#Tax Impact on ONGC

[virajpawar]

Navigating the Labyrinth of Government Policies: Understanding Their Impact on ONGC Share Price

In the dynamic world of energy, Oil and Natural Gas Corporation (ONGC), India's state-owned oil and gas behemoth, stands as a towering figure. However, ONGC's share price, a critical indicator of investor sentiment, is not immune to the intricate web of government policies and regulations that govern the oil and gas sector.

Production Regulation: A Double-Edged Sword

ONGC's production levels, the lifeblood of its operations, are directly influenced by government regulations. While these regulations aim to promote responsible exploration and production practices, they can also impose restrictions on ONGC's activities. For instance, environmental regulations may limit ONGC's access to certain areas, potentially impacting its production capacity.

Pricing Dynamics: A Balancing Act

ONGC's pricing decisions, a delicate dance between profitability and consumer affordability, are subject to government oversight. While ONGC enjoys some flexibility, government intervention, particularly during periods of price volatility, can significantly impact its revenue and profitability. For example, government-controlled pricing mechanisms can squeeze ONGC's margins, affecting its share price performance.

Taxation Policy: The Fiscal Burden

ONGC's financial well-being is heavily influenced by government taxation policies. The company faces a myriad of taxes, including corporate income tax, excise duty, and royalty payments. Changes in tax rates or structures can directly affect ONGC's profit margins and overall financial health, consequently impacting its share price.

Investment Approvals: Navigating the Regulatory Maze

ONGC's investment decisions, crucial for its growth and expansion plans, are subject to government approvals. The company must obtain clearances for new projects, exploration activities, and acquisitions. Delays or rejections of these approvals can hinder ONGC's growth trajectory, potentially affecting its share price performance.

Subsidy Programs: A Double-Edged Sword

Government subsidy programs, while aimed at providing relief to consumers, can indirectly influence ONGC's share price. Subsidies provided for oil and gas products can reduce ONGC's revenue and profitability. However, subsidies can also stabilize energy prices, potentially benefiting ONGC's long-term share price performance.

Conclusion: A Delicate Balance

In conclusion, government policies and regulations play a pivotal role in shaping ONGC's share price trends. These factors can influence the company's production levels, pricing strategies, taxation burden, investment decisions, and overall financial performance. Investors should closely monitor government policies and regulations related to the oil and gas sector to assess their potential impact on ONGC's share price.

[rudrjobdesk]

रिलायंस इंडस्ट्रीज, ONGC और ऑयल इंडिया का खेल बिगाड़ेगा विंडफॉल टैक्स

रिलायंस इंडस्ट्रीज, ONGC और ऑयल इंडिया का खेल बिगाड़ेगा विंडफॉल टैक्स

केंद्र सरकार ने हाल में सेज रिफाइनरीज समेत सभी रिफाइनर्स पर डीजल, पेट्रोल और एयर टर्बाइन फ्यूल (ATF) के एक्सपोर्ट पर विंडफॉल टैक्स लगा दिया है। इसके अलावा, केंद्र सरकार ने डोमेस्टिक क्रूड आउटपुट पर सेस भी लगाया है। मार्केट एनालिस्ट्स का कहना है कि यह डिवेलपमेंट रिफाइनर्स को झटका देने वाला है, क्योंकि उन्होंने FY23 एस्टिमेट्स में तेज कटौती की है। एनालिस्ट्स का कहना है कि टैक्स का इस्तेमाल ऑटो…

[capitalways-blog1]

Eye on RBI policy meet this week; bet on these 2 Nifty stocks for 7-10% returns

The central bank could leave policy rates unchanged but hawkish comments from the governor would be slightly supportive for the currency, says Akash Jain of Ajcon Global Services

Ajcon Global Services

On the domestic front, focus will now shift to this week's Monetary Policy Committee meeting. Expectation is that the central bank could hold rates unchanged, but hawkish comments from the governor would be slightly supportive for the currency.

Q1 FY19 results so far have been encouraging on a lower base due to Goods & Services Tax impact on earnings last year. In the coming week, around 450 companies will declare their corporate earnings. These include: Housing Development Finance Corporation (HDFC), Tata Motors, Oil & Natural GAs Corporation (ONGC), Tech Mahindra, Shree Cement, Axis Bank, Vedanta, UPL, Power Grid Corporation of India and Titan Company.

In the broader space, IDFC Bank, InterGlobe Aviation, Avenue Supermarts, Escorts, Idea Cellular, Central Bank of India, Godrej Consumer Products, IDFC, Dabur India, Bharat Electronics, Bank of India, Tata Global, Marico, Steel Authority of India and Wockhardt will announce earnings.

Investors will also keep an eye on macroeconomic data like India core infrastructure output for June, which will be released on Tuesday. India Nikkei Manufacturing Purchasers Managers' Index for July will be announced on Wednesday and Nikkei Services PMI for July on Friday.

India’s foreign exchange reserve for the week-ended July 27 and deposit and bank loan growth for the week-ended July 20 will also be released on Friday.

Capital Ways Investment Adviser 605, Industry House , AB road Indore (MP) 452001 info@capitalways.com Contact Us: 08517810864 https://www.capitalways.com/ 

[rdagade]

Global Petroleum and Diesel Retail Market

Global Petroleum and Diesel Retail Market was valued US$ xx Bn. in 2019 and the total revenue is expected to grow at 6.73% through 2019 to 2027, reaching US$ xx Bn.

Market Dynamics

The report covers an in-depth analysis of COVID 19 pandemic impact on Global Petroleum and Diesel Retail Market by region and on the key players’ revenue affected till July 2020 and expected short term and long-term impact on the market.

Petroleum and diesel retail has based on the downstream part of the oil & gas business. The petroleum retail outlet is a setup that proposes a wide variety of items from raw petroleum.

The global market for petroleum and diesel retail is expected to grow significantly in the forecast period, thanks to the booming automobile industry all over the world. Most retail outlets over the world are monitored by countrywide oil organizations of their countries. The drivers with respect to public division units can be categorized into fiscal drivers, standards of security, environmental policies and regulations. On the other hand, instability in the costs of raw petroleum is hampering petroleum and diesel retail market opportunities to an extent.

Due to the Covid-19 pandemic, domestic demand for diesel, petrol, jet fuel and shipping fuel has dropped by over 10% in the first two weeks of March even though the worldwide market for oil remained favorable for Indian customers with sharp fall in both petroleum and crude product costs.

The MMR reports cover key developments in the petroleum and diesel retail market as organic and inorganic growth strategies. Various companies such as Royal Dutch Shell Plc., Reliance Industries Ltd, Saudi Aramco and others are involved in adopting sustainable strategies to gain competitive edges such as new product launch, product up-gradation and collaborative agreements.

The average price of diesel around the globe is US$ 0.89 per litre. Though, there is a substantial difference in these costs among economies. As a general rule, richer economies have higher costs while poorer economies and the countries that produce and export oil have significantly lower costs. One important exception is the US which is an economically advanced country but has low gas costs. The differences in costs across economies are owing to the several taxes and subsidies for diesel.

The report also offers a brief analysis of the major regions in the petroleum and diesel retail market, Europe, North America, Latin America, Asia-Pacific, and the Middle East & Africa. Asia-Pacific Petroleum and Diesel Retail Market was valued US$ xx Mn. in 2019 and is expected to reach a value of US$ xx Mn. by 2027, with a CAGR of 56% during 2019-2027. This is attributed to a growing population combined with the rising popularity of automotive in countries in APAC, Such as China and India are likely to propel the investments in the growth of existing and new retail shops.

The Indian government has plans to build new petroleum retail openings in Karnataka state which are projected to drive the demand for petroleum and diesel retail shops in the APAC.

Europe also plays important roles in the petroleum and diesel retail market, with a market of US$ xx Mn in 2018 and will be US$ xx Mn in 2026, with a CAGR of xx%. The U.K. petroleum and diesel market have over 200 establishments that are working with refining, production, distribution, and marketing activities of various products.

The objective of the report is to present a comprehensive analysis of the Global Petroleum and Diesel Retail Marketincluding all the stakeholders of the industry. The past and current status of the industry with forecasted market size and trends are presented in the report with the analysis of complicated data in simple language. The report covers all the aspects of the industry with a dedicated study of key players that includes market leaders, followers and new entrants. PORTER, SVOR, PESTEL analysis with the potential impact of micro-economic factors of the market has been presented in the report. External as well as internal factors that are supposed to affect the business positively or negatively have been analyzed, which will give a clear futuristic view of the industry to the decision-makers.

The report also helps in understanding Global Petroleum and Diesel Retail Marketdynamics, structure by analyzing the market segments and projects the Global Petroleum and Diesel Retail Marketsize. Clear representation of competitive analysis of key players by Application, price, financial position, Product portfolio, growth strategies, and regional presence in the Global Petroleum and Diesel Retail Market make the report investor’s guide.

For more information visit@ https://www.maximizemarketresearch.com/market-report/petroleum-and-diesel-retail-market/69381/

Scope of the Global Petroleum and Diesel Retail Market

Global Petroleum and Diesel Retail Market, By Operator

• Public • Private Global Petroleum and Diesel Retail Market, By License Type

• Company owned and dealer operated • Company owned company operated • Dealer owned and dealer operated Global Petroleum and Diesel Retail Market, By Product

• Diesel • Petroleum Global Petroleum and Diesel Retail Market, by Region

• North America o US o Canada • Europe o UK o France o Germany o Italy o Spain o Norway o Russia • Asia Pacific o China o India o Japan o South Korea o Australia o Malaysia o Indonesia o Vietnam • South America o Mexico o Brazil o Argentina • Middle East and Africa o GCC Countries o South Africa o Nigeria o Egypt Key players operating in the Global Petroleum and Diesel Retail Market

• Royal Dutch Shell Plc. • Saudi Aramco • Reliance Industries Ltd. • Exxon Mobil Corporation • ONGC • Halliburton Corporation • Statoil • Gazprom • Total SA • British Petroleum Ltd • Chevron Corp. • Pemex • Sinopec • Lukoil

This report submitted by Maximize market Research Company

Customization of the report:

Maximize Market Research provides free personalized of reports as per your demand. This report can be personalized to meet your requirements. Get in touch with us and our sales team will guarantee provide you to get a report that suits your necessities.

About Maximize Market Research:

Maximize Market Research provides B2B and B2C research on 20,000 high growth emerging opportunities & technologies as well as threats to the companies across the Healthcare, Pharmaceuticals, Electronics & Communications, Internet of Things, Food and Beverages, Aerospace and Defense and other manufacturing sectors.

Contact info:

Name: Lumawant Godage

Organization Address: MAXIMIZE MARKET RESEARCH PVT. LTD.

Email: sales@maximizemarketresearch.com

Address: Omkar Heights, Sinhagad Road, Manik Baug, Vadgaon Bk,Pune, Maharashtra 411051, India.

Contact: +919607195908

[kanavsingh-blog]

In the previous session, the 30-share index cracked 560.45 points or 1.44 percent to settle at 38,337.01. Similarly, the broader NSE Nifty sank 177.65 points or 1.53 percent to 11,419.25. This was the second-biggest fall for the Sensex in 2019. 

The index had plunged 792.82 points on July 8 following the Budget. In early trade, HDFC Bank was among the top losers in the Sensex pack, cracking up to 3 percent, after the lender reported a rise in non-performing assets (NPAs). 

During the quarter, gross NPAs rose to Rs 11,768.95 crore which is 1.40 percent of the total advances, compared with Rs 9,538.62 crore which was 1.33 percent in the same quarter 2018-19 fiscal.

 Other losers included Bajaj Finance, HDFC, IndusInd Bank, Kotak Bank, ONGC, HUL, ITC, NTPC, Bharti Airtel and ICICI Bank, falling up to 2.85 percent. On the other hand, Vedanta, Tata Motors, Yes Bank, Sun Pharma, Hero MotoCorp, Asian Paints and Maruti were among the top gainers, rising up to 3.54 percent. On a net basis, foreign institutional investors sold equities worth Rs 950.15 crore, while domestic institutional investors purchased shares to the tune of Rs 733.92 crore, provisional data available with stock exchanges showed Friday.

 According to experts, the selloff by foreign funds was due to the government's reluctance to tweak foreign portfolio investors (FPIs) income tax surcharge. The deficiency in monsoon rain and weak corporate earnings have also impacted the risk sentiment, they said. With domestic investors already battling concerns of a slowing economy, markets are witnessing broad-based selling, said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management. "The market reaction post the BJP victory in 2019 is in stark contrast to the bullish tenor in 2014, and market participants expecting a repeat of 2014 are clearly disappointed, he added. Meanwhile, the Indian rupee depreciated 22 paise (intra-day) to 69.02 against the US dollar. 

The global oil benchmark Brent crude futures were trading 1.34 percent higher at 63.31 per barrel. Elsewhere in Asia, Shanghai Composite Index, Hang Seng, Nikkei and Kospi were trading in the red in their respective early sessions.

