NEW DELHI: India should appoint energy diplomats in global oil hubs, empower the regulator and allow market prices for local gas producers to achieve energy security for the country, which imports about 80% of its oil requirements, according to a top government panel.
Energy diplomats should be positioned in Moscow, Sydney, London, Calgary, Houston and Johannesburg, the panel said.
“These diplomats will serve as outposts of India with the objective of furthering the agenda of ensuring energy security for the country,” the panel headed by former petroleum secretary Vijay Kelkar said in its final report titled, “Roadmap for Reduction in Import Dependency in the Hydrocarbon Sector by 2030.”
HDFC chairman Deepak Parekh, former Shell India CEO Vikram Mehta and former ONGC chairman RS Sharma were among the 10 members on the panel, which said the country’s annual import bill could be cut by $70-80 billion by implementing the recommendations.
Indian companies should bid for hydrocarbon assets in a consortium as it increases their financial strength and bargaining power and different arms of the government should come together to develop country-specific approaches while scouting for energy assets overseas, the panel proposed.
It also suggested setting up a think tank to produce quality research reports on oil and gas-rich Arabian Gulf region countries and its impact on India’s energy security.
The panel proposed making the Directorate General of Hydrocarbons, a technical arm of the government, an independent and empowered regulator.
“At present, the multiple roles of government as policy maker, regulator and operator lead to conflicts of interest and dampen investor confidence in the sector,” it said. “The DGH should be given, as is the case of Sebi, quasi-judicial powers accompanied by an appellate tribunal for fast and effective dispute resolution,” it added.
(Source: The Economic Times, February 25, 2015)
PNGRB INVITES LICENCE BIDS FOR RETAILING CNG, PIPED GAS
NEW DELHI: Oil regulator PNGRB has invited bids for issuing licences for retailing CNG and piped cooking gas in 20 cities like Haridwar and Aligarh.
The Petroleum and Natural Gas Regulatory Board said that April 23 is the last date of bidding for development of city gas distribution networks in East Godavari, West Godavari, Belgaum, Ahmadnagar, Krishna, Muzaffarnagar, Badaun, Aligarh, Bulandshahr, Banaskantha, Tumkur, Latur, Dhar, Dahod, Shivpuri Haridwar, Dharwad, Bidar, Osmanabd and Udham Singh Nagar.
Bidders have been asked to quote the tariff they will charge for the pipeline network to be laid in the city and the compression charge for dispensing CNG (compressed natural gas) over the 25 years.
They have also been asked to quote the inch-kilometre of steel pipelines they will lay during first five years and the number of domestic consumers proposed to be connected by piped natural gas, according to the regulator.
This will be the fifth bid round even though PNGRB is yet to award licenses of the previous rounds.
Fourteen cities offered in the fourth round announced in October 2013 are yet to be awarded. These were Eranakulam in Kerala; Rangareddy/ Medak, Nalgonda and Khammam in Andhra Pradesh; Bengaluru rural and urban districts in Karnataka; Raigarh, Pune and Thane in Maharashtra; Daman; Dadar & Nagar Haveli; Shahjahanpur in Uttar Pradesh; Guna in Madhya Pradesh; Panipat in Haryana and Amritsar in Punjab.
To accelerate deployment of the CGD network in the country, PNGRB had invited bids in 2009 for 13 cities in first two rounds.
GAIL Gas Ltd walked away with four of the six cities offered in round one.
It won Sonepat in Haryana, Dewas in Madhya Pradesh, Meerut in Uttar Pradesh and Kota in Rajasthan while Bhagyanagar Gas Ltd got Kakinada in Andhra Pradesh and DSM Infratech Mathura in Uttar Pradesh.
In round two, Indian Oil Corp-Adani Group combine walked away with Allahabad and Chandigarh, while Reliance Gas got Rajahmundry, Shahdol and Yanam in Andhra Pradesh. Jhansi went to Central UP Gas Ltd.
The third round of bidding was opened in July 2010 and concluded in February 2011 (after extension), but final awards of most cities are yet to be made because of certain litigation involving PNGRB and a few other parties.
