Quality check: CIL empanels additional 3rd-party agencies

Last month, the government had announced its plan to bring in a new regime for sampling and testing of the dry fuel from January 1 to ensure supplying quality coal to consumers.



With quality determination of fossil fuels posing as a challenge to the government, the state-owned CIL has roped in additional third-party agencies to do the job. "CEA (Central Electricity Authority) has recommended empanelment of additional third-party sampling agencies in pursuance to which... agencies are being empanelled in addition to the existing third-party agencies," Coal India said in a letter. The agencies are Allied (India), Shree Coal Research LLP, Mitra SK Pvt Ltd, R V Briggs & Company Pvt Ltd, CIL said. Coal Secretary Anil Swarup had earlier termed the quality of coal as "an area of concern". Last month, the government had announced its plan to bring in a new regime for sampling and testing of the dry fuel from January 1 to ensure supplying quality coal to consumers. The move is aimed at putting an end to controversies like the one between NTPC and the coal behemoth on the quality front. "The new regime for sampling and testing of coal is to become operational from 1st January, 2016," Swarup had said. "Testing of quality will ensure the customer pays for the quality that is determined independently...coal will also be crushed before supply from January 1." Samples for coal quality analysis will be collected by select agencies as per BIS norms, the Secretary had tweeted, adding that "results will be available within 18 days". Coal India  Ltd (CIL), which accounts for about 80 percent of the domestic dry fuel production, supplies coal to power and other utilities.

Cairn to seek $ 700 mn compensation from govt

In a letter to Finance Minister Arun Jaitley, Cairn disputed the Rs 10,247 crore tax notice sent to it on alleged capital gains made on a 2006 internal reorganisation of its India business saying no tax was due even if the retrospective amendments to Income Tax Act are applied.



British energy firm Cairn Energy has said it will seek about USD 700 million in compensation from the government for the loss of value of its shareholding in Cairn India  suffered since their attachment nearly two years ago over a tax dispute. In a letter to Finance Minister Arun Jaitley, Cairn disputed the Rs 10,247 crore tax notice sent to it on alleged capital gains made on a 2006 internal reorganisation of its India business saying no tax was due even if the retrospective amendments to Income Tax Act are applied. "Even though the transactions undertaken by the Cairn PLC Group companies as part of the Group Reorganisation should not have even been considered as potentially subject to taxation in India, as they occurred outside of India, there would not have been any taxation owed in connection with such transactions even if they had taken place within India as they did not result in any real income earned by the Cairn Energy PLC Group," company chief executive Simon Thomson wrote. The Income Tax Department says Cairn Energy allegedly made a capital gain of Rs 24,503.50 crore in 2006 while transferring all its India assets to a new company, Cairn India, and getting it listed on the stock exchanges. Cairn Energy, which had in 2011 sold majority stake in its Indian unit to mining group Vedanta for USD 8.67 billion, still holds 9.8 percent stake in Cairn India. But it has been barred by the IT Department from selling this stake. The company has initiated arbitration seeking quashing of the tax notice and compensation for the loss of value of its holding in Cairn India. "At current oil prices, the billion dollar stake in Cairn India is significantly reduced and compensation at the moment would be around USD 700 million," a company spokesperson said. Thomson told Jaitley that the application of the retrospective amendments to Section 9 of the Income Tax Act to Cairn constitute a violation of the UK-India Bilateral Investment Treaty. "...even if the retrospective amendment did apply to Cairn (which is denied), no amount could be quantified as income that would be liable to tax in India," he wrote. Cairn said it had in 2006 undertaken a group reorganisation in the manner mandated by applicable Indian laws, regulations and procedures established by authorities such as SEBI, RBI and FIPB. As part of the exercise, shares of nine subsidiaries were transfered to a newly incorporated company, CUHL in Scotland. These were then transferred to Cairn India Holdings Ltd, a company incorporated in Jersey. In the final step, an Indian company was incorporated, Cairn India Ltd on August 21, 2006.

Let us talk a little bit about natural gas prices. Will natural gas prices also decline more and what is the trend that you are noticing over there?

There are two things in the liquefied natural gas (LNG) market, the global gas market. You have one, the fundamentals look pretty sloppy, in that you have somewhat temperate growth expectations for Asia, the key market whilst at the same time, you have the onset of US and Australian LNG exports about to hit the market. So, you have pretty lousy supply-demand fundamentals while you have the additional negative impact of oil price and a lot of global gas or LNG term contracts priced relative to oil. So, as oil drops, that drags down the price that someone pays for an LNG cargo that is linked to oil, so it has that double negative impact, so we are pretty low in terms of global gas prices. There is still some scope to head lower particularly with this extremely temperate weather that we have been having, but similar to oil yes, we may go lower, but we are already at very low levels. So, the magnitude of the move may not be massive on the downside.

So, in that case, what is your range for Brent in the first quarter of 2016 and what is the average?

We see a low USD 40’s for the first quarter and low USD 40’s again for the second quarter. And the WTI Brent spread, we have very narrow USD 1-2 in the first quarter of 2016. So, similar prices for outright WTI as well. 

So, how much worse can it get for crude. When do you think crude will bottom-out in terms of both levels and time?

It is a difficult question, it is definitely conceivable that you can have crude going below USD 30 a barrel, likely West Texas Intermediate (WTI), it is not going to be able to stay there for any sustained period of time, because of the harm that it is going to do to corporate and sovereign producer balance sheets. However, you can get there because cash costs or operating costs are kind of the operandis around USD 30-35 a barrel. But, you also have things such as foreign exchange (FX) depreciation. You just look at the ruble, the Canadian dollar, the peso, the riyal, they are doing some of the work to shield some of the producers. You also got high de-commissioning costs that have also offset some of the initial cash costs. So, you could definitely go through that USD 30 barrel mark. 

When that could happen? 

The first half of next year continues to look the kind of sloppiest period for the oil market, particularly the end of the first quarter, when refinery maintenance is about to start globally, but particularly in Europe and as well in North America. So, if that happens and you start to see crude need to be placed on a tanker, then that is the scenario where you can see oil dip below USD 30, so I do not think we are necessarily at the bottom yet, but we are not going to be able to sustain this level of low prices for that much longer. 

All that news is already known for a goodish bit. Both the demand and supply factors that you mentioned – slow global demand, Iran supply and shale gas. Have they all not been factored in adequately?

I think in part, everyone expects Iran to come back with somewhere between 3,000 and 5,000 barrels a day. The Iranians themselves think one million barrels a day in 12 months, but that seems unlikely. So, all these things have been factored into people’s oil balances, but it is difficult to square that this is not going to tip the balance in the physical oil market where things are looking pretty bearish right now. And part of the reason you go lower is because the time spreads having to weaken incrementally further to pay for the cost of storage. And as I said before, with the weather, you are just not having any supportive news flow coming for oil markets and so, you continue to just grind lower with perhaps, cash costs being potentially needed to bring the market back into balance.

First, what is pulling crude down so relentlessly in the last few weeks ?

It is just the continuation of the fact that supply remains outpacing demand. And as a result of that, when your S is greater than your D, you are going to have to put that oil somewhere and that oil ends up going into homeland inventories. And what you are seeing now, even at these lower prices, you are not yet bringing the supply demand relationship back into balance. So, your supply is not slowing down fast enough and your demand has not been high enough to re-address that balance. Hence, you are putting an increasing amount of oil into storage and as a result of that, that is weighing on both the flat price and the time spreads of crude whilst the very recent development of this extremely temperate winter that you are having as a result of El Nino, particularly in North America and Europe that is just hitting desolate demand as well. It is just a continuing rumbling of the bearish fundamentals in the crude market.