[supervidyavinay]

NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) has warned that the COVID-19 pandemic will impact the speed of execution of its projects and the company is identifying opportunities for optimisation of capital and operating expenditure. While about 9 per cent of the company's natural gas output was impacted by inability of customers to take supplies due to the coronavirus lockdown, lower oil and gas prices had impacted its revenues, the company said. In a note on the material impact of COVID-19 pandemic submitted to stock exchanges, ONGC said operations and production have gone on uninterrupted during the nationwide lockdown imposed on March 25 to contain the spread of the coronavirus. Crude oil production was almost at the same level as before the COVID-19 outbreak but natural gas "output was down by 9 per cent on account of less demand and offtake by customers due to the lockdown," it said. However, with the easing of lockdown restrictions and gradual opening of industries, gas demand has been now restored to normal levels. "With the imposition of lockdown, onshore operations were hampered in quite a few places which resulted in idling of drilling rigs and equipment. However, since April 20, 2020, onshore operations have also been restarted in places where these were stalled and are near normal at present. "It may however be stated that the COVID will impact the speed of execution of various projects and if COVID remains around for a long time, some disruptions in activity levels at local basis cannot be ruled out," it said. The company is currently implementing several projects to bring oil and gas discoveries on both east and west coast to production. The projects under execution include development of KG-D5 block in Bay of Bengal. ONGC said it currently has the financial capability to sustain its operations and activities including capital and operating expenditure, though both these are being closely examined afresh for possible optimisation and rationalisation. "Management is well abreast of all the challenges and attempts are also underway to seek assistance from the government for rationalisation of existing taxes and duties structure," it said. "Lower oil and gas prices are expected to impact internal resource generation capacity, but given low gearing levels at standalone basis fund raising for the same is not expected to be an issue," it added. The company borrowed short-term funds to manage liquidity position during the lockdown. "The onset of COVID itself will impact project progress to some extent and the company is identifying opportunities for Capex and Opex optimisations," it said. "Going forward it is anticipated that a combination of higher oil and gas prices, rationalization in expenses and some statutory relief will help the company to protect and maintain our activity level." Also, there have been some disruptions in supply chains especially in the international arena but these have not yet had any major impact on day-to-day operations. "As far as some projects are concerned, the supply chain disruption has pushed back the anticipated completion dates. However, close monitoring is in progress to ensure that supplies and normalcy is attained at the earliest," it said. ONGC top management closely monitored the operations, resulting in uninterrupted supply chain for smooth operations as well as supplying essential items required for safety and wellbeing of operational employees, and for continued production of oil and gas for the nation. from Economic Times https://ift.tt/2NgKSgO

[arrowmoney]

News/Updates

*ET NOW BROKERAGE RADAR* MS ON GAS EXCHANGE LAUNCH Step towards government's goal of market-linked gas pricing Move can benefit domestic producers like ONGC in medium term PLNG & GAIL also benefit medium term as it raises infrastructure utilisation Small industries can source gas competitively. Fertilisers, Power and city gas distributors can be key consumers JP MORGAN ON NMDC Overweight, Target 105 Operationally in line 4Q but Net impacted by tax case settlements Co. opted for various tax case settlements under recent Government schemes Expect ASPs and volumes to normalize from 2Q onwards EMKAY ON SHOPPERS STOP Hold , Target 225 Revenue decline in line with estimates, due to temporary store closures in Mar’20 EBITDA loss was disappointing due to higher costs Expects successful rental negotiations (already achieved in ~56% of stores) Co. indicated closure of unprofitable stores to improve profitability

[askstockmarket]

Why the actual fiscal deficit is much higher than 3.4%

Why the actual fiscal deficit is much higher than 3.4% Fiscal deficit always has a much larger implication because it shows the extent to which the government needs to borrow to balance its budget. Even since the Fiscal Responsibility Act was passed in 2004, the government has tried hard to keep the fiscal deficit in check. Of course, there have been instances during the UPA regime and the NDA regime; when there have been clear cases of transgressing the limit. The entire issue of the fiscal deficit came back to the fore when Jaitley admitted that the actual fiscal deficit may be closer to 3.8%. Why is this important? Fiscal deficit: 3.8% or more? For the fiscal year 2018-19, the GST and direct tax revenues fell woefully short. The government had already overshot the fiscal deficit by 20 bps and did not have room for more. The clear loser was the expenditure side. The government actually cut down expenses by Rs.1 trillion to keep the fiscal deficit in shape. That clearly implies that quite a few key areas of allocation like education, health care, defence and infrastructure would have taken a hit. Cutting expenditure, especially with productive and long term externalities, has dual implications. They put off the liability to a future date and understate the fiscal deficit. Also, such a move has its clear implications on national productivity since important items of long term value are being put off to a future date. Fiscal deficit for last year should have been 3.8%, ideally. What about state deficit? There are two important reasons why the central deficit of the government may not give a very clear picture. In fact, economists have pointed out time and again that the real risk for the Indian economy could stem from the state deficits, which are now as high as the central fiscal deficit. Let us understand how this comes about. Firstly, the government has been promising farmer write-offs; left, right and centre. This has a direct impact on the fiscal deficit of the states. With farm distress rising, this could become a bigger problem. Secondly, power sector dues of SEBs are now monetized by UDAY bonds. But the liability still rests in the books of the state. One needs to add this to get a clear picture. Some creative accounting too There are other indirect accretions to the fiscal deficit that are not recorded. ONGC buying out the government stake in HPCL and making borrowing for the same is the fiscal deficit. Similarly, parking food grain dues to the tune of over Rs.1.50 trillion in the books of FCI is also a virtual accretion to the fiscal deficit. Then there is the oil subsidy which tends to be normally passed on partially to the OMCs. If all these are added up, the fiscal deficit of the government would be much higher. It is time to get a real picture of the deficit and tune strategy accordingly.

Read the full article

[aapnugujarat1]

Govt to sale Air India & BPCL by March 2020 : FM

Finance Minister Nirmala Sitharaman has said that the government wants the sale process of Air India and oil refiner Bharat Petroleum Corporation Limited (BPCL) to be completed by March 2020. He said that both these works are expected to be completed by early next year. The Finance Minister said that the government will get a profit of one lakh crore from selling these two companies in this financial year. Sitharaman said, “Enthusiasm has been seen in investors even before the commencement of Air India’s sales process.” Last year, investors had not shown much enthusiasm in buying Air India, so it could not be sold. Explain that in view of the decline in tax collection in the current financial year, the government wants to raise revenue through disinvestment and strategic sales. The Finance Minister also said that necessary steps have been taken in time to deal with the economic slowdown and many sectors are now getting out of lethargy. Sitharaman said that the owners of many industries have been asked to improve their balance sheets and many of them are preparing for new investments. The central government is going to sell more than 53% of its stake in BPCL. For this, all preparations have been completed by the government. The net worth of BPCL is currently 55,000 crores. The government aims to raise Rs. 65,000 crore by selling its entire 53.3 percent. Last year, the government pressurized ONGC to acquire HPCL. After this, the government had asked LIC to take over the bank in the last financial year after it did not find an investor for the stranded IDBI Bank. The government has also resorted to exchange traded funds (ETFs) to raise resources under the disinvestment process. In August, Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) stated that Air India’s outstanding fuel bill had gone up to Rs 5,000 crore, which was almost unpaid. The Finance Minister said that he hoped that GST collection would increase with improvements in some areas. Apart from this, tax collection can also increase with reform measures. He said that the decision given by the Supreme Court on Essar Steel has seen a lot of improvement and in the next quarter its impact will be seen on banks’ balance sheets. He said that there has been a change in people as banks have disbursed loans of 1.8 lakh crores during festivals. Sitharaman said, “If the economic situation of consumers was not on track then why would they even consider taking loans from banks? And this is so across the country. Read the full article

[ijtsrd]

Analysing the Impact of Indian Disinvestment Policy on the Basis of Profitability: A Case of Selected Public Sector Units

By Dr. Sudhendu Giri"Analysing the Impact of Indian Disinvestment Policy on the Basis of Profitability: A Case of Selected Public Sector Units"

Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-2 , February 2018,

URL: http://www.ijtsrd.com/papers/ijtsrd8355.pdf

http://www.ijtsrd.com/management/accounting-and-finance/8355/analysing-the-impact-of-indian-disinvestment-policy-on-the-basis-of-profitability-a-case-of-selected-public-sector-units/dr-sudhendu-giri

open access journal of management, call for paper chemistry, ugc approved journals for management

As the Disinvestment took its final shape and implemented in the year 1991 formally by then Finance Minister Dr. Man Mohan Singh. The implication is yet to be tested about its successful implementation. Present paper is an attempt to test the Analytical Impact of Indian Disinvestment Policy on Selected Public Sector Undertakings(PSUs) in terms of Profitability, which is the sound indicator whether these undertakings outperformed or not. Several Indicators are used to test the Hypothesis which include Return on Sales Ratio, Return of Assets Ratio and Return on Capital Employed. Profitability Ratios are also computed after considering the Profit After Tax Basis. The final result shows a significance change in some trends in PSUs like ONGc and BHEL and others also got impacted by the Disinvestment drive.

[ways2capitalreview-blog]

Ways2Capital Reviews : Broker Radar For August 3

Ways2Capital Reviews : Broker Radar For August 3

JP Morgan on ONGC:

Maintained ‘Overweight’ with a price target of Rs265.

Second-highest net realisation drives Ebitda beat.

Net profit impacted by lower other income and higher tax.

Debt for acquisitions has declined and should fall further.

Expect sequential pickup in crude production and full benefit of rupee depreciation to flow.

CLSA on Indiabulls Housing:

Maintained ‘Buy’; raised price…

[rdagade]

Petroleum and Diesel Retail Market

Global Petroleum and Diesel Retail Market was valued US$ xx Bn. in 2019 and the total revenue is expected to grow at 6.73% through 2019 to 2027, reaching US$ xx Bn.

Market Dynamics

The report covers an in-depth analysis of COVID 19 pandemic impact on Global Petroleum and Diesel Retail Market by region and on the key players’ revenue affected till July 2020 and expected short term and long-term impact on the market.

Petroleum and diesel retail has based on the downstream part of the oil & gas business. The petroleum retail outlet is a setup that proposes a wide variety of items from raw petroleum.

The global market for petroleum and diesel retail is expected to grow significantly in the forecast period, thanks to the booming automobile industry all over the world. Most retail outlets over the world are monitored by countrywide oil organizations of their countries. The drivers with respect to public division units can be categorized into fiscal drivers, standards of security, environmental policies and regulations. On the other hand, instability in the costs of raw petroleum is hampering petroleum and diesel retail market opportunities to an extent.

Due to the Covid-19 pandemic, domestic demand for diesel, petrol, jet fuel and shipping fuel has dropped by over 10% in the first two weeks of March even though the worldwide market for oil remained favorable for Indian customers with sharp fall in both petroleum and crude product costs.

The MMR reports cover key developments in the petroleum and diesel retail market as organic and inorganic growth strategies. Various companies such as Royal Dutch Shell Plc., Reliance Industries Ltd, Saudi Aramco and others are involved in adopting sustainable strategies to gain competitive edges such as new product launch, product up-gradation and collaborative agreements.

The average price of diesel around the globe is US$ 0.89 per litre. Though, there is a substantial difference in these costs among economies. As a general rule, richer economies have higher costs while poorer economies and the countries that produce and export oil have significantly lower costs. One important exception is the US which is an economically advanced country but has low gas costs. The differences in costs across economies are owing to the several taxes and subsidies for diesel.

The report also offers a brief analysis of the major regions in the petroleum and diesel retail market, Europe, North America, Latin America, Asia-Pacific, and the Middle East & Africa. Asia-Pacific Petroleum and Diesel Retail Market was valued US$ xx Mn. in 2019 and is expected to reach a value of US$ xx Mn. by 2027, with a CAGR of 56% during 2019-2027. This is attributed to a growing population combined with the rising popularity of automotive in countries in APAC, Such as China and India are likely to propel the investments in the growth of existing and new retail shops.

The Indian government has plans to build new petroleum retail openings in Karnataka state which are projected to drive the demand for petroleum and diesel retail shops in the APAC.

Europe also plays important roles in the petroleum and diesel retail market, with a market of US$ xx Mn in 2018 and will be US$ xx Mn in 2026, with a CAGR of xx%. The U.K. petroleum and diesel market have over 200 establishments that are working with refining, production, distribution, and marketing activities of various products.

The objective of the report is to present a comprehensive analysis of the Global Petroleum and Diesel Retail Marketincluding all the stakeholders of the industry. The past and current status of the industry with forecasted market size and trends are presented in the report with the analysis of complicated data in simple language. The report covers all the aspects of the industry with a dedicated study of key players that includes market leaders, followers and new entrants. PORTER, SVOR, PESTEL analysis with the potential impact of micro-economic factors of the market has been presented in the report. External as well as internal factors that are supposed to affect the business positively or negatively have been analyzed, which will give a clear futuristic view of the industry to the decision-makers.

The report also helps in understanding Global Petroleum and Diesel Retail Marketdynamics, structure by analyzing the market segments and projects the Global Petroleum and Diesel Retail Marketsize. Clear representation of competitive analysis of key players by Application, price, financial position, Product portfolio, growth strategies, and regional presence in the Global Petroleum and Diesel Retail Market make the report investor’s guide.

For more information visit@ https://www.maximizemarketresearch.com/market-report/petroleum-and-diesel-retail-market/69381/

Scope of the Global Petroleum and Diesel Retail Market

Global Petroleum and Diesel Retail Market, By Operator

• Public • Private Global Petroleum and Diesel Retail Market, By License Type

• Company owned and dealer operated • Company owned company operated • Dealer owned and dealer operated Global Petroleum and Diesel Retail Market, By Product

• Diesel • Petroleum Global Petroleum and Diesel Retail Market, by Region

• North America o US o Canada • Europe o UK o France o Germany o Italy o Spain o Norway o Russia • Asia Pacific o China o India o Japan o South Korea o Australia o Malaysia o Indonesia o Vietnam • South America o Mexico o Brazil o Argentina • Middle East and Africa o GCC Countries o South Africa o Nigeria o Egypt Key players operating in the Global Petroleum and Diesel Retail Market

• Royal Dutch Shell Plc. • Saudi Aramco • Reliance Industries Ltd. • Exxon Mobil Corporation • ONGC • Halliburton Corporation • Statoil • Gazprom • Total SA • British Petroleum Ltd • Chevron Corp. • Pemex • Sinopec • Lukoil

This report submitted by Maximize market Research Company

Customization of the report:

Maximize Market Research provides free personalized of reports as per your demand. This report can be personalized to meet your requirements. Get in touch with us and our sales team will guarantee provide you to get a report that suits your necessities.

About Maximize Market Research:

Maximize Market Research provides B2B and B2C research on 20,000 high growth emerging opportunities & technologies as well as threats to the companies across the Healthcare, Pharmaceuticals, Electronics & Communications, Internet of Things, Food and Beverages, Aerospace and Defense and other manufacturing sectors.

Contact info:

Name: Lumawant Godage

Organization Address: MAXIMIZE MARKET RESEARCH PVT. LTD.

Email: sales@maximizemarketresearch.com

Address: Omkar Heights, Sinhagad Road, Manik Baug, Vadgaon Bk,Pune, Maharashtra 411051, India.

Contact: +919607195908

[sporadicwinnersong]

Banking on the LIC lifeline

IDBI Bank joins the likes of PNB and Canara Bank, among other PSBs, in the insurance behemoth's portfolio. Will this collective stress hurt policyholders?

When the Insurance Regulatory and Development Authority of India (Irdai) met on June 30 at its headquarters in Hyderabad to discuss a possible move by the Life Insurance of India (LIC) to raise its stake in one of the country’s weakest banks, IDBI Bank, the contours of the meeting and its decisions, were quite evident from beforehand. Under its recently appointed chairman Subhash Chandra Khuntia, Irdai allowed LIC to hold more than 15 percent stake in a particular company, granting an exemption in the regulatory rules for insurance companies. (An approval from the LIC and IDBI Bank boards is awaited.)