City-based Jay Madhok Energy won rights to Jalandhar city, according to PNGRB.
(Source: The Financial Express, February 25, 2015)
AFTER LPG, GOVT MULLS DIRECT FERTILISER SUBSIDY
The Government is considering direct transfer of fertiliser subsidy to farmers on the lines of LPG, Chemicals and Fertilisers Minister Ananth Kumar told Parliament on Tuesday while insisting that there is no shortage of farm nutrient in the country. He said that any issues related to distribution of fertilisers is the responsibility of respective states.
“The proposal for direct subsidy transfer to all farmers is under consideration of the government… We are considering it. It should be done shortly,” Kumar said while responding to questions in the Lok Sabha. The government is already transferring subsidies through Direct Benefit Transfer scheme to LPG consumers.
With regard to concerns about short fall in supply of fertilisers, the Union Minister said, “There is no shortage of fertilisers in the country… In some states there are issues with the distribution system. If there is any problem, it is the responsibility of (respective) state governments.” When some members from Uttar Pradesh raised concerns about shortage of fertilisers in their state, the Minister said, “if there is any blackmarketing happening, then they should ask the UP government.”
The response elicited sharp protests from the Opposition, especially SP members. Kumar said both during the rabi and kharif seasons, adequate amount of fertiliser was supplied.
This month, the demand for urea is estimated at around 13 lakh Metric Tonne and the government has already sent about 23 lakh MT to the states, he said. Insisting that there is no dearth of fertilisers, Kumar said, “we have sent advisories to state governments and they can carry out raids in cases of black marketing of fertilisers is happening.”
According to the Minister, urea is sold at Rs 5,360 per metric tonne in India while in neighbouring countries such as Bangladesh, it is sold at about Rs 22,000 per tonne. Mostly, urea from the country is smuggled to these countries, he added.
Subsidy on urea and 22 grades of phosphatic & potassic (P&K fertilisers is passed on to farmers through fertiliser companies in the form of lower maximum retail price (MRP).
“While urea is provided at government fixed price of Rs 5,360 per metric tonne (excluding taxes), the P&K fertilisers are provided to farmers at subsidised prices based on the nutrient content on each grade of P&K fertiliser,” Kumar said.
Any sale above the printed MRP is punishable under the Essential Commodities Act.
“In order to check whether the prices fixed by the fertiliser companies are reasonable, the companies are required to submit cost data of their fertiliser products so that the government can ensure that the subsidy has been passed on to the farmers. Thus all the farmers are benefited from the grant of subsidy on fertilisers,” the Minister said.
(Source: Millennium Post, February 25, 2015)
NO EVIDENCE AGAINST SENIOR OFFICIALS IN LEAKGATE: BASSI
NEW DELHI: No senior government officer is under the scanner in the corporate espionage case, Delhi Police Commissioner Bhim Sain Bassi made it clear on Tuesday.
“There is no evidence so far against any senior (government) officer,” Bassi said on a day when the police arrested yet another junior official, taking the total arrests to 14.
Meanwhile, Delhi Police have started summoning senior corporate executives for questioning after mid-level officials of five companies were arrested for being the alleged recipients of the stolen documents according to sources familiar with the probe.
But the police are tight-lipped on whether it had already summoned or questioned senior government officials of the petroleum, coal and power ministries.
The person arrested on Tuesday, Virender Kumar, is also a junior staff member of the defence ministry engaged in house-keeping duties, who allegedly stole the identity card of an auditor at Indian Defence Accounts Service and passed it on to one of those arrested earlier, Lalta Prasad.
“No secret documents of the defence ministry were however stolen or compromised,” a senior Delhi Police official clarified, saying Kumar was a casual employee of defence ministry.
The crime branch has however asked clarification from MoD officials and one senior officer joined the probe on Tuesday to clarify on Kumar’s activities.
A police official told ET that there does not seem to be any criminal culpability on part of senior government officials that had led to the leakage of documents.
“At most, it may be a case of negligence on part of senior government officials in keeping documents safe and secure,” the investigator said.
