Cairn India output from Rajasthan oilfield down 4 per cent
Cairn IndiaBSE 1.75 % today reported 4 per cent drop in crude oil production at its flagship Rajasthan oilfields during the quarter ended March 31, mainly due to under-performance of its second biggest discovery. Production at Barmer block in Rajasthan in January-March dropped 4 per cent to 167,650 barrels of oil and oil equivalent gas per day, Cairn said in a regulatory filing. Its eastern offshore Ravva fields saw a 40 per cent drop in output in the fourth quarter of 2015-16 fiscal at 19,058 boepd while Cambay field off Gujarat managed a 8 per cent increase in production at 10,331 boepd. “Average gross production for Q4 FY2016 was 197,039 barrels of oil equivalent per day (boepd), 9 per cent lower than Q4 FY2015, primarily due to lower volumes from Ravva on account of its natural decline,” Cairn said. Gross production from Rajasthan declined by 4 per cent “mainly due to natural decline and under-performance of the Bhagyam reservoir,” it said. Bhagyam is the second biggest oil discovery in the Rajasthan block after Mangala. “Lower volumes at Rajasthan were partly offset by infill wells in Aishwariya, better reservoir management initiatives across the field and a ramp up of production from successful EOR project execution. “Gross production from Development Area DA1 and DA2 averaged at 150,918 boepd and 16,732 boepd, respectively,” it said. DA1 comprises of Mangala, Bhagyam and Aishwariya oilfields while other discoveries are in DA2. Cambay block production increased by 8 per cent compared to Q4 FY2015 driven by commissioning of an artificial gas lift system and better reservoir performance in 4Q16, it said. For the full 2015-16 fiscal, average gross production was 203,703 boepd, 4 per cent lower than FY2015 on account of lower production from Rajasthan and offshore assets. “Rajasthan production declined 3 per cent (to 169,609 boepd) due to reservoir underperformance at Bhagyam. However, an excellent performance by Mangala EOR and contribution from Aishwariya infill program partly made-up for the decline,” it said. Cairn said Mangala enhanced oil recovery (EOR) project was on track and producing the result as expected. “Prudent reservoir management practices helped us reduce the impact of natural decline in our offshore assets,” it said. Gas production from the RDG field increased to an average rate of 27 million standard cubic feet per day in 2015-16 as compared to 16 mmscfd in 2014-15 and surpassing guidance of 25 mmscfd.
India-Iran sign agreements on crude oil imports, gas field development
Eyeing to step up energy partnership in the post-sanctions period India and Iran have signed an agreement that involves crude oil imports, petrochemical complexes and gas fields development besides Delhi making an announcement of $20 billion for strategic Chabahar Port complex during ongoing two-day visit of Oil Minister Dharmendra Pradhan to Tehran. Pradhan who met his Iranian counterpart Bijan Zanganeh in Tehran Saturday also discussed on increasing India’s import of Iranian oil from its current 350,000 barrels a day. “We hope this number will increase now that sanctions have been lifted,” Zanganeh told Iranian news agency Shana after his meeting with Pradhan. A high-level delegation of Indian major oil and energy firms who accompanied the Minister, also evinced interest in Iran’s oil, gas and petrochemical projects, government sources here said. The two ministers signed a cooperation agreement encompassing oil exports, petrochemical operations and gas-field development on the occasion, sources said. Pradhan addressing a joint press conference on Saturday with his Iranian counterpart said, “Iran and India’s energy ties are no longer limited to crude oil imports,” and that India was ready to invest $20 billion in the port of Chabahar in Southeastern Iran. He added that “energy sector can be determining in development of Tehran-New Delhi relations.” India has already extended over $ 100 million Line of Credit for berths and jetties at Chabahar. India’s participation at Farzad-B gas field topped discussions between the two Ministers, sources informed. Last year ONGC submitted a proposal of $ 3 billion for development of Farzad-B field. In fact the most important item in Zanganeh discussions with Pradhan was the investment to develop Farzad-B offshore gas field, sources said. “It was decided that Iranian and Indian sides agree on the schedule of implementing the project which is a demanding job and take time,” sources quoting the Iranian Minister said. Post sanction Iran wants to cultivate closer ties with countries in the East and India’s close relationship with Iran is an added advantage, Iranian government sources said, adding the Minister also discussed pending oil payments issue by India with the banking authorities in Tehran.
