NEW DELHI: Reliance Industries (RIL) and its foreign partner BP have reported eight oil discoveries in the Cambay basin block bagged by them in the fifth round of New Exploration Licensing Policy (Nelp) auction. The discoveries in block CB-ONN-2003/1 reportedly hold oil-initially-in-place (OIIP) of 15.04 million barrels, two officials in the know of developments told FE.
It was not immediately known if the management committee of the block, comprising representatives from the petroleum ministry, Directorate General of Hydrocarbons (DGH) and the explorers, have given go-ahead for the declaration of commerciality (DoC) of the discoveries.
It is important for RIL to bring on stream new oil and gas discoveries, as its exploration and production business contributes just 1.51% to its turnover (R6,068 crore out of R4.01 lakh crore in FY14). It is less than 10% to its sum-of-the-parts valuation of R941 per share, say analysts.
The block CB-ONN-2003/1, covering an area of 635-sq kilometre that is divided into two parts — Part A & B, is located nearly 130 km from Ahmedabad in Gujarat in the Cambay basin. RIL, as the operator, holds a 70% participating interest, while BP has remaining 30% stake. “The explorers have drilled 18 wells and a total eight discoveries were made during phase I, including the extension period,” said one of the officials.
The production sharing contract of the block was signed on September 23, 2005, and the total exploration period was spread from June 2006 till June 2013.
The contractor, according to article 10.5 of the PSC, has submitted the DoC of eight discoveries — D-43, 46, 47, 48, 49, 50, 51 and 45. It is proposed to drill six development wells in the block. The estimated cost of development is pegged around $25.57 million, while operating cost of each year is expected at about $4 million.
RIL did not respond to queries sent by FE, asking when is the commercial output expected from the block. BP spokesperson said, “RIL is the operator of the block and best positioned to respond to your specific queries.”
In a media statement issued on June 28, 2010, RIL had announced seventh oil discovery in the block CB–ONN–2003/1. The discoveries made in the block were witnessed by DGH representatives, said the second official. According to industry watchers, after DoC is given go-ahead, it may take another two-three years to put the discoveries into commercial production.
The Mukesh Ambani-promoted firm has faced investors’ glare after production from its flagship project KG-D6 has dropped drastically. The gas fields in deep waters of the east coast began production in April 2009 and touched a peak of 69.43 mmscmd in March 2010. Currently, the output is around 11-12 mmscmd.
Fortunes for UK-based BP’s investments in India’s oil and gas fields also did not match up market expectations. BP has written down the value of its investment in eastern offshore KG-D6 block by $830 million, following a lower-than-expected gas price hike. Recently, BP said, “Third quarter, fourth quarter and full year 2014 include write-offs of $375 million, $20 million and $395 million, respectively relating to the block KG-D6 in India.”
(Source: The Financial Express, March 3, 2015)
POEM PLACES CORPORATES IN A SPOT AS TAX MUDDLE LOOKS SET TO GET WORSE
MUMBAI: A Budget proposal requiring companies to pay taxes on overseas subsidiaries if the management of that subsidiary is effectively in India for even a short time has caused some anxiety in corporate India. In the event the proposal is not withdrawn, companies could end up paying taxes twice on the overseas business.
Among the firms likely to be impacted is ONGC Videsh (OVL), the overseas arm of state-run Oil and Natural Gas Corporation. OVL has around 30 subsidiaries across the world through which it conducts its oil and gas business in countries like Brazil, Sudan, Russia and Vietnam.
SP Garg, director of finance at OVL, said that the company’s subsidiaries collectively pay around R2,000 crore as corporate tax around the world. “We have about one year to make the necessary structural changes in its subsidiaries to enable them to avoid paying double taxes,” Garg told FE.
R Shankar Raman, CFO, Larsen & Toubro, said that most of the company’s foreign subsidiaries were operational firms where the decision-making happens on the ground along with local partners and domain experts. “Therefore, there is a good chance that many of these meet the effective management criteria, enabling them to avoid double taxation,” Shankar Raman said. L&T has subsidiaries in West Asia, the Pacific Rim and Bangladesh, among other areas. He added that it is important to first understand the provisions before quantifying any additional tax burden.