Cabinet secretary Ajit Seth has already spelt out fresh guidelines for senior government officials asking them to practise utmost care in handling secret documents, by, for instance, not leaving them on the table while leaving for the day.
“Utmost vigil will be kept on visitors and CCTVs in all sensitive ministries which will prevent the recurrence of such incidents. Visitors will not be left alone by officials in their rooms and the use of photocopying machines will be regulated in the future,” an official said.
Investigators also say that those arrested had also resorted to clicking pictures of original documents from their smart phones and sending them on WhatsApp to consultants and company officials to ascertain their importance and the level of interest among the buyers.
“If a document ran into several pages or the recipient showed interest in the same, a photocopy was invariably taken as well by the accused,” a police official said. A Central Industrial Security Forces inspector posted at Shastri Bhawan has also joined the probe of the Delhi Police after alleged negligence on the part of the CISF in regulating entry at off hours to the ministry.
The CISF, for its part, has made it clear that it was only responsible for “access control” to the building and did not patrol the ministry corridors or guard each room. “The entry was provided after the accused showed I-cards.
These have however later been found to be forged,” a CISF official said.
Police are investigating the role of junior officials at the Home Ministry who may have been allegedly bribed by the arrested accused for obtaining fake identity cards and car stickers for getting access to Shastri Bhawan, officials said.
(Source: The Economic Times, February 25, 2015)
OIL MINISTRY SUSPENDS ONGC TECHNICAL DIRECTOR SHASHI SHANKAR
NEW DELHI: The Oil Ministry has suspended ONGC Director (Technical) Shashi Shankar over allegations of irregularities.
The ministry yesterday wrote to Oil and Natural Gas Corp that a disciplinary proceeding against Shankar is being contemplated.
“The competent authority in exercise of the powers conferred under ONGC Conduct, Discipline and Appeal Rules, 1994, has placed Shashi Shankar, Director (T&FS) ONGC, under suspension with immediate effect,” the company said in a regulatory filing.
Shankar, who turns 54 on Monday, is the youngest director on the board of the nation’s most profitable oil company. He was appointed Director (Technical and Field Services) on February 1 last year.
While the exact reason for the move is not yet clear, sources said there were allegations of tender irregularities, which the vigilance department is now probing.
(Source: The Economic Times, February 25, 2015)
PETROLEUM MINISTRY OFFICIAL ON GAIL BOARD
Gail (India) Ltd has informed Bombay Stock Exchange that Ashutosh Jindal, Joint Secretary in the Ministry of Petroleum & Natural Gas has been appointed as a Part-time Director on its board.
(Source: Indian Oil & Gas February 25, 2015)
UPSTREAM PSUs LOOK FOR CLARITY ON SUBSIDY
In the context of the Indian economy, the word ‘subsidy’ draws sharp and contrasting reactions from all quarters—whether for food, fertiliser or export. However, the most ill-famed and veiled is perhaps the fuel subsidy. Such that it is perceived to be one of the key reasons why the government’s proposed divestment in ONGC remains in limbo.
Out of last year’s under-recoveries of about $24 billion (R1.4 lakh crore), ONGC itself contributed about 40% of it—a staggering $9 bn (R56,000 crore). The estimate of under-recoveries this fiscal is to the tune of $13 bn (R78,000 crore). Such reduction in under-recoveries has been aided by the global drop in prices of crude oil as well as by the deregulation of diesel.
The matter is not just about the financial strain this puts on the public sector undertakings (PSUs). Ever since the introduction of the fuel subsidy mechanism, there has been immense lack of transparency and clarity in the method of determining how the subsidy burden is to be shared between the government and the upstream PSUs. Historically, the government sent out a quarterly subsidy bill to the PSUs, based on which discounts were given to the OMCs. This then moved to a subsidy capped at $56 per barrel, which continued even after global crude oil prices had plummeted to sub-$50 levels.
With fair reason, this has led to discontentment among minority shareholders and scepticism among potential investors. Planning for future exploration expenditure becomes a challenge, when the uncertainty of the subsidy burden looms large. ONGC and OIL’s effective returns are directly impacted by the losses calculated by OMCs and the proportion of such loss the government allocates to them.