Crude yet to bottom; may be in low $40s/bbl in H1 2016

“No balance is seen yet in supply-demand dynamics. Also, temperate winter in North America and Europe due to El Nino is hitting demand further worsening the balance”, says Chris Main, Commodities Strategy Analyst, Citi

Chris Main, Commodities Strategy Analyst, Citi, says crude price may not have hit the bottom yet and weakness is likely to continue. “No balance is seen yet in supply-demand dynamics. Also, temperate winter in North America and Europe due to El Nino is hitting demand further worsening the balance”, Chris says. Chris believes it is unlikely that Iran can reach their targeted 1 mn bbl/day over the next one year. Market estimates peg the likely production from Iran at 300,000-500,000 bbl/day.    Although Chris does expect price to dip below USD 30/bbl, he believes it may not sustain at that level for long. “It is conceivable that WTI Crude could head below USD 30/bbl but it may not stay there for longer. Factors like currency depreciation, high decommissioning costs which offset the initial cash cost could take oil through the USD 30/bbl-mark”, he says, adding the first quarter of next year could be the sloppiest period for crude as refinery maintenances start in Europe and North America. Chris also expects drop in oil to drag down oil-linked LNG cargo prices. He see the global gas prices heading lower.

Q2 current account deficit widens to $8.2bn; 1.6% of GDP

The country's current account deficit (CAD), or the difference in the value of goods and services exported and imported, widened from USD 6.2 billion in the first quarter (1.2 percent of gross domestic product) of the fiscal year to USD 8.2 billion (1.6 percent of GDP) in the second.



The country's current account deficit (CAD), or the difference in the value of goods and services exported and imported, widened from USD 6.2 billion in the first quarter (1.2 percent of gross domestic product) of the fiscal year to USD 8.2 billion (1.6 percent of GDP) in the second. The CAD is lower when compared year-on-year: in the second quarter last year, it stood at USD 10.9 billion (2.2 percent of GDP). 

India's energy demand will be double by 2040: Pradhan

India's energy demands will be more than double by 2040 as the economy will grow over five times its current size, Petroleum Minister Dharmendra Pradhan said on Monday.



India's energy demands will be more than double by 2040 as the economy will grow over five times its current size, Petroleum Minister Dharmendra Pradhan said on Monday. Dharmendra Pradhan said in Lok Sabha the International Energy Agency has released India's energy outlook in the World Energy Outlook 2015 which said that for the entire period till 2040, Indian economy will grow at a faster rate than any other country in the world by an average of 6.5 percent per year. "India's energy demand will be more than double by 2040 as economy will grow to more than five times its current size. A six million barrels per day rise in oil use is the largest projected for any country's oil demand as 260 million new passenger vehicles will be added. "The demand for oil is projected to rise to 458 million tonnes of oil equivalent (MTOE) with a CAGR (Compound Annual Growth Rate) of 3.6 percent (2013-2040)," he said during Question Hour. Pradhan said LPG will substitute for firewood as cooking fuel and industrial energy use will be buoyed by substantial growth in domestic manufacturing encouraged by the Make in India initiative. Gas production will rise to 90 BCM (billion cubic metres) in 2040, subject to adjustment to the current formula that determines the price paid to domestic producers. The demand for natural gas is projected to rise to 149 MTOE with a CAGR of 4.6 percent (2013-40). India requires a cumulative USD 2.8 trillion in investment, an average of USD 110 billion per year, to meet the supply projections, 75 percent of which is in the power sector, and an additional USD 0.8 trillion to improve energy efficiency. Cumulative investment of USD 62 billion in upstream oil, USD 192 billion in refining, USD 127 billion in upstream gas and USD 11 billion in bio-fuels is projected till 2040. Replying to a question, the Minister said the blending of ethanol with petrol currently stands at 2.5 percent and efforts are on to reach the target of ten percent.

Crude oil futures - weekly outlook: December 21 - 25

Investing.com - West Texas Intermediate oil prices crashed to a fresh seven-year low on Friday, after data showed that rigs drilling for oil in the U.S. rose last week, underlining concerns over robust domestic production. Industry research group Baker Hughes (N:BHI) said late Friday that the number of rigs drilling for oil in the U.S. increased by 17 to 541 last week, the first gain in five weeks. On the New York Mercantile Exchange, crude oil for delivery in January shed 22 cents, or 0.63%, to close the week at $34.73 a barrel. It earlier touched $34.29, the lowest since February 2009. The more actively traded February contract ended at $36.06. For the week, New York-traded oil futures declined 89 cents, or 2.49%, the third straight weekly loss. U.S. oil futures are down nearly 35% so far this year amid worries over ample domestic supplies. The U.S. Energy Department Wednesday reported an unexpected 4.8 million-barrel increase in U.S. crude stockpiles last week. At 490.7 million barrels, U.S. oil inventories remain near levels not seen for this time of year in at least the last 80 years. Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery dipped 18 cents, or 0.49%, on Friday to close the week at $36.88 a barrel. Prices slumped to $36.14 on December 14, a level not seen since the depths of the 2008 global financial crisis. On the week, London-traded Brent futures dropped 97 cents, or 2.77%, the third consecutive weekly decline. Brent oil prices are on track to post an annual decline of 36% in 2015, as oversupply concerns dominated market sentiment for most of the year. Oil futures have fallen sharply this month after the Organization of the Petroleum Exporting Countries failed to agree on output targets to reduce a glut of oversupply on global energy markets. Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share. Meanwhile, the spread between the Brent and the WTI crude contracts stood at $2.15 a barrel, compared to $2.11 by close of trade on Thursday. The price gap between the two benchmarks narrowed to the smallest level in 11 months earlier this week, following Congress' decision to lift a ban on domestic oil exports, signaling that the U.S. oil market is likely to grow tighter, while a global glut gets worse. In the week ahead, trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility. The U.S. is to release key reports on gross domestic product, durable goods orders, home sales and jobless claims. Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there is no relevant data on this day.

Tuesday, December 22

The U.S. is to release final data on third quarter economic growth, as well as a report on existing home sales. Later in the day, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday, December 23

The U.S. is release a string of reports, including data on durable goods orders, personal spending, new homes sales, consumer sentiment and crude oil inventories.

Thursday, December 24

Markets in Germany will remain closed in observance of Christmas Eve. The U.S. is to produce weekly data on initial jobless claims.

Friday, December 25

Markets in Australia, New Zealand, Europe, the U.K., Switzerland, Canada and the U.S. will remain closed for the Christmas Day holiday.

InterGlobe up 3% but Morgan Stanley wary of oil volatility

According to Morgan Stanley, IndiGo’s low-cost business model and bulk orders for planes give it one of the lowest cost per available seat kilometre (CASK) among global airlines.

