CNG capacity stays comfortable, says IGL
Indraprastha Gas Ltd, the city gas distributor in the National Capital Region, said its CNG compression capacity of over 7 million kg per day is more than enough to meet the fuel demand after the Supreme Court’s decision banning diesel taxis in the city. Narendra Kumar, Managing Director of IGL said in a statement, “While the current average daily CNG sale of IGL is over 2.5 million kg per day, the existing refuelling infrastructure of IGL is enough to dispense over 3.5 million kg per day through a comfortable fuelling experience to our customers.” The statement added further that 73 new CNG filling facilities have been set up at retail outlets of oil marketing companies like Indian Oil, BPCL and HPCL since January 2016. “While 52 out of these fuelling facilities are located in Delhi, 21 are in the nearby towns of Greater Noida and Ghaziabad. Another 17 CNG fuelling stations would be set up by the end of the month thereby taking the total number of CNG fuelling facilities of IGL to 414,” the statement said. IGL has also introduced differential pricing by offering a discount of ? 1.5 per kg on the selling price of CNG for filling between 12 a.m. to 5 a.m. in order to incentivise non-peak hour refuelling. The company which provides the fuel over 8,50,000 vehicles in NCR, claims the CNG at current price levels offers over 57 per cent saving towards running cost compared to petrol driven vehicles. As compared to running cost of diesel vehicles, IGL claims CNG offers savings of 28 per cent. Jordy Nelson Authentic Jersey
Why cornering oil assets is important to India
Picking up stakes in Middle-East oil companies will have positive effects on the currency as well as on India’s energy security. A bear market is generally considered as the best time for value picking. If this rule holds true for investing, then it makes even more sense for companies who acquire distress assets in a bad market. Unfortunately, few companies have the foresight or excess cash during business cycle troughs to capitalise on such opportunities. So-called vulture funds or private equity investors generally fill this gap of acquiring deep distress assets. But the game of acquiring or picking up strategic stakes in distress assets is now being played at a much bigger level. Learning from China’s aggressive acquisition of oil assets globally, India is now considering picking up stake in oil rich Middle East countries. In an interview, oil minister Dharmendra Pradhan said that India is in talks with Middle East nations to pick up stakes in oilfields in the region for the first time ever. India, through its public sector enterprises – ONGC, ONGC Videsh and Oil India invests in strategic oil sector assets globally. India already has presence in Russia, Africa and even US Shale but has no stake in the oil and gas rich Persian Gulf. Low oil prices have already starting to have an impact in the Middle East. A recent conference call by Indian companies who have business interests in the Middle East suggests a sharp slowdown in business activity in the region. News reports say that remittances from Indian labour working in the region have come down by nearly $1.5 billion in FY15 to $68.9 billion. Gulf countries’ distress can also be seen in the financial markets where they are withdrawing their savings. Saudi Arabia has in fact announced that they will be selling a part of their stake in their crown jewel Aramco oil company. This is probably the best time to book India’s oil requirement from these oil rich countries. Not only does this ensure a steady supply of oil but also gets a better price for it. This is how it works. Assuming an Indian company, say ONGC (although the same logic is valid for private sector players), picks up a stake in an oil field. If oil prices move up Indian companies will have to import oil at higher prices which will result in outflow of foreign reserves. But as ONGC will have a stake in the oil field in gulf, it will benefit from the price rise and book its income at higher these higher prices, thus bringing in more foreign exchange in the country and acting as an hedge to oil prices. In the process, though refiners will be hit, the country benefits as the loss of one set of companies (especially public sector ones) is to an extent set-off by gains in the other. The impact on currency on account of higher import bill and current account deficit will also be muted. The key is in taking a meaningful stake in these oil ventures rather than smaller ones that Indian oil companies have been doing over the years. Oil companies should be given a free hand in dealing with it as they are the experts in the field. These public sector companies had complained of slow approval from government officials which resulted in China picking up some strategic assets earlier. Cornering oil assets is of strategic importance to a fast growing country like India. Darrius Heyward-Bey Jersey
ADB hopes TAPI gas line project to be completed in next five years