Even the CAG, in its report tabled before Parliament in July 2014, called for a formal and transparent burden sharing mechanism among all stakeholders instead of the present ad hoc system of compensation of under-recoveries.
Being listed companies with public interest, this subsidy transfer has also raised corporate governance issues in the past. The government has acknowledged this, with current oil minister stating that the subsidy formula issued will be relooked at, which would fetch a better price for ONGC in the proposed stake sale. The proposed revamped formula calls for graded subsidy sharing and this may be a welcome move from the perspective of the upstream PSUs. There is also a proposal to consider the cess paid on production of crude oil (currently R4,500 per tonne) as part of the subsidy to be shared. Thus, there seems to be a general push towards addressing stakeholder concerns on the subsidy sharing issue.
The upstream companies want the subsidy sharing mechanism to be transparent, fair and stable. And the government should rightly afford them this clarity. Of course, in the long run, complete deregulation must also be kept on the radar of policy makers, so that the issue of fuel subsidies can be packed away amid growing clamour that the amounts budgeted for subsidies be channelled towards more productive public spending.
(Source: The Financial Express, February 25, 2015)
ENERGY CONSULTANTS KNOWN FOR ORGANISING BIG CONFERENCES
MUMBAI: Consultants named in the information leakage scandal at the petroleum ministry were conspicuous in industry circles for years, organising high-profile conferences attended by ministers and CEOs, or accompanying a former oil minister on a foreign jaunt.
While Santanu Saikia’s website Indianpetro.com boasts of quality readers including “top and middle management” and “most are decision makers”, Prayas Jain’s consultancy Metis Business Solutions lists a galaxy of global and Indian corporate names as clients on its website.
These include Blackstone, Dow Jones, Chevron, Rolls Royce, Rio Tinto, Shell, KPMG, Mitsui, Essar Power, Reliance Industries Ltd, Reliance Power, Lanco, Axis Bank, Hindalco, ATKarney, and state firms such as NTPC, ONGC, BPCL. Officials say this helped him organise conferences that attracted big names.
Jain had hobnobbed with dignitaries including oil minister Dharmendra Pradhan at a conference last month, which also listed top corporate leaders such as Shell India Chairman Yasmine Hilton and chiefs of state oil firms as speakers.
“Development of India’s gas infrastructure is an area of priority for the government. The minister participated in India Gas Infrastructure Summit 2015 in order to propagate the government’s views on the subject and obtain feedback from the participants on this subject. Judging participation on the basis of subsequent developments with hindsight is avoidable,” the spokeswoman for the ministry of petroleum and natural gas said in an email to ET.
Corporate espionage: Energy consultants like Santanu Saikia, Prayas Jain known for organising big conferences In previous conferences, western diplomats and executives of Essar, Reliance Industries, Tata Power, Gail, IOC and BPCL as well as bureaucrats are listed as speakers. Officials say that consultants also made wrong claims, such as naming the oil ministry as a sponsor of the gas infrastructure conference in January.
“It may be mentioned that Ministry of Petroleum had not sponsored the event,” the spokeswoman for the ministry said. Similarly some state-run firms said that they had stopped advertising on Indianpetro. com but the portal had not removed those advertisements.
Indianpetro’s Saika had also enjoyed journalistic privileges such as accompanying Mani Shankar Aiyar, when he was petroleum minister under UPA-1, on a foreign tour along with journalists from leading newspapers and international agencies. He also attended news conferences of state-run energy companies like Oil and Natural Gas Corp.
Indianpetro’s website has advertisements of state firms such as IOC, ONGC, Gas Authority of India, Oil India and Indraprastha Gas.
“We subscribed to the website since we need to use their information but we don’t regularly advertise with them. As soon as we heard of the involvement of the website’s owner in the corporate espionage case we have immediately stopped all advertisements on this website and other industry news and information websites as a prudent step,” said GAIL spokesperson.
