S&P BSE GOLD Oil & Gas blog is a revolutionary website which gives a rough sketch of the Oil and Gas sector everyday and also is an information monitoring platform to its viewers. It gives all the information about (S&P Bombay Stock Exchange Sensitive Index), also-called the S&P BSE Oil & Gas which was lunched at 23 August, 2004, a free-float market-weighted stock market index of 10 well-established and financially sound oil companies listed on Bombay Stock Exchange.
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 Failure on the part of the company led to a situation wherein rigs were being operated with outdated/obsolete equipment, CAG said.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.
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.
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".
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.
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.
"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.
"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.