At oil marketing company Bharat Petroleum, which has four overseas subsidiaries, P Balasubramanian, director (finance), said the matter would need to be looked into while at Bajaj Auto, finance director Kevin D’Sa said the proposal would need to be examined. Bajaj Auto has one overseas subsidiary in the Netherlands.
C Ramakrishnan, president and CFO, Tata Motors, said there was a need to look at provisions closely and study them. UK’s Jaguar Land Rover is a wholly-owned subsidiary of the automobile company.
Seshagiri Rao, joint managing director and CFO, JSW Steel, said the provision has been imported from the Direct Taxes Code, which the government has otherwise scrapped. Rao pointed out that this has significant implications since Indian companies will have to change the way they operate.
“Many executives associated with the Indian parent company function as directors of its foreign subsidiaries. Now the power will have to be entirely delegated to an independent board abroad, only associated with the foreign entity. This may increase compliance cost for Indian companies,” he said.
The Budget has proposed the amendment of Section 6 of the Income Tax Act which alters the conditions under which a company is resident in India by including the concept of ‘place of effective management’ or POEM. Instead of the clause “during that year, the control and management of its affairs is situated wholly in India”, the new clause will read “its place of effective management, at any time in that year, is in India”.
As Rahul Garg, national direct tax leader at PwC, points out, “Even if for a short time the effective control is in India, that would make the company tax resident.” Since the government is attempting to align the provisions of the I-T Act with the double taxation avoidance agreements (DTAAs), it is possible some companies with which India has a DTAA may be spared. However, as Garg says, some jurisdictions such as the US do not provide for a resolution of tax residence except through a competent authority process.
If an Indian company has a subsidiary in another country where it has certain operations and pays taxes to the local authority there, it will have to pay tax back home in India if key decisions with respect to the foreign business are determined to have been taken in India, or if key management personnel like a director on the board of the overseas firm resides in India.
In 2013-14, OVL posted revenues of Rs 22,128 crore, with a net profit of Rs 4,432 crore and a corporate tax liability of Rs 2,557 crore. OVL has stake in 33 oil and gas projects in 16 countries with 13 producing assets.
Rao also pointed out that many overseas subsidiaries are created for the purpose of facilitating business activities like fund-raising and did not have any operations of their own, and these may be especially impacted as a consequence of the proposed amendment law.
Vikas Vasal, partner, tax, at KPMG in India, said that he expects the government to come out with clarifications on the underlying criterion for determination of the place of effective management. For instance, in the case of individuals the residential status is determined on the basis of period of stay in the country. Similarly, in the case of companies, guiding principles should be laid out that address aspects like where senior management personnel including the board of directors need to make key decisions.
The government believes the current conditions are practically inapplicable and contends they can be easily subverted by simply holding a board meeting outside India, leading to the creation of shell companies, which are incorporated outside but controlled from India.
(Source: The Financial Express, March 3, 2015)
TRIAL RUN OF NATIONAL DATA REPOSITORY TO START THIS MONTH
NEW DELHI: After the idea to set up a national data repository (NDR) was conceived 17 years ago, the trial run for the IT-enabled database of oil and gas blocks in the country would start this month. However, the NDR, being set up by upstream regulator Directorate General of Hydrocarbons (DGH), would be fully functional only by March 2016. “The trial run for NDR would start this month. Several software-based platforms have been developed. Selected data would be fed into them and we would test the system. NDR would not be open to bidders right way,” said a government official in the know.
The idea to set up the NDR was mooted to bring in practice the Open Acreage Licensing Policy (OALP) and do away with the current auctioning methodology for oil and gas blocks, the New Exploration Licensing Policy (NELP).
The NDR would validate, store, maintain and reproduce high quality reliable geo-scientific data of Indian sedimentary basins. The contract to set up the NDR has been bagged by HLS Asia (HLSA), which has foreign collaboration with US-based Halliburton Energy Services. The company was awarded the contract in March last year.
To make India a favourable destination globally for exploration and natural gas, the government plans to move to the OALP regime soon. This will enable upstream companies to bid for any oil and gas block without waiting for the announcement of bidding under the NELP regime. The idea was floated many years ago when Murli Deora was petroleum minister.
NDR would be hosted at the DGH office in Noida. The government had amended Rule 19 of the petroleum and natural gas rules to enable DGH to obtain all data from operators or licensees, which could be disclosed to prospective bidders as and when required under the open acreage system.
