DBT for Kerosene Subsidy
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Lok Sabha that the Government has decided to implement Direct Benefit Transfer in Kerosene (DBTK) in 33 districts identified by 9 State Governments. The States are gearing up for implementation of direct transfer of subsidy. Under DBTK, the consumer will pay the non-subsidized price of kerosene at the time of purchase. Subsequently, the amount of subsidy will be directly transferred to the bank account of the beneficiary. As a part of this scheme, implementing States will be given fiscal incentive equivalent to 75 % of subsidy saved in the first two years, 50 % of subsidy saved in third year and 25 % of subsidy saved in 4th year. In case the States voluntarily agree to undertake cuts in kerosene allocation, beyond the savings due to DBTK, a similar incentive will be given to those States/UTs. The calculation will be based on net savings in kerosene consumption at State level from the baseline. The baseline for calculation of savings shall be 90% of the 2015-16 allocation of PDS SKO. All State/UTs have been requested to join the Scheme either in identified districts or in the entire State. The Ministry is in touch with the State Governments to ensure that proper mechanisms are put in place at the earliest. Tavon Young Authentic Jersey
Ethanol Blending of Petrol
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Lok Sabha that in India, the Government has permitted Oil Marketing Companies (OMCs) to sell Ethanol blended petrol with percentage of ethanol up to 10% as per BIS Specification to achieve 5% ethanol blending across the country as a whole. During the sugar year 2014-15, OMCs have achieved a blending percentage of 2.3 per cent. The Government has fixed the price of ethanol. As petrol has been decontrolled with effect from June, 2010 OMCs take appropriate decision on pricing of petrol as per international prices and market conditions. Ethanol blending in Petrol results in saving of Petrol to the extent of its blending and consequent foreign exchange. The potential foreign exchange earnings for the Sugar Year 2014-15 amounts to around USD 285 Million. In order to improve the availability of ethanol and encourage ethanol blending, the Government has taken following steps : (i) The Government has fixed the delivered price of ethanol in the range of Rs.48.50 per litre to 49.50 per litre. (ii) Ethanol produced from other non-food feedstocks besides molasses, like cellulosic and ligno cellulosic materials including petrochemical route, have been allowed to be procured. (iii) Ministry of Petroleum and Natural Gas, on 1st September, 2015, inter-alia has asked OMCs to target ten percent blending of ethanol in Petrol in as many States as possible. (iv) The procedure of procurement of ethanol under the EBP has been simplified to streamline the entire ethanol supply chain. (v) Excise duty has been waived on ethanol supplies to OMCs for EBP by sugar mills during 2015-16. Above initiatives to incentivize Ethanol Blended Petrol (EBP) Programme are expected to increase blending of ethanol in the near future. Trenton Cannon Authentic Jersey
Setting Up of Refinery in Maharashtra
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Lok Sabha that Oil PSUs namely Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have announced the plan to jointly set up an integrated refinery-cum- petrochemical complex with a refining capacity of 60 MMTPA (million metric tonnes per annum) in 2 phases in Maharashtra. Engineers India Limited (EIL) is carrying out detailed feasibility study. Oil PSUs and EIL are in the process of site selection for the refinery in consultation with Govt. of Maharashtra. Oil Companies take decision on equity structure and financing of the project depending on various financial and operational parameters. The estimated expenditure and other details of the project are finalized after the completion of Detailed Feasibility Study and selection of site. The implementation time for the proposed Refinery is estimated to be seven years after acquisition of land. Mackensie Alexander Jersey
Odisha asks Indian Oil to release equity contribution to plastic park
The Odisha government has asked Indian Oil Corporation Ltd (IOCL) to make equity contribution for the plastic parkproject coming up at Paradip in the vicinity of IOCL’s 15 million tonne crude oil refinery. Odisha Industrial Infrastructure Development Corporation (Idco) has already formed a special purpose vehicle (SPV) for the project titled Paradip Plastic Park Ltd to monitor the project, for which at least 120 acres has already been procured. “As per the initial estimate, the plastic park will be set up at a cost of Rs 1.0678 billion out of which Rs 400 million will be available as grant-in-aid from the Government of India. It is proposed that in view of the long-term partnership with IOCL in this venture, the project cost excluding the grants from the Government of India (Rs 667.8 million) may be shared equally between Idco and IOCL”, Sanjeev Chopra, principal secretary, industries wrote to IOCL chairman. The plastic park complex is expected to provide feedstock to downstream industries. It will also offer an assured market for IOCL’s refinery products. IOCL has already commissioned its crude oil refinery, investing around Rs 350 billion. The Paradip refinery product mix would consist of 37.5% high speed diesel, 25.3% motor spirits, 13.1% ATF, 5.2% propylene+LPG, 8.1% petroleum coke and 1.8% sulphur. The products will be predominantly consumed in the domestic market except a portion of motor spirits, which will be exported. The IOCL refinery, its petrochemical complex, and the planned plastic park complex are an integral part of the PCPIR (petroleum, chemicals and petrochemicals investment region) hub spread over an area of 284 sq km, straddling Jagatsinghpur and Kendrapara districts in Odisha. The PCPIR hub is expected to attract investments to the tune of Rs 2740 billion. IOCL is the anchor tenant for the PCIR hub. Andrew MacDonald Jersey