Cairn Energy’s daunting I-T maths
The I-T Dept had on Jan 22, 2014 issued a draft assessment order of Rs 102.47 billion on alleged capital gains Cairn made in a 2006 reorganisation of its India business. British oil explorer Cairn Energy Plc has told its shareholders it faces a penalty up to Rs 102 billion over and above the Rs 290 billion in tax and interest demand slapped by the Indian income tax authorities, involving a case of retrospective legislation. The company, in a circular to shareholders dated Wednesday, said it had on February 4 got “a final assessment order from the department”, of Rs 102 billion plus interest backdated to 2007 totalling Rs 188 billion. “The aggregate amount excludes any applicable penalties which may also be applied to the final assessment (potentially up to 100 per cent of the final assessment order, excluding interest),” it said. It added that Cairn strongly contests the final assessment proceedings in India and is pursuing its rights under Indian law to appeal, both in respect of the basis of taxation and the amount assessed. And, to protect from enforcement against the assets of CUHL (Cairn UK Holdings). An e-mail to Cairn seeking clarification on the circular remained unanswered. The I-T department had in January 2014 issued a draft assessment order of Rs 102.47 billion on alleged capital gains Cairn made in a 2006 reorganisation of its India business. The final assessment order was issued on February 4, 2016. The notice was, however, issued before Finance Minister Arun Jaitley in his Budget for 2016-17 made a one-time offer to waive interest and penalty if companies paid the principal amount to settle the retrospective tax disputes. The company said it had on March 11 this year filed a Notice of Dispute under the UK-India Investment Treaty, to protect its legal position and shareholder interests.
Green nod for HPCL’s Rs 8 billion storage tank project in Mumbai
Hindustan Petroleum Corporation (HPCL) has received environment clearance for construction of storage tanks in the existing complex of its Mumbai refinery, entailing an investment of Rs 8 billion. HPCL’s Mumbai refinery has a total installed capacity of 7.5 million tons per annum. The company intends to decongest the refinery through relocation of storage tanks to newly acquired 57 acres of Calico plot at Chembur. “Based on the recommendations of the Expert Appraisal Committee, the Environment Ministry has granted environment clearance and Coastal Regulation Zone (CRZ) clearance to the HPCL’s project,” a senior government official said. The clearance has been given subject to general and specific conditions, the official added. As per the proposal, HPCL will construct storage tanks and associated facilities for white oil products at the Calico plot. The project includes construction of storage tanks for six different types of white oils apart from storage for Naphtha and Slop. Six different types of white oils are MS-I, MS-II, HSD-I, HSD-II, SKO and ATF. The project also involves laying of new pipelines (to and fro) from Calico plot to HPCL Mumbai Refinery and connecting to existing pipelines for distribution of products with the cost of the project estimated to be Rs 8 billion.
IOC to spend Rs 200 billion to expand Gujarat refinery
IOC’s Gujarat Refinery has been asked to move to the more stringent BS VI norms from the current BS IV. Indian Oil Corporation is going to spend Rs 200 billion for the brownfield expansion of its refinery in Gujarat, Union Minister Dharmendra Pradhan said. “IOC’s Gujarat Refinery here has been asked to jump directly from BS IV to the more stringent BS VI norms for petrol and diesel, so that cleaner transport fuels become available sooner to bring down vehicular emissions,” the Union Minister of State for Petroleum and Natural Gas said after visiting the refinery. He told PTI that the Gujarat Refinery was expanding capacity to 18 million tons per annum (MTPA) from the existing 13.7 MTPA. The expansion is expected to be commissioned in 2020. “After the expansion, it will become the refinery with the largest capacity for the company,” the Union Minister said. Pradhan also said he would be visiting Iran on April 9, and was looking to expand energy ties with that country. The agenda of the visit includes ONGC’s participation in developing the Farzad-b gas field, buying additional crude oil and settling pending payments for earlier oil purchased from Iran, he said. “I will also discuss projects including petrochemicals and fertiliser plants in the special economic zone at Chabahar port in Iran,” he said. External Affairs Minister Sushma Swaraj will visit Iran later this month, he said. With changes in the geopolitical situation, India is in a better position to source natural gas and LPG from Iran and oil and gas from Russia, he said. “Post-sanctions Iran provides a huge opportunity for India for sourcing natural gas which would increase the availability of CNG and cooking gas in the country,” he added.