This paved the way for LIC to bail out yet another public sector company, adding to a long list of disinvestments that include Hindustan Aeronautics Ltd, General Insurance Company, New India Assurance and Indian Oil Corporation in 2017 and 2018, besides buying stakes in Bhel, ONGC and NTPC earlier. Although these investments have been officially announced, LIC has not disclosed their rationale or impact.

LIC may now decide to infuse capital of nearly ₹13,000 crore into IDBI Bank for a 40 percent stake, with the government’s stake decreasing proportionately. Currently, LIC holds 10.82 percent stake in the bank, while the government holds 80.96 percent; other institutions and the public hold the rest. LIC’s total assets are ₹25 lakh crore (about $385 billion), with a life fund of about ₹23 lakh crore, as of FY17.

Just nine days before the June 30 meeting, the government, through officials in the ministry of finance, had suggested that a decision from LIC to pick up additional stake in IDBI Bank would lie “with independent boards” of both organisations. So, what then was the tearing hurry for LIC to hike its stake in a loss-making bank?

In a family of capital-guzzling public sector banks (PSBs), IDBI Bank received the highest recapitalisation from the government, of ₹12,471 crore, in FY18. What is worrying are its gross non-performing assets (NPAs) of ₹55,588 crore, which form 28 percent of its total advances as on FY18. The bank has reported a net loss for the last three years—widening with each year—to touch ₹8,238 crore on March 31, 2018. LIC’s increased stake in it could mean the government will not need to provide additional recapitalisation, at least for this year.

LIC and IDBI Bank declined to speak to me for this article.

Appealing against the move that might make LIC the promoter of IDBI Bank, the All India LIC Employees Federation has written to its chairman VK Sharma. “It [IDBI Bank] will need significant amount of capital to clean up its books and maintain minimum levels of regulatory capital. Given the precarious situation of NPA in IDBI Bank and the intention of LIC to substantially raise its stake in the said bank, there is contagion risk on the policyholders’ precious savings, which will grossly impact the capability of LIC to serve its policyholders,” the letter says.

“Dumping IDBI Bank on LIC will not be of help to anyone. It is just going to postpone a problem. LIC will have to pay for this in the long term,” says Rajesh Kumar, general secretary of the federation. He argues that investment decisions gone wrong will finally impact the books of the corporation and, in this case, the valuation surplus for LIC. The insurer’s valuation surplus—the money available for distribution to policyholders (as a bonus) after paying expenses and taxes—has fallen by 11.87 percent to ₹44,006.67 crore in FY17, compared to the previous year. 

To ensure proper governance, if a bank or an investor is keen to buy another company, it is usual practice to draw up a proposal and present it to the company’s board, regulators and shareholders. However, it did not happen in this case. “A proposal could have been made to the policyholders. They provide the funds, and the investments are made out of life funds managed by LIC,” says a financial advisor on condition of anonymity. “We have a peculiar situation, where the shareholder has only subscribed ₹200 crore by way of capital, and all the reserves that are a part of net worth belong to the policyholders.”

Insurance companies make investments to generate returns and increase its actuarial surplus every year. This ensures that their liabilities—claims made by policyholders—are always met. However, in the case of LIC, which was formed in 1956 by nationalising around 245 companies and consolidated into a single entity by an Act of Parliament, its policies are sovereign guaranteed.

Following the collapse of state-run mutual fund US-64 in 2001, policyholders were worried that LIC would go the same way. “Concerns regarding the solvency of LIC were being raised since it focussed largely on selling products that guaranteed [assured] returns,” the financial advisor says. In 2003, the LIC board appointed Deloitte India to conduct a management audit, focusing on assessing financial viability, investment management and capital requirement for the organisation. While solvency fears of the LIC were dispelled, it was found to be needing capital.

It remains imperative for LIC to invest prudently and manage returns well. But “the benchmark performance of its investment portfolio is not publicly available and therefore there is no basis available to examine the robustness of its investment decisions. Very often LIC has made its funds available for federal and state government projects and public-sector entities,” the advisor adds.

IDBI Bank’s genesis was in 1964 as a development financial institution called IDBI, whose ownership was transferred from the Reserve Bank of India (RBI) to the government in 1976. In 1992, when new banks were created, IDBI applied to diversify into commercial banking, and, between 2003 and 2008, became a corporate entity operating under the Companies Act.

What has hurt IDBI Bank the most in recent years is its institutional book, which was largely focussed on infrastructure. “If it was a bank in the first place, the proportion of lending towards infrastructure would have been smaller. The other benefits of becoming a bank—building deposits, a branch network, a retail franchise or becoming a diversified lender—came later,” says Udit Kariwala, associate director (financial institutions), India Ratings & Research, part of the Fitch Group. He believes that in the new set-up, IDBI Bank’s management may not be from LIC; the insurer could, instead, place a nominee on the bank’s board and not directly manage daily operations.

Kapil Mehta, co-founder of insurance broker SecureNow, believes that the deal could emerge as a sound bet. “Across the world, larger insurers have started small and then grown and built on their investments. In this case, the challenge will be to turn IDBI Bank around. LIC will have to play a more active role in its management.”

The first step would be to start cleaning up the bank’s books, which, analysts say, could take more than six to seven quarters. “The bank will need to clean up its balance sheet further by writing off a few more large bad loans accounts,” says Asutosh Mishra, senior research analyst, Reliance Securities. “One option could be to transfer these loans into an asset reconstruction company or alternate investment funds.

However, LIC’s concerns go well beyond IDBI Bank: It owns stakes in 21 PSBs, most of which are listed under prompt corrective action, which is a monitoring and control mechanism introduced by the RBI to take remedial action against weak banks. Some of these banks have shown a sharp drop in their stocThe bad news is that for PSBs, slippages towards bad loans are nowhere close to an end. Kariwala of India Ratings says the total expected corporate slippages over the next four quarters (July 2018 onwards) could be in the range of ₹1.2 to 1.4 lakh crore, that too only relating to the corporate book. Some more slippages could come from the small and medium enterprises and retail books.

An independent Fitch study shows that nearly half of India’s PSBs are at a risk of breaching their minimum capital triggers, indicating the need for further recapitalisation.

LIC has a 12.24 percent stake in Punjab National Bank (PNB), which is reeling from a ₹14,357-crore fraud. Analysts say that a sharp rise in stressed assets and impending provisions (on gratuity, investment depreciation) will be concerns going ahead in FY19. “PNB could take some more time to come out of its troubles. The government will attempt to do its best to turn things around,” says Mishra of Reliance Securities.

In the case of Canara Bank, where LIC has a 9.47 percent stake, it will need to make changes in their business strategies. In FY18, it reported a loss of ₹4,222 crore, against a profit of ₹1,122 crore in FY17, hurt by higher provisions for bad loans. The bank’s gross NPAs were not too far behind IDBI Bank’s, at ₹47,468 crore by March-end. Canara Bank has now approved a fund raising plan for ₹7,000 crore for the current financial year, to fund credit growth.

According to a Motilal Oswal post-Q4FY14 earnings report, the net stress on the books remains high, and the bank will face high credit costs that would keep returns subdued. “Given weak operating profitability, we would wait and watch developments in asset quality,” wrote Anirvan Sarkar of Motilal Oswal, in a note to clients in May.

But even while other banks struggle, the attention for now will be on IDBI Bank. Ashvin Parekh, managing partner of Ashvin Parekh Advisory Services, says, “Time will tell whether the investment made by LIC is a good one. The answer lies in the price that LIC will be required to pay for the equity.”

As of now, LIC has not disclosed the valuations, or the assumptions made, towards the price. The requirement is for an independent body or a judicial system, like the Comptroller and Auditor General, to examine the investments made by LIC, or where blatant exceptions have been provided. This would make the LIC board and, in turn, the government, more accountable for their decisions. Till then, one can only hope that LIC takes on the role of an active fund manager for its investments.k prices in the past four years, thereby affecting LIC’s profitability in these investments.

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Sensex Opens in Green; ONGC & M&M Gain

Asian stock markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.3% while the Hang Seng is down 0.1%. The Shanghai Composite is trading down by 0.6%. Meanwhile, the S&P 500 rose to its highest in more than five months and the Dow climbed for a fifth session on Wednesday as solid earnings boosted financial and industrial stocks and reinforced expectations for a strong second-quarter reporting season.

Back home, India share markets opened the day on a positive note. The BSE Sensex is trading up by 94 points while the NSE Nifty is trading up by 7 points. The BSE Mid Cap index opened down by 0.3% while BSE Small Cap index opened down by 0.1%.

As the Sensex keeps soaring and the BSE Smallcap keeps bleeding, Our, Co-head of Research & Editor of StockSelect, Tanushree Banerjee, exhorts all our readers, to slightly shift their goal post. It's a small tweak that can allow you to buy stocks with the maximum upside at minimum risk.

Which Index Will Allow you to Stay 'In the Money'?

Her goal post is to recommend stocks that will stay in the money (consistently reasonably profitable) for a long period of time.

Here's an excerpt of what she wrote in The 5 Minute WrapUp recently:

So, you have to focus on increasing the size of your capital a wee bit every year. And you have to be very careful not to lose big. If both are done well, you won't need headline grabbing stocks to create a lot of wealth. I've never considered it a legitimate goal to recommend stocks at the bottom. You can't really know where the bottom is, other than in retrospect. That means the only way to grow your capital a bit, without losing a lot, is to keep your margin of safety in valuations intact. Fortunately, several safe stocks, in which I sought more margin of safety in valuations, until a few months back, are a buy a now. And I'm sure, StockSelect subscribers who received several special alerts over the past few days, aren't complaining.

Moving on...The rupee is currently trading at 68.57 to the US$.

Sectoral indices have opened the day on a mixed note with consumer durables stocks and automobiles stockswitnessing maximum buying interest. While, healthcare stocks & realty stocks have opened the day in red.

Airline Stocks opened the day on a mixed note with SpiceJet & Jet Airways leading the gainers. As per a report by ICRA, the domestic airline industry is expected to post losses to the tune of Rs 36 billion in the current fiscal on rise in crude oil prices and falling rupee.

The losses would come despite around 15% expected average annual growth in passenger traffic over the medium-term due to conducive factors, support from regulatory environment and development of new airports.

Higher crude prices, due to which most airlines saw a decline in their yields during the second half of FY18, resulted in a higher than estimated aggregate loss for the domestic aviation industry to around Rs 24-25 billion in the previous fiscal.

According to Icra, the ATF price was 35.4% higher as on 31 March 2017, against the 31 March 2016 level, impacting the financial performance of the airlines during the year due to their inability to pass on the increased cost to the customers.

While the jet fuel prices declined by about 8% to Rs 51,640 per kilo litre (kl) as on September 2017, partly on account of the appreciation of the rupee, it witnessed a significant year-on-year increase of 12.6% to Rs 63,162 per kl as on March 2018.

Overall, the average ATF prices during FY18 were higher by 10.4%. This is evident from the increase in fuel cost per available seat per kilometre (ASKM) for the three listed airlines during FY18, Icra noted.

While the strong passenger traffic growth will allow airlines to improve yields to offset cost pressures to some extent, the increase may not be adequate, the agency said.

Therefore, the RASK (revenue per available seat kilometre) CASK (cost per available seat kilometre) spread is expected to get squeezed.

Furthermore, the aggregate industry debt level is expected to increase to about Rs 665 billion by March 2019 as some airlines have large capacity expansion plans, which may be either owned (through debt funding) or on operating lease.

The ASKM growth in this fiscal is estimated to be around 15-17%, Icra said adding the key driver for the industry capacity growth continues to be the sizeable order backlog of the industry.

In another development, JK Tyre & Industries Ltd reported a consolidated net profit of Rs 642.4 million for the first quarter ended 30 June, mainly driven by robust sales.

The company had posted a net loss of Rs 1172.1 million in the year-ago quarter.

Revenue from operations during the first quarter stood at Rs 24.4 billion. It was at Rs 19.3 billion in the same period last fiscal.

The two figures are not comparable as revenue from operations is net of taxes after GST implementation in July 2017, while in the year-ago quarter it was inclusive of excise duty, the company stated.

Reportedly, there was higher volume across categories, especially in truck/bus radial, passenger car and light truck radials.

Further, the company stated that, during the quarter, the company's subsidiaries namely, JK Tornel, Mexico and Cavendish Industries Ltd have performed well.

Moreover, labour restructuring completed at JK Tornel last year is reaping good dividend which has added to the over-all profitability.

JK Tyre & Industries share price opened the day up by 1.8%.

To get more updates on share market, click here.

This article was originally published in English at www.equitymaster.com

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After big gains, the rally might continue in the coming truncated week but largely there could be volatility and rangebound trade, experts suggest.

The week has gone by was great for the market as not only equity benchmarks, but also broader markets ended at fresh record closing highs, driven by technology, metals, auto, FMCG and PSU banks stocks. The BJP’s victories in the Gujarat and Himachal Pradesh Assembly elections lifted sentiment. Global cues also lent support after the US passed a bill that slashes the corporate tax rate in the country to 21 percent from 35 percent.

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Benchmark indices added more than 3 percent gains in three consecutive weeks while for the passing week, the 30-share BSE Sensex gained 1.4 percent; and the 50-share NSE Nifty rallied 1.55 percent to close a tad below the psychological 10,500-mark ahead of the expiry of December futures & options contracts next week. The index hit an intraday record high of 10,501.10 on Friday.

Short covering could be one reason for the rally as the rupee has been rangebound around 64-64.50 against the US Dollar during the month despite FII selling, and rising bond yields and crude oil prices.

The broader markets outperformed frontline indices, with the Nifty Midcap index, surged 4.4 percent and BSE Smallcap gained 4.5 percent. On the other side, the volatility has also gradually been reduced especially after the Gujarat elections, with India VIX falling to 11.5875 from 16.4075 in the previous week.

After big gains, the rally might continue in the coming truncated week but largely there could be volatility and rangebound trade, experts suggest.

One reason for consolidation would be the December F&O expiry on Thursday and second would be the low volumes expected at FIIs desk and lack of cues due to Christmas holidays.

Experts expect stock-specific action to continue.

Overall, 2017 is expected to end with around 28 percent gains on the Nifty, though there could be consolidation in the last week of the year.

Amar Ambani of IIFL Private Wealth feels with FIIs now in vacation mode, subdued index action is likely and the focus on broader markets is expected to stay.