Executives of ONGC, IOC and Indraprastha Gas told ET that they have been subscribing to the website and even placing advertisements in the past but have not placed ads in the last 3-5 years. “In the past we have given the website some support and sponsorship. We have not given any ads in the last few years but they continue to use our logo without our consent,” a spokesman from country’s largest oil marketing Indian Oil Corporation told ET.
He added that the company has removed the hyperlink in the ad that leads to the IOC website.
Saikia was arrested last Thursday for his alleged involvement in leaking sensitive information from the oil ministry.
Besides Saikia, staff from the ministry and executives of energy companies like Reliance Industries, Cairn India, Essar Energy, Reliance Power and Jubilant Power have also been arrested. The scope of investigation has extended to other ministries like coal and power and has led to the arrest of Lokesh Sharma, an executive of another energy consultancy and news service firm based in Noida, Infraline.
(Source: The Economic Times, February 25, 2015)
CRUDE CONCERN: CAUGHT IN AN OIL SLICK
The rally in the BSE Oil and Gas index on expectations of pricing reforms reversed due to crude oil’s rout. The index is now up 19 per cent over the past year, but down 9 per cent since the last July’s budget.
The halving in crude oil prices since June 2014 has hurt exploration stocks Cairn India, ONGC and Oil India. Cairn’s profit in the first half of 2014-15 nearly halved year-on-year. Refining biggie Reliance Industries also took a hit due to lower realisations. But there are beneficiaries too. Lubricant maker Castrol India which uses crude oil derivatives as raw material gained on the bourses. The benefit in the financials will show after some lag. The Centre’s smart move to decontrol the price of diesel helped public sector oil marketing stocks HPCL, BPCL and Indian Oil. Low crude oil price will mean inventory losses for these companies in the near-term, but long-term gains due to lower subsidies.
The PSU upstream companies ONGC and Oil India, which share the fuel subsidy, should also benefit. But with lack of clarity on subsidy sharing on LPG and kerosene there are fears that these companies will suffer low realisations. While the OMCs have improved their financial performance this fiscal, the upstream companies have seen profits fall or remain flat.
The stock of gas importer Petronet LNG has gained on hopes of higher volumes due to lower global gas prices. But underutilisation of its Kochi plant for want of pipeline connectivity poses challenges. Clarity on subsidy sharing, if provided in the Budget, will give respite to PSU upstream companies. To encourage exploration, the sector wants concessions on service tax and longer period of tax breaks.
(Source: Hindu February 25, 2015)
MRPL TO SUBSCRIBE RIGHTS ISSUE BY ONGC MANGALORE
The board of directors of Mangalore Refinery and Petrochemicals Ltd has decided to subscribe the entire shares offered through rights issue by ONGC Mangalore Petrochemicals. The latter had been offered about 45.9 crore shares at ₹14.20 a share by ONGC Mangalore Petrochemicals. The company has already informed the exchanges about its intent to acquire a major stake in OMPL. MRPL will be holding controlling stake in OMPL, following the allotment of rights shares. The stock of MRPL closed flat at ₹65 on the NSE.
(Source: Hindu Business Line February 25, 2015)
OIL AND GAS SECTOR NEEDS SOME ENERGY BOOST
February reminds us all of the Budget, and the Budget is one way to stimulate the economy. Here are the five energy boosters that the oil and gas sector badly needs:
- A tax holiday was promised to attract risk capital for exploration and the Centre had highlighted it as a major incentive at the New Exploration Licensing Policy road shows. Later, this was disallowed saying that mineral oil was not defined in Section 80IB(9) of the Income Tax Act. The Centre went back on its word and sought to define mineral oil to exclude gas. Gas and oil both have hydrocarbons, and no country has attempted to differentiate the two. By restating that mineral oil includes ‘all hydrocarbons’ the Budget can restore clarity and give the relief it had promised.
- There is a need to reduce the financial burden and increase exploration activities, which have come under the service tax net. Operators of oil and gas fields have been termed as service providers. It must be noted that an operator is a technically competent co-owner and acts as the agent of the Joint Venture does not provide any services and must not be taxed.