Cairn India cuts capex by a third to $100 mn for FY ’17
In 2014-15, the company had spent $1.1 bn of capital expenditure. Battered by a slump in oil prices, Cairn India has slashed its capital expenditure for 2016-17 by a third to $100 million (around Rs 6.60 billion). Cairn had originally planned a capex of $1.2 billion for 2015-16, but later revised it to $500 million as oil prices started to fall. In third quarter, the firm further trimmed it down to $300 million. In an investor presentation post announcing FY16 earnings, Cairn said for 2016-17 a capex “of $100 million” is planned. In 2014-15, the company had spent $1.1 billion of capital expenditure. Eighty per cent of $100 million planned investment will be for “development including Raageshwari gas (field) and Mangala enhanced oil recovery (both in flagship Rajasthan block) completion activities and 20 per cent in exploration,” it said. The company, however said: “Despite record low oil prices and substantial cut in capex, we will maintain the production broadly at FY16 level.” Cairn’s flagship Rajasthan block produced 1,67,266 barrels per day of oil in 2015-16, down 3 per cent from the previous year. Gas output was 57 per cent higher at 14 million standard cubic feet per day. The firm will “continue investing in pre-development activities of our key projects in core Mangala-Bhagyam- Aishwariya (MBA) fields, Barmer Hills and Satellite fields, to ensure project readiness for development with rebound in oil prices and grant of extension of Rajasthan license.” “Aim to have healthy cash flows post capex to retain the ability to pay dividends subject,” Cairn said in the presentation. Benchmark brent crude oil prices witnessed a decline of 44 per cent during the year, resulting in Cairn realising only $40.8 per barrel for the oil it produced in 2015-16. This compared with $76.8 a barrel it got in the previous year. “We maintain the flexibility to raise our capital investment as oil prices improve and aim to generate a healthy cash flow post capex so as to retain the ability to pay dividends,” Cairn said. Cairn had on Friday reported its biggest quarterly loss of Rs 109.4822 billion during three-month period ended March 31, as it took impairment loss on goodwill and non-producing oil and gas assets due to drop in oil prices. “Due to decline in crude oil prices in the international market, the group has recorded an impairment on the carrying value of goodwill and some of its non-producing oil and gas assets aggregating to Rs 113.8963 billion and Rs 2.8417 billion respectively,” the company had said announcing the results. For full fiscal, the company posted a net loss of Rs 94.32 billion compared with Rs 44.80 billion profit a year ago. Tracy McGrady Jersey
LPG subsidy surrender valid for only one year: Oil Minister Dharmendra Pradhan
More than 10 million consumers who have voluntarily given up their cooking gas subsidy have the option to switch back to subsidized cylinders after a year, oil minister Dharmendra Pradhan has said. 11.3 million households have given up cooking gas subsidy so far across the country in response to the government call to well-off citizens to surrender their share of subsidy. India has a total of 202.1 million cooking gas consumers. A massive media campaign by the government and an oil collapse that has depressed cooking gas prices and squeezed subsidy have aided consumer decision to dump subsidy. The subsidy, which varies from state to state, is just about Rs 90 on a 14.2 kg cooking gas cylinder in Delhi today, a reflection of the two-thirds drop in oil prices in two years. But if the oil prices, currently around $45 per barrel, were to climb back to the mighty heights seen a few years ago, buying a non-subsidised cylinder might start hurting consumers as commodity spike is often accompanied by a general inflation in the economy. Pradhan said consumers who have given up subsidy can again ask for it as the voluntary surrender by them is valid only for a year. This means if a consumer changes his mind and wants his cooking gas subsidy back, he can do so after a year of giving up. But if a consumer doesn’t make any such request, the government will assume that he doesn’t need subsidy even the next year. Nearly half of those who gave up cooking gas subsidy came from Maharshtra, Uttar Pradesh, Delhi, Karnataka and Tamil Nadu. The government’s plan to introduce direct cash transfer for kerosene consumers has been delayed as states have sought more time for the roll-out, Pradhan said. The plan to transfer cash in the bank accounts of kerosene consumers, as has been done for cooking gas consumers, was slated to begin from April 1. But complication in sorting the consumer database is delaying the project. James Develin Authentic Jersey
Government plans to begin auction of marginal oil, gas fields