Despite having security concerns for materialising the much-awaited $10 billion TAPI (Turkmenistan-Afghanistan-Pakistan and India) gas pipeline, the Asian Development Bank (ADB) hopes that this flagship project of regional connectivity would now be on the ground and would be completed in the next five years. “All four member countries have established a project company by contributing initial money of $200 million, which will pave the way for the construction of 800-kilometre-long pipeline for 33 billion cubic feet of gas,” ADB’s Director General for Central and West Asia Department Sean M. O’ Sullivan told reporters during a media briefing on the sidelines of the 49th annual meeting of Manila based bank here on Wednesday. The ADB, he said, is also working with Pakistan for providing $150 million energy sector development programme which is expected to go to the board for approval by the end of this calendar year. Another $300 million loan programme for restructuring of state owned enterprises (SOEs) including Railways is expected to be approved next month (June 2016) which will make SOEs commercially viable. The ADB is also considering providing a facility of $50 million to Pakistan’s commercial banks. In another bid to connect the energy rich country with energy deficient countries in this region, the ADB is working on transmission line from Turkmenistan to Afghanistan, which will then be connected with Pakistan under the TAP project for which the ADB will finance $600 million. It will supplement the CASA-1000MW project from which the ADB had pulled out around 2009. Flanked by Hong Wei, Deputy Director General of ADB, Sullivan said that even Afghanistan had paid its equity share for establishing the project company for the TAPI gas pipeline. The major challenge for TAPI project will be ensuring security in the region but it is hoped that it will be overcome, he added. He said that under new arrangement, Pakistan’s resource envelop in terms of its quota for seeking financial assistance from the ADB went up from $1.2 billion per annum to around $2 billion per annum but it would depend upon the country’s ability to show results on pledged commitments. He said that under the initiative of Central Asia Regional Economic Cooperation (CAREC), the consortium of donors made plans for investing $28 billion on infrastructure and energy projects. To a question regarding volatile security environment in Afghanistan and non interest shown by giant oil and gas companies in the TAPI project, the ADB’s DG said that international oil companies might come in and for overcoming security concerns the communities would be involved for protecting the pipelines. The ADB, he said, has been selected as transaction advisor and termed it as major achievement on account of regional connectivity. Turkmenistan, he said, had already kick-started work on this project and now the work will be done to finalise design of the pipeline. He said that Islamic Development Bank (IDB) had committed $800 million. Under the initiative of CAREC, he said that Pakistan had already received $1 billion loan for construction of different road networks. He said now the ADB was planning to get involved into restructuring of Pakistan Railways, hydro and renewable energy to ensure energy security. The ADB provided assistance to Pakistan for Jamshoro coal project, although its working slowly and for bringing improvement in generation, transmission and distribution system of the country. The ADB provided $400 million for providing solar bulbs in the country. Regarding signing of Memorandum of Understanding between ADB and Asian Infrastructure Investment Bank (AIIB) for co-financing road project in central Punjab, he said it would be fourth installment of 386 kilometer road network for which now the AIIB joined as partner. This section of road, he said, will have estimated cost of $273 million including $100 million from AIIB, $100 million ADB, $34 million UK based-DFID and remaining $39 million by govt of Pakistan. Justin Smoak Jersey
Cairn can’t export crude till India attains self sufficiency, says government
The government today told the Delhi High Court that Cairn India cannot be permitted to export excess crude from its Rajasthan oil field, till India attains “self sufficiency”. “The stand of the central government is unequivocal and unambiguous that as a national policy, export of crude oil is not permitted till India attains self sufficiency,” the Centre told a bench of Justice Manmohan. The submission was made by the Ministry of Petroleum and Natural Gas which is opposing Cairn’s request for permitting them to export crude oil. Additional Solicitor General (ASG) Tushar Mehta, who was assisted by central government standing counsel Anurag Ahluwalia, said, “It is admitted position that between the parties that a Production Sharing Contract (PSC) is entered into by and between the parties and that the petitioner is governed by the terms of the said PSC which prohibits exports till self sufficiency .. ASG further said that, “whether to permit exports of crude oil exploited from the fields located within the territory of India (at a time when the country itself is suffering from huge deficit in demand and supply of hydrocarbons and is primarily dependent on imports), essentially falls within the realm of a policy decision, which is to be taken by the government keeping in mind the national interest and large public purpose. “The decision of the government not to permit export of the oil produced by the petitioner is a policy decision taken by the government, which cannot be in anyway termed to be an arbitrary, irrational or a mala fide decision warranting interference by this court,” the Centre submitted. The court asked the government to show it the copy of the policy under which Cairn was denied permission. While listing the matter for further hearing on May 18, it also asked them to inform whether there was any law or any contract under which they can restrict Cairn from selling their crude abroad. The court was hearing the plea of Cairn India, subsidiary of UK-based Vedanta group, seeking directions to the government to permit it to export the excess crude. Justin Coleman Womens Jersey
