Date: 3/01/2014
Issue: 826
The Financial Express: ONGC strikes it rich in KG Basin, output in FY17
After finding oil in the KG DWN 98/2 field it bought from Cairn India in 2005, ONGC has now found a large reserve of gas and hopes to begin production by FY17. According to the declaration of commerciality (DoC) ONGC submitted to the Directorate General of Hydrocarbons (DGH) last week, the field has 3-4 trillion cubic feet of gas and 90 million tonnes of crude oil, ONGC director (exploration) Narendra Verma told FE. The estimated capex to develop the field is $9 billion by 2030. Based on a 25-30% recovery rate for oil, and a 10-year extraction window, that translates into 2.5 million tonnes of oil each year; an 80% recovery rate for gas means the field can produce around 10-12 million standard cubic metres per day (mmscmd) each year, which is around what Reliance Industries is producing from all its blocks today.
(Similar news appeared in The Indian Express)
Financial Chronicle: Choked by mining ban, iron ore firms tap other avenues
TOP trader MMTC's $80 million iron ore export terminal, ready since 2010, has never handled a cargo. Now the company wants to spend $16 million to convert the terminal to ship coal. Bans on iron ore mining and exports in top producing states of Karnataka and Goa have choked the industry so hard that MMTC is one of many firms exiting. Even if efforts to fully lift the bans make it past the many bureaucratic and legal hurdles, iron ore miners do not expect complete resumption of production until late 2014. The bans, put in place as the government tried to clamp down on illegal mining, have cut the iron ore exports by around 85 percent, or 100 million tonnes, over the past two years. They have also reduced foreign exchange earnings by more than $17 billion in the same period, according to the Federation of Indian Mineral Industries (FIMI). The structural shift in India's iron ore industry could be a blessing for other suppliers, as demand growth from top market China slows and Australian miners Rio Tinto and BHP Billiton ramp up output. "There are about 30 or 40 companies whose quantities are so low that they will never restart," said Basant Poddar, owner of Mineral Enterprises, which has four mining leases in Karnataka but none operating currently. "For those willing, the issue is with forest clearances. The whole process goes through about 50 levels or officers for stage one clearance, and for stage two it's cut down to about 20." On Monday, Vedanta Resources, a London-based mining conglomerate controlled by Anil Agarwal, said its Sesa Sterlite unit had resumed operations in Karnataka after clearance from a court-appointed panel.
Forbes: Business Turnarounds In The Making
Mining Moguls: The unexpected winding up of the Shah Commission, which was investigating illegal mining, may have raised environmentalists' eyebrows, but the Indian mining sector is looking forward to a better year. Mining had stalled for about two years, hurting mining and steel companies like Sesa Goa and JSW Steel. Karnataka has taken steps to open over 90 mines cleared by the Supreme Court. Sesa Goa. owned by billionaire Anil Agarwal. now has the go-ahead for a lapsed mining lease in Goa. The mine has a capacity to produce 2.3 million tonnes of iron ore a year and will help Agarwal get back into business. This is also good news for JSW and smaller sponge iron manufacturers that operate in the state who were forced to cut production because of raw material shortage. Prospects for miners in Goa might not be as sanguine. In late 2013, the Supreme Court kept the ban on Goa's iron ore mining but allowed sale of a stockpile of 11 million tonnes. The mining ban. various estimates say, has cost the Indian government S10 billion in revenues in the last two years. But with gradual easing over the next two years, most companies will likely regain lost ground.
Hindustan Times: Hockey India Announces Hil Schedule
Punjab Warriors will take on last year's runners-up Delhi Waveriders in the inaugural match of the second edition of the HIL at Mohali on Jan 25. On next day, holders Ranchi Rhinos will take on Uttar Pradesh Warriors in Ranchi. The entire League will be telecast live on Star Sports. The 34 matches will be held at Mohali, Ranchi, Delhi, Mumbai, Lucknow and Bhubaneswar. Semifinals and final will be played in Ranchi on Feb 22 and 23 respectively.
The Asian Age: Ticket sale starts for HWL final
After a gap of eight years, state-owned explorer Oil and Natural Gas Corporation (ONGC) has
resumed drilling in West Bengal and the company would take up drilling of 11 exploratory
wells. "We have resumed drilling in Bengal a few days back at Ladhi near Malda. We have
identified another area at Daulatpur in the northern part of the state", ONGC sources told PTI here.