Dilip Bhat, Joint MD, Prabhudas Lilladher said, “The momentum that has been built up following Gujarat Elections has been complemented by global factors as well. So, the momentum is expected to continue. However, for the Nifty to move above 10,700 and 10,800, it will need the support of strong earnings growth as well as GDP growth.”

Indian and global markets will remain shut on Monday for Christmas.

Here are 10 things to watch out for in the coming truncated week:-

F&O Expiry

The Nifty futures and options contracts will expire on Thursday and trading positions will be rolled over to January the series.

On Friday, Maximum Put open interest was seen at 10,000 strikes followed by 10,400 while maximum Call OI was at 10,500 strikes followed by 10,600 strikes.

Fresh Put writing was seen at 10,400, 10,450 and 10,500 strikes while fresh Call writing was seen at 10,550 and 10,650 strikes.

As volatility is largely expected in the coming week, the 10,400 levels on the Nifty could be key to watch out for and the expiry is likely around 10,400-10,500 levels.

Amit Gupta of ICICIdirect said, “The Nifty50 is expected to consolidate above 10,400 in the coming week. Eventually, it should be able to move towards 10,600.”

The shift in Put writing, as well as Call writing to a higher strike, suggests shifting of the support. Option band signifies a broader trading band between the range of 10,400 to 10,600 for next coming sessions, sources said in a report.

Winter Session of Parliament

The ongoing winter session of Parliament will be important to watch out for. The Rajya Sabha has been in a deadlock since the beginning of the session as the Congress is demanding that Narendra Modi apologizes for allegedly insulting his predecessor Manmohan Singh during the Gujarat election campaign. So all eyes will be on how the government is able to pass the important Bills listed on its agenda.

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The Goods & Services Tax (Compensation to States) Ordinance, 2017, Insolvency & Bankruptcy Code (Amendment) Ordinance, 2017, Indian Forest (Amendment) Ordinance, 2017, Motor Vehicles (Amendment) Bill, 2016, and Muslim Women (Protection of Rights on Marriage) Bill, and Prevention of Corruption (Amendment) Bill, 2013 are some of the important bills expected to be taken up.

Auto Sector

Auto stocks will remain in focus in the coming week, especially on Friday ahead of December sales data due on January 1.

Sales data have been good so far and there was no disruption due to GST rollout.

The Nifty Auto index rallied more than 30 percent in 2017 and gained over 4 percent in the passing week.

Oil Sector

Oil stocks will be in focus on Tuesday as crude oil prices are near their highest levels since 2015 after comments from Saudi Arabia and Russia stating that any exit from crude output cuts would be gradual.

Oil marketing companies (HPCL, BPCL, and IOC) might be under selling pressure but oil exploration firms (ONGC and Oil India) may strengthen further.

ONGC rallied 3 percent on Friday following an increase in crude oil prices. Brent crude oil futures ended above USD 65 a barrel last week.

If crude oil rises further from here on then that will have a major impact on the fiscal deficit and economic growth as India imports around 80 percent of oil requirement.

Macro Data

On Friday, infrastructure output data for November (which was at 4.7 percent in October) and foreign debt for Q3 (USD 485.8 billion in the previous quarter) will be released.

Foreign Exchange Reserves for the week ended December 22 (which was at USD 401.39 billion in the previous week) will also be announced on Friday.

Technical Outlook

The Nifty50 formed a robust bull candle after two bearish candles which are a bullish sign, experts said. Investors should remain long with a stop loss below 10,426 levels, they advised.

The near-term trend of Nifty is positive as per smaller and larger timeframe (like daily and weekly) and more upside could be expected in the next couple of weeks. However, due to year end, there is the possibility of gradual up move amidst range bound action for next week, sources said.

The hope is that on Tuesday the market is expected to open with a gap-up and continue with the momentum. If that happens, then 10,700-10,750 should be immediate targets.

FIIs and DIIs Flow

The money flow from foreign institutional investors could be slowed down in the coming week as FIIs generally go on leave during the last week of the year because of the Christmas holidays. However, domestic inflow is expected to continue.

Domestic institutional investors were net buyers to the tune of around Rs 3,500 crore in the passing week while FIIs have net sold nearly Rs 3,000 crore worth of shares.

Stocks in Focus

Corporation Bank will also be in focus as its board of directors has approved additional fundraising of Rs 300 crore in one or more tranches with greenshoe option.

EID Parry may react positively as the board has approved the sale of its biopesticides business as a going concern by the way of slump sale to Coromandel International for Rs 303 crore. It also approved the sale of an entire stake in Parry America Inc for Rs 35.4 crore.

Reliance Communications will be in focus as a media report indicated that Reliance Jio emerged as the highest bidder for the company’s assets.

Global Cues

The minutes of the Bank of Japan monetary policy meeting will be released on Tuesday. On Thursday, Japan’s industrial production data for November and US initial jobless claims for the week ended December 22 will be announced.

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Energy News Monitor | Volume XIII: Issue 33

ENERGY MONITOR

ENERGY NEWS MONITOR

ENM

HIGH EXPECTATIONS REVITALISE THE INDIAN OIL SECTOR

Monthly Oil News Commentary: December 2016 – January 2017

India

India’s petroleum consumption has been in the limelight for some time now. This month was no different. According to the Ministry of Petroleum, India’s fuel consumption is expected to touch 200 MT FY17. In FY16 India’s fuel consumption grew at 10.9 per cent to 183.5 MT. In 2016 consumption of petroleum products was 750 MT in the United States and 500 MT in China. It was also reported that the government was in advanced stages of awarding oil and gas blocks under the new HELP. The launch of the national sedimentary data repository is expected to provide the new exploration policy an additional thrust and help to ramp up output. In FY17 a 60 MTPA refinery is expected to be built by the three PSU oil firms, IOC, BPCL and HPCL on the West coast. The companies have already signed an initial pact to construct the refinery at a cost of $30 billion. IOC will have the major share of 50 percent.  The oil ministry concluded the auction of 67 Discovered Small Fields in FY16 where a bulk of the participation came from new entrants. The auctions witnessed 134 e-bids from 42 companies. One of the expectations in the oil industry is an increase in oil prices on account of the OPEC decision to cut output by 1.2 MBPD. Some expect a decrease in excise duty on fuel in the budget for FY18. An increase in petroleum prices is also expected to increase the petroleum subsidy budget for FY18 and also affect oil company balance sheets.

Some of the milestones in the oil industry for FY17 included Russia’s oil major Rosneft’s decision to acquire Essar Oil and its Vadinar refinery at over $10 billion and the launch of Ujjwala Yojana that aimed to provide 50 million LPG connections to BPL families with a support of Rs 1,600 per connection in the subsequent three years. The government was reported to have ruled out the system of subsidising petroleum but has said that it may reduce excise duties if oil prices continued to increase.  Though the government has claimed that it has passed on 50 percent of the reduction in oil prices to consumers the retail price of petroleum products has remained the same as it was when crude oil price was three times its current prices. When oil prices fell in the second half of 2014 and early 2015, the government hiked excise duty on petrol and diesel nine times to increase its take that helped the government meet its revenue and fiscal deficit targets. In all, it raised excise duty on petrol by Rs 11.77 a litre and that on diesel by Rs 13.47. For every dollar increase in the price of a barrel of crude oil India’s import bill increases by over $1.3 billion. India spent $63.96 billion on crude oil import in FY16, about half of $112.7 billion outgo in the previous fiscal and $143 billion in FY14. For the current fiscal, the import bill has been pegged at $66 billion at an average import price of $48 per barrel. HSBC forecast that India’s trade position of petroleum products in the country’s imports could fall from the current second place to third place between 2015 and 2030. Petroleum products fall from India’s second largest import to third largest over the forecast period, behind industrial machinery and mineral manufactures. This is in line with the government’s focus to raise the share of manufacturing in GDP to 25 percent from 14 percent currently.

Rest of the World

The IEA said that global oil prices would witness much more volatility in 2017 even if markets rebalance in the first half of the year if output cuts pledged by producers are implemented. OPEC agreed to cut output by 1.2 MBPD to 32.5 MBPD for the first six months of 2017, in addition to 558,000 bpd of cuts agreed by independent producers such as Russia, Oman and Mexico. The IEA expects US shale oil to increase production this year. According to a poll by Reuters oil prices will gradually rise toward $60/bbl by the end of 2017 with further upside capped by a strong dollar, a likely recovery in US oil output and possible non-compliance by OPEC with agreed cuts. Brent crude futures is expected to average $57.43/bbl in 2017. The current forecast is marginally higher than the $57.01 forecast in the previous survey. Average Brent prices are expected to improve with each subsequent quarter, starting with $53.88 in the first, to $56.61 in Q2, $58.79 in Q3 and $59.68 in the fourth quarter. Brent has averaged about $45 per barrel in 2016.

NATIONAL: OIL

India hopes to complete oil storage talks with UAE

January 24, 2017.

India hopes to conclude negotiations with the United Arab Emirates (UAE) to fill its strategic oil reserves at Mangalore, in southern India, the foreign ministry said. Oil-rich Abu Dhabi has been in discussions to finalise a deal to lease part of India’s crude oil storage facilities. India, which imports about 80 percent of its oil needs, is building emergency storage in vast underground caverns to hold some 36.87 million barrels of crude as it seeks to hedge against energy security risks.

Source: Reuters

Centre sends 35 tonne petroleum products to crisis-hit Manipur

January 24, 2017.

The Centre has dispatched 35 tonne of petroleum products to Manipur to tackle the crisis arising out of the 82-day economic blockade on a national highway which has crippled normal life in the state. While 35 tonne petroleum and diesel were sent through an Indian Airforce C-17 Globemaster plane, 70 tonne more petroleum products will be sent soon. The move came two days after an inter-ministerial meeting, chaired by Union Home Minister Rajnath Singh and attended by Oil Minister Dharmendra Pradhan, reviewed the stock of food grains and petroleum products in Manipur and how to replenish the supply.

Source: The Economic Times

NHAI eyes LPG bottling plant to expand highway

January 24, 2017.

The liquefied petroleum gas (LPG) bottling plant set up by Hindustan Petroleum Corp Ltd (HPCL) on the direction of former Union finance minister and Hazaribag MP Yashwant Sinha at Chano under Baheri panchayat of Hazaribag Sadar block now faces a major hurdle. The National Highway Authority of India (NHAI) has selected a major portion of the land for conversion of Hazaribag- Barhi section of NH 33 into four lanes. The present land measuring 5.58 acres was provided to HPCL by Ranchi Industrial Area Development Authority (RIADA). Meanwhile, chief regional manager of HPCL Gautam Mahuli said that HPCL will not hand over even an inch of land of the existing plant to NHAI. He said that they have already taken up the matter with RIADA to provide more land to them for expansion of the existing bottling plant at Hazaribag. The plant meets the LPG requirements of consumers from Hazaribag, Ramgarh, Koderma, Rajmahal Palamau and Sahebgunj. Mahuli said due to non-availability of land, HPCL is only able to supply 3,000 LPG cylinders per day, which is less as per the statutory regulation of the Government of India. He said that HPCL can shift the present plant from Hazaribag to RIADA-acquired land in Barhi, however, it will take at least four years to complete the project. During this period, consumers in the concerned districts will face serious problems and will not be able to meet their fuel requirement, he said.

Source: The Economic Times

RBI may consider extending deadline for reduced MDR at petrol pumps: Oil Minister

January 24, 2017.

Oil Minister Dharmendra Pradhan said RBI (Reserve Bank of India) may consider extending deadline for reduced Merchant Discount Rate (MDR) charges at petrol pumps beyond March 31 to promote digital transaction. The RBI had decided to slash MDR charges on payments made through debit cards and do away with levies on small transactions through mobile phones and Internet from January 1 to March 31. The MDR for debit card payments, including for payments made to the government, has been capped at 0.25 percent for transactions up to Rs 1,000 and 0.5 percent between Rs 1,000-2,000, the RBI said. The existing MDR cap is 0.75 percent for transactions up to Rs 2,000 and 1 percent for over Rs 2,000. However, there is no RBI cap on MDR on credit card payments.

Source: The Economic Times

Amarinder promises cheaper power, petrol, LPG in Punjab

January 23, 2017.

Punjab Congress president Amarinder Singh promised cheaper petrol and liquefied petroleum gas (LPG) besides 10% reduction in electricity duty throughout the state. Elaborating on the promise to bring about parity in petrol and LPG prices with Chandigarh and neighbouring states, he said. In order to cut down on the cost, he said, taxes for petrol pumps will be rationalised to make them at par with others. This, he claimed, will help bring down the petrol price by about Rs 3 per litre. He said LPG price would come down to Rs 15 per cylinder through the initiative. He said the decision on reduction of petrol and LPG prices was based on the feedback received from the people, particularly industrialists who said the higher rates of these commodities were impacting their business in Punjab.

Source: The Economic Times

State oil firms use 90 percent capex on govt nudge

January 23, 2017.

State oil firms have spent 90% of this fiscal’s capital expenditure in the first nine months, with ONGC Videsh Ltd (OVL), Oil India Ltd (OIL) and Indian Oil Corp (IOC) having exceeded their annual targets already. The government has nudged state firms to invest big and quick to boost jobs and economic growth in the country as private investment has languished. Relentless pressure from the government to pay higher dividend or to return unused cash to shareholders has also accelerated state firms investment in projects. Between April and December, they spent Rs 78,000 crore on drilling new oil wells, building processing platforms, expanding refining and storage capacity and fuel supply networks. The target for the full year is Rs 88,000 crore. OVL has spent Rs 16,519 crore, more than its annual target of Rs 14,843 crore as it purchased stake in some fields and contributed its share of capex in others. OIL’s capital spending of Rs 9,300 crore is more than double that of its annual target. With an investment of Rs 15,423 crore, IOC has just surpassed its annual target in nine months. ONGC has been relatively slow in making the planned expenditure. It has spent about Rs 19,000 crore, against an annual target of Rs 29,000 crore. Petroleum products consumption has grown 8.8% so far this fiscal year aided by lower prices and faster economic expansion in the country. To cater to the growing fuel demand, state firms have been adding refining capacity and building deeper networks of supplies across the country.

Source: The Economic Times

Petrol prices cross 2013 peak levels but political opposition missing

January 22, 2017.