The government is planning to begin the process to auction marginal oil and gas fields in a month after delaying it for several months due to lower oil prices, an oil ministry official has said. The oil ministry will hold a meeting next week to finalize a timeline for the auction, after which officials will begin a roadshow, showcasing small discovered fields to potential investors, the official said. Last year, the government unveiled a new policy for 69 small discovered fields that had remained undeveloped for years due to their limited reserves, high development cost and technological constraints. All these fields were earlier owned by Oil and Natural Gas Corp (ONGC) and Oil India (OIL). The government will auction 67 fields divided in about 44 clusters, the official said. Two fields in the north-east will not be part of the auction. The fields have been divided into clusters to make them financially attractive for potential investors as they can then plan common infrastructure for fields, keeping costs low. The auction will test the potency of some of the key policy changes introduced by the government lately in the exploration and development sector to attract investors. The government has offered companies the marketing freedom for gas and introduced revenue-sharing, instead of profit sharing, between the operator and the government in its marginal field policy. Barkevious Mingo Jersey
Govt to appoint 10,000 new LPG distributors in FY ’17
Union Petroleum Minister Dharmendra Pradhantoday said 10,000 new LPG distributors will be appointed in the current financial year. “At present, there are 18,000 gas distributors in the country and in the coming three months, 2,000 new distributors will be made and by the end of this financial year 8,000 more distributors will be made,” Pradhan told reporters. He was here to oversee the preparations for Prime Minister Narendra Modi’s visit on May 1 to launch Ujjwala Yojana. The ambitious Rs 80 billion scheme will provide 50 million free LPG connections to BPL families using the money saved from 11.3 million cooking gas users voluntarily giving up their subsidies. Modi will launch the Pradhan Mantri Ujjwala Yojana here on May 1 and do a repeat function at Dahod in Gujarat on May 15. Pradhan said 61 per cent households in the country have LPG connections, while in Uttar Pradesh 53 per cent houses have gas connections. Besides increasing production in refineries, the government is taking other steps to increase availability of LPG for consumers, Pradhan said. Melvin Gordon Jersey
ONGC to drill 17 exploratory wells for shale gas
ONGC Limited is planning to explore as many as 17 shale gas and oil wells in both east and west coasts with an investment of around Rs 7 billion. According to the minutes of a recent meeting of the Expert Appraisal Committee (EAC) of Ministry of Environment and Forests, the PSU sought the ministry’s nod to prepare Terms of Reference for exploring the wells. A senior official of the PSU said this is the first time that the oil and gas company has taken up shale gas exploration in such a big scale. Also, it first time that it has taken up shale gas exploration in the Krishna-Godavari basin. According to the minutes, ONGC sought permission for drilling 11 exploratory wells for shale oil/shale gas in Cambay basin at Mehsana, Ahmedabad and Bharuch districts of Gujarat, one well in Cauvery basin at Nagapattinam in Tamil Nadu and five wells in KG Basin at East and West Godavari districts of Andhra Pradesh. Shale gas is the natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich resources of petroleum and natural gas. “ONGC Ltd has proposed for exploratory drilling of 11 wells for shale oil/shale gas in Cambay basin at Mehsana, Ahmedabad, Bharuch in Gujarat. Total cost of project is Rs 3.66 billion,” according to the minutes of the meeting. The costs of the projects at KG-Basin and Cauvery are Rs 2.17 billion and Rs 450 million, respectively, it added. “ONGC was given a mandate to identify a minimum of 50 nomination blocks where it will take up shale gas and oil exploration in Phase-I. “ONGC will have to drill at least one (two in blocks having area more than 200 sq km) well for assessment of shale gas and oil in each of these blocks by 2017,” the official cited above told PTI. Realising the importance of shale gas and oil for meeting the energy demands of the country and the need to expedite exploration and assessment of domestic reserves, the Centre had announced policy guidelines on October 14, 2013, whereby national oil companies ONGC and OIL were to take up shale gas and oil exploration activities in their nomination blocks. According to a report released in 2013 by US Energy Information Agency, India has 63 trillion cubic feet of shale gas trapped under rocks. Raekwon McMillan Womens Jersey
Confident of launching direct benefit transfer for kerosene this fiscal: Pradhan
The Ministry of Petroleum and Natural Gas is confident of rolling out the direct benefit transfer for kerosene (DBTK) scheme in the 2016-17 fiscal. “The issue with kerosene is that states will have to compile the consumer list. They have asked for some more time which we have agreed to. But I am confident of rolling out a comprehensive DBTK model in the 2016-17 fiscal,” Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, said on Friday. The Minister was speaking at an event to announce that more one crore households have given up the LPG subsidy under the government’s ‘GiveItUp’ scheme. “The latest figures that we have shows that 1.13 crore people have given up the LPG subsidy voluntarily across states in little over a year since the campaign was launched. Five states – Maharashtra, Uttar Pradesh, Delhi, Karnataka and Tamil Nadu – have contributed to 50 per cent of those who have given up the LPG subsidy,” said Pradhan. As a result of the voluntary foregoing of subsidy, 60 lakh below poverty line families have been provided LPG connections, the Minister said. Under the GiveItUp scheme, consumers foregoing subsidy cannot reclaim subsidy till at least one year is over. “We will look at different models of providing them subsidy if they want it when LPG prices are higher,” Pradhan said. Will Butcher Jersey