The New Indian Express: Piped Natural Gas a Better Alternative
As the LPG price burns the consumer's pocket, experts point out that Piped Natural Gas (PNG)
supplied through City Gas Distribution network is a fine alternative for Kochiites. The major merits
of PNG are the cost will be 30 to 40 per cent less, no upfront charge, environment-friendly, safety
and convenience. After much delay the first phase of the City Gas Distribution project is expected to
be ready by December 2014. The price of piped natural gas (PNG) to households in Delhi is `29.50
per standard cubic metre for consumption of up to 30 scm in two months. Beyond the bimonthly 30
scm, the applicable rate is `52 per scm. Since we have a LNG terminal here, the difference in price
will not be as huge as in Delhi and elsewhere in the country, sources said.
The Hindu Business Line: ONGC hopes to farm out stakes in CBM blocks this fiscal
Oil and Natural Gas Corporation (ONGC) is hopeful of completing sale of minority stakes in three of
its coal-bed methane (CBM) assets located in Jharkhand and West Bengal to private players this
fiscal. Once these deals are completed, the private companies will play a key role in developing the
CBM assets. CBM is a form of natural gas extracted from coal beds. The explorer recently finalised a
draft agreement outlining the responsibilities of both sides in implementing the projects, say sources.
The agreement will be signed once ONGC board approves the same by the end of this month or early
next month. ONGC plans to sell a 25 per cent stake each to Great Eastern Energy Corp and Deep
Industries, respectively, in Ranigunj and North Karanpura blocks.
The Times of India: HPCL blast: 4 months on, no disciplinary action
Though more than four months have elapsed since the deadly blast in one of the cooling towers of
Hindustan Petroleum Corporation Limited (HPCL)-Visakha Refinery that killed 28 persons, neither
the Union petroleum ministry nor the state-run oil major has taken any disciplinary action against the
people responsible for the blast. Confirming this to mediapersons at a function organized to distribute
compensation cheques to 15 out of the 27 dead contract workers here on Thursday at the HPCL
Waltair Park, Union minister of state for petroleum and natural gas Panabaka Lakshmi said "The
OISD (Oil Industry Safety Directorate) has not given any specific names (of those responsible for
causing the accident). They have only given a report for the cause. The file is with (Veerappa)
Moilyji. He has to take a decision."
Business Standard: Vizag: Compensation paid to families of refinery blast victims
Hindustan Petroleum Corporation Limited (HPCL) today paid compensation to families of 28
persons killed in a blast at its refinery here on August 23 last year. Union Minister of State for
Petroleum and Natural Gas, Panabaka Lakshmi, handed out the cheques of Rs 20 lakh each to the kin
of victims. Barring one, all the workers who died in the blast were employed by a private contractor.
The Times of India: Pricing woes hit LPG supply
Following confusion regarding linking Aadhaar cards and bank accounts of consumers for availing
LPG subsidy, most distributors in Kochi downed their shutters on Thursday. Supply by all three oil
companies such as Indian Oil Company (IOC), Bharat Petroleum Corporation Ltd (BPCL) and
Hindustan Petroleum (HP) had stopped for the last two days in the city. Oil companies and
distributors swear that there is no shortage of LPG. According to them, the problem lies in the billing
due to confusion over pricing. "After the petroleum ministry made linking Aadhaar to bank accounts
mandatory for availing subsidy, the new pricing system came into force on January 1," said Babu
Varghese, general secretary, All India Indane Distributors Association, Kerala circle.
The Hindu Business Line: GAIL gets green nod for 200 MW power plant in Maharashtra
GAIL India Ltd, the nation's biggest gas marketing company, has received environmental clearance
for setting up a 220 MW gas-based power plant at Raigad in Maharashtra at a cost of Rs 1,028 crore.
The state-owned firm plans to use 1 million standard cubic meters per day of natural gas to generate
220 mega-watt of electricity at the proposed combined cycle power plant. The State Level
Environmental Impact Assessment Authority of Maharashtra in its 63rd meeting "decided to accord
environmental clearance to the project under the provisions of Environment Impact Assessment
Notification, 2006," R A Rajee, Principal Secretary in Environment Department of Maharashtra
Government, wrote to GAIL on December 23. GAIL plans to set up the combined cycle gas based
power plant within the existing LPG plant boundary. Electricity generated at the plant will be sold to
Maharashtra.
Bloomberg: Bakken Crude More Dangerous to Ship Than Other Oil: U.S.
Safety rules will probably be tightened on crude oil shipments from North Dakota following a string
of railway explosions, threatening to damp an energy boom that has boosted the region's economy.
U.S. regulators issued a safety alert after a train carrying oil crashed and caught fire earlier this week
in North Dakota, where surging production has helped lead a renaissance in domestic energy and
driven the state's unemployment rate to the nation's lowest. The type of oil pumped from the shale
formations of North Dakota may be more flammable and therefore more dangerous to ship by rail
than crude from other areas, the Transportation Department said in the alert. Regulators are
considering imposing tougher rules on railcar construction, among other things, potentially raising
the costs of moving the crude to market.