- It is only a matter of time before the Goods and Services tax is adopted. But there are some indications that the petroleum industry may be exempted from this. To develop the gas sector GST should cover petroleum products too.
- Pre-NELP Production Sharing Contract guaranteed fiscal stability and required the licensee to bear the cess and royalty costs. Despite this, rates of cess and royalty continue to rise making it unviable for the licensee. As a result several marginal and matured fields are struggling to survive. Freezing the cess and royalty at the rates that prevailed on the date of signing of respective PSC will be a boon.
- The Budget should allow at least one-third of the cess being collected under Oil Industry Development Act (OIDA) to be used for development of the oil industry.
(Source: Hindu February 25, 2015)
A NEW PLAN FOR GAS
New Delhi: The continuing controversies surrounding the oil and gas sector will only be solved through stronger, independent regulation. That, in a nutshell, should be the takeaway from reading the report of the committee set up by the last government, and headed by a former finance secretary, Vijay Kelkar, to investigate reform of the sector so as to enhance energy independence. The committee insists the only fair price for gas is “the best price a gas molecule can command, or the price that is market-determined in a transparent way on an arms-length basis”. This is true in general, but questions remain as to how to determine this price when there is no such thing as a genuine global market for natural gas, a commodity that is difficult to transport. While the committee insists that “at the end of the new gas pricing period, producer prices for natural gas should be unfettered”, the government must temper this recommendation with the basic economic understanding that government-granted monopolies are something to be avoided. Yes, of course, the Kelkar committee is right to argue that monopolistic price-setting will incentivise private exploration of natural gas. But that will also, obviously, impose other costs on the economy, and the incentives for private exploration of natural gas are better evaluated by comparison of profit margins from other similar wells.
Certainly, if the government moves towards such a “market-linked” approach in the gas sector, reasonable questions will be asked as to why it has not done so in the coal sector, especially given that coal can indeed be transported in a way that gas cannot, and so the idea of a “world coal price” has meaning. In other words, the recommendations of the committee could more fruitfully be applied to other energy sectors. After all, why should coal prices domestically not reflect the highest prevailing world price? Similar points can and should be made about the committee’s sensible recommendation to dismantle end-user rules that privilege sectors like power and fertiliser. These must end, certainly, for they distort the supply of natural gas. However, the equivalent must apply to other energy sectors, too. Thus, coal prices should reflect the highest prevailing world price (which is what is recommended for gas) and all end-use restriction as through coal “linkages” to specific factories or power stations should go.
In general, the government should see the report as the first step in working out the exact costs to various stakeholders of different policies of energy pricing. How much do consumers lose or gain? How much does the exchequer lose or gain? And what would be the loss or gain of individual companies – whether producers or users of energy? The absence of such examination in the coal sector has led to much spin and confusion about the economic consequence of the ongoing auctions. The public should be more properly informed about such issues, and it would have been useful if the committee itself had done such an exercise.
(Source: Business Standard February 25, 2015)
‘RE-TENDERING ISOLATED WELLS WILL HIT INDUSTRIAL BELTS OF KG BASIN’
HYDERABAD: The proposed new policy of re-tendering isolated wells instead of renewing the existing gas supply agreements (GSAs) will hit small and medium gas-based industrial belts of KG Basin, according to T Seshagiri Rao, president, KG Basin Isolated Wells Consumers Association (KGBICA).
The gas-based industries operate in various isolated gas fields of ONGC and GAIL in the KG Basin of Andhra Pradesh and these isolated gas fields are located away from the main grid, interconnected by a local grid.
“ONGC is threatening to stop gas supplies to the industry and go for re-tendering of wells which is detrimental for the survival of industries,” alleged Rao, also the chairman of Sentini Group of Industries.
According to Rao, gas allocation to the industries was made by KGBICA by the ministry of petroleum and natural gas (MoPNG), till the year 2012.
Later on, as the gas allocation policy evolved, ONGC was delegated the responsibility of allocating natural gas to promising industries through open tendering process. These industries have tied up for gas supply with GAIL or ONGC.