TAPI Pipeline to Bring Sustainable, Cleaner Energy to India
Shareholders of the TAPI Pipeline Company Limited (TPCL) signed an Investment Agreement on April 7 in a ceremony witnessed by petroleum ministers and senior government officials of Turkmenistan, Afghanistan, Pakistan and India and senior Asian Development Bank (ADB) officials. The TAPI pipeline will pave the way for the delivery of sustainable natural gas supplies to India. The Investment Agreement provides an initial budget of over $200 million to fund the next phase of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. This includes funding for detailed engineering and route surveys, environmental and social safeguard studies, and procurement and financing activities, to enable a final investment decision, after which construction can begin. Construction is estimated to take up to 3 years, according to ADB. “TAPI is a partnership that will bring about economic integration and prosperity in the region. It will not only provide a long-term and sustainable gas supply to India but also allow the country to improve its energy supply mix,” said K.D. Tripathi, Secretary of India’s Ministry of Petroleum and Natural Gas. TPCL will build, own, and operate the TAPI pipeline, which once completed, will transport up to 33 billion cubic meters of natural gas annually from Turkmenistan for the next 30 years. The pipeline stretches about 1,600 kilometers from the Afghan/Turkmen border to the Pakistan/Indian border “TAPI exemplifies ADB’s key role in promoting regional cooperation and integration over the past 20 years. It will unlock economic opportunities, transform infrastructure, diversify the energy market for Turkmenistan, and enhance energy security for the region,” said Sean O’Sullivan, Director General of ADB’s Central and West Asia Department. Acting as TAPI secretariat since 2003 and as transaction advisor since 2013, ADB has been instrumental in the progress of the TAPI pipeline to date. In the latter role, ADB helped establish TPCL, select Turkmengaz as consortium leader, and finalize the Shareholders and Investment Agreements.
Funding of exports to Iran from India through the Export Development Fund of Exim Bank
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for increasing the framework agreement between Exim Bank of India and a consortium of Iranian banks lead by Central Bank of Iran for financing the purchase of goods and services from India to Rs.3000 crore from Rs. 900 crore. This will be done by utilising the Export Development Fund (EDF). The proposal provides for domiciling two contracts of export of steel rails by STC and for the Chabahar Port Development project previously approved by the Cabinet under EDF. The proposal will promote the country’s exports with Iran. It will also deepen India’s relationship with Iran as a strategic partner. Background The Exim Bank of India and seven Iranian Banks led by Central Bank of Iran had negotiated a framework agreement in November, 2014 for financing the purchase of goods and services from India by Iranian entities to the tune of Rs.900 crore under EDF. The increase to Rs. 3000 crore will enable the Exim bank to provide Buyer’s credit facility to Iran, secured via sovereign guarantee from Iran, for the export of goods and services. This will provide opportunity to Indian Companies to penetrate and enhance their footprint in Iran along with facilitating the growing trade and investment with Iran. This will also help in employment generation and development of ancillary activities in India.
Minister of State for Petroleum and Natural Gas Sh Dharmendra Pradhan to visit Iran and UAE
Shri Dharmendra Pradhan, Minister of State (I/C) for Petroleum and Natural Gas, will be visiting Iran and UAE on 9-12 April 2016. During his visit to Iran from 9-10 April, Sh. Pradhan will meet Iranian Minister of Petroleum, Senior Adviser to President of Iran on Free Trade Zones and Governor of Central Bank of Iran in Tehran. He would also be addressing the Tehran Chamber of Commerce. He will be visiting Chabahar FTZ to interact with FTZ authorities. The last visit by an Indian Minister of Petroleum and Natural Gas to Iran was in April 2007. India and Iran share historic bilateral relations with substantial economic engagements, covering many sectors. The trade relations have traditionally been buoyed by Indian import of Iranian crude oil. The bilateral trade during the fiscal year 2014-15 was US $ 13.13 billion. India imported US $ 8.95 billion worth of goods, mainly crude oil and exported commodities worth US $ 4.17 billion. The visit of Sh Pradhan envisages engaging with the Iranian political leadership to work with them, particularly in the hydrocarbon, petrochemicals and fertilisers sectors for mutual benefits, including strengthening of India’s energy security. During the visit to UAE from 11-12 April, Sh Pradhan will meet HE Suhail Mohammed Al Mazrouei, Minister of Energy of UAE in Abu Dhabi. He will also meet with CEO of ADNOC and Chairman of AIDA (Abu Dhabi Investment Authority). During his stay in Dubai, Sh Pradhan will meet Emirati Businessmen, inaugurate India Pavilion at the Annual Investment Meet-2016 at the World Trade Centre, visit Jabel Ali Free Zone Authority (JAFZA) and interact with JAFZA authorities. He is also scheduled to meet Indian businessmen and professionals. The visit of Sh Pradhan to UAE is a follow up of the February 2016 visit of Crown Prince of Abu Dhabi HH Sheikh Mohammed Bin Zayed Al Nahyan and Minister of Energy H E Mr Al Mazrouei. In the recent years, the traditionally close and friendly India – UAE bilateral relationship has evolved into a significant partnership in the economic and commercial sphere. India-UAE trade, which was valued at US $ 180 million per annum in the 1970s, is today around US $ 60 billion making UAE, India’s third largest trading partner for the year 2014-15. For UAE, India is the largest trading partner for the year 2014, with an amount of over US$ 28 billion (non-oil trade). On the energy front, UAE contributes significantly to India’s energy security, being the 6th largest supplier. India is the 2nd largest destination for UAE’s oil exports. India imported 16.11 MMT of crude oil from UAE during 2014-15 and 11.52 MMT during April-December 2015. Mr Pradhan will be accompanied by senior officials from his Ministry and also from Departments of Petrochemicals, Fertilizers and Economic Affairs, apart from CMDs/MDs and officials from Central Public Sector Oil and Gas, Fertilizers, Shipping and Metal companies. Representatives of private Indian companies involved in petroleum, petrochemicals and fertilizers sectors will also be travelling along with Sh Pradhan as part of a FICCI delegation.