Shares of  InterGlobe Aviation jumped 3 percent intraday on Thursday, extending its rally. The owner of low-budget airline company has been quite favoured by analysts and investors as it has given around 61 percent returns in about a month time of listing on November 10. It touched record high at Rs 1234 per share on December 16. Now, Morgan Stanley has initiated coverage on IndiGo owner company with a equalweight rating. It expects IndiGo to post strong earnings growth in near-term stating that it is among the world's best run airlines and crude oil prices at a seven-year low to give additional boost.  According to Morgan Stanley, IndiGo’s low-cost business model and bulk orders for planes give it one of the lowest cost per available seat kilometre (CASK) among global airlines. However, it says that the company's exposure to volatility in crude oil prices and exchange rate movements are risky. Also aggressive pricing strategies by peers pose a threat to the competitiveness. “We estimate low oil prices, strong demand growth and weak competition will propel the EBITDAR margin for IndiGo to an all-time high of 36.4 percent in FY16. However, we expect earnings momentum to moderate in subsequent years as the industry ex Indigo adds capacity. Margins are likely to trend lower, and we estimate a 33 percent EBITDAR margin in FY18,” Morgan Stanley adds. At 11:58 hrs Interglobe Aviation was quoting at Rs 1,213.25, up Rs 22.75, or 1.91 percent on the BSE.

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Oil prices to fall further as OPEC stands pat: Goldman

The investment bank is standing by its prediction of USD 20 a barrel bottom—the breakeven cash cost for highly levered high-cost US shale producers. If oil prices fall below that level, companies will have to make output cuts in order to avert losses.




Goldman Sachs sees further weakness for oil due to the worsening of already weak fundamentals after OPEC held back from cutting production at its recent meeting. The investment bank is standing by its prediction of USD 20 a barrel bottom—the breakeven cash cost for highly levered high-cost US shale producers. If oil prices fall below that level, companies will have to make output cuts in order to avert losses. Even though global oil stock will remain below storage capacity, Goldman said the rebalancing is "far from achieved" as US rig count and exploration and production guidance are "too high" to achieve the required supply decline. OPEC is also likely to pump aggressively toward the high-end of Goldman's 32-million-barrel a day forecast as Iran resumes productions after US sanctions are lifted over the next few months. Oil storage also runs the risk of hitting constraints by next spring. Oil prices have fallen over 50 percent in the last 18 months due to burgeoning energy supply and slowing demand. "The post-OPEC oil price decline accelerated as the discord between members became more apparent and the lack of a supply response more certain. The meeting confirmed our view that it is not in OPEC's interest to balance the market in the face of still growing higher-cost production," Goldman Sachs analysts wrote in a report Thursday. OPEC's resolve was strengthened after US production picked up once prices neared USD 60 a barrel this summer, they added. The group of 13 oil-producing countries has kept its production ceiling around 30 million barrels a day for years, with kingpin Saudi Arabia standing firm against an output cut in order to maintain market share and drive higher cost producers out. "Despite the fiscal challenges that low oil prices create now, the alternative of cutting production reduces long-term revenues instead," said the Goldman Sachs analysts. Oil prices are now near seven-year-lows with US WTI crude prices are around USD 35 a barrel—below Goldman's three-month USD 38 a barrel forecast—while Brent crude is now around USD 37 a barrel. OPEC said in its latest monthly report that the supply of oil from countries outside of the cartel will contract next year. "Saudi Arabia's policy change in November 2014, when it decided to stop defending prices and pursue a market-share strategy by maximizing production of its low-cost crude is beginning to bear fruit: US shale oil production has started to drop," analysts at Societe Generale wrote in a note Friday. International Energy Agency's executive director, Fatih Birol, concurred, saying that current price levels will drive a decline in oil production outside of the Middle East next year, with North America production falling half million barrels a day. The expected contraction in supply diversity does not bode well for oil security, he said. "We will have to be very careful that our oil supply will be concentrated more and more on a very few low-cost countries in the Middle East. Given the current geopolitical situation of the Middle East…this may not be the best news from oil security point of view," he told CNBC's Capital Connection. Some market watchers who see OPEC's strategy working eye a rebound in prices by late 2016. The SocGen analysts expect Brent oil to rebound to USD 60 a barrel in the fourth quarter of next year due to a drop in stockbuild growth in the second half of the year. IEA's Birol said low prices may attract some demand, so the market "may well see some surprises in the next few years balancing the market but with higher prices than we think for now."

Iraq Sees Crude Oil Prices Rising on Strong Fundamentals

Crude prices are set to rise from current “very low” levels that are hurting producers, Iraq’s Oil Minister Adel Abdul Mahdi said after a meeting of Arab petroleum-exporting nations.

Abdul Mahdi, whose country is the second-biggest producer in OPEC, didn’t forecast when prices would rebound from an almost seven-year low for Brent, the benchmark for more than half of the world’s oil. Qatar’s Energy Minister Mohammed Al Sada told reporters before the meeting in Cairo there was no need to be pessimistic about prices.

“There is no doubt that oil prices will rebound,” Abdul Mahdi told reporters Sunday after the meeting of the Organization of Arab Petroleum Exporting Countries. “This current level is too low, and it’s affecting oil producers. I think economic factors and fundamentals are still strong.”

A global oversupply of crude has triggered the worst slump in the energy business since the 2008 world financial crisis. Brent crude has tumbled 68 percent since June 19, 2014, as non-OPEC producers such as Russia and U.S. shale drillers boosted output. Saudi Arabia, the world’s biggest crude exporter, led the Organization of Petroleum Exporting Countries in November last year to defend market share instead of cutting output to support prices.

Brent for February settlement slid as much as 56 cents to $36.32 a barrel on the London-based ICE Futures Europe exchange and was at $36.34 at 3:38 p.m. Sydney time. The contract decreased 18 cents to $36.88 on Friday, the lowest close since December 2008. Prices are down 37 percent this year, set for a third annual loss.

OAPEC was established in 1968 to foster the development of the petroleum industry in member states as part of an economic integration plan among Arab countries. Seven of the nations within OAPEC are also members of OPEC.

Volatile crude and USD may hit refining margins: HPCL exec

The decline in crude prices reduces the working inventory and this will prove to be profitable for HPCL  , says BK Namdeo, the company’s Director – Refineries. Namdeo says production margin of refinery is currently good but continued volatility in crude or US dollar prices might impact the performance in coming quarter. “Our refining margins totally depend on the price differential at the point of dispatch from the supplier to our refinery and then to the final retail outlet. Typically, the price is the monthly average plus either a premium or discount depending on crude and dollar prices”, Namdeo says. Namdeo expects the throughput this year to be marginally higher or similar to the levels seen in the previous quarter.

Brent crude at 11 year low as mkt rout heads into Christmas

Analysts said a strong dollar following last week's US interest rate hike, which makes oil consumption more expensive for countries using different currencies, as well as a renewed increase in US oil rig counts were weighing on crude prices.



