Free LPG connections: Find out who is getting the lion’s share
Elections bring bounties with it. In the first 45 days since the Pradhan Mantri Ujjwala Yojana (PMUY) was launched on May 1, three-fourths of the free LPG connections went to BPL families in Uttar Pradesh, quite a big and disproportionate share, even if one concedes the fact that the state has among the country’s higher number of poor. The Modi government has indeed focused on the poll-bound state in the distribution of the largesse. According to the Tendulkar panel methodology-based estimate, Uttar Pradesh had about 6 crore people below the poverty line (BPL) in 2011-12, while the country as a whole had 27 crore. While 3,20,646 new LPG connections were given to women from BPL families till June 15, Uttar Pradesh topped with 2,38,196 connections. Rajasthan with 48,595 free LPG connections, Madhya Pradesh (2,1363) and Gujarat (11,259) followed. According to poverty estimates for 2011-12 (Tendulkar committee), Assam, Odisha, Bihar, Jharkhand and Chhattisgarh have as high as 30-40% of their total population below the poverty line against the national average of 21.9%. Till June 15, PMUY had not forayed into Assam and Chhattisgarh, while 284 connections were offered in Odisha, 27 in Bihar and 5 in Jharkhand. The government has decided to distribute free LPG connections — with a set of cylinder, stove and regulator — to 1.5 crore BPL families in the current fiscal (financial support of `1,600 for each LPG connection). Five crore families will benefit under the scheme in the next three years while the cost to the government will be around `8,000 crore. Tyrann Mathieu Jersey
Mahanagar Gas IPO sails through, subscribed 1.08 times on Day 1
The Rs 10.40 billion initial public offering (IPO) of Mahanagar Gas received good response on Tuesday, with the issue sailing through on Day 1 itself. Data showed that the issue received bids for 1,88,19,255 shares, 1.08 times the total size of 1,73,46,150 shares. On NSE, QIB quota was subscribed 1.59 times, non-institutional investor quota 0.15 times and retail individual investor quota 0.37 times. On BSE, the QIB quota was subscribed 0.22 times, non-institutional subscribed 0.22 times, non-institutional investor 0.07 times and the retail quota 0.71 times. The company has fixed 50 per cent quota for qualified institutional buyers (QIBs). Non-institutional bidders will be issued not more than 15 per cent of the issue size. The remaining 35 per cent quota has been kept aside for retail investors. “On considering almost similar growth potential as that of industry peer Indraprastha Gas(IGL), Mahanagar Gas’ RoE levels in excess of 22 per cent in last six years, debt-free status, yearly cash flow generating potential of Rs 2 billion and strong dividend payout ratio make the issue price attractive at 12.9 times FY2016 PE,” Angel Broking said in a note. The gas distributor had on Monday allotted 7,348,350 equity shares to 25 anchor investors at Rs 421 a share, thus raising Rs 3.093 billion. BNP Paribas, Morgan Stanley, DB International Asia, Abu Dhabi Investment Authority-Merrill Lynch Capital Market and DSP BlackRock were among the anchor investors that subscribed to the issue. The issue is an offer for sale (OFS) in which existing promoters GAIL and Singapore-based BG Asia Pacific Holdings — now acquired by Royal Dutch Shell — intend to sell 12,347,250 shares each, aggregating to 24,694,500 shares of face value Rs 10 each. The company has supplied CNG to over 0.47 million vehicles through a network of 188 CNG filling stations as of March 31. It has PNG connections to approximately 0.86 million domestic households, over 2,866 commercial and 60 industrial consumers in Mumbai and its adjoining Areas. The company’s total revenue has grown at a compound announce growth rate (CAGR) of 12.42 per cent to Rs 21.2162 billion in FY16 from Rs 13.2834 billion in FY12. Profit after tax (PAT) has risen 0.08 per cent on an annualised basis to Rs 3.0868 billion in FY16 from Rs 3.0774 billion in FY12. Jason Castro Authentic Jersey
LPG tankers and oil companies are not following guidelines
District administration had come out with 10 norms for them to follow. Rounds of official meetings to make oil companies and transporters of liquefied petroleum gas (LPG) take precautionary measures to prevent accidents on highways in Dakshina Kannada have not yielded desired results. It came to the fore in the Karnataka Development Programme review meeting presided over by B. Ramanath Rai, Minister in-charge of Dakshina Kannada here on Monday. Additional Deputy Commissioner Kumar told the meeting that the district administration had given 10 guidelines to them to follow. But none of them had been adhered to. They had been told to identify two acres between Mangaluru and Shiradi for developing it as a truck terminal. The companies and transporters had to keep an additional emergency rescue vehicle. The LPG tankers should have had one more additional driver to make it a three-member crew (two drivers and a cleaner). They had been asked to fix speed governors and connect a vehicle tracking system to the office of Superintendent of Police. They had been asked to set up a quick response team and keep a crane ready for rescue operations. But none of the guidelines had become a reality. “They have not yet given positive commitment,” he said. A.B. Ibrahim, Deputy Commissioner, said that about 1,800 tankers plied on the highways in the district daily. He said an LPG tanker from Mangaluru to Hassan toppled at Addahole on NH 75 on Sunday. It was a cause for concern. There is a ban on the movement of LPG tankers in the district between 10 p.m. and 6 a.m. Ivan D’Souza, MLC, and B.A. MohiuddinBava, MLA, took the officials of the National Highways Authority of India (NHAI) to task for water-logging on the highways between B.C. Road and Mangaluru and between Talapady and Udupi. They questioned what sort of engineering the NHAI was following. Expressing concern over increasing accidents on the highways, Rai instructed the Police and Transport departments and the NHAI to work in coordination to take preventive steps. Ivan D’Souza, MLC, alleged here on Monday that though movement of tankers transporting cooking gas or LPG on the highways in Dakshina Kannada is banned between 10 p.m. and 6 a.m., the police are allowing it by taking bribe. At a Karnataka Development Programme review meeting here on Monday, he said that recently crew of a tanker near Uppinangady told him that if bribed Rs. 500 police allow movement of tankers during night. The MLC said that when he noticed a LPG tanker on the highway near Uppinangady recently, he stopped it and questioned how it could ply during night. The crew revealed that they could ply by bribing.
AMC reminded to use CNG buses
In a second reminder, a high-level committee on air quality for Ahmedabad has once again reminded the Ahmedabad Municipal Corporation (AMC) of opting for CNG buses instead of new diesel buses. It was only recently that AMTS bus service had decided to replace the 400 odd CNG buses. Over the last five years, CNG-run buses were being strategically phased out in Ahmedabad, even as diesel engines continue to spew out venomous particulate matter of 2.5 microns (PM 2.5) and NOx gases into the air we breathe. Ahmedabad’s BRTS, which started in 2004 with the concept of buses run on clean fuel like CNG, has transformed its fleet to 220 Euro III and Euro IV complaint diesel buses today, and just 25 old CNG buses remain. The AMTS, too, has ordered 330 diesel buses to add to its existing 725-strong CNG bus fleet. The trend continues despite the fact that the Petroleum Planning and Analysis Cell (PPAC) claimed in its 2013 report that even Bharat Stage IV complaint diesel vehicles spew out seven times more PM 2.5 than petrol vehicles. “The diminishing difference between diesel and CNG fuels, has affected clean public transport. In May 2010, the cost of a litre of diesel was Rs 40 while that of CNG was Rs27.50 per kg. Today, the difference is of a few rupees,” said a senior AMC official. Luc Robitaille Jersey
Fuel consumption grows 6.7% in May, import dependence goes up to 81.9%
India’s fuel consumption grew 6.7% in May over that a year ago, reflecting greater use of cars and increased air traffic in an expanding economy, while crude oil production fell 3.3%, increasing import dependence to 81.9% from 81.3%. In May, India consumed 9.4% more diesel and 16.7% more petrol than it did a year ago, the latest data released by the oil ministry’s Petroleum Planning & Analysis Cell shows. Aviation turbine fuel consumption grew 20% as lower prices and holiday travels boosted air traffic. Except for kerosene and naphtha, the consumption of all other petroleum products went up during the month. Domestic output of oil and gas, however, did not pick up. In May, local crude oil production declined 3.3% to 3.1 million metric tons from a year ago. Natural gas production fell 6.9% to 2,656 million metric standard cubic meters. Increasing gas demand in the country was met by increased import of liquefied natural gas. India imported 2082 MMSCM of LNG, 43% more than it did a year ago. The government has set a target to bring down oil imports to 67% of total consumption by 2022. According to the Petroleum Planning & Analysis Cell’s estimate, India’s crude oil import will increase 2% to $66 billion in 2016-17 from $64 billion in the previous financial year considering crude oil price of $45 per barrel for the Indian basket and an exchange rate of Rs 67 to a dollar for the remaining part of this fiscal. The prices of Brent crude averaged $46.88 per barrel in May, compared to $41.48 in April. The Indian basket crude oil averaged $44.97 per barrel in May, significantly higher than $39.85 a barrel in the previous month. Tyeler Davison Womens Jersey
Essar Oil’s Ranigunj asset logs record CBM production