In February 2013, opposition parties, notably the Bharatiya Janata Party (BJP), took to the streets in protest as the price of petrol in the national capital spiralled to Rs 69.06. Petrol prices in the national capital have shot up to Rs 71.14. That for diesel is Rs 59.02, against Rs 48.16 in February 2013. Even kerosene and cooking gas prices have jumped — Rs 18.54 per litre against Rs 14.96, and Rs 585.00 per cylinder against Rs 410.50. More significantly, the petrol and diesel prices have surged past February 2013 levels despite the fact that crude oil is today ruling at less than half the rates prevailing then. Data shows that the Indian basket of crude oil — which comprises around 70 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent — was $114 per barrel in early 2013. Today, it is at $54. True, the rupee-dollar exchange rate today is not as favourable as it was then — around Rs 68 to a dollar versus Rs 54.30 at that time. But even in rupee terms, crude oil prices are ruling at half the rates prevailing then — around Rs 3,625 per barrel now, versus Rs 6,210 at that time. In fact, data with the state-run oil sector think tank Petroleum Planning and Analysis Cell shows that prices of petroleum prices are among the steepest in India vis-a-vis neighbouring countries, save for kerosene and cooking gas in some cases, due to the huge subsidy involved. In terms of Indian rupees, retail price of petrol, for example, is Rs 43.70 in Pakistan, Rs 54.18 in Sri Lanka and Rs 75.42 in Bangladesh. Even in Nepal, which depends on India for a transit point for its entire petroleum needs, which adds much to the transportation cost, the price is lower at Rs 64.38. For diesel, the price is Rs 49.60 in Pakistan, Rs 43.99 in Sri Lanka, Rs 57 in Bangladesh and Rs 49.16 in Nepal. A look at the break-up of how transport fuels are priced — or taxed — reveals the high retail tariff for these products in India. Such data is drawn from what is called price build-up of petrol and diesel, available with the state-run oil marketing companies. The oil marketing companies, in turn, charged Rs 31.94 per litre to the dealers — that is the petrol pumps. The rest is what one paid in taxes and levies. In the national capital, a consumer of petrol today pays Rs 21.48 per litre as excise duty — this is nearly 75 percent of the refinery transfer price, or the price paid by the oil marketing companies like Indian Oil Corp and Bharat Petroleum Corp to the refineries.

Source: The Economic Times

Impartial work on UPA’s LPG scheme fuels BJP’s rise in UP

January 20, 2017.

Another UPA government effort leveraged by Narendra Modi government appeared creating ripples for its impartial implementation in poll-bound Uttar Pradesh (UP). Oil Minister Dharmendra Pradhan has been aggressively pushing Ujjwala Scheme in relatively poor states like UP, Bihar, West Bengal and Odisha. Pradhan’s push has meant maximum enrolment in UP since the scheme was launched by PM in May last year from Ballia. About 50.26 lakh new LPG connections have been issued to the poor in UP since May last year. This works out to 12,500 households getting the massively subsidised Ujjwala LPG cylinders in each assembly segments across the state. Ujjwala LPG connections also have fewer critics compared to similarly targeted social outreach schemes like Indira Aawas Yojana or the food ration cards of yesteryears that were marred by massive errors of inclusion of ineligible beneficiaries and exclusion eligible beneficiaries. The oil ministry said it was made possible by leveraging the Socio-Economic Caste Census (SECC), popularly known as BPL census, carried out by the previous UPA regime during 2011-13. The data with the oil ministry suggest there were at least 10 districts in Uttar Pradesh – Sitapur, Kushinagar, Allahabad, Lakhimpur-Kheri, Bahraich, Unnao, Gonda, Gorakhpur, Hardoi, Kanpur Dehat — where more than none lakh new LPG cylinder connections was distributed since the launch of scheme in May last year.

Source: The Economic Times

Saudi oil giant likely to set up refinery in AP

January 19, 2017.

Global giant in the oil sector, Saudi Aramco has hinted at setting up a refinery in Andhra Pradesh (AP). The Saudi Arabian oil major also evinced interest in turning coastal AP as one of its major bases but this plan will move forward only after the Centre okays the proposal. AP Chief Minister N Chandrababu Naidu held negotiations with Aramco president and CEO Amin al-Nasser, and extracted a positive response on making investments in AP. The CM promised Naseer to allot land and water without any hassle for the mega refinery. Naidu told Nasser that his government is firm on completing the mega petro-chemical corridor along the coast. Articulating elaborately on the oil reserves in the Krishna-Godavari basin, Chandrababu invited Aramco to invest in AP. Nasser said that Aramco would collaborate with the government in India first and study the possibility of partnering with Andhra Pradesh in setting up the refinery.

Source: The Times of India

NATIONAL: GAS

GSPC looks at financial restructuring post ONGC deal

January 22, 2017.

After selling its stake in KG gas block to Oil and Natural Gas Corp (ONGC) for $1.2 billion, Gujarat State Petroleum Corp (GSPC) is mulling a big financial restructuring including trimming stake in some business like liquefied natural gas (LNG) and portfolio readjustment. The Gujarat government firm, which is saddled with nearly Rs 20,000 crore of debt, has a large gas trading business, gas transmission pipelines and city gas business. GSPC has already offered to IOC its entire 50% stake in Rs 4,500 crore LNG import terminal being set up at Mundra in Gujarat in partnership with Adani Group. The 5 million tonne a year import terminal is 90% complete. Asked if divesting stake in other ventures is an option. Within the country, GSPC has working interest in 23 blocks, out of which 16 blocks are producing and balance 7 are under exploration/development stage.

Source: Livemint

RIL writes down $6 bn for new accounting standards

January 18, 2017.

Reliance Industries Ltd (RIL) has written down almost $6 billion (Rs 39,570 crore) of investments in its Krishna Godavari Basin D6 block and US shale gas assets attributing it to change in accounting policy. RIL said that while Indian Generally Accepted Accounting Principles (IGAAP) recognises two methods of accounting for oil and gas activities, namely, full cost method and successful efforts method, the new method under Indian Accounting Standards (Ind-AS) only recognises the successful efforts method which resulted in the huge write-down. The write-down constitutes Rs 20,114 crore on domestic oil and gas assets, mainly the KG-D6 fields. The company’s flagging KG-D6 field produced 0.26 barrels of crude oil and 24.4 billion cubic feet of natural gas in the third quarter of FY17, a reduction of almost 30% year-on-year.

Source: The Economic Times

Centre agrees to supply LNG to households in Yanam: Puducherry CM

January 18, 2017.

Puducherry Chief Minister (CM) V Narayanasamy said the Centre has acceded to the Puducherry government’s plea to supply cooking gas to every household through pipelines in Yanam region, an enclave of Puducherry in Andhra Pradesh. Narayanasamy said the natural gas available in the Godavari basin off the coast of Kakinada would be used for supply of liquefied natural gas (LNG) to every house hold in Yanam region. A terminal would come up in Karaikal region as per the assurance given by the oil ministry. The territorial government had also decided to show considerable concessions in the sales tax for sale of the fuel by the IOC for the flights that would be operating soon from Puducherry airport, he said.

Source: The Economic Times

NATIONAL: COAL

Govt may cap number of coal blocks a company can hold

January 23, 2017.

The government is considering capping the amount of coal blocks that a company can hold. The clause is part of the draft coal block allocation guidelines issued for public comments by the coal ministry and would apply to mines other than the 204 blocks that were cancelled by the Supreme Court in October 2014. The Centre may also specify the maximum number of coal blocks or amount of coal reserves or both that may be allocated to a company or corporation or its subsidiary or associate companies, the draft coal block allocation rules said. The draft rules have been framed to bring the provisions of Mines and Minerals Development and Regulation Act in line with the provisions of Coal Mines (Special Provisions) Rules, 2014, to bring uniformity in the coal block allocation. The rules provide that in case coal block is allotted or secured by a project with supplies from Coal India Ltd (CIL), then entitlement to receive coal will be proportionately reduced. The rules also limit the role of state governments and propose to invite representatives of the state government where the coal block is located, only if required.

Source: The Economic Times

CIL to launch coal auction for power companies with flexible lifting

January 19, 2017.

Coal India Ltd (CIL) will hold long-term special forward auction for power producers with flexible lifting period of up to 3 years. CIL will soon notify the detailed offer, schedule dates for auction. Power utilities consume about 75-77 percent of the total coal, as per estimates. CIL, which accounts for over 80 percent of the domestic coal production, is eyeing 1 billion tonne of output by 2020.

Source: The Economic Times

Coal ministry to move Cabinet soon for fuel linkages to power sector

January 19, 2017.

The coal ministry will soon seek the Cabinet’s approval for the auction of coal linkages for the power sector. He said that the government was never in a hurry to auction linkages for the power sector as there is sufficient availability of coal in the country for all the sectors. Earlier, the Cabinet Committee on Economic Affairs had approved allocation of coal linkages for non-regulated sector only through auction. Coal India Ltd had decided to allocate a total quantity of around 23.25 million tonnes per annum in the first tranche of coal linkage auction.

Source: The Economic Times

Electricity may get costlier as states demand higher royalty on coal: India Ratings

January 18, 2017.

Chhattisgarh’s request for a revision in royalty rates on coal to 30 percent from the existing 14 percent ad-valorem, will push up the cost of electricity by 7 percent or 10-12 paisa per kWh, India Ratings said. The state government has constituted a study group to consider the revision in the royalty rates based on the request. Assuming a pithead price of Rs 720 per tonne for coal, the royalty increase will also lead to a higher contribution towards district mineral foundation (DMF) at 30 percent of royalty and National Mineral and Exploration Trust (NMET) at 2 percent of royalty, which translates into a higher cost of electricity generation by 10-12 paisa per kWh. Since January 2015, coal consumers have been hit by rising prices due to the imposition of DMF and NMET (effective January 2015), taking the effective royalty rate up to 18.48 percent from 14 percent. Additionally, if the royalty rates were to increase to 30 percent, the effective royalty rate would be 39.6 percent including DMF and NMET contribution. Furthermore, the clean energy cess increased to Rs 400 per tonne from Rs 200 per tonne in the Union Budget 2016.

Source: The Economic Times

NATIONAL: POWER

MSEDCL on aggressive recovery drive

January 24, 2017.

The state power utility has appealed to the consumers to pay their pending dues towards electricity bills, if any, as it has undertaken an aggressive recovery drive. With the financial year nearing an end, Aurangabad circle of the Maharashtra State Electricity Distribution Company Limited (MSEDCL) has launched a campaign for collecting the outstanding amount. As a part of the drive, the MSEDCL staff has permanently disconnected power supply of 1,752 consumers in the circle for failing to pay their dues. The dues worth Rs 18.96 crore were left to be recovered from these consumers. Also, power connections of another 3,285 consumers have been snapped on a temporary basis due to non-recovery of dues worth Rs 19.3 crore. As far as Aurangabad is concerned, Rs 10.45 lakh has been recovered from 2,514 consumers. Over 1,000 consumers have had their power connections disconnected permanently, while 1,092 have lost electricity temporarily. Dues worth over Rs 20 crore are to be recovered from consumers whose power supply is cut.

Source: The Economic Times

Power audit to regulate consumption by biz entities in Gurgaon

January 24, 2017.

Malls, hospitals, plazas, hotels and even government buildings in Gurgaon are likely to come under the dragnet of renewable energy department, which has made it mandatory for them to carry out an energy audit that will curb exceeded power consumption. This, the government hopes, will bring Gurgaon’s peak load – which stands at 1,400 MW – down by 30%. Invoking Section 18 of the Energy Conservation Act, 2001, the department of renewable energy passed new guidelines, making it mandatory for power consumers, drawing a connected load of 1 MW or more, to get an energy audit conducted by an auditor accredited by the bureau of energy efficiency (BEE), within 18 months from the date of notification. The order also fixes a penalty in case consumers fail to act on the expiry of the three years and six month period from the date of issuance of notification.

Source: The Economic Times

MPPKVVCL finds consumers stealing power with neutral lines

January 24, 2017.

Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd (MPPKVVCL) have detected a new modus operandi of some consumers to steal power. MPPKVVCL said that the consumers were using a separate neutral line against their connection. It has come to the notice of the power company that many consumers were using an alternate neutral supply line for their permanent connection. Reportedly, a few of them had used a single hot wire with an earth return to draw power. Though the power company is not sure about the exact number of consumers involved in this practice, monthly consumption of over 20,000 consumers have been recorded less than 20 units, raising suspicion over them. MPPKVVCL said that residents regularly connect to neutral line illegally, which is dangerous for them and others as well. A special team will be formed to check such practice

Source: The Times of India

Adani Group in talks to buy South East UP Power Transmission Company for $800 mn-$1 bn

January 23, 2017.

Adani Group is in advanced talks to buy South East Uttar Pradesh (UP) Power Transmission Company for an enterprise value of about $800 million-$1 billion. South East UP Power Transmission Company was established in 2009 to develop intrastate electricity transmission system on a build-own-operate-transfer on public-private partnership basis.

Source: The Financial Express

Smart meters can be game changers in long run: Goyal

January 23, 2017.

Outlining the need for smart and efficient electrical appliances, Power Minister Piyush Goyal said smart meters can be a game changer in long-term planning for the power sector. India is the world’s largest market for this sector and we have a billion people aspiring for better quality of life and have a nascent and latent energy demand which will expand this sector by almost four times in next 15-17 years, Goyal said.

Source: The Statesman

Chinese entry into power sector raises security fears

January 21, 2017.

Indian power equipment manufacturers have raised alarm over vulnerability of the country’s transmission networks to hacking as Chinese companies make steady inroads into SCADA (supervisory control and data acquisition) systems being added to smarten up city grids. In an electrical system, SCADA maintains balance between demand and supply in the grid. Chinese companies have recently bagged SCADA contracts for 18 cities spanning Rajasthan, Madhya Pradesh, Tamil Nadu and Puducherry. More such contracts are on anvil. Besides, Chinese companies have also qualified to bid for three transmission links being laid by the Centre to strengthen the national grid.

Source: The Times of India

Kalpataru Power Transmission bags new orders worth Rs 8.2 bn

January 20, 2017.

Kalpataru Power Transmission has bagged orders worth Rs 825 crores in the past few months, the company said. These orders include jobs worth Rs 440 crore for various transmission line and substation projects, and two pipeline projects from Indian Oil Corp and GAIL (India) Ltd for around Rs 277 crores.

Source: The Economic Times

Kerala’s power usage nears 64 million units per day

January 20, 2017.