Brent crude prices fell on Monday to their lowest since 2004 on renewed worries over a global oil glut, with production around the world remaining at or near record highs and new supplies looming from Iran and the United States. Brent futures fell as low as USD 36.32 per barrel in overnight trading around 0000 GMT, the weakest since 2004, before edging back to USD 36.49 per barrel by 0203 GMT. US West Texas Intermediate (WTI) futures were down 20 cents at USD 34.53 per barrel and close to last Friday's 2015 lows. Both benchmarks are down more than two-thirds since mid-2014 when the rout began. Analysts said a strong dollar following last week's US interest rate hike, which makes oil consumption more expensive for countries using different currencies, as well as a renewed increase in US oil rig counts were weighing on crude prices. "The US oil rig count bounced back this week, up by 17 (to 541), putting an end to four consecutive weekly declines," Goldman Sachs said. "The increase in rig count even in a low crude oil price environment suggests shale producers are committed to maintaining production levels. The resilient production data reflect rising US crude stockpiles, which have surged to 491 million barrels, the most for this time of year since 1930," ANZ bank said. The US glut adds to global oversupply as the main producers, including Russia and the Organization of the Petroleum Exporting Countries (OPEC), pump hundreds of thousands of crude every day in excess of demand. Russian production has surpassed 10 million barrels per day (bpd), its highest since the collapse of the Soviet Union while OPEC output also remains near record levels above 31.5 million bpd. Adding to the existing glut is that new oil is likely to become available soon, with Iran hoping to ramp up sales in early 2016 once sanctions against Tehran are lifted. Iran will export most of its enriched uranium to Russia in coming days as it rushes to implement a nuclear deal and secure relief from international sanctions, Tehran's nuclear chief was quoted as saying over the weekend. This comes only days after the US voted to lift a 40-year-old ban on crude exports which could see some of its excess production dumped on the global market. On the demand side, there are also bearish factors as most of the northern hemisphere is experiencing an unusually mild start to the winter due in part to the El Nino weather phenomenon, denting heating oil demand.

Laramie Energy to buy Piceance basin assets

Piceance Energy LLC, doing business as Laramie Energy Co. and financially backed by Par Pacific Holdings Inc., has agreed to acquire certain properties in the Piceance basin of Colorado for $157.5 million. 

The assets comprise 89 MMcfed of existing production during November, 283 bcfe of proved developed producing reserves as of November, and more than 53,000 net operated acres and more than 18,000 net nonoperated acres.

Par Pacific says the assets’ estimated proved reserves total 541 bcfe; proved and probable reserves total 1.2 tcfe; and proved, probable, and possible reserves total 5 tcfe each as of November.

The acreage has 5,000 drilling locations, with more than 90% of operated acreage held by production. Pro forma for the deal, Laramie will have 140 MMcfed of production for the month of November.

The deal also includes 195 miles of gas gathering lines with 21,000 hp of owned compressors. A significant portion of the operations acquired is directly adjacent to existing Laramie operations with the potential for meaningful cost savings upon consolidation, Par Pacific notes. 

The deal is expected to close on or before Mar. 1, 2016. As part of the financing, Houston-based Par Pacific's ownership interest in Laramie is expected to increase from 32.4% to 42.3% as a result of its $55 million common equity investment. 

Piceance Energy in September entered into a joint venture with Wexpro Co., a subsidiary of Questar Corp., to develop gas in the basin (OGJ Online, Sept. 23, 2015).

The Piceance currently produces gas both from the Mesaverde tight gas sand formation, developed vertically; and from the Mancos shale formation, which is being developed both vertically and horizontally.

Foreign investors want govt to defer Coal India stake sale

Foreign investors such as Fidelity, Wellington Management and BlackRock have also conveyed that they might look at selling their holding in Coal India since the share price could plummet further in case the disinvestment happens soon, sources told PTI.

Opposing an immediate stake sale in Coal India  Ltd, foreign investors have told the Finance Ministry that further disinvestment in the coal miner should be put off as the current market valuation is low. Foreign investors such as Fidelity, Wellington Management and BlackRock have also conveyed that they might look at selling their holding in Coal India since the share price could plummet further in case the disinvestment happens soon, sources told PTI. The Cabinet had last month approved a 10 per cent disinvestment in Coal India, which could fetch about Rs 20,000 crore at the current market prices. "Long-term investors have clearly told the Disinvestment Department that stake sale should not happen now as valuations are very low. They have said they will not invest and rather sell their current investments if government proceeds with stake sale," a source said. The Department of Disinvestment (DoD) is also of the view that current market scenario is not conducive to a major stake sale like that of Coal India. "In today's date, there is no scope for Coal India," an official said. In January, the government had sold 10 per cent stake in the company at a floor price of Rs 358 a piece. The stake sale had fetched about Rs 22,600 crore to the exchequer. However, the share price of the PSU has declined over 14 per cent since then and has come down to Rs 307. The government had last month shortlisted five Indian merchant bankers including JM Financial  , SBI Capital and ICICI Securities for managing the over Rs 20,000-crore stake sale in Coal India. "Foreign bankers like Deutsche, Citi, Morgan Stanley were all interested to bid for managing Coal India stake sale. But the international lobby on environment is so strong that they could not bid. HSBC bid in anticipation, but they did not get approval and hence had to withdraw at the last moment," the official added. Global investment bankers have flagged concerns over Coal India allegedly not meeting green commitments. It had in 2013 committed to a Sustainable Development Policy under which the Maharatna PSU has to pursue mining, integrating environmental, socio-cultural and economic factors. According to sources, during recent overseas roadshows, the investors gave a presentation to the government on Coal India. "The investors flagged bloated salary bills compared to peers, very low productivity and declining return on equity compared to peers as their concern," sources said.

Chennai Petroleum restarts 2 crude units at Manali refinery

Chennai Petroleum Corp Ltd has restarted two crude units or about 57 percent of its 210,000 barrels per day (bpd) crude processing capacity at Manali refinery in the state of Tamil Nadu, a company spokesman said on Thursday. Chennai Petroleum had last week shut its Manali refinery due to heavy floods in the southern state. "We are starting units in phases and we hope all units will be operational by end of the week," the spokesman told Reuters. He said the crude units that were started last evening have a combined capacity of about 120,000 bpd. The company had also shut its 20,000 bpd Nagapattinam refinery on Sunday night, it said in a stock exchange filing. The spokesman said no decision has yet been taken on the resumption of operations at Nagapattinam plant as "weather condition is bad and before start-up we have to move out refined fuels stock from the refinery". Chennai Petroleum is a unit of the country's biggest refiner, Indian Oil Corp .

RIL withdrawing money from MFs to fund capex plans

The move, which has seen the largest private sector company withdrawing close to Rs 15,000 crore in recent days, is also seen as a way to de-risk its investments as it expects interest rates to remain high, sources said. When contacted, RIL spokesperson declined to comment.

Reliance Industries  , the largest investor in mutual funds worth around Rs 43,000 crore, is aggressively redeeming various funds of late to invest into its soon-to-be-launched telecom arm Jio, fuel expansion of its petrochemical business apart from paring debt. The move, which has seen the largest private sector company withdrawing close to Rs 15,000 crore in recent days, is also seen as a way to de-risk its investments as it expects interest rates to remain high, sources said. When contacted, RIL spokesperson declined to comment. For long, the Mukesh Ambani-led company has been the biggest treasury player and used to net around 40 percent of its total profit from such operations. However, for the past few quarters, it has been steadily lowering treasury play to around mid-20s and increasing its investments in MFs and other long-term investments. At the end of 2014-15, Reliance had Rs 43,005 crore in mutual fund debt schemes and other papers, up from a little over Rs 36,000 crore a year ago. Of this, Reliance has reportedly moved around Rs 15,000 crore in the past few days from duration schemes to liquid schemes of mutual funds. "RIL is investing large amount in various projects like telecom (around Rs 1 trillion) and petrochemicals. RIL's 4G telecom arm Jio was supposed to take off by the month-end, however, it has got delayed now. "Moreover, the company is looking for expanding its petrochemical business," LIC Nomura Mutual Fund chief investment officer Sarvana Kumar told PTI. LIC Nomura, however, did not say whether it has seen any redemption by RIL nor did it say whether the company had invested in any of its funds. It can be noted that Reliance has undertaken a massive USD 32 billion capex a few years ago to set up infrastructure for its 4G telecom services, Reliance Jio, and to expand its oil refining and petrochemicals business. Already, the company has invested Rs 1 trillion in Jio. An analyst, who wished not to be named, said when RIL started all its multi-billion dollar expansion it had no debt on its book at a net level. "I think with these redemptions, company is creating liquidity with a view to make zero debt at the net level and become debt-free on a debt basis," the analyst said. It can be noted that during the past AGM, RIL chairman Mukesh Ambani had said that as investment cycles peak, the company would strive to become debt-free on a net level, which should start from next fiscal. Many funds believe domestic markets will face withdrawals by FPI if the US rates rise. "RIL is taking a call in view of the fact that the interest rate may harden post Fed rate hikes, which is likely to be around 25 bps when it reviews its monetary policy on December 16. "In their bid to protect capital appreciation, they are liquidating their duration investment and shifting towards liquid funds which are free from any interest rate risks," he added. Duration investment schemes are medium-term mutual funds that offer good returns when interest rates are low, while liquid schemes are almost cash equivalent.