DBTL helped save Rs 216.72 billion of LPG subsidy
Pradhan outlines four-point identification programme for Ujjwala beneficiaries. The government saved more than Rs 216.72 billion of LPG subsidy outgo in the past two financial years (2014-15 and 2015-16) thanks to the implementation of the Direct Benefit Transfer in LPG (DBTL) scheme that eliminated ghost or duplicate connections. The scheme, under which cooking gas subsidy is transferred directly into bank accounts of beneficiaries to cut down leakages, was rolled out beginning November 2014. “If DBTL was not there, the government would have had to spend around Rs 150 billion more in 2014-15,” petroleum minister Dharmendra Pradhan said at a seminar on energy subsidies here. Oil ministry’s Joint Secretary Ashutosh Jindal, who was also present on the occasion, said the savings accruing as a result of DBTL stood at around Rs 70 billion last fiscal, lower than the gains of Rs 146.72 billion in previous financial year, due to the slump in crude oil prices. India had 181.9 million registered LPG consumers as on 1 April 2015 including 148.5 million active consumers implying a gap of 33.4 million duplicate, fake or inactive consumers, according to the oil ministry. Eliminating these unclaimed 33.4 million consumers helped save Rs 146.72 billion in 2014-15, Pradhan said. DeMario Davis Authentic Jersey
Gas price issue: RIL to decide on merits of arbitration
Reliance Industries Ltd (RIL) is perusing whether to withdraw a pending arbitration with the government on the gas price issue so that it can benefit from the higher prices. The company’s top management is understood to be looking into two divergent views of whether to drop the arbitration to gain from the near doubling of gas prices or carry on with the two-year-old case. “There is a view in favour of continuing with the case, while a second one favours dropping the arbitration. Both the views have been presented to the top management and the board will take a final call,” said a senior executive close to the development. An e-mail sent to the firm remained unanswered. The Cabinet had decided in March a new liberal pricing policy would apply to a company only if it ended or withdrew disputes it had filed against the government on gas pricing. Key RIL executives, including Executive Director P M S Prasad and President (E&P) Ajay Khandelwal, had met Oil Minister Dharmendra Pradhan early last month, fuelling speculation over whether the company has initiated talks with the government on withdrawing arbitration. The previous government had in January 2014 notified domestic natural gas pricing guidelines that would have doubled the prices from the then prevailing $4.2 per million British thermal units (mBtu). However, an Election Commission diktat did not allow the implementation of the guidelines from April 1, 2014. In May 2014, RIL and its partners BP and Niko went to court against the government for not implementing the new price. The National Democratic Alliance government came to power in May 2014 and deferred the revision of gas price. A new price of $5.6 per mBtu was implemented from November 2014. The government had in March this year launched crucial reforms for the oil and gas sector, based on which the Petroleum Planning and Analysis Cell of the oil ministry had announced a ceiling price of $6.61 per mBtu for gas from deep water, ultra-deepwater and high-pressure, high-temperature areas. This was more than double the current domestic gas price of $3.06 per mBtu. A source close to RIL denied the firm discussed the issue of withdrawal with Pradhan in the April 5 meeting but asserted the company was pressing ahead with its development plan for the KG Basin project. RIL had last month floated an expression of interest (EoI) to develop its oil and gas assets, including some of the discoveries in the KG-D6 block. Based on the bids, RIL plans to submit a revised field development plan to the government. The firm is also looking to place engineering, procurement, installation and commissioning contract for subsea facilities and pipelines for deepwater field development and offshore platform modification work. For KG-D6, the firm has invited an EoI for all operation and maintenance services, equipment and materials. Mario Addison Womens Jersey
In 2008, DGH declared GSPC’s K-G venture as commercially viable’
Taking on the Opposition’s corruption allegations in Gujarat State Petroleum Corporation Limited (GSPC)’s Krishna-Godavari (K-G) Block venture, Gujarat Energy Minister Saurabh Patel said that the previous UPA government and its officials had approved the commercial viability of the project as well as the Field Development Plan in 2009. “This itself shows that the UPA government and its Director General of Hydrocarbons (DGH) himself had accepted the success of GSPC. Hence, the investment of ?198.16 billion made by GSPC was not a wasteful spend as alleged by the Opposition, which wants to score political points falsely indicting GSPC and thereby Gujarat government,” said the Minister. Patel said that GSPC first focused on developing three discoveries of the DDW field in KG Block. In December 2008, the DGH had approved this project as commercially viable and going a step further, the DGH and the Ministry of Petroleum and Natural Gas had approved the FDP in November 