The state government, according to sources has given a clear indication to Kerala State Electricity Board (KSEB) that it need not to embrace more financial liabilities in its efforts to ensure uninterrupted power supply. The average power consumption in the state has almost touched 64 million units. This may rise to 80 or 82 million units in the peak of summer in March. It is expected to settle somewhere between 75 to 78 million units throughout the summer, sources in the board said. The Pinarayi government has already proclaimed its stand that the state cannot shy away from setting up power generation units, both hydel and thermal, for a sustainable future in the power front. According to sources, the government has given a clear go ahead to KSEB to ensure that it doesn’t burn itself in the bid to ensure 24X7 power supply in the state. At present, the board imports around 57 million units of power to meet the daily demand. Of this 29 million units, the state get as central share and the rest is brought to the state through long, medium and short-term power purchases.

Source: The Economic Times

Govt plans to phase out incandescent bulbs in the next 3 yrs

January 18, 2017.

The government plans to phase out the iconic incandescent bulbs by 2020, putting gradual bans on production and sale starting with high voltage lamps, and encourage consumers to use energy efficient alternatives. Incandescent lamps consume 80 percent more electricity than light emitting diode (LED) lamps, but are widely used in smaller cities and rural areas because they cost much less. A 60 watt incandescent lamp costs Rs 10 per piece, while CFL lamps start at Rs 90-100 per piece. Elcoma, a lighting manufacturers’ association, said the industry is willing to cut production of incandescent lamps and shift to LED lamps. Market prices of highly energy efficient LED lamps in India have nosedived by almost three times on the back of a government mass distribution scheme to be at par with CFL lamps. This has impacted sales of CFL bulbs, but a majority of households still use incandescent bulbs.

Source: The Economic Times

NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Videocon eyes 13 percent market share in AC segment with new solar energy powered range

January 24, 2017.

Home-grown home appliances company Videocon is looking to capture 13% market share in the Indian air conditioner (AC) market by the end of financial year 2017 with the launch of its first hybrid solar air conditioner range for the households and institutions. At present the company claims to have 9% market share in the air conditioning segment. The hybrid solar AC by Videocon utilizes the energy from solar power to allow 100% power savings in contrast to the energy guzzling conventional ACs, the company said. However, if ever required it automatically shifts to regular electricity supply. Videocon has rolled out 2 new models comprising of 1 ton and 1.5 ton, in the solar hybrid AC range and both the models comply with BEE star ratings and possess 5 stars. The new range is priced at Rs 99,000 and Rs 1,39,000 respectively.

Source: The Economic Times

India’s first wind tender oversubscribed despite offtake uncertainties: Bridge to India

January 24, 2017.

India’s first wind tender offered by Solar Energy Corp of India (SECI) was oversubscribed despite offtake uncertainties feels Bridge to India, a renewable energy analyst firm. SECI received bids for India’s first wind power tender. There are two unique aspects of this tender – successful bidders will sign 25-year power purchase agreements (PPAs) with power trading company, PTC India, which will sign back-to-back PPAs with as yet unknown distribution companies; and existing operational projects under construction projects are eligible to participate. However, the proposed offtake structure may pose challenges for developers as well as distribution companies (discoms) and policy makers need to proactively ensure that renewable project capacity is evenly distributed across the country for easier integration in the grid. The government has been reiterating for some time that wind power should also be procured through auctions to lower tariffs and scale up capacity addition. This tender is a first step towards that change and should pave way for future development of wind power in the country. The tender provides for project sizes between 50 – 250 MW. Bidders are free to locate projects anywhere in India but they need to connect to the national grid at 220 kV level allowing discoms anywhere to purchase this power. Most states in India are currently offering wind feed in tariffs of about Rs 4.00-6.00 per unit. Tariffs in this tender are expected to fall below Rs 4.00 per unit in line with upcoming solar tenders. Reduction in tariffs will make wind more attractive to distribution companies. However, Solar Energy Corp of India may still struggle to find willing buyers as it requires them to provide a considerable collateral package of six months letter of credit and an escrow account over revenues.

Source: The Economic Times

Tata Power expects stronger focus on solar power in Budget 2017-18

January 24, 2017.

Tata Power Solar is expecting stronger focus on solar manufacturing with clear long-term outlook in the Budget 2017. Tata Power is hoping for increased focus to promote solar rooftops, which has not been leveraged to its full potential till now. Streamlining and improvement of subsidy disbursal should be another key focus area. While rooftop solar systems attract subsidies, the disbursement process is not streamlined and standardized across the country, thus, reducing the impact of the same.

Source: The Economic Times

Gujarat discoms fail to meet purchase target for renewable power

January 24, 2017.

Gujarat Urja Vikas Nigam Ltd (GUVNL) affiliated four distribution companies (discoms) fell short of purchasing required renewable energy in 2015-16 on account of low supply of power from wind and other renewable energy sources. Under the Renewable Purchase Obligation (RPO), a distribution company is mandated to buy electricity from renewable energy at a defined minimum percentage of the total consumption of its consumers. The RPO target for 2015-16 was 9% (7% from wind, 1.5% from solar and 0.5% from other sources such as biomass and mini hydro projects). As against the stipulated target of 9%, GUVNL could procure only 7.66% from renewable energy sources in 2015-16. This translated into a shortfall of 980 million units 2015-16.

Source: The Economic Times

DM orders solar power for 129 Bareilly booths

January 24, 2017.

After the administration identified as many as 129 polling booths in Bareilly district with no electricity, district election officer and district magistrate (DM) Surendra Singh ordered village panchayats to install solar-powered lights in these booths. The Election Commission has already issued directions that ensure proper light arrangements, drinking water, toilets and other basic amenities be provided at every booth.

Source: The Times of India

Punjab solar power companies seek more time for setting up units

January 23, 2017.

Solar power producers in Punjab have sought extension of deadline for setting up projects that will be eligible for exemption from transmission and wheeling charges. Punjab electricity regulator had in January last year approved the exemption for renewable energy projects set up in the state between from July 9, 2015 and March 31, 2017 to boost renewable energy projects. Open Access Users Association (OAUA), representing captive solar power producers, has petitioned the Punjab State Electricity Regulatory Commission to extend the programme’s deadline by 12 months to March 31, 2018. The association has also called for regulations conducive to renewable open access. Open access, as enabled in the Electricity Act, gives industrial consumers the right to choose their source of electricity. Many states like Karnataka, Andhra and Telangana have provided similar concessions with implementation window of at least 4-5 years.

Source: The Economic Times

Kudankulam second unit generates full capacity of 1 GW

January 23, 2017.

The second unit of Kudankulam Nuclear Power Project (KNPP) has attained its maximum generating capacity of 1,000 MWe, six months after it went critical. The second unit of the Indo-Russian joint venture project attained criticality on July 10 last year and synchronised with the southern grid on August 29. Power generation had been gradually increased at several stages after mandatory tests were stipulated by the Atomic Energy Regulatory Board. The first KNPP unit began commercial operations in December 2014. Tamil Nadu gets the major share of the power produced in the two units of the nuclear plant. Under the agreement between India and Russia, four more units of 1000 MWe each would be set up at Kudankulam in this district in southern Tamil Nadu. Excavation work for the third and fourth units are underway and power generation is expected to start in 2022-23.

Source: The Economic Times

NEXTracker to set up manufacturing unit in India to push solar power generation

January 23, 2017.

US-based sunshine solar tracker maker NEXTracker said it will set up a manufacturing plant in India in next six months to push tracker-based solar power generation in the country. NEXTracker, a Flex group company, manufactures sunshine trackers which enables solar panels and cells to absorb maximum heat and light. This enhances the efficiency of solar power generation by 15-20 percent. NEXTracker would seal deals with firms among India’s top 10 solar power producers for supply of equipment to aid one GW of capacities in few weeks. India’s solar tracker market is expected to grow exponentially by 2021, amounting to 31 percent of ground mounted projects, up from 7 percent in 2016, the company said. NEXTracker last year supplied India’s largest solar tracker project to date for 105 MW Adani Power Plant in Punjab.

Source: The Economic Times

Delegation in Indore to promote use of solar energy

January 23, 2017.

A delegation comprising around 60 solar energy enthusiasts who visited the city, said an international level symposium may soon be hosted in Indore. The delegation studied the practical utilities and workings of solar energy plants at Barli Institute and at Sanawadia village. The delegation had also tucked in on food that had been cooked using solar energy. They interacted with local residents at the institute who were being trained in using solar cookers and other equipment. While interacting with students at the institute, other speakers from Uganda, the US and India spoke about relating sustainable energy to other issues of society like eradicating violence, helping those with physical disabilities and generating employment for the poor. The talk also included other topics like organic farming and its advantages as well as implementing the use of solar energy plants in every household through manufacturers, businessmen, common people and marketing agencies.

Source: The Economic Times

Suzlon bags 50.4 MW order from a power utility in Gujarat

January 23, 2017.

Wind turbine maker Suzlon Group said it has bagged 50.40 MW order from a leading power utility in Gujarat. The project consists of 24 units of S97 120 metre hybrid tower with rated a capacity of 2.1 MW. Located at Kutch in Gujarat, the project will be completed by March 2017, the company said.

Source: The Indian Express

Solar-powered system to provide safe drinking water in India

January 23, 2017.

Scientists are developing a low-cost, solar-powered water purification system that may help over 77 million people in remote parts of India get access to safe drinking water. According to researchers at the University of Edinburgh in the UK, there is no systematic treatment of sewage in rural India. The government has focused on purifying contaminated water in rivers and streams, but the situation could be greatly improved by tackling the problem at source, researchers said. The team, including researchers from Indian Institute of Science Education and Research in Pune, is adapting its existing technologies to power this second stage in the decontamination process. The system uses sunlight to generate high-energy particles inside solar-powered materials, which activate oxygen in the water to incinerate harmful pollutants and bacteria. The initiative will not only provide safer drinking water, but could also help reduce the spread of disease, researchers said. The team hopes to incorporate technologies developed during the five-month pilot project into larger-scale initiatives that deal with water contamination – a major problem in the developing world. Around 77 million people in India do not have access to safe drinking water – more than any other country in the world, researchers said.

Source: The Indian Express

Solar energy to power Sambalpur University with 245 KW plant

January 22, 2017.

The Sambalpur University has planned to set up a 245 KW solar power project on its premises in its bid to move towards harnessing eco-friendly sources of energy. The hostels, academic blocks and administrative block of the university will be provided with solar energy after the project is materialised. The project is estimated to cost Rs 3.5 crore. The Odisha Renewable Energy Development Agency (OREDA) is the consultant of the project. The hostels will get uninterrupted and steady power supply after the university switches to the solar energy. Under this project, the solar panels will be set up on the rooftop of the hostels and academic blocks. The decision to set up a solar energy project at the university has been welcomed by students of the institution.

Source: The Economic Times

India headed for a green energy revolution: Harvard Scientist

January 22, 2017

. Harvard chemist and energy innovator Daniel G. Nocera is a man on a “renewable” mission. The inventor of the artificial leaf and co-creator of its bionic version plans to launch a pilot of the advanced technology in India with the assertion that a “renewable energy revolution will take place” in the country. Nocera, currently the Patterson Rockwood Professor of Energy at the Department of Chemistry and Chemical Biology at Harvard University, invented the artificial leaf that uses solar power to split water and make hydrogen fuel. Because society isn’t set up to use hydrogen, to circumvent the problem of storing and using hydrogen, he and his team went one step further with the bionic leaf. They made liquid fuel. The bionic leaf turns sunlight into liquid fuel. It uses solar energy to split water molecules and hydrogen-eating bacteria to generate the fuel. The system churns out energy 10 times more efficiently than natural photosynthesis. Nocera collaborated with Pamela Silver of Harvard Medical School for the bionic version. Nocera, as the co-founder of the Sun Catalytix start-up had also started working with the Tata group in India on hydrogen as a fuel. However, due to the lack of infrastructure to use hydrogen, his company turned to developing a flow battery to store the power and plug it into the grid. Lockheed Martin acquired the start-up in 2014. Envisioning a future where households will have rooftop bionic systems, Nocera believed it’s a tough call for India — which has a 100 GW solar power target for 2022 — to continue using fossil fuels to keep the economy growing or to set up a whole new infrastructure for renewables.

Source: NDTV

Pakistan asks India to suspend work on Kishanganga, Ratle hydro power projects in J&K

January 21, 2017.

Pakistan’s two parliamentary committees in a joint resolution asked India to immediately suspend the ongoing construction of the Kishanganga and Ratle hydro power projects in Jammu and Kashmir (J&K). The two projects are being constructed on the Jhelum and Chenab rivers. A resolution adopted by the National Assembly’s foreign affairs and water and power committees also asked the World Bank to set up a Court of Arbitration to mediate the dispute over the Indus Waters Treaty between the two countries. It said that under the Indus Waters Treaty (IWT), it is the responsibility of the World Bank to play its role without further delay. Until the World Bank constitutes the court of arbitration, it must persuade India to put an immediate halt to ongoing construction of the Ratle dam till the issue is resolved, read the joint resolution adopted unanimously by both the government and opposition members of the committees. The construction of dams on the western rivers by India has brought the two countries at loggerheads and Pakistan has engaged the World Bank, a facilitator of the IWT, to stop India from going ahead with the construction.

Source: The Times of India

Power ministry plans to give renewable energy tag to supplies for large hydro projects

January 21, 2017.

The power ministry is proposing renewable energy status to supplies meant for large hydropower projects to help keep power tariffs low under the proposed goods and services tax (GST). The ministry, which has sought zero rating or deemed export status for solar power projects on the grounds that levy of GST will substantially increase tariffs, now wants the same to be extended to supplies for under-construction hydropower projects. These supplies are currently exempt from excise duty or enjoy concessional value-added tax of 0-5% and a central sales tax at 2%. Once GST comes into effect, all central and state taxes on goods and services will be replaced by a single levy of 18%, pushing up the cost of these supplies, which in turn will increase the cost of power. About 11,000 MW of hydro power capacity is expected to be added over the next five years and a GST rate of 18% would inflate capex by 10-12%.

Source: The Economic Times

IL&FS in talks with Chennai-based Orient Power to merge its wind energy assets

January 19, 2017.

Infrastructure Leasing and Financial Services (IL&FS) is in advanced talks to merge its wind energy assets with Chennai-based listed Orient Green Power. The all-stock reverse merger of unlisted IL&FS Energy Development will value the combined entity at Rs 4,500-5,000 crore. At 1,400 MW generating capacity, it will create one of India’s largest listed wind energy companies. In March 2016, ILFS sold 49 percent in the wind energy business to Japanese group Orix, which is an investor in the parent since 1993. India has set a target of installing 100 GW of solar capacity and 60 GW of wind capacity by 2022.