CAG raps ONGC for Rs 8k cr loss due to poor rig management

In a report tabled in Parliament today, CAG said the state-owned firm lacked uniformity in preparation of annual rig requirement plan (RRP), delayed rig acquisitions and hiring, was inconsistent in deployment and had inefficient repair and refurbishment policy.

The Comptroller and Auditor General of India (CAG) has rapped India's largest oil and gas producer ONGC  for poor planning in hiring and use of drilling rigs that resulted in a loss of Rs 7,995 crore. In a report tabled in Parliament today, CAG said the state-owned firm lacked uniformity in preparation of annual rig requirement plan (RRP), delayed rig acquisitions and hiring, was inconsistent in deployment and had inefficient repair and refurbishment policy. ONGC's non-productive time or idling time of rigs ranged between 19 and 23 percent over 2010-14. "The bulk of idling time costing Rs 6,418 crore was due to factors which could have been controlled by the company," CAG said. The company also did not adhere to safety procedures and continued to do drilling/testing operations even after one anchor of its rig Sagar Vijay had snapped. As a result, another anchor of the rig snapped which caused drifting of the rig from its location. Consequently, the well had to be closed and abandoned. As a result, expenditure of Rs 1,577.27 crore incurred by ONGC on drilling of the original location and drilling of a relief well by using another rig proved avoidable. "The insurer did not honour the claim of ONGC on the ground that the latter had not followed recognised safe operating practice," the report said. Also, the company did not adhere to the repair schedule for dry dock management and major lay-up repairs of jack-up rigs which was against an efficient operational practice. Failure on the part of the company led to a situation wherein rigs were being operated with outdated/obsolete equipment, CAG said. CAG said ONGC had prepared 5-year rig requirement on the basis of RRP, which included non-operational idling time of rigs that was entirely controllable by the company.      Annual Rig Deployment Plans (RDPs) were prepared on the basis of RRP. "Therefore, the Annual Rig Deployment Plans had an in-built inefficiency," it said.      While there was no uniformity in preparation of annual RDPs among the Assets and Basins of ONGC, the company failed to decide a policy on acquisition of new offshore rigs for over a decade -- from 2002 to 2015. Meanwhile, four out of six owned offshore rigs outlived their economic usable life of thirty years. CAG asked ONGC to ensure that the plans (five year plan, annual plan, rig requirement plan, rig deployment plan) are complete and consistent with each other and are complied with. The situation where one out of every three wells drilled is un-planned needs to be corrected, it said, adding that the controllable non-productive time of past periods should not be loaded to future rig requirement plans and efforts to be taken to reduce such non-productive time.

ONGC stock price

On December 18, 2015, Oil and Natural Gas Corporation closed at Rs 223.25, down Rs 1.1, or 0.49 percent. The 52-week high of the share was Rs 373.70 and the 52-week low was Rs 208.00. The company's trailing 12-month (TTM) EPS was at Rs 20.81 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 10.73. The latest book value of the company is Rs 169.02 per share. At current value, the price-to-book value of the company is 1.32. 

OilMin pitches for ad-valorem levy of oil cess

Pradhan made a case for levy of ad-valorem rate of cess, which results in higher payouts when prices are high and lower when rates fall.

The Petroleum Ministry wants the Finance Ministry to cut cess on crude oil and make it ad valorem in view of the slump in global oil rates, Oil Minister Dharmendra Pradhan said on Tuesday. Pradhan made a case for levy of ad-valorem rate of cess, which results in higher payouts when prices are high and lower when rates fall. Currently, state-owned Oil and Natural Gas Corp ( ONGC  ) and Oil India  Ltd (OIL) pay a cess of Rs 4,500 per tonne on crude oil they produce from their allotted fields on a nomination basis. Cairn has to pay the same cess for oil from the Rajasthan block. With oil prices dropping to an 11-year low of under USD 35 per barrel, the cess translates into one-third of the realisation going away in just one levy. "We have asked the Finance Ministry that the cess pattern has to be changed to ad valorem from fixed rate now. Make it formula-driven," Pradhan told reporters here. The Ministry wants cess to be levied at no more than 8 percent of the price of crude realised. The Oil Industry (Development) Act, 1974, provides for collection of cess as a duty of excise on indigenous crude oil. Cess incurred by producers is not recoverable from refineries and thus, forms part of cost of production of crude oil. The cess was levied at Rs 60 per tonne in July 1974 and subsequently revised from time to time. In 2005-06, when the crude oil prices had increased from an average of USD 40 per barrel to USD 60, the OID cess was raised from Rs 1,800 to Rs 2,500 per tonne from March 1, 2006. Again, when the crude prices climbed to over USD 100, the rate of cess went up to Rs 4,500 (USD 12 per barrel) with effect from March 17, 2012. While the government had effectively linked the cess rate to prevailing crude oil prices in the past, there has been no reduction when the oil prices have declined. "For a net importer of oil, availability is an issue. Domestic production meets 20-25 percent of the oil needs. We have to protect this level and increase it. For this to happen, fiscal pattern has to be looked into," Pradhan said. The finance ministry, he said, will take a view on the issue considering the overall finances of the government and the requirements of the economy. The producers say the current cess rate constitutes about one-third of the oil price, which has severely impacted several small discoveries and marginal fields, making many of the projects unviable. In the low oil price environment, several countries including the UK, the US, and China have changed fiscal systems to increase production and promote investments. Most of crude oil produced in India comes from pre-NELP and nomination blocks and is liable for payment of cess. While New Exploration Licensing Policy (NELP) blocks like Reliance Industries' KG-D6 are exempt from payment of cess, pre-NELP discovered blocks like Panna/Mukta and Tapti and Ravva pay a fixed rate of cess of Rs 900 per tonne. 

IOC in talks to buy stake in Siberia oil project

India, the world's fourth-biggest oil consumer, has to ship in three quarters of its oil needs and with oil prices close to their lowest since the global financial crisis has added incentive to seal purchases to limit import reliance.