Petroleum & Natural Gas Minister dedicates 36 new CNG stations in Delhi & NCR
The Minister of State (Independent Charge) for Petroleum & Natural Gas Shri Dharmendra Pradhan today dedicated 36 new CNG stations located in Delhi and NCR to the public. 30 out of these stations have been installed by Indraprastha Gas Limited (IGL) at the retail outlets of Oil Marketing Companies like Indian Oil, BPCL and HPCL. 3 stations by Haryana City gas in Gurgaon, 1 station by GAIL Gas in Sonepat and 2 stations by Adani gas – one each in Faridabad and Khurja (Bulandshahar) have been set up. While 25 out of these 36 CNG stations are located in NCT of Delhi, 11 are located in NCR – Ghaziabad, Greater Noida, Gurgaon, Faridabad, Sonipat and Khurja. Inaugurating the CNG dispensing at the retail outlet of Indian Oil located in Gole Market, New Delhi, Shri Pradhan underlined the commitment of the central government to make CNG available across the country so that clean fuel is accessible at doorsteps for all. He said that CNG corridors across Delhi – Mathura – Agra – Lucknow – Bareilly, Delhi – Chandigarh, Delhi – Jaipur and Delhi – Haridwar would be operational shortly so that the vehicles can run long distances on CNG. He reiterated that CGD industry has been given top priority in natural gas allocation. The Minister applauded the efforts of oil marketing companies and city gas distribution companies for rolling out the current initiative for CGD infrastructure in Delhi and NCR. He also said that these companies are geared up for extending all possible cooperation for converting cars to CNG in Delhi and NCR. Out of the 1026 CNG stations currently in operation in the country, about 34% are located in Delhi and adjoining NCR towns. Delhi/NCR is having 347 CNG stations of about 77 lakh kg per day CNG dispensing capacity. All 4 CGD companies operating in Delhi/NCR have planned to augment the existing CNG dispensing capacity to 88 lakh kg per day by developing additional 104 CNG stations in Delhi/NCR. The actual CNG consumption in Delhi/NCR is around 25 lakh kg/day. With the focussed approach of the central government for augmenting CNG capacity in Delhi/NCR, 36 new CNG stations with the total capacity of about 2.3 lakh kg/day have been commissioned today. The new dispensing capacity will increase the availability of CNG to the people of Delhi and NCR. Also present on the occasion were Ms Meenakshi Lekhi, Member of Parliament, Shri B.C. Tripathi, CMD, GAIL (India) Ltd., Shri B. Ashok, Chairman, Indian Oil, Shri Ashutosh Jindal, Joint Secretary, Ministry of Petroleum & Natural Gas, Ms Sunita Narain, DG, Cenre for Science & Environment and Mr Narendra Kumar, MD, IGL.
IOC sought details about Cuddalore unit, says Nagarjuna Oil
Hyderabad-based Nagarjuna Oil Refinery Ltd has said that Indian Oil Corp (IOC) sought information on the upcoming Cuddalore refinery for making a possible equity investment but the state-owned firm said there was no such proposal under consideration at present. “Various prospective investors including public sector companies such as IOC have sought information on the project,” Nagarjuna Oil said in a stock exchange filing. “These prospective investors have been provided with the information sought from time to time.” IOC, however, in a statement said, reports of it being interested in stake in the Cuddalore refinery is speculative and “there is no such proposal under consideration by Indian Oil at present”. Highly placed sources yesterday said that IOC was talking to Nagarjuna Oil. The move followed talks by Singapore-based Netoil to buy a stake in Nagarjuna Oil Corp (NOCL) broke off in February this year. Nagarjuna Oil Refinery Ltd (NORL) holds 46.78 per cent of the equity share capital of Nagarjuna Oil Corporation (NOCL). Tatas too are a shareholder in the refinery. Nagarjuna Oil Refinery had in September year stated that a confirmatory due diligence of NOCL was being undertaken by Netoil to acquire the project for Rs 3,600 crore. The six million tonnes refinery is the first phase of a Rs 25,000 crore project that will have an ultimate capacity of 12 million tonnes. The project was delayed due to damages caused by a cyclone some years back as well as funding problems due to global economic slowdown later.