Essar Oil announced its Ranigunj (East) coal-bed methane asset in West Bengal reached the one million metric standard cubic metre a day (mmscmd) production mark. This is the first CBM asset in the country to cross the milestone. The second best, Great Eastern Energy Ltd is producing in the range of 0.4 mmscmd. The total CBM production in the country is around 1.5 mmscmd. “Essar has commenced supply to Matix Fertilisers for its pre-commissioning activities at the rate of 150,000 scmd (0.15 mmscmd). Besides Matix, the CBM is supplied to industrial consumers in Durgapur as per government notified gas prices,” the company said in a press release. Matix’s Rs 50 billion urea manufacturing facility at Panagarh in West Bengal was idling for more than a year for delay in gas availability from Essar. According to Essar, as per 2016 NSAI (Netherland Sewell & Associates, Inc.) report, the proven, probable and possible gross CBM reserves in the Ranigunj (East) Block is estimated at 1.09 tcf (trillion cubic feet). Ron Parker Womens Jersey
Crude oil, natural gas output down in May
Domestic crude oil and natural gas production fell 3.34 per cent and 6.88 per cent, respectively last month, according to data released by the Ministry of Petroleum and Natural Gas. Domestic crude oil production stood at 3.078 million tonnes in May 2016 compared with 3.184 mt in the same month last year. Natural gas production stood at 2.656 billion cubic meter during May against 2.852 billion cubic meter in the same month last year. Further, refinery throughput during the month grew 1.24 per cent to 19.950 mt compared with 19.705 mt in the same month last year. Dave Dravecky Womens Jersey
Indian pipe companies dominate Rs 550 crore GAIL contract
Three Indian pipe manufacturers have walked away with a major pie of a Rs 550 crore order from GAIL as the state-run gas utility began spending on building the main stretch of Urja Ganga — PM Narendra Modi’s proposed energy lifeline to revive fertilizer units and supply cleaner fuel in the eastern region. Sources said Gas Authority of India (Limited) has placed the order for 341km of pipes with Jindal Saw, Essar Steel and MAN Industries. China’s Zhongyou BSS (Qinhuangdao) Petropipe is the lone overseas company to be awarded part of the contract, indicating competitiveness of Indian manufacturing. The order is for linking Phulpur in UP with Dobhi in Bihar, which is part of the Phulpur-Haldia pipeline. Work on spur lines from Gaya to Barauni via Patna in Bihar are already in progress. GAIL is set to complete the Rs 12,000-crore Phulpur-Haldia-Dhamra (Odisha) project in three phases The project envisages laying a 2,050km pipeline for supplying cleaner and cheaper fuel to Allahabad in UP; Patna, Gaya, Chapra, Siwan, Gopalganj, Muzaffarpur, Bettiah and Bhagalpur in Bihar; Bokaro, Dhanbad, Ranchi and Jamshedpur in Jharkhand; and Asansol, Durgapur and Kolkata in West Bengal. The pipeline will help revive defunct fertilizer plants in Gorakhpur in UP, Barauni in Bihar, Sindri in Jharkhand and Durgapur in West Bengal by supplying gas, considered a cheaper feedstock than naphtha. In addition, the pipeline will also supply natural gas to refineries in Barauni and Haldia, steel industries, power plants and other large manufacturing units in the region. Josh Jackson Jersey
Oil-poor India needs to supersize its Rosneft order: Gadfly
Vladimir Putin is said to be looking to sell almost a fifth of Russian state oil champion Rosneft and wants China and India to team up to buy it. Narendra Modi should negotiate for a bigger share. The attractions for Putin of splitting a stake between the world’s No. 2 and No. 3 oil importers are obvious. Russia has been fighting Saudi Arabia for market share in China for years, and often bests the world’s biggest producer in terms of import volumes into the People’s Republic. With the globe awash in oil and an initial public offering of Saudi Aramco in the works, equity in oil companies might be a more valuable resource in cementing trade relationships than the black gold itself. Still, China’s oil consumption appears to be slowing, with apparent demand plateauing and even declining since August last year. While Chinese companies have been lavish with their overseas investments of late, there’s no particular need to buy a chunk of Rosneft to secure a new source of energy supply. Indeed, of China’s big three oil exploration and production companies, refinery-heavy Sinopec is cutting production and PetroChina is growing it in the low single-digits. Only Cnooc is making a serious attempt to raise output. India is a different beast, with a shortage of crude that’s only going to get more acute as incomes rise and automobile ownership grows. Its state-run explorer Oil & Natural Gas Corp. is getting ready for a $5 billion spending spree to boost production off the country’s east coast and has assets in Sudan, Colombia, Venezuela, Brazil, Vietnam, Syria and Russia. With a geological shortage of exploitable oil, it’s ultimately those overseas fields that will end up plugging India’s output gap. New Delhi has long looked to its Cold War ally for a solution to its energy handicap. About 32 per cent of the 5.5 million metric tons of oil production from ONGC’s overseas arm ONGC Videsh last year came from its 20 per cent stake in the Sakhalin-1 project in Russia, which the Indian company acquired from Rosneft in 2001. That’s not enough to sate its appetite, though. At the peak of the 2008 financial crisis, Videsh somehow found $2 billion to purchase Imperial Energy, a then U.K.