Gas supply agreements executed with the allottee industries by ONGC are valid for a period ranging from six months to five years or more based on the estimated life of the isolated wells. The GSAs executed by ONGC with a few consumer industries prior to the year 2000 were valid initially for a period of five to six years, which on expiry, were extended for additional blocks of five years.
“Such GSAs are now due for expiry during the years 2015 and 2016. It is understood that ONGC is now proposing to re-auction these wells instead of extending the validity of the existing GSAs as done on earlier occasions,’’ he said.
Responding to these allegations ONGC officials said, “Post implementation of ‘New Domestic Gas Pricing Guidelines, 2014’, the ministry of petroleum and natural gas, revised the small/isolated field guidelines on December 19, 2104.”
As per the guidelines, “in case of new supplies or where the duration of existing contracts have been completed the price would be determined by NOCs by calling bids through open competitive bidding process”. Therefore, ONGC shall be acting based on the prevalent instructions of government.
The isolated gas fields are located in Lingala-Kaikalur, Pedana, Malleswaram, in Krishna district, Kammapalem, Kesanapalli, Antarvedi, Upplaguptam, Vygreswaram in East Godavari district and Penugonda in West Godavari district.
The association, comprising of more than 20 industries from diverse sectors such as power, ceramic tiles, vitrified tiles, ceramic table ware, steel pencil ingots manufacturing, steel re-rolling, cold storage and ice and other allied industries, have made a representation to MoPNG on this issue.
KGBICA says the industries have made a collective investment of over R2,200 crore and provide direct and indirect employment to around 15,000 people.
(Source: The Financial Express, February 25, 2015)
FOR PETRONET, SHIPS RUNNING ON LNG OFFER HOPE
Kochi: For Petronet LNG Ltd, the underutilisation of Kochi LNG terminal has been worry as there were no takers for natural gas. But there is a new-found hope with ocean-bound ships looking for natural gas as fuel. Petronet can supply this through bunkering from its Puthuvypeen terminal.
There has been an increasing demand for setting up such fuelling facilities worldwide due to stringent emission norms in various countries for fuels used in ships.
A newly launched vessel KVITBJORN has called at the Kochi Port directly from Singapore yard for its maiden voyage to Europe to fill LNG. The ship, designed to run on LNG fuel, will be operating in the Baltic and North Sea region.
It is anchored in Q-7 berth of Kochi Port currently and requires 140 tonnes of this green oil. But Kochi LNG terminal was not equipped to meet the demand.
PLL officials are busy carrying out some technical modifications and fuel supply will start on Wednesday. Due to the small size of the ship, additional tugs will be used for bunkering operations. If the venture proves successful, Kochi can expect at least 50 vessels this year fetching more revenue to the port as well as for PLL, port sources said.
They told BusinessLine that LNG bunkering has emerged as a new avenue in the global maritime sector due to stringent emission norms implemented by several countries on passing merchant ships using heavy fuel oil (HFO). This has forced many vessels to look for alternatives especially those mainly within the Emission Control Areas on the either coast of North America as well as the Baltic and North seas of Europe.
In view of the reduced emissions compared to heavy bunker oil and low sulphur marine diesel, sources said LNG has emerged as an accepted marine fuel for several shipping lines. Today, there are about 100 LNG powered ships operating worldwide besides the 400-odd LNG carriers.
The reduced LNG cost combined with lower emissions gives natural gas an advantage in helping ships lower operating costs.
However, the infrastructure to provide LNG as bunkers has not developed in any of the terminal facilities in Asia, sources said.
If everything goes well, Kochi after being the first port in India to handle containers in the 70’s and will become the first port to supply LNG bunkers to ships in the whole Indian Ocean region, sources added.
(Source: Business Line February 25, 2015)
HPCL CELEBRATES CENTRAL EXCISE DAY
VISAKHAPATNAM: Executive director of Hindustan Petroleum Corporation (HPCL) Visakh Refinery G Sriganesh said that the revenue collected by the Centre, including the Central excise, was being used to fund health, education and other social sector schemes. The departments collecting the taxes have a vital role in nation building, he added.