Indian Oil Corp  and Oil India  are in talks with Russia's Rosneft to buy up to a 29 percent stake in a Siberian oil project, two sources said, as New Delhi accelerates a push to secure overseas energy assets. India, the world's fourth-biggest oil consumer, has to ship in three quarters of its oil needs and with oil prices close to their lowest since the global financial crisis has added incentive to seal purchases to limit import reliance. The deal, which could be worth around USD 1 billion based on the valuation of a recent stake purchase, is expected to take final shape during Prime Minister Narendra Modi's visit to Moscow next week for summit talks with President Vladimir Putin, said the sources with direct knowledge of the situation. Rosneft, the world's biggest listed oil company by output, also stands to benefit as it has been scouting for partners as Western sanctions tied to Russia's annexation of Crimea have limited its access to global funds and technology. Officials at the two state-run Indian firms are in Moscow to negotiate with Rosneft for up to a 29 percent stake in Rosneft's Taas-Yuriakh, the sources said, adding that the exact size and value of the stake was yet to be decided. The sources declined to be named because of the sensitivity of the issue. Taas-Yuriakh, which operates the Srednebotuobinsk field, is expected to produce more than 5 million tonnes of oil annually from 2017. Rosneft last month sold a 20 percent share in Taas-Yuriakh to BP for USD 750 million, and based on that valuation a 29 percent stake could be worth around USD 1 billion. Rosneft said on Nov. 30 it planned to select a second partner in Taas-Yuriakh. Business development directors at the two Indian companies and Rosneft declined to comment. If the deal goes through, it would mark India's second acquisition in Russia since Modi took office in May last year and a third under the ruling Bhartiya Janata Party. In 2002, Oil and Natural Gas Corp bought a 20 percent stake in the Sakhalin I field. India has frequently lost out to China in the race to acquire resources overseas in the last decade, but its oil diplomacy has gained momentum under Modi, who has made frequent foreign trips. In September, ONGC Videsh, the overseas investment arm of oil firm ONGC, acquired a 15 percent stake in Russia's Vankor field, a deal that was sealed in July when Modi met Putin at a BRICS summit. N.K. Verma, managing director of ONGC Videsh, said the push by the Modi government meant that "India Inc has now been taken as a dependable partner and a serious player by the global community in the bigger projects".

Moving auto , cooking fuel from adjoining states to TN: IOC

The company said it could not communicate about the shutdown earlier "due to non-availability of communication system and water logging in the office and the abnormal situation arising out of natural calamity."

Indian Oil Corp , the nation's biggest oil firm, on Monday said that it has moved auto and cooking fuel from neighbouring states to flood-hit Chennai to restore supplies. "There is no fuel shortage. We have moved tankers from Kerala and Karnataka to Chennai," IOC Chairman B Ashok said. He said some petrol pumps in the city had gone under water after heavy rains and flooding. "Petrol pumps are restarting..There may be few which are still under water but supplies are being restored." In the immediate aftermath of the worst flooding, fuel supplies to the metropolitan city had been affected. "Our (subsidiary) refinery CPCL had to take an emergency shutdown as it was flooded with four feet of water. Water as receded and they have moved to restart the unit," he said adding the 11.5 million tons refinery will be restarted this week. CPCL in a filing to the stock exchanges on Monday said, "due to heavy rains and water logging in the Refinery premises, as a precautionary safety measure, the Manali Refinery of CPCL was shutdown effective December 02, 2015 (night), and the Cauvery Basin Refinery at Nagapattinam was shutdown effective December 06, 2015 (night)." The company said it could not communicate about the shutdown earlier "due to non-availability of communication system and water logging in the office and the abnormal situation arising out of natural calamity." Manali refinery near Chennai has a capacity of 10.5 million tons per annum while Nagapattniam has one million tons a year capacity.

Petrol price cut by 50p/litre; diesel by Rs 0.46/ litre

In a press statement, IOC said: "The current level of international product prices of petrol and diesel and the rupee-dollar exchange rate warrant a decrease in prices, the impact of which is being passed on to the consumers with this price revision."


Indian Oil Corporation  (IOC) on Tuesday cut petrol prices by Rs 0.50 per litre and diesel by Rs 0.46 per litre with effect from midnight tonight. In a press statement, IOC said: "The current level of international product prices of petrol and diesel and the rupee-dollar exchange rate warrant a decrease in prices, the impact of which is being passed on to the consumers with this price revision." IOC also said that it will continue to monitor the movement of prices in the international oil market and INR-USD exchange rate. It further added that developing trends of the market will be reflected in future price changes. However, sources said the government will shortly hike excise duty on petrol and diesel. Government sources also said that OMCs have not passed on entire benefit to consumers.

GAIL launches project for satellite monitoring of pipelines

"Despite challenges, GAIL (India) has proved space technology can be used efficiently to monitor the pipeline's Right of Use (RoU). "GAIL has more than 13,000 kms of pipeline network, wherein monthly monitoring of pipeline RoU is presently done via Helicopter surveys," GAIL said in a statement.

To address pipeline safety concerns, state-run energy major GAIL  and National Remote Sensing Centre, a unit of ISRO, have launched an innovative surveillance geo-portal called 'Bhuvan-GAIL Portal' for utilising space technology for its pipeline application. "Despite challenges, GAIL (India) has proved space technology can be used efficiently to monitor the pipeline's Right of Use (RoU). "GAIL has more than 13,000 kms of pipeline network, wherein monthly monitoring of pipeline RoU is presently done via Helicopter surveys," GAIL said in a statement. By January 2016, GAIL would begin live satellite monitoring of its pipeline RoU. It is also seeking alternative methods such as advanced Unmanned Aerial Vehicles (UAV) which can be integrated with this system, the company said. GAIL said it has also developed an innovative mobile application from which pictures of untoward incidents, taken from any mobile phone, can be uploaded instantly on the portal. A report system integrated with the Bhuvan-GAIL portal can send alerts to relevant executives through SMS and e-mail, regarding the changes noted along the RoU as well as the arrival of any new satellite photos. To establish the technical feasibility of utilising space technology for its pipeline applications, GAIL began the study with imageries from Indian satellites and later shifted to very high-resolution foreign satellites, the statement added. Globally, pipeline safety and security is a major issue. With recent progress in satellite-sensing technology, availability of new high-resolution satellites, object-oriented image analysis etc., there is a possibility to introduce space technology for pipeline monitoring applications, it said. "GAIL's R&D pilot project on satellite monitoring of pipeline RoU for the 610-kms long Dahej-Vijaipur pipeline is one such effort to keep pace with the technological advancements enabling time and cost-effective solutions." "The Bhuvan-GAIL portal is operated via manual as well as auto-change analysis options to monitor changes along the natural gas pipeline RoU. Change analysis can be undertaken with this technology within the RoU and outside the RoU up to 1 km of the risk zone," it added

On December 18, 2015, GAIL India closed at Rs 340.00, down Rs 3.1, or 0.9 percent. The 52-week high of the share was Rs 452.00 and the 52-week low was Rs 260.25. The company's trailing 12-month (TTM) EPS was at Rs 15.61 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 21.78. The latest book value of the company is Rs 229.56 per share. At current value, the price-to-book value of the company is 1.48.

GAIL launches project for satellite monitoring of pipelines

"Despite challenges, GAIL (India) has proved space technology can be used efficiently to monitor the pipeline's Right of Use (RoU). "GAIL has more than 13,000 kms of pipeline network, wherein monthly monitoring of pipeline RoU is presently done via Helicopter surveys," GAIL said in a statement.