Source: The Economic Times

J&K govt to set up 25 MW wind power project in Reasi

January 18, 2017.

Jammu and Kashmir (J&K) government said a 25 MW wind power project will be set up in Reasi district of the state. A potential of 25 MW of wind power has been assessed at village Bidda, district Reasi, Jammu and Kashmir, out of which 6 MW is being harnessed in the first phase as a pilot project, State Minister for Science Technology Sajjad Lone said. The Minister said, the work will be initiated on the 6 MW wind project as soon as the land is transferred and it is expected that the project would be executed during the FY 2017-18. The detailed project report for the project has been prepared by the National Institute of Wind Energy, a subsidiary of Ministry of New and Renewable Energy (MNRE), and the project is estimated to cost approximately Rs 50 crore.

Source: The Economic Times

India, China to fuel demand for natural resources: Saudi Energy Minister

January 18, 2017.

India is set to play a bigger role in shaping the energy policies of the Middle East due to its growing hunger for oil. Saudi Energy Minister Khalid al-Falih said fossil fuels cannot be just wished away since rising car ownership in India and China will fuel the demand for natural resources. Although al-Falih pledged $30-50 billion investment by Saudi Arabia in renewable energy by 2023, he appeared bullish on oil and gas. Passenger car ownership in India is estimated to grow by 775% over the next 24 years, according to the International Energy Agency.

Source: The Times of India

$1.77 bn FDI equity came into Indian renewable sector between April 14 to September 16: Govt

January 18, 2017.

India witnessed a total of $1.77 billion equity investment in the form of foreign direct investment (FDI) in the non-conventional energy sector between April 2014 and September 2016, the Modi government said in an “Achievement Report” of its flagship Make in India initiative. As per the data available, a majority of the bigger investments have come from Mauritius, Malaysia, Philippines, Singapore, Japan, Germany, Spain, US and Seychelles. Under automatic route for projects of renewable power generation and distribution, 100 percent FDI is allowed subject to provisions of the Electricity Act, 2003. The government has revised its target of renewable energy capacity to 175 GW by end of 2022, making it the largest expansion plan in the world, providing plenty of opportunities for investors. The UN Environment Program’s “Global Trends in Renewable Energy Investment 2016” report ranks India among the top ten countries in the world investing in renewable energy. The government plans to achieve 40 percent installed capacity of power from non-fossil-fuel-based energy resources and reduce emissions by 33-35 percent by 2030. According to the report, the renewable energy sector has witnessed the highest-ever solar power and wind power capacity addition since April 2014.

Source: The Economic Times

India committed to goals on renewable energy: Goyal

January 18, 2017.

India is committed to meet its renewable energy goals and is not bothered about US president-elect Donald Trump’s skepticism on policies related to climate change, Power, Coal, New and Renewable Energy and Mines Minister Piyush Goyal said. Goyal was asked whether Trump’s negative stand on global warming will influence India to change its plans of becoming a global hub for renewable energy. Although India remains dependent on coal to fuel its energy needs, it aims to scale up its solar power capacity to 100 GW by 2022. It is targeting 60 GW from wind energy and plans to bring in hydro power, from which it generates 40 GW, into the category of renewable energy. By 2022, the country plans to generate around 225 GW from clean and renewable sources. When other global industry experts said renewable energy needs private funding to be successful, Goyal said he does not see any challenge in getting finance for renewable energy in India. Goyal said the cost of renewable energy has been gradually decreasing and currently it is at par or marginally higher than what is generated from fossil fuels.

Source: The Times of India

INTERNATIONAL: OIL

US tax reforms could ‘transform’ global oil market: Goldman Sachs

January 24, 2017.

The push by Republicans in the United States (US) House of Representatives for a shift to border-adjusted corporate tax (BTA) could push US crude prices higher than the global benchmark Brent, triggering large-scale domestic production, according to analysts at Goldman Sachs. Goldman said it anticipates a 25 percent jump in the prices of US crude futures, also known as West Texas Intermediate (WTI), and refined products in comparison to the global prices if the switch is implemented. The appreciation in prices could be an incentive for producers to sharply increase activity, the bank said warning, that the ramp up in US production in a market only starting to rebalance would create a renewed large oil surplus in 2018, which could lead to an immediate sharp decline in global oil prices. The bank said it sees Brent prices coming down to $50 per barrel in 2019, assuming a 15 percent appreciation in the US dollar upon implementation of the BTA and a 30 percent pass-through of US production costs to global production costs. If this pass through of costs continues in the long run, it would result in 2020 Brent prices falling to $40 per barrel, Goldman analysts said. BTA would also leave US refiners just as happy as its producers, as the immediate spike in US crude and petroleum products prices would leave them with excess returns, analysts said.

Source: Reuters

Shell, Phillips 66 buy 6.4 mn barrels of oil from US emergency reserve

January 24, 2017.

Oil companies Shell and Phillips 66 together bought 6.4 million barrels of oil from the Strategic Petroleum Reserve (SPR), according to Department of Energy document. Shell bought 6.2 million barrels of oil and Phillips 66 bought 200,000 barrels, according to the document. The federal government held the sale to fund a revamp of the emergency oil stash, which is stored in salt caverns in Louisiana and Texas along the Gulf Coast. The Department of Energy had said it would sell up to 8 million barrels as part of its modernization program. Shell will take delivery of 1.7 million barrels of oil to a vessel, the documents said, while the remainder of the barrels are slated for pipeline delivery. The United States (US) lifted its decades-long ban on exporting US crude in December 2015, giving buyers of the oil the opportunity to export oil purchased from the reserves. Phillips offered a price of $53.8985 a barrel for the oil, and Shell offered between $53.668 and $54.338 a barrel, the documents said. Shell and Phillips 66 both operate oil refineries along the US Gulf Coast near sites of the strategic reserves.

Source: Reuters

BP starts oil production at Thunder Horse South Expansion in Gulf of Mexico

January 24, 2017.

BP has commenced production from the Thunder Horse South Expansion project in the deep-water Gulf of Mexico, further boosting output from one of the largest oil fields in the region The Thunder Horse South Expansion project, which has been completed ahead of schedule and $150 mn under budget, involved addition of a new subsea production system about two miles to the south of the existing Thunder Horse platform. The expansion project is aimed at boost production at the facility by an estimated 50,000 gross barrels of oil equivalent per day. Jointly owned by BP and ExxonMobil, the Thunder Horse platform has been designed to handle capacity of 250,000 gross barrels of oil and 200 million gross cubic feet per day of natural gas. BP said that the project marks a step ahead in reaching its goal of adding 800,000 barrels of new production by the end of the decade. It also marks the first of several upstream start-ups planned by the end of 2017.

Source: Energy Business Review

US President clears way for controversial oil pipelines

January 24, 2017.

The United States (US) President Donald Trump signed orders smoothing the path for the controversial Keystone XL and Dakota Access oil pipelines in a move to expand energy infrastructure and roll back key Obama administration environmental actions. Oil producers in Canada and North Dakota are expected to benefit from a quicker route for crude oil to US Gulf Coast refiners. But going ahead with the pipelines would mark a bitter defeat for Native American tribes and climate activists, who successfully blocked the projects earlier and vowed to fight the decisions through legal action. Trump campaigned on promises to increase domestic energy production. Before taking office he said the Dakota pipeline should be completed and that he would revive the C$8 billion ($6.1 billion) Keystone XL project, which was rejected in 2015 by then-President Barack Obama.

Source: Reuters

Asia grabs record North Sea crude oil as OPEC cuts supply

January 23, 2017.

Asia’s oil refineries are turning to the North Sea for crude supplies like never before as their primary suppliers restrict output in an effort to eliminate a glut. Crude exports to Asia from the North Sea are poised to reach a record 12 million barrels in January, data show. Tankers hauling 9 million barrels from fields off the coasts of Norway and the UK already sailed east, and at least another 3 million barrels are set for export. If all the oil flows move as planned, about two-fifths of January supply underpinning the Brent crude benchmark will go to Asia. North Sea crude suppliers are among those reaping the benefits from output cuts by the Organization of Petroleum Exporting Countries and 11 other nations in an effort to steady global oil markets. The group’s supply cuts have increased the relative value of Middle East oil to a 16-month high, while producers including Saudi Arabia and Kuwait are restricting eastbound cargo flows. That means North Sea grades are becoming somewhat more affordable for refiners in Asia, where China is guzzling crude at record levels. Monthly shipments of key North Sea grades Brent, Forties, Oseberg and Ekofisk to Asia reached a previous record of 10 million barrels in October. This compares with an average of about 6 million barrels a month, or roughly 200,000 barrels a day, for all of 2016, according to data.

Source: Bloomberg

Iraq plans to triple gas liquids exports from southern oilfields

January 23, 2017.

Iraq expects to more than triple exports of liquefied petroleum gas (LPG), and to double exports of gas condensates in 2017 as it collects more of these fuels at its southern oilfields, the South Gas Company said. LPG exports are set to increase to 100,000 tonnes this year, from 30,000 tonnes in 2016, South Gas said. Gas condensate exports are set to rise to 400,000 cubic meters this year, from 200,000 cubic meters in 2016, South Gas said. Iraq started exporting gas liquids, processed by the Basrah Gas Company, a joint venture between South Gas, Shell and Mitsubishi, last year.

Source: Reuters

China to tender more Xinjiang oil, gas blocks to non-state firms

January 23, 2017.

China will auction about 30 oil and gas blocks in the north-western region of Xinjiang this year to investors outside the top state energy firms, as Beijing steps up efforts to boost private participation in the sector. Lack of private investment in oil and gas exploration has been a big stumbling block in Beijing’s attempts to reform the sector, and it has picked the hydrocarbon-rich autonomous region of Xinjiang to try to break the grip of the big companies. China’s top two energy giants China National Petroleum Company (CNPC) and Sinopec Group have been the dominant players onshore China, while China National Offshore Oil Company (CNOOC) dominates offshore exploration and production. This will be the second such auction in Xinjiang, this time covering 30 oil and gas exploration blocks totaling 300,000 sq km. The blocks have been relinquished by the state-run oil giants. In July 2015, the Ministry of Land and Resources released five blocks in Xinjiang in its first tender to attract non-state investors. An independent Shandong-based company and state-owned Beijing Energy Investment Holdings were among the firms awarded four of the five blocks. Those companies had pledged to spend a total of nearly 8.5 billion yuan ($1.24 billion) over three years.

Source: Reuters

Israel’s Modiin Energy plans to buy North Sea drilling rights

January 22, 2017.

Modiin Energy said it signed a letter of intent to buy 25 percent of the oil drilling rights in a site in shallow North Sea waters in British territory. Modiin will pay the seller, who was not identified, $175,000 to cover previous expenses, Modiin said. The seller will continue to serve as operator and retain the remaining rights. Modiin will pay a third of the costs associated with the first drill in the site.

Source: Reuters

Oil market to balance even with increased drilling: Qatar Energy Minister

January 22, 2017.

Qatar Energy Minister Mohammed Al-Sada said that even with an increase in drilling rigs, the oil market is likely to reach a balance as producers implement agreed output cuts. Al-Sada said demand is healthy, with expected growth in line with last year’s rise of around 1.2 million barrels per day (bpd). OPEC and non-OPEC producers have agreed to lower output by almost 1.8 million bpd in hopes of reducing oversupply and supporting prices.

Source: Reuters

Sees oil price at $50-$60 in 2017: Russian Energy Minister

January 22, 2017.

Russian Energy Minister Alexander Novak sees global oil prices at between $50 and $60 per barrel in 2017. Novak said that countries involved in a deal between OPEC (Organization of Petroleum Exporting Countries) and non-OPEC oil producers could reduce their output by more than 1.7 million barrels per day by the end of January.

Source: Reuters

Output cuts set to lower oil inventories: Saudi Arabian Energy Minister

January 22, 2017.

Saudi Arabian Energy Minister Khalid al-Falih said that OPEC and non-OPEC oil producers were complying with their pledge to lower oil output and that global oil inventories could be taken back to their five-year average by mid-year with full compliance. Producers have pledged to lower output beginning this month in order to support prices.

Source: Reuters

Schlumberger expects international markets recovery in late 2017

January 20, 2017.

Schlumberger NV said that it does not expect a “dramatic” short-term recovery in international markets, compared with North America where shale producers are already ramping up drilling activity. The world’s No.1 oilfield services provider reported a more-than-8-percent drop in fourth-quarter revenue as strong activity in the Middle East and North America was offset by weakness in Latin America, Europe, Russia and Africa. Schlumberger’s earnings from international markets, including Mexico, Venezuela, Brazil, Sub-Sahara Africa, China and onshore Russia, in the fourth quarter of 2016 was more than 70 percent lesser than its earnings in the fourth quarter of 2014, when oil prices began to slump.

Source: Reuters

Russia’s Gazprom Neft says launches more wells at Arctic oil project

January 20, 2017.

Russia’s Gazprom Neft, the oil arm of gas giant Gazprom, said it has launched two more production wells at Prirazlomnoye offshore Arctic oil field. The number of production wells at the field, Russia’s only offshore Arctic oil project, was increased to six, the company said. Oil flow rate at a new well has reached 1,760 tonnes per day.

Source: Reuters

China crude oil throughput hits daily record in December and 2016

January 20, 2017.

China’s December refinery production touched new highs as facilities replenished stocks ahead of a long holiday break, lifting crude oil throughout for the year as a whole by 2.8 percent to another record. The surge came as China’s crude oil production slipped last year to its lowest annual level since 2009, as oil firms shut in higher-cost fields amid lower crude prices. Data from the National Bureau of Statistics showed that crude throughput rose 3.7 percent last month from the same period a year earlier to 47.82 million tonnes, or 11.26 million barrels per day (bpd). For the whole of 2016, throughput climbed to 541 million tonnes, or 10.79 million bpd – a jump mostly due to the country’s independent oil refiners ramping up operations after obtaining permits to import for the first time.

Source: Reuters

Bangladesh backtracks on plan to cut oil product prices

January 18, 2017.