2009, Patel stated adding that the company has entered into the production stage of the Field Development Plan. Challenging the Opposition charges on surrender settlement costs for surrendering the 37 blocks, Patel maintained that out of 65 blocks, GSPC did not succeed in 37 blocks. “GSPC spent ?29.92 billion for these surrendered blocks. But such cases are normal in the hydrocarbon sector. Central PSU ONGC had spent ?480 billion, while Oil India Limited (OIL) had spent around ?18 billion for such surrender settlement. Also, British Petroleum had to spend ?480 billion towards exploration cost settlement,” said Patel. Charges baseless The minister further mentioned that once the company begins commercial production, it will start getting revenues, hence the allegations of pending recovery of ?23.1943 billion from the joint venture partners Geo Global Resources and Jubilant have no truth in it, he said. “We plan to recover the dues of ?10.346 billion from Geo Global from its revenue share from the sale of gas. Similarly, Jubilant Offshore Drilling Pvt Ltd has paid ?14.2094 billion to GSPC so far. The remaining will be recovered from the company from its share of revenue from the sale of gas,” Patel informed. Ryan Getzlaf Authentic Jersey
RPower gets approval for LNG-based plant in Bangladesh
Anil Ambani-led Reliance Power has won an in-principle approval from the Bangladesh government for the first phase of the 3,000 megawatt LNG-based power plant. “Under the approval, first phase of 750 MW power plant will be set up at Meghnaghat (Narayanganj district), around 40 km South-East of Dhaka, along with the FSRU terminal at Maheshkhali Island in Cox’s Bazar district of Bangladesh,” the company said in a statement here. Reliance Power will set up a 2-million-tonne a year floating LNG import terminal with a floating storage and re-gasification unit (FSRU) to bring the fuel in ships for firing the power plant. “Power plant land at Meghnaghat will be provided by Bangladesh Power Development Board (BPDB). FSRU-based LNG terminal will supply re-gasified LNG for the power project and additional RLNG to PetroBangla,” the statement said. The first phase will be commissioned in 24 months from the zero date, in 2018-19 and help meet Bangladesh’s rising demand for electricity. “This will be the largest foreign direct investment in Bangladesh with a potential investment of over $1.3 billion,” the statement said. Total investment in the 3,000-MW power plant together with LNG terminal would be close to $3 billion. The company will use the equipment it had contracted for its Samalkot project in Andhra Pradesh for setting up the power plant in Bangladesh. The equipment will be under appropriate warranties from General Electric (GE), the USA and other global suppliers. Deone Bucannon Jersey
Different Rates for Supply of Natural Gas in States
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha that the delivered price of gas varies from customer to customer depending upon the basic price of gas, transportation cost, local taxes and levies. The natural gas consumed in the country can be categorized into two category viz., domestic gas and imported Regasified Liquefied Natural Gas (RLNG). The price of domestic natural gas is determined in accordance with the New Domestic Natural Gas Pricing Guidelines, 2014. As per the above guidelines, the base price of domestic natural gas supplied is same for all consumers irrespective of their location and sector, except for North East Region where the rate is 60% of the notified rate for certain allocations. The imported RLNG is being supplied at market determined prices by different gas suppliers/importers and Government does not control the prices of imported RLNG. Logan Cooke Womens Jersey
Reforms in Oil and Gas Exploration
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha that the Government takes various policy and administrative initiatives from time to time to facilitate hydrocarbon exploration in the country. Some of the policy decisions taken by the Government in recent years to enhance exploration and production activities are as under: • Government has approved Hydrocarbon and Exploration Licensing Policy (HELP) and same has been notified on 30th March 2016. This policy provides for a uniform licensing system to explore and produce all hydrocarbons such as oil, gas, coal bed methane, shale oil/gas, etc. under a single licensing framework Policy also provides many incentives such as reduced royalty rates for offshore blocks, marketing & pricing freedom and easy to administer revenue sharing model. • Marketing and Pricing freedom for new gas production from Deepwater, Ultra Deepwater and High Pressure-High Temperature areas subject to certain conditions. • Discovered Small Fields Policy- 67 oil & gas fields which have been held by ONGC and OIL for many years, but have not been exploited, has been approved for bidding under this policy. • Policy for grant of extension to the Production Sharing Contracts of 28 Small and medium sized discovered blocks. • Policy Framework for relaxation, extensions and clarifications at the development and production stage under PSC regime for early monetization of hydrocarbon discoveries: Government approved this policy on 10.11.2014, and the same is being implemented. Under this policy, about 40 pending cases have been resolved. • New Domestic Natural Gas price Guidelines, 2014: Under these guidelines, gas price has been linked to the market/ important hub prices. OG Anunoby Authentic Jersey