Open acreage will enable bidders to bid for blocks on offer at any time of the year. Data for the blocks will be made available to bidders through NDR. Pakistan also has such a system in place. The NDR is expected to play a much larger and significant role in the exploration and production scenario in the years to come. It will also facilitate gathering of all geo-scientific data available in India under one roof so that it is easily available to the agencies that require it.
(Source: The Financial Express, March 3, 2015)
INDIA’S IRAN OIL IMPORTS IN FEBRUARY FALL TO LOWEST SINCE JULY 2013
India slashed its Iranian oil imports in February to a 1-1/2-year low to keep annual volumes from Tehran near the previous fiscal year’s levels and within the limits allowed under a deal aimed at curtailing the OPEC nation’s nuclear programme.
India, Iran’s top client after China, shipped in about 102,200 barrels per day (bpd) of crude and condensate from Tehran in February, the lowest since July 2013, and down 63 percent from January and 62 percent from a year ago, according to tanker arrival data from trade sources and ship tracking services on the Thomson Reuters terminal.
The cuts follow smaller but still sharp reductions in January. The two months of lower shipments came after New Delhi instructed Mangalore Refinery and Petrochemicals Ltd, Essar Oil and Indian Oil Corp to “virtually halt” Iranian oil imports in February-March.
Refiners in India had raised imports during April-December – the first nine months of this fiscal year – by more than 40 percent, leading U.S. authorities to raise an alarm with India’s foreign ministry ahead of President Barack Obama’s visit to New Delhi in January, a source involved in the talks said.
New Delhi wants to keep its average oil imports from Iran at 210,000-220,000 bpd or about 11 million tonnes in the year to March 31, 2015, to meet the terms of a temporary deal that asks buyer nations to retain purchases from Tehran at 2013 levels.
The deal brokered by six world powers and Iran in November 2013 eased some sanctions on Tehran in exchange for curbs to the Islamic republic’s nuclear programme, capping its oil exports at around 1 million-1.1 million bpd.
The powers – the United States, Russia, China, Britain, France and Germany – are now working with Iran towards a final agreement on sanctions and its disputed uranium enrichment activities, aiming to reach a political understanding by the end of March and a lasting agreement by a June 30 deadline. Two earlier deadlines have been missed.
The West is worried that Iran’s nuclear activities are aimed at making a weapon. Tehran says its uranium enrichment programme is only for power generation.
Over April-February India’s oil imports from Iran averaged about 240,000 bpd, or nearly 11 million tonnes, leaving little room for further imports in March.
The April-February imports from Iran were up 16 percent compared with 206,800 bpd imported in the same period of the previous fiscal year, the data showed.
“So far there are no cargoes booked from Iran or Dalian in China for voyage to India (for March arrivals),” a trade source said. Iran has leased oil storage at Dalian in China from which it can supply regional clients.
MRPL had to buy additional oil from Kuwait and Saudi Arabia for February and March to make up for the reduced Iranian oil imports, said an industry source.
MRPL has also booked Iraq’s Basra light for March loading from spot markets to replace crude from Iran.
MRPL’s managing director H. Kumar declined to comment on any additional purchases from Kuwait and Saudi Arabia. – Reuters
(Source: The Financial Express, March 3, 2015)
LPG SUBSIDY GIVEN UP BY 1.5 LAKH CONSUMERS TO BOOST GOVERNMENT’S SUBSIDY REGIME REFORMS
NEW DELHI: About 1.5 lakh beneficiaries have voluntarily given up LPG subsidy, boosting the government’s efforts to reform the subsidy regime by providing cash subsidy directly to consumers to allow them to buy cooking gas at market price while encouraging affluent customers to surrender their subsidy claims.
Uttar Pradesh accounts for about a third of the LPG subsidy surrenders so far, with 45,184 customers opting out of subsidy as on February 23. Delhi came in second, with 23,542 customers choosing to forego subsidy, according to data provided by Oil Minister Dharmendra Pradhan to Parliament on Monday. The amount of subsidy, which varies from city to city every month, wasRs 187.18 per 14.2 kg LPG cylinder during February.
Subsidised LPG has been a potent issue for lower and middle-class voters, forcing governments in the past to renege on their promises of reforming the subsidy regime.
