road transport and lowers diesel consumption for farm pumps too contributed to lower diesel figures, the PPAC said. In June, petrol sales rose 4.4%, much lower than quarterly growth of 10%, primarily due to shifting of offtake as buyers anticipated lower prices in May and July, PPAC said. Growth in consumption of petrol was higher than diesel mainly due to increasing consumer preference for petrol-driven vehicles as the price differential has waned and policy thrust on scrapping older diesel vehicles gotten louder, PPAC said. Brad Marchand Authentic Jersey
Spinners oppose plan for gas price hike
Top spinners urged the government to increase gas price in phases, not in one go, as the sector is facing challenges due to the import of cheaper yarn and fabrics from India and China. A proposed 130 percent hike in gas prices for captive power plants, which the spinners use for continued power generation, will badly hurt the sector, said A Matin Chowdhury, managing director of Malek Spinning Mills. The proposed hike is abnormally high and it will be difficult for the spinners to absorb price shocks in the current volatile situation, Chowdhury added. The hike will take the price of gas to Tk 19.26 per cubic metre from Tk 8.36 now. The government had already raised the price of gas for captive power plants as recently as September last year from Tk 4.36 per cubic metre to the current rate. Bangladesh Energy Regulatory Commission will hold a public hearing on the gas price hike proposed by Titas Gas Transmission and Distribution Company Ltd on August 7-8. The sector has also been facing a downward price pressure of yarn and fabrics, volatile cotton markets and the negative impact of the Gulshan terror attack on the garment sector, Chowdhury told reporters on Thursday. Recently, the Indian government announced a package worth $900 million for employment generation and promotion of export in the textile and apparel sector, according to Chowdhury. The package has been launched to improve labour working conditions, give a 25 percent investment subsidy and an income tax waiver to garment makers, he added. India has disbursed $3.5 billion in funds for factory upgrades between 2000 and 2014. These initiatives by the Indian government and higher gas prices for the captive power plants will erode our competitiveness as many local knitters and woven garment makers will rely on cheaper Indian yarn and fabrics,” Chowdhury said at the Bangladesh Textile Mills Association office. “The local spinners would not be able to supply yarn at lower prices for the Indian subsidies,” he said. As a result, the massive investment to the tune of nearly $5 billion has been made in the sector over the years will be in big trouble. One of the major difficulties is that the spinners and weavers cannot pass on additional prices to consumers as the value of products depends on foreign retailers, he added. Captive power generators account for 17 percent of total gas consumption, according to data from Petrobangla, the national oil, gas and mineral exploration company. Primary textiles account for 4 percent of the electricity generated by captive power plants. “We are selling our products at minimum prices only to keep our businesses afloat. The profit margin declined in the spinning and weaving sectors,” said Tapan Chowdhury, president of BTMA. “The primary textile sector could grow to its current position because of subsequent government support in gas prices and other policies. We need further support for the growth of the local business.” Currently, the spinners can supply 90 percent of raw materials to the local consumers and weavers can meet 45 percent demand of the local users, he said. New investment would not come in the sector if the gas price is hiked abnormally, he added. Darren Woodson Authentic Jersey