To address pipeline safety concerns, state-run energy major GAIL  and National Remote Sensing Centre, a unit of ISRO, have launched an innovative surveillance geo-portal called 'Bhuvan-GAIL Portal' for utilising space technology for its pipeline application. "Despite challenges, GAIL (India) has proved space technology can be used efficiently to monitor the pipeline's Right of Use (RoU). "GAIL has more than 13,000 kms of pipeline network, wherein monthly monitoring of pipeline RoU is presently done via Helicopter surveys," GAIL said in a statement. By January 2016, GAIL would begin live satellite monitoring of its pipeline RoU. It is also seeking alternative methods such as advanced Unmanned Aerial Vehicles (UAV) which can be integrated with this system, the company said. GAIL said it has also developed an innovative mobile application from which pictures of untoward incidents, taken from any mobile phone, can be uploaded instantly on the portal. A report system integrated with the Bhuvan-GAIL portal can send alerts to relevant executives through SMS and e-mail, regarding the changes noted along the RoU as well as the arrival of any new satellite photos. To establish the technical feasibility of utilising space technology for its pipeline applications, GAIL began the study with imageries from Indian satellites and later shifted to very high-resolution foreign satellites, the statement added. Globally, pipeline safety and security is a major issue. With recent progress in satellite-sensing technology, availability of new high-resolution satellites, object-oriented image analysis etc., there is a possibility to introduce space technology for pipeline monitoring applications, it said. "GAIL's R&D pilot project on satellite monitoring of pipeline RoU for the 610-kms long Dahej-Vijaipur pipeline is one such effort to keep pace with the technological advancements enabling time and cost-effective solutions." "The Bhuvan-GAIL portal is operated via manual as well as auto-change analysis options to monitor changes along the natural gas pipeline RoU. Change analysis can be undertaken with this technology within the RoU and outside the RoU up to 1 km of the risk zone," it added.

BPCL up 4.5%; UBS upgrades to buy, ups target to Rs 945

Shares of  Bharat Petroleum Corporation  (BPCL) gained 4.5 percent to hit a life high of Rs 831.60 on Wednesday. Brokerage UBS has upgraded the stock to buy with increased target price of Rs 945. "Our new Rs 945 price target recognises higher marketing business valuations of 7.5x EV/EBITDA (from 6x earlier) on a better marketing business outlook and factors in lower debt as working capital eases. BPCL trades at a premium to peers and at near-peak valuations on P/BV and EV/EBITDA," said the brokerage in its note. While explaining why the BPCL is best among peers, UBS said the state-run oil marketing company has favourable sales mix, in which deregulated fuels contribute 68 percent of volumes; marketing business EBITDA contribution is the highest at 53 percent; and non-fuel business, with revenues of Rs 430 crore, is ahead of peers’. Other positives about the company are its refining margins & benefits from capacity expansion; efficient inventory/working capital cycles; and smaller debt and a limited capex outlook. The brokerage sees a risk that the government might make all marketing SOEs absorb a 3-5 percent share of fuel losses over FY15-17E as their profitability improves. However, it believes BPCL's earnings are least vulnerable as the 16 percent contribution of LPG and kerosene to its sales mix is lower than peers’ 18-19 percent. BPCL's E&P assets (in Mozambique and Brazil) may face risk from delays, but UBS is not concerned. At 12:29 hours IST, the scrip of Bharat Petroleum Corporation was quoting at Rs 825.90, up Rs 30, or 3.77 percent on the BSE.

Reliance Industries FY15 results on April 17, 2015

Reliance Industries board meeting will be held on April 17, 2015, to consider and approve standalone and consolidated audited financial results of the Company for the quarter / year ended March 31, 2015 and to consider and recommend dividend on equity shares of the Company. 



Reliance Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on April 17, 2015, inter alia, to consider and approve standalone and consolidated audited financial results of the Company for the quarter / year ended March 31, 2015 and to consider and recommend dividend on equity shares of the Company.Further, the Company has decided that the close period (i.e. closure of trading window) for Insiders covered under "Reliance Code of Conduct for Prohibition of Insider Trading" would commence from 6:00 p.m. on April 09, 2016 and will end 24 hours after the results are made public on April 17, 2015.Source : BSE 

Aban Offshore allots 6 lakh shares to Deepa Reji Abraham

Aban Offshore Ltd has informed BSE that the Allotment Committee at the meeting held on April 07, 2015 has allotted 6,10,000 shares to Mrs. Deepa Reji Abraham, belonging to Promoter Group pursuant to receipt of balance 75% of purchase price in respect of preferential warrants issued in February 2014.

Petrochemical regions attract investment of Rs 1.06 lakh cr

Petrochemical regions attract investment of Rs 1.06 lakh cr "The target of Modi Government is to achieve an investment of Rs 7,62,000 crore and generate employment for 34 lakh people in PCPIRs in time bound manner. Already there has been an investment of Rs 1,06,000 crore which has generated employment for 2.23 lakh people in various PCPIRs," fertiliser minister Ananth Kumar said.

Petrochemical investment regions in the country have attracted an investment of Rs 1.06 lakh crore so far and the target is to achieve Rs 7.62 lakh crore of investment in time bound manner, Fertiliser Minister Ananth Kumar has said. Kumar informed this in a meeting of the Consultative Committee of Parliament attached to Fertiliser Ministry held yesterday to discuss the topic of 'Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs)' and Plastic Parks. "The target of Modi Government is to achieve an investment of Rs 7,62,000 crores and generate employment for 34 lakh people in PCPIRs in time bound manner. Already there has been an investment of Rs 1,06,000 crores which has generated employment for 2.23 lakh people in various PCPIRs," Kumar said in an official statement. PCPIR is a delineated area of around 250 sq km for setting up manufacturing facilities for domestic and export led production. In March 2007, the Cabinet Committee on Economic Affairs had approved the proposal to set up PCPIRs in four states -- Gujarat, Andhra Pradesh, Odisha and Tamil Nadu. Anchor tenant in Gujarat is  ONGC  promoted OPal, while in Odisha the anchor tenant is IOCL . In Andhra Pradesh and Tamil Nadu, the anchor tenants are  HPCL  and Nagarjuna Oil Corp , respectively. In the meeting, Kumar said the present challenge in the sector is value addition. "For that value addition, milking the crude for further proliferation of the downstream industries is needed." Kumar also informed the members about the government's initiatives to increase the number of plastic parks from 4 to 10 to catch up with the increasing demand. He mentioned that the number of Central Institutes for Plastic Engineering and Technology (CIPET) will be increased from 23 to 100, to create additional capacity for skill development in the area. Kumar said the government is working on reducing the consumption of non-biodegradable plastics, and re-using and re-cycling of other graded polymers. The government has instituted awards for Green Technology in plastic processing, to promote environment friendly efforts in the industry, he added. 