The Modi government has projected to contain its subsidy bill within 2% of GDP in the current fiscal and plans to reduce it to 1.6% in 2016-17. The direct transfer scheme – world’s largest direct cash transfer plan intended to benefit over 15 crore LPG customers – was rolled out across the country at the beginning of the year.
Customers have until March to link their bank account with LPG consumer number to be able to receive subsidy directly in their bank account. If they fail to do so, they will continue to get subsidised LPG cylinders till March but will receive their fuel at market rates between April and June while the intended subsidy gets parked with oil marketing companies.
(Source: The Economic Times, March 3, 2015)
INDIA ALLOCATES $388 MLN IN FY15 BUDGET TO FILL OIL STORAGE
New Delhi: India has provided `2,400 crore (about $388 million) in the revised budget estimates for the current fiscal year to fill its first strategic crude reserves, a government statement said on Monday, indicating oil could be purchased by end-March.
A fall in oil prices helped finance minister Arun Jaitley to present a budget that loosened the reins on public spending to drive growth as the federal government could save billions of dollars in oil subsidy.
India, the world’s No.4 crude consumer, is building storage facilities at three locations in the south of the country to hold a total 36.87 million barrels of oil, enough to cover about 13 days of its needs in case of a supply disruption.
The first underground facility at Vizag that can hold 9.75 million barrels is completed and ready for commissioning.
The Vizag facility has two compartments of 7.55 million barrels and 2.20 million barrels. The smaller compartment will be used by Hindustan Petroleum Corp. Ltd for its 166,000 barrels-per-day Vizag refinery in Andhra Pradesh.
With global oil prices trading at around $62.2 per barrel, it would cost around $470 million to fill the bigger compartment at Vizag.
The remaining two strategic storage facilities at Padur and Mangalore in southern Karnataka state that can together hold 29.3 million barrels are expected to be ready by October.
(Source: Mint March 3, 2015)
JOINT MECHANISM WITH STATES TO CURB CRUDE OIL PILFERAGE
New Delhi: The Centre will step up vigil against pilferage of crude oil under a joint mechanism with States and oil marketing companies, Minister of State (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan informed the Lok Sabha on Monday. He said 57 cases of pilferage of crude oil during transportation had been reported so far this financial year, up from 47 cases last year.
Raising supplementaries during Question Hour, members cutting across party lines drew the Centre’s attention to rising oil pilferage. Sona Ram, a BJP MP from Barmer, Rajasthan, said he had drawn the attention of the local authorities, but his complaints had not been taken seriously. “These matters should not be left to the States and oil companies,” he added.
“The world’s best practices are being implemented for the safety of crude pipelines. We, in coordination with the State governments, will take the matter to its logical conclusion,” Pradhan assured the House, adding that digital technology is being deployed to monitor theft. The Minister said public sector oil firms are doing round-the-clock monitoring of pipeline flow and pressure through supervisory control and data acquisition system for pipelines, daily foot patrolling, electronic surveillance as well as patrolling by local police.
(Source: Business Line March 3, 2015)
CORE GROWTH SLOWS
New Delhi: Growth in eight core industries slowed to 1.8 per cent in January – the lowest in at least 13 months – because of a contraction in the crude oil and natural gas output.
The eight industries – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – had expanded 3.7 per cent in January 2014 and 2.4 per cent in December.
Aditi Nayar, senior economist with rating agency Icra, said the sequential decline in growth was broad-based, with a worsening performance by six of the eight sectors.
“Although growth of steel output displayed an uptick in relation to December, it nevertheless remained subdued. A meaningful improvement in growth of domestic steel production appears unlikely, in light of the prevailing supply-demand dynamics. The sluggish performance of available lead indicators, such as the low growth of core industries and automobile production as well as the contraction in merchandise exports, foretell a muted outlook for IIP growth for January,” she said.
The core sector contributes 38 per cent to the overall industrial production – a parameter that the RBI takes into account while framing its monetary policy.
The production of crude oil and natural gas contracted 2.3 per cent and 6.6 per cent, respectively, according to commerce ministry data.
Steel, cement and electricity production grew in January but the expansion was lower compared with the year-ago period. However, coal output grew 1.7 per cent against 1.2 per cent a year ago, while refinery products grew 4.7 per cent compared with a contraction of 4.2 per cent.
During April-January, the eight sectors grew 4.1 per cent against 4 per cent a year ago.