Bangladesh has backtracked on its plan to slash prices for gasoline, diesel fuel and other oil products amid a rise in global crude oil markets, Nasrul Hamid, junior minister for power, energy and mineral resources, said. The government said it would cut oil product prices in phases after cutting rates by up to 10 percent in April. After the reduction last year, a liter of gasoline costs 86 taka ($1.10) and 95-octane gasoline is 89 taka while a liter of diesel and kerosene cost 65 taka. Global oil prices started tumbling in 2014 on a persistent supply glut to below $30 a barrel in early 2016. Bangladesh last raised oil prices in 2013 when the price of oil jumped to $122 a barrel. However, the government kept prices unchanged over the last two years to help Bangladesh Petroleum Corp offset its previous losses. Bangladesh’s demand for oil is growing sharply because a shortfall of natural gas means it has relied on costly oil-fired power plants to resolve its crippling electricity shortages. Bangladesh imports 600,000 tonnes of Murban crude from Abu Dhabi National Oil Co and another 600,000 tonnes of Arab Light from Saudi Aramco annually for its sole refinery. The south Asian country also imports around 3.5 million tonnes of refined oil products through tenders and term deals.

Source: Reuters

Higher oil prices to aid Gulf external balances but growth outlook still low

January 18, 2017.

A rebound in oil prices over the past few months looks set to improve the external balances of rich Gulf Arab countries but economic growth will stay low, the poll of 17 private sector analysts found. The poll of analysts expect the current account balances – which capture trade in goods and services – of Saudi Arabia, the United Arab Emirates and Qatar to improve in both 2017 and 2018 even more than forecast in the last poll conducted three months ago. Saudi Arabia’s current account deficit, for example, is forecast to shrink to a median 3.3 percent of gross domestic product this year from 8.0 percent in 2016. In the last poll, this year’s deficit was projected at 3.9 percent. For 2018, the Saudi current account deficit is now projected at 2.5 percent instead of 3.1 percent. In addition to higher oil prices, Riyadh’s efforts to reduce its state budget shortfall are expected to improve its external balance. However, the poll found little improvement in the current account outlook for the least wealthy economies of the six-nation Gulf Cooperation Council, Oman and Bahrain.

Source: Reuters

INTERNATIONAL: GAS

Tanzania hopes for LNG plant agreement with oil majors by 2018

January 24, 2017.

Tanzania hopes to reach an agreement with international oil companies in 2018 paving the way for the construction of a liquefied natural gas (LNG) plant, part of a bigger plan for a new export terminal. The planned new infrastructure will enable Tanzania to export some of the huge offshore gas reserves discovered in recent years in a region that has turned into a hydrocarbon exploration hotspot. BG Group – recently acquired by Royal Dutch Shell -, together with Statoil, Exxon Mobil and Ophir Energy, plan to build a $30 billion onshore LNG export terminal in partnership with the state-run Tanzania Petroleum Development Corp. But a final investment decision has been held up by government delays in finalizing issues relating to the acquisition of land at the site and establishing a legal framework for the nascent hydrocarbon industry. As a first step, the Tanzanian government and oil companies must work out a “host government agreement” setting out terms on which the foreign investors will build and run the project. The government has said it is keen to promote the LNG project but has said little about the timeline. The government said it has acquired more than 2,000 hectares (5,000 acres) of land for the construction of the planned two-train LNG terminal at Likong’o village in the southern Tanzanian town of Lindi close to large offshore natural gas discoveries. Tanzania discovered an additional 2.17 trillion cubic feet of gas deposits in February, raising its total estimated recoverable reserves to more than 57 trillion cubic feet.

Source: Reuters

MHI sets up new O&G division to expand in North America

January 24, 2017.

Mitsubishi Heavy Industries (MHI) has set up a new division within Mitsubishi Heavy Industries America (MHIA) to expand its oil and gas (O&G) business in North America. The move is part of the company’s efforts to offer one stop solutions to the upstream, liquefied natural gas (LNG) and downstream markets.

Source: Energy Business Review

Russia’s Gazprom calls for urgent gas investment decisions in Europe

January 24, 2017.

Long-term gas demand in Europe means immediate investment decisions are needed to build new infrastructure, Russian gas giant Gazprom said. Last year, Russia supplied Europe and Turkey with a record 179.3 billion cubic meters (bcm) of gas as consumers capitalized on low gas prices, which follow the prices of oil with a lag of six to nine months. Its share of the European Union (EU) gas market rose to an all-time high of 34 percent from 31 percent in 2015. Russia plans to boost supplies further and remain the dominant player on the European gas market. Gazprom has been pushing for the Nord Stream-2 underwater gas pipeline project, which would double the existing annual capacity of the current two pipelines from 55 bcm.

Source: Reuters

China LNG imports hit record in December

January 23, 2017.

China’s liquefied natural gas (LNG) imports hit a record high in December, customs data showed, driven up as the country pushes towards cleaner fuels. The world’s No.2 economy shipped in 3.73 million tonnes of LNG in December, topping the previous record of 2.66 million tonnes in November and up from 2.10 million tonnes a year ago, the General Administration of Customs said. China’s government in 2014 launched a “war on pollution” to reverse the damage done by decades of untrammelled growth. Trade flow data shows that Australia and Qatar exported the most LNG to China in December. Australia shipped 22 cargoes, equivalent to 1.5 million tonnes of LNG, according to that data, while Qatar exported 9 cargoes. For the whole of 2016, China’s LNG imports rose 32.8 percent to 26.06 million tonnes, China’s customs data showed. The nation’s December diesel imports climbed 166.1 percent from the same month a year earlier to 110,000 tonnes, while kerosene imports fell 2.3 percent on the year to 290,000 tonnes.

Source: Reuters

Master Plan for Vietnam Gas Industry Development to 2025 approved

January 23, 2017.

The Prime Ministry of Vietnam has approved the Master Plan for Vietnam Gas Industry Development to 2025, with an outlook up to 2035. The Master Plan aims to develop the Vietnamese gas industry, to collect 100% of the gas production from the fields operated by national company PetroVietnam and by foreign contractors, to achieve a domestic gas production of 17 to 21 billion cubic meters (bcm) per year in 2026-2035. The country aims to develop the gas distribution system for industrial, transports and city household customers. The Master Plan targets a gas market of 23 to 31 bcm in the 2026-2035 period.

Source: Enerdata

Peru will not compensate Odebrecht for natural gas pipeline project

January 23, 2017.

The government of Peru said that it will not compensate an Odebrecht-led consortium for investments made in a $5 billion natural gas pipeline project after it rescinds the contract over a missed financing deadline. Energy and Mines Minister Gonzalo Tamayo said a new builder and operator of the pipeline project may buy the project’s assets in a public auction that the government will aim to schedule as soon as possible. The government will start the contract’s termination and plans to cash in a $262 million guarantee from the consortium for not fulfilling its contractual obligations, Tamayo said.

Source: Reuters

Saudi Aramco to boost gas production at Hawiyah, Haradh

January 20, 2017.

Saudi Aramco plans to boost gas production at its Hawiyah and Haradh plants to meet growing domestic energy needs. The projects, estimated to cost approximately $4 billion, would see engineering companies expand the processing capacity at Hawiyah by 1.3 billion standard cubic feet per day. Hawiyah gas plant currently processes 2.5 billion standard cubic feet per day (scfd) of gas.

Source: Reuters

US gas market has eliminated storage surplus despite warm winter

January 20, 2017.

The United States (US) gas market has tightened significantly over the last nine months as low prices have spurred strong consumption and exports while slashing drilling of new wells. The market has rebalanced despite an unusually mild winter so far, which points to the degree of underlying tightness and suggests prices will need to remain higher in 2017 than they were in 2016 to avoid a shortage. At the half-way point in the current winter heating season, working gas stocks in underground storage are 77 billion cubic feet (3 percent) below the five-year average. At the same point last year, stocks were 473 billion cubic feet (17 percent) above average, according to the US Energy Information Administration.

Source: Reuters

Poland to take final decision on Norway gas link in 2018

January 20, 2017.

Poland will take final investment decision on the planned construction of a gas connection to the Norwegian shelf next year, Polish government said. The ruling conservative Law and Justice party announced its plan to revive the project to build a gas link to Norway at the end of 2015, after it won the parliamentary election in October. Poland, which imports most of the 15 billion cubic metres of gas it consumes from Russia’s Gazprom, plans to have the link ready by 2022 when the long-term agreement on gas supplies with Gazprom terminates. The plan assumes that part of the link will be the Baltic Pipe – a gas connection linking Poland and Denmark. The open season, a procedure in which shippers provide operators with their potential investment signals, is expected to start this year. As part of its plan to reduce the reliance on Russia’s gas Poland started in June its first liquefied natural gas (LNG) terminal in Swinoujscie at the Baltic Sea.

Source: Reuters

Bulgaria, Serbia agree to work on pipeline to cut reliance on Russian gas

January 19, 2017.

Bulgaria and Serbia signed a memorandum of understanding to work together for the construction of a natural gas pipeline to link the Balkan neighbours to boost security of supplies and reduce their strong reliance on Russian gas. The two countries plan to begin the construction of the 150 km gas inter-connector link by May 2019 and have it operational by the end of 2020. Bulgaria has already drafted a technical plan for the 61 km of the pipeline that will link Sofia with the Serbian city of Nis. Bulgaria, which still gets over 95 percent of its gas from Russia’s Gazprom, has opened a gas link with neighbouring Romania and is working to connect its gas network with neighbouring Greece and Turkey to diversify its suppliers.

Source: Reuters

Russia launches new domestic oil and gas pipelines

January 18, 2017.

Russia launched a new domestic gas pipeline and two new oil pipelines at a ceremony attended by President Vladimir Putin. The Bovanenkovo-Ukhta 2 gas pipeline, which has the capacity to pump 263 million cubic meters per day, will feed supplies into export routes to northern Europe. Also inaugurated at the ceremony were the Kuyumba-Taishet and Zapolyarye-Purpe oil pipelines.

Source: Reuters

INTERNATIONAL: COAL

Rio Tinto sells coal assets to China’s Yancoal for up to $2.45 bn

January 24, 2017.

Rio Tinto Plc has agreed to sell its Australian unit Coal & Allied Industries Ltd to Chinese government-controlled Yancoal Australia Ltd for up to $2.45 billion in cash, it said. Analysts said the price was a good deal for selling off thermal coal assets, which Rio no longer views as core. The deal involves an initial sum of $1.95 billion, followed by further annual installments, taking the total price up to $2.45 billion. Yancoal also has an option to make a single cash payment of $2.35 billion, Rio said. Once deal is complete, its divestments will total at least $7.7 billion since 2013, including Australian coal assets such as stakes in the Bengalla, Clermont and Mount Pleasant mines.

Source: Reuters

Holiday on ice as coal mines get skates on to beat Beijing curbs

January 20, 2017.

Chinese coal miners are so determined to cash in on a window of high prices that many are slashing holiday leave for workers and raising pay through the Lunar New Year celebrations before government introduces limits on output again. Prices in China, the world’s biggest coal user, have slipped back 16 percent from their two-year peak of 610 yuan ($88.83) per tonne two months ago, but they are still profitably high after a couple of barren years for miners.

Source: Reuters

INTERNATIONAL: POWER

Siemens wins order for CLP’s 550 MW CCGT power project in Hong-Kong

January 23, 2017.

Castle Peak Power Company (CAPCO), the joint venture of China Southern Power Grid and CLP Power Hong Kong (CLP Power), has awarded Siemens an order for a power block for a new CCGT unit in its Black Point power plant in Tuen Mun, in the northwest of Hong Kong. The total order for Siemens includes the delivery and commissioning of the power block, with a single-shaft configuration. The 550 MW CCGT power plant should be commissioned by 2020. Hong Kong aims to raise local gas generation to around 50% of the total fuel mix for electricity generation by 2020, while decreasing emissions and pollutant output from power generation sector.

Source: Enerdata

Canada’s Hydrostor eyes role in $1 bn US peak power market

January 20, 2017.

Canadian underwater energy storage company Hydrostor is eyeing $1 billion of contracts to replace decommissioned US peak power plants in the next two or three years. So-called “peakers,” electrical generators which are turned on only when demand is highest, are a critical but expensive element of the electricity grid. Hydrostor and its engineering partner AECOM are targeting dozens of mostly coal-powered facilities of at least 100 MW capacity across the US that either shut down in 2016 or will shut this year.

Source: Reuters

National Grid warns of costs if Britain exits EU energy market

January 20, 2017.

Taking Britain out of Europe’s energy market could stymie development of new power links designed to help avert a looming supply crunch and also drive up the cost of imported European electricity, National Grid warned. Prime Minister Theresa May signalled a so-called hard Brexit, which would involve leaving Europe’s single market when Britain quits the European Union (EU). May gave no indication of what this would mean for energy markets in her speech. But any change could have implications for the development of Britain’s electricity supplies, around 9 percent of which come from European imports. Several more power links are planned over the next decade, which are intended to give Britain access to cheaper electricity abroad as the country faces a supply crunch by the early 2020s as old nuclear power plants and coal-fired power stations close.

Source: Reuters

INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Court appeal argues California emissions trading plan akin to ‘illegal tax’

January 24, 2017.

Parties in a four-year-old legal challenge to California’s emissions trading program will head to court in Sacramento with a business group arguing the billions the program collected amounts to an “illegal tax” on businesses. California’s cap-and-trade program sets an overall limit on greenhouse gas emissions (GHGs) and either hands out or sells a declining number of state-issued permits, which large manufacturers and oil refineries are required to turn in annually. The lawsuit by business group CalChamber argues that the state legislature never authorized the California Air Resources Board (ARB) to collect revenue from the program when it passed AB 32, its landmark climate change law. Revenue from the program funds clean energy programs, especially in poorer communities, and helps finance the state’s ambitious high speed rail project. The ARB prevailed in Sacramento Superior Court in 2013 after successfully arguing that it was given broad authority to design a program to meet emissions targets, including the sale of permits.

Source: Reuters

France reaches agreement with EDF over Fessenheim closure

January 23, 2017.

The French government has reached an agreement with state-controlled utility EDF on the conditions under which the company will shut down France’s oldest nuclear plant. EDF and the French government agreed in August on a €400 million ($430 million) compensation package for the closure of the Fessenheim nuclear plant. The government decree to halt operations at Fessenheim would be subject to the company obtaining necessary official authorization for its new generation EPR reactor in Flamanville. EDF will get the green light from the government to restart its 1,300 MW Paluel 2 nuclear reactor which has been offline since May 2015, and would require a new decree authorizing it to restart. According to France’s 2015 energy bill, any reactor that has been offline continuously for more than two years can be considered permanently out. The government can extend the outage