Oil Min allows ONGC to sell gas from small fields via bids

Oil Ministry has allowed national oil companies ONGC   and Oil India   Ltd to sell any new natural gas supplies from their small and isolated fields through an open tender. While the BJP-led government had approved an international gas hub-based formula for all of the domestically produced natural gas in November last year, small and isolated fields were exempt. The Oil Ministry on April 1 issued amendment to the guidelines for pricing of gas from small and isolated fields by allowing producers to sell gas at market rates by inviting competitive bids from prospective consumers. Companies will fix minimum price for their gas, which would be the prevailing government-determined rate, and ask interested buyers to offer more through bidding, officials said. Government had on March 31 announced USD 4.66 per million British thermal unit as the gas price for six-month period ending September 30 based on the approved formula. "In case of new supplies, the price would be determined by NOCs (national oil companies) by calling bids through an open competitive bidding process," the guideline said. The ministry guidelines state that it was imperative that NOCs are able to quickly monetise the output of their discoveries particularly marginal ones where where production is small and fields are isolated. The guidelines defined such fields as ones "whose peak production is less than 0.1 million standard cubic meters per day and they are situated more than 10 km away from the gas grid." Also, "fields whose peak production is less than 0.1 mmscmd and have a gas pressure which is less than the grid pressure" have also been defined as small/isolated fields. Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) have several such discoveries, which cumulatively produce around 3-4 mmscmd, enough to generate about 900 MW electricity. Officials said while the guidelines issued on April 1 are for additional or new production from small/isolated fields, ONGC had in November last year used e-tendering to finalise a price of USD 10.10-11.20 per mmBtu for sale of gas from new marginal fields in Gujarat and Andhra Pradesh. ONGC has finalised a price of USD 10.10 per mmBtu for gas from Gamij-GGS-2 field and a rate of USD 11.10 per mmBtu for Gamij-GGS-3 field, both in Gujarat. For the Warosan-4 field in Mehsana basin of Gujarat, it has finalised a rate of USD 10.50 per mmBtu, they said. In case of Triputallu, Kaza, Mandapeta-23, Gokarnapuram and Suyyaraopeta marginal fields in Andhra Pradesh, the firm has finalised a price of USD 11.20 per mmBtu. 

Women directors: 32 PSU firms non-compliant with Sebi norms

Women directors: 32 PSU firms non-compliant with Sebi norms


As many as 32 public sector firms including GAIL  , ONGC  , NTPC  ,  SAIL  and  Punjab National Bank  have failed to comply with regulator Sebi's norms to appoint at least one woman director on their respective boards. Bharat Electronics  , Bharat Petroleum Corporation  , Container Corporation of India  , Power Finance Corporation  , Rural Electrification Corporation  , are among other PSUs that have been non-compliant with Sebi directive, Prime Database said today. Going by information gathered by Prime Database, a total of 180 NSE-listed companies have not appointed a woman director on their respective boards within the due date. These include as many as 32 PSUs (Public Sector Units) and PSBs (Public Sector Banks). "As many as 180 out of a total relevant 1,456 NSE- listed companies or nearly 12 per cent of the companies, had still not appointed a woman director," Prime Database Managing Director Pranav Haldea said. All listed firms were required to have at least one woman director on their boards from April 1, this year, as per a new Sebi directive, as also under the Companies Act, 2013. As on April 1, this year, about 832 women have been appointed to 912 directorship positions in 872 companies. Of these 872 companies, 43 companies already had a woman on the board before the Sebi guideline was announced but appointed a second woman director on their board. Of the remaining 829 firms which complied with the Sebi norms, as many as 278 did so in the month of March this year. "The hope of another deadline extension appearing dim, there was a last minute rush to appoint women," Haldea said. Data further showed that across all 1,456 NSE-listed firms, after the recent appointments of women, there are now 1,222 women presently occupying 1,431 directorship positions. "Of these, more than half (671 women) are holding 713 non-independent directorship positions," Haldea said. The 1,431 women directorships represent 12 per cent of the total 11,935 directorship positions, up from 5 per cent in February 2014, Haldea said. The companies with the highest number of women directors (four each) are Apollo Hospitals Enterprise, Indraprastha Medical Corp and Monte Carlo Fashions. 

Interlink Petroleum enters into MoU with Sun Petrochemicals

Interlink Petroleum has entered into a biding Memorandum of Understanding (MoU) with Sun Petrochemicals through its exploration and production division.

Interlink Petroleum Ltd has informed BSE regarding "Signing of Binding MOU for Transfer & Assignment of Baola and Modhera Fields".Source : BSE

Indraprastha Gas acquires 4.75 crore shares of MNGL

Indraprastha Gas has acquired 4.75 crore shares of M/s. Maharashtra Natural Gas Limited (MNGL), in the first tranche at a price of Rs 38 per equity share from certain financial investor shareholders of MNGL.



With reference to earlier announcement dated August 04, 2014 and August 28, 2014, regarding investment in the equity shares of M/s. Maharashtra Natural Gas Limited (MNGL), Indraprastha Gas Ltd has now informed BSE that the Company has acquired 4.75 Crores shares (constituting 50% of present paid up capital) of MNGL in the first tranche at a price of Rs. 38/-(Rupees Thirty-eight) per equity share from certain financial investor shareholders of MNGL

New gas price to be $5.01 a unit from April 1: Reports

The government had in October last year fixed natural gas price at USD 5.05 per million British thermal unit based on weighted average of international hub rates. This was on gross clarofic value (GCV) basis.



In the first ever reduction in domestic natural gas prices, the rates will be slashed by 9 percent to USD 4.56 per unit from April 1 to reflect the softening in international prices, benefiting users in the power and fertiliser sectors. The government had in October last year fixed natural gas price at USD 5.05 per million British thermal unit based on weighted average of international hub rates. This was on gross clarofic value (GCV) basis.  "The price of gas on GCV basis from April 1 will be USD 4.56 per mmBtu," a top source said. On net clarofic value (NCV) basis, the price would come to USD 5.01 per mmBtu as compared to USD 5.61 per mmBtu rate prevalent currently. "The government does not fix or notify a rate. A formula was notified last year, based on which the price applicable from April 1 would be USD 4.56 per mmBtu on GCV basis," said the source. This will be the first reduction in price of natural gas ever in India. While it will impact the revenue producers like Oil and Natural Gas Corp  and Reliance Industries , it will be a bonanza for users in the power and fertilizer sector.  As per mechanism approved in October 2014, price of domestically produced natural gas were to be revised every six month using weighted average price at Henry Hub of US, National Balancing Point of UK, rates in Alberta (Canada) and Russia with a lag of one quarter. So, rate for April 1 to September 30 would be based on average price at the international hubs during January to December 2014. The Oil Ministry is likely to announce the price for next six months "within next couple of day", said the source. When contacted, Oil Minister Dharmendra Pradhan refused to indicate the likely price but said, "if we are getting a cheaper price, its good for the economy". ONGC Chairman and Managing Director Dinesh K Sarraf said lower gas prices would deter the company from going ahead with investments in developing gas discoveries both off the east and the west coast. "We have to take a long term view and I think these prices will certainly not be deterrent and we will continue to invest billions of dollars in gas development," he said. The current price of USD 5.61 per mmBtu is already among the lowest in Asia Pacific. China pays explorers USD 11.9 per mmBtu rate for new projects while Indonesia and the Philippines price the fuel at USD 11 and USD 10.5 respectively. Gas from offshore fields in Myanmar, where Indian firms ONGC and GAIL  have stake, are sold to China for USD 7.72. Thailand prices gas from new projects at USD 8.2 per mmBtu. The only nations with lower rates are Vietnam (USD 5.2) and Malaysia (USD 5). There was a drop in prices at international gas hubs in the second half - US Henry Hub dropped from USD 6 per mmBtu in February to USD 3.78 per mmBtu in October, and from USD 10.72 per mmBtu on NBP in January to USD 6.40. The government had on October 17, 2014 approved a new formula that priced all domestic gas at weighted average of rates prevalent in gas-surplus economies of US/Mexico, Canada and Russia. This will be the first reduction in natural gas in India. Domestic gas price was raised from USD 4.2 per mmBtu to USD 5.61 per mmBtu effective November 1.