Business Standard: Oil flow via Iraq to Turkey begins
Crude oil flow from northern Iraq to Turkey started via a new pipeline Thursday, the Turkish
government announced. The oil started to accumulate at the Turkish Mediterranean export hub of
Ceyhan but will not be shipped to world markets without the consent of Iraqi government, Xinhua
quoted Turkish Energy Minister Taner Yildiz as saying. Stating that oil flow through the pipeline
would start at 300,000 barrels per day (bpd) and rise to 400,000, the minister expressed hope that a
deal with Baghdad could be reached this month for exports.
The Wall Street Journal: Shale-Oil Boom Puts Spotlight on Crude Export Ban
The U.S. government virtually banned the export of crude oil in the wake of the mid-1970s energy
crisis. But as America pumps more crude, 2014 could be the year those constraints are lifted. For
decades, even discussing the possibility of exporting domestic oil was a political nonstarter in
Washington. Now, surging U.S. production has led to the beginning of a glut along the Gulf Coast,
home to the largest refinery complex in the world. Too much crude is driving down prices there,
making producers eager to export some of their oil to places like Europe where prices are higher.
Reuters: Shares of Bakken oil producers plunge after U.S. warning
Shares of Whiting Petroleum Corp , Continental Resources Inc and other top crude oil producers in
the Bakken shale formation plunged on Thursday after the U.S. government said oil produced there
may be extra flammable. The warning came three days after a BNSF train carrying crude oil collided
in eastern North Dakota with another train carrying grain. The resulting explosion led to the
temporary evacuation of a nearby town and added to the growing concern about the safety of oil-byrail
shipments. Last July a runaway oil train, which originated in North Dakota, derailed and
exploded in a small Quebec town, killing 47 people.
Voice of America: Rise in Russian Oil Output Supports Overstretched Budget
Russia retained the title of the world's top oil producer, with 2013 output reaching a post-Soviet high
as rising exports to China and strong prices allow the Kremlin to maintain record spending from an
overstretched budget. Energy has been the engine of Russia's growth during more than a decade of
leadership by President Vladimir Putin, with oil and gas accounting for more than half of budget
revenues. But the government, which has amassed some of the world's largest foreign exchange
reserves of more than $500 billion, has been increasingly overstretching its finances due to social
spending promised by Putin before the 2012 election, as well as a swelling $50 billion budget for the
2014 Winter Olympics.
Colombo Gazette - Sri Lanka cannot get Iran oil
The Sri Lankan Government has been informed by the United States that it cannot import crude oil
from Iran despite some sanction being lifted recently, the Ministry of Petroleum Resources said.
Petroleum Resources Minister Anura Priyadharshana Yapa has had several rounds of talks with the
US Embassy in Colombo while the Sri Lankan Embassy in Washington has had talks with the US
Government. At these talks it has been said that while world leaders agreed recently to lift some
sanctions on Iran the restrictions on importing oil still remains, the Ministry of Petroleum Resources
said. The Ministry said that the move is affecting Sri Lanka's ability to refine crude oil at the
Sapugaskanda oil refinery which was built to refine Iranian oil.The U.S. State Department had in
November extended a waiver from US sanctions to Sri Lanka for another six months for not
purchasing crude oil from Iran.
The Economic Times: Oil Ministry forms panel to codify discovery-recognition norms
Amid disputes over recognition of oil and gas finds, the oil ministry has formed a panel headed by
the Director General of Hydrocarbons (DGH) to codify globally recognised industry practices for
adoption in India. Though Production Sharing Contracts prescribe the adoption of generally accepted
international petroleum practices or standards, there have been disputes between the DGH and
operators such as Reliance Industries over tests that should be carried out to confirm discoveries.
Deccan Herald: Oil Ministry to move SC over gas distribution
The Petroleum Ministry will soon approach the Supreme Court to enforce its recent guidelines for
uniform distribution of natural gas to city gas distributors after a Bombay High Court Bench put a
stay on the implementation of the order in Maharashtra till January 9. According to an official in the
Petroleum Ministry, the Law Ministry's views are being sought on the matter. As per the government
order, a distribution agency in any city will get domestically produced gas to meet 80 per cent of its
requirements at a uniform base price, while the balance could be imported. In its November
notification, the Petroleum Ministry had laid down norms for uniformity in price as well as quantum
of supply of natural gas across city gas distribution segments.
The Economic Times: CNG price may rise due to Centre's guidelines: Delhi govt to HC
The city government today told the Delhi High Court that it apprehended rise in price of CNG due to
reduction in allocation following new guidelines by Ministry of Petroleum and Natural Gas even
asthe Centre said that any shortfall will be met by import of the fuel. The price of CNG or
compressed natural gas in the national capital was just last week hiked by a steep Rs 4.50 per kg, the
second increase in rates in three months.
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