(Source: Telegraph March 3, 2015)
OMC SHARES ON FIRE AS FUEL PRICES HIKED
MUMBAI: The stocks of state-owned oil marketing companies such as Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation rallied on Monday, surging up to 8%, after petrol and diesel prices were increased from Sunday. HPCL shares gained 5.5% to end at Rs 654.15 and BPCL jumped 4.4% to Rs 778.85 on the BSE.
Shares of IOC, too, were up 5.53% at Rs 350.40. But, the BSE oil and gas index ended flat at 9685.68, up 0.21%, as the ONGC stock declined nearly 1.5%. Petrol price was raised by Rs 3.18 a litre and diesel’s by Rs 3.09, the second such increase in a month, on rising international crude rates. After seven months of decline, the international crude market was up 18% in February — the highest monthly rise in almost six years. On Monday, however, the prices fell 1%. “Markets were enthused by the extent of increase in petrol and diesel prices,” said Kush Katakia, CEO, Beanstalk Advisory. “Oil marketing companies were being re-rated following improvement in margins.”
The Budget has proposed to lower corporate tax rate over the next four years, which is also a positive for oil marketing companies, analysts said. “The government’s intention to lower corporate tax rate from 30% to 25% with a corresponding decrease in exemptions should be a positive for oil PSU stocks,” said Vinay Jaising, analyst, Morgan Stanley India.
“We expect earnings of oil PSUs to be impacted positively by 8-9% in the first full year of its implementation.” Chennai Petro (6%), Gujarat Gas (5%), Hindustan Oil Exploration (4%) and Petronet LNG (2.5%) also rallied on Monday. During the quarter ended December 2014, marketing margins improved by 19.3% quarter-onquarter, mainly due to a collection of state-specific charges coupled with additional margins on petrol/diesel and other industrial fuel, as the full benefit of sharp correction in crude oil/product price was not passed on to consumers at the time of a cut in selling prices, said analysts.
“Though results for the quarter ended December 2014 were below estimates, sequentially, marketing margins improved by 19% on additional margins from auto and industrial fuel,” said Daval Joshi, analyst, Emkay Global. “With expected improvement in marketing margin and benefit of implementing DBT, we continue to maintain our positive stance on OMCs,” he said.
(Source: The Economic Times, March 3, 2015)
IOC SUSPENDS SENIOR EXECUTIVE ON CHARGES OF LEAKING INFORMATION TO PRIVATE FIRM
NEW DELHI: Indian Oil Corporation, the country’s biggest refiner and fuel retailer, has suspended a senior executive in the sensitive foreign trade department for allegedly leaking confidential information to a private firm, a company spokesman told ETon Monday.
Debangshu Ray, Indian Oil’s general manager for international trade in Delhi, was suspended on Friday after allegedly being caught leaking information by phone to an executive of a private company, the spokesman said, adding that an internal inquiry into the allegation against Ray is being carried out.
He refused to name the private company in question or give details on information being leaked. No police case has been registered as yet.
The suspension follows a larger clampdown on information leaks from the government, especially the oil ministry. The Delhi Police have arrested more than a dozen people including junior government staff, mid-level corporate executives and consultants in the past two weeks for their alleged involvement in leakage of classified government information. IOC executives said the suspension of the company executive did not seem directly linked to the government crackdown.
Ray held a crucial position where he dealt in the purchase of crude oil from the international markets, a sensitive task where leaked information could potentially help vested interests make a killing at the cost of the company.
Indian Oil refines 65.7 million metric tonnes of crude oil per annum (MMTPA) or 1.30 million barrels per day. Crude is trading at about $60 per barrel these days. Officials said sensitive information about government policy as well as affairs of state firms has leaked regularly in recent years, prompting stern action by the oil ministry.
The crackdown, which began with the arrest of some lower-level staff in the oil ministry for alleged theft and sale of documents containing information on policies, data and administrative decisions, has spread to other economic ministries as well.
Senior executives at major energy firms are being questioned in what looks like a determined effort by the government to clean up the mess where classified documents were allegedly bought and sold for just a few thousand rupees, jeopardizing the government’s decision making.
There has been a resentment in the government that private companies got to know of the government information quite quickly and used it to manipulate the policy making process.
In a separate move, the government had last week suspended a director at state-run Oil and Natural Gas Corp on alleged corruption charges.