-traded producer with fields in Siberia. Last month, it paid Rosneft $1.27 billion for a 15 per cent stake in Vankor, one of the largest Russian oil fields to go into production in the last quarter century. Taking a stake in Rosneft itself — the whole 19.5 per cent slice would go for about $11 billion, people familiar with the matter said — seems a good idea in the context of that scramble for fuel. If you look at an oil company as a claim on its underground reserves of crude, Rosneft is about the cheapest way to source supply right now among the giant 1 million-barrels-of-oil-a-day producers. Each barrel of Rosneft’s developed reserves is worth about $4.16 of enterprise value, according to Bloomberg calculations — well below ONGC’s $7.16, not to mention figures north of $20 for the likes of Exxon Mobil, Total and Shell, and $46.62 for Cnooc. ONGC isn’t short of cash for acquisitions, either. Ebit over the most recent 12-month period was equivalent to almost 11 years’ of interest payments, comfortable relative to a median 3.34 years for the 17 members of the 1 million-barrel-a-day club. For producers with strong balance sheets, the ongoing weakness in oil markets is creating an attractive environment in which to pick up assets. If Rosneft is selling a 19.5 per cent stake, ONGC should abandon its dormant alliance with PetroChina parent CNPC, elbow the Chinese aside, and ask for the lot. This column does not necessarily reflect the opinion of Bloomberg LP and its owners. Harrison Butker Jersey
Cheap Oil Prompts ONGC’s Biggest Crude Exploration Binge
Oil and Natural Gas Corp., India’s biggest explorer, is preparing to spend on its biggest ever crude binge as sub-$50 oil halves the cost of rigs and services. State-run ONGC is contracting as many as five deepwater drill ships and dozens of jack-up rigs as it launches a $5-billion development program in the Krishna-Godavari Basin off the east coast of India, Chairman Dinesh Kumar Sarraf said in an interview. The company wants to make use of the drop in hiring rates for vessels and oilfield services to lower costs and boost profit, he said. “This is the largest ever campaign undertaken by us,” Sarraf said. “Never in the past have we had five rigs in offshore deep-water at one time. We believe this is the right moment when we can increase our investment.” The company, which intends to spend 11 trillion rupees by 2030 to raise output, is key to Prime Minister Narendra Modi’s target of cutting import dependence by 10 percent in the next six years. That goal is crucial for a country that imports most of its oil. India will be the fastest-growing crude consumer in the world through 2040, according to the International Energy Agency. ‘Exceptional Strength’ “It makes immense sense for an oil explorer to undertake capex in the current times when oil field services costs and charter rates have dropped so sharply, especially if they have strong financial profile,” said K. Ravichandran, co-head, corporate ratings at assessor ICRA Ltd. “Lower debt in relation to reserves gives ONGC exceptional strength in comparison to others.” Offshore jack-up rigs which cost as much as $90,000 a day when oil was surging, now cost about half that, Sarraf said. ONGC shares rose 1.5 percent to 213.85 rupees, the most since June 9, in Mumbai. The benchmark index S&P BSE Sensex closed up 0.9 percent. The flagship explorer in Asia’s third-largest economy is betting its spending will pay off once oil prices revive. Production has declined in fields accounting for almost three-quarters of ONGC’s output, adding pressure to bring on stream new assets. “While the big investments are going to help ONGC in the long term, it can strain the profits in coming years if crude prices were to remain around $50 a barrel levels,” said Dhaval Joshi, a Mumbai-based analyst at Emkay Global Financial Services Ltd. ONGC is working on as many as six large projects on its western offshore fields and plans to spend about 300 billion rupees ($4.5 billion) during the fiscal year that started April 1. The company has awarded 36 major contracts across the country’s eastern and western coasts, worth a total 340 billion rupees, in the past year-and-a-half, including 13 offshore rigs. “We expect production would increase this year,” Sarraf said. “That’s why we need to add more and more fields.” The company expects to start gas output from the KG-basin block by mid-2019 with a peak production of 15 million standard cubic meters a day. Crude oil output will begin a year later and may go up to 77,000 barrels a day. Jeff Petry Jersey