Delivering the key-note address at the Central Excise Day celebrations held in the port area Tuesday, Sriganesh congratulated the Central excise officers on their contribution to the nation. He revealed the importance of this year’s theme – Year of Tax Payers.
Presiding over the event, chief commissioner of Customs and Central Excise, Visakhapatnam zone, Deepa B Dasgupta said that this year, till January 15, the department had collected Rs 6,591 crore, 8.6 per cent higher than the corresponding period of the last fiscal. During the past fiscal, the Central excise department had collected Rs 7,624 crore. The top revenue yielding commodities of the zone are petroleum, petroleum products, cement, iron and steel, she said.
On the service tax revenues, the chief commissioner said that till January 15 this year, Rs 1,599 crore was collected, 11.23 per cent higher than the corresponding period of the last fiscal.
Deepa Dasgupta called the officers to organise events all through the year, focusing on taxpayers and services.
Central excise commissioners C Rajendiran and Anil G Shakkarwar spoke.
(Source: The New Indian Express, February 25, 2015)
OIL REBOUNDS ABOVE $59 AFTER LIBYA’S LARGEST FIELD SHUTS
LONDON: Brent crude oil reversed early losses to trade back above $59 a barrel on Tuesday as Libya’s largest oilfield stopped production, and as traders awaited US oil inventory data to see whether it would show another large increase.
The Sarir oilfield in Libya shut because of a power cut, in a further blow to exports from the Opec member.
Brent futures for April were up 55 cents at $59.45 a barrel by 1227 GMT, recovering from an earlier low of $58.10.
US crude was up 21 cents at $49.66.
Traders and analysts said that while lower output from Libya was providing prices some support, fast-rising oil stocks in the United States still pointed to a market that is heavily oversupplied.
“The fundamental backdrop is still bearish,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, adding there was a “huge oversupply in the market”.
A Reuters survey forecast that figures from the American Petroleum Institute on Tuesday, and the US government’s Energy Information Administration on Wednesday, would show US crude stocks rose by 4 million barrels to a record last week.
“We expect another strong increase in US crude inventories to be reported,” Fritsch said.
Huge increases in domestic oil production have left the US oil market with a fuel glut, exacerbated by a refinery strike that has squeezed demand for crude.
The United States is in the fourth week of its largest refinery strike for 35 years, affecting 12 plants accounting for a fifth of national production capacity. Talks to end the strike are not expected to resume this week.
“Spreads for crude oil are becoming severely altered by the refinery strikes,” analysts at Singapore brokerage Phillip Futures said in a note to clients, adding that the strike had reduced demand for US crude and helped widen its discount below Brent, the North Sea benchmark.
The spread between Brent and US crude stood at $9.73 a barrel at 1227 GMT, after hitting $10.27 on Monday, its widest since March 2014.
A report in the Financial Times on Monday quoted Nigeria’s oil minister as saying the country would call an OPEC extraordinary meeting if prices dropped further, offering some support to oil prices.
But delegates to the Organization of the Petroleum Exporting Countries told Reuters on Tuesday that the producer group had no plans to meet before June.
Analysts said an emergency Opec meeting was not expected.
“By making statements with no backup, countries like Nigeria and Venezuela are hurting oil prices (and their budgets) as they just continue to show that they have no power within Opec,” said independent Swiss energy consultant Olivier Jakob, the managing director of Petromatrix. — Reuters
(Source: The Financial Express, February 25, 2015)
GLOBAL CRUDE OIL PRICE OF INDIAN BASKET WAS US$ 57.39 PER BBL ON 23RD FEBRUARY, 2015
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 57.39 per barrel (bbl) on 23.02.2015. This was lower than the price of US$ 59.90 per bbl on previous publishing day of 20.02.2015. In rupee terms, the price of Indian Basket decreased to Rs 3568.51 per bbl on 23.02.2015 as compared to Rs 3729.37 per bbl on 20.02.2015. Rupee closed stronger at Rs 62.18 per US$ on 23.02.2015 as against Rs 62.26 per US$ on 20.02.2015.
(Source: Indian Oil & Gas February 25, 2015)