(Source: The Economic Times, March 3, 2015)
GAIL NOT KEEN ON PACT WITH IRANIAN COMPANIES: OIL MINISTER DHARMENDRA PRADHAN
NEW DELHI: State-owned gas utility GAIL India is unwilling to sign any agreement with Iranian companies for sourcing of gas because of the fear of US sanctions, Oil Minister Dharmendra Pradhan said today.
GAIL had in 2005 signed an agreement with National Iranian Gas Export Corporation (NIGEC) for import of 7.5 million tons a year of gas in its liquid form (LNG) from Iran. It was also a signatory for receipt of gas via the proposed Iran-Pakistan-India (IPI) gas pipeline.
But after US imposed sanctions on Iran over its suspected nuclear programme, Indian firms are wary of entering into pacts which may lead to them being sanctioned by Washington.
“Since GAIL has substantial business interest in the US, GAIL is unwilling to sign any agreement involving an Iranian entity until a final position emerges with respect to Iran sanctions,” he said in a written reply to a question in the Lok Sabha.
Pradhan said South Asia Gas Enterprise (SAGE) is pursuing a deep-sea gas pipeline from Middle East to India for importing natural gas. It has entered into a Memorandum of Understanding with NIGEC for transportation of gas to India through deep water route.
“In the year 2011, GAIL was nominated by the Ministry (of Petroleum and Natural Gas) as the designated agency for the project,” he said.
The company has a Principles of Cooperation (PoC) with SAGE since July 2009 where GAIL and SAGE have agreed to cooperate in the pipeline project.
“GAIL has reservations in signing of the non-binding framework agreement forwarded by SAGE in March 2013 with an Iranian company, since it could lead to impairment of GAIL’s access to international commercial or financial services and capital markets, in its global business ventures,” he said.
The state-owned firm has 20 per cent stake in Carrizo shale gas venture in the US where it has committed to invest USD 300 million. Also, it has multiple agreements for sourcing of gas and use of LNG terminals for shipping it to India.
The US Government Accountability Office (GAO) listed three Indian companies as having commercial activity in Iran’s energy sector, potentially attracting US sanctions.
State-owned Oil and Natural Gas Corp ( ONGC), Oil India Ltd (OIL) and Indian Oil Corp ( IOC) have been on the list since 2010 for having stakes in Iran’s Farsi oil and gas field.
Under US sanctions against Tehran, companies doing energy business in with Iran face exclusion from the US financial system.
(Source: The Financial Express, March 3, 2015)
GAS LEAK CAUSES FIRE ACCIDENT ON KAKINADA-BARUCH TRUNK LINE
Hyderabad: A major fire broke out due to gas leakage at one of the pressure control points of the 1,440-km Kakinada-Baruch trunk line, owned by Reliance Gas Transportation Infrastructure (RGTIL), at Maddikunta village in Telangana’s Medak district, about 75 km from Hyderabad, in the early hours on Monday.
In a statement, RGTIL said there could be reduction or interruption of gas flow to the downstream customers for 24-48 hours. It added that normal gas flow would resume after an internal investigation was carried out.
The fire could be put out at around 9.30 am after six hours of coordinated efforts, which included emptying the pipeline on this particular stretch to stop the supply at the leakage point. Police and fire extinguishers were pressed into service to avert any loss to life or property.
High flames of up to 30 metres were noticed early in the morning, according to eye witnesses. However, no injury or loss of life was reported, company officials and police said.
“At around 2.50 am, the company’s Mumbai control centre alerted the local SHO (station house officer) at Sadasivapet of the fire accident. Our personnel reached the spot immediately and evacuated the people living in a nearby colony to a safer place,” B Sumathi, district superintendent of police, told Business Standard. The cause of the leakage or the sparks that caused the fire was yet to be ascertained, she added.
The police has registered a case of fire accident and started the investigation.
This was for the first time that the accident of this nature happened after the trunk line was built, the company officials told the police.
“Early morning today (Monday), a fire was noticed in a section of the RGTIL pipeline in Maddikunta near Sadasivapet in remote Telangana. Our experts immediately reached the War Room as well as the site of fire,” the company spokesperson said in a statement.
The pipeline is being remotely monitored round-the-clock by the company using sensors and other technologies, which helped them notice the fire early on.
According to Sumathi, the main trunk line was not directly involved in the fire accident as the leakage was caused at a pressure control point connected to the main pipeline. Pressure control points, similar to the one involved in the gas leakage, is located at every 30 km along the pipeline.
The company teams reached two such locations on either side of the accident spot and released the gas into the air by opening the valves in a bid to stop the supply at the leakage point. “Though the fire was put out, the leakage of gas had not entirely stopped,” Sumathi added.
The East-West trunk line was established in 2009 to carry natural gas produced in Reliance Industries’ (RIL) KG-D6 fields off the coast of Andhra Pradesh from the landfall point in Kakinada to Baruch in Gujarat for supply to the clients located on the west coast. RGTIL is owned by RIL chairman Mukesh Ambani.
(Source: Business Standard March 3, 2015)
OIL DROPS AS GAIN IN SAUDI ARABIAN OUTPUT BOOSTS OPEC PRODUCTION
Melbourne: Oil fell after the first monthly gain since June as Saudi Arabia stepped up production, lifting Opec’s output beyond its collective quota for a ninth month.
Futures decreased as much as 1.1% in New York. The Organization of Petroleum Exporting Countries pumped 30.6 million barrels a day in February, according to a Bloomberg survey. Oil sank almost 50 % in 2014 as Saudi Arabia led the group’s decision in November to maintain its output target at 30 million a day, exacerbating a global glut.
West Texas Intermediate’s discount to European prices settled at the widest in more than a year on 27 February as U.S. crude stockpiles expanded to the highest level in weekly data that started August 1982. The oversupply has driven U.S. drillers to cut the number of rigs in service for a 12th week to the fewest since June 2011, Baker Hughes Inc. data showed.
“It’s a supply-driven story,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. “OPEC’s rhetoric has suggested that they wouldn’t cut production and all we’ve seen now is the numbers confirm that. That’s putting pressure on the price.”
WTI for April delivery slid as much as 54 cents to $49.22 a barrel in electronic trading on the New York Mercantile Exchange and was at $49.38 at 2:51pm. Singapore time. The contract rose $1.59 to $49.76 on 27 February, capping a 3.2% gain for the month. The volume of all futures traded was about 40% below the 100-day average.
Brent for April settlement was down 38 cents, or 0.6%, to $62.20 a barrel on the London-based ICE Futures Europe exchange. It advanced $2.53 to $62.58 on Friday. Prices rose 18% in February, the most since May 2009. The European benchmark crude was at a premium of $12.80 to WTI after closing at the widest close on Friday since January 2014.
Saudi Arabia’s output rose by 130,000 barrels a day to 9.85 million a day, the highest level since September 2013, a Bloomberg survey of companies, producers and analysts shows. The country pumps the most crude among the 12 nations of OPEC, which supplies about 40 % of the world’s oil.
Prices may trade at $64 to $65 a barrel in the near-term, Adel Abdul Mahdi, Iraq’s oil minister, said Sunday. OPEC’s second-biggest producer plans to ship more than 3 million barrels a day of oil in March after exporting more than 2.5 million a day in February, he said. The Bloomberg survey for February puts Iraq’s output at 3.45 million barrels a day.
In the US, where horizontal drilling and hydraulic fracturing have unlocked shale formations to drive an oil boom, drillers idled 33 rigs last week to 986, according to data from Baker Hughes, an oilfield services operator. Companies have reduced the number of machines in service by 589 since 5 December, the figures showed.
The current rig count implies an output growth of 385,000 barrels per day by the fourth quarter, down 55,000 barrels a day from last week, Goldman Sachs Group Inc. said in a report e-mailed on Monday. The slowdown points to growth decelerating close to levels needed to balance the market, it said.
Crude supplies in the US, the world’s biggest oil consumer, increased by 8.43 million barrels to 434.1 million through 20 February, according to data from the Energy Information Administration. The nation’s output rose to 9.29 million barrels a day, the highest level in weekly data from the Energy Department’s statistical arm since January 1983.
In China, the central bank cut interest rates Saturday for the second time in three months to shore up growth in the world’s largest energy user. The government’s manufacturing gauge was at 49.9 last month from 49.8 in January, the statistics bureau and the China Federation of Logistics and Purchasing said Sunday. Numbers below 50 signal contraction.
(Source: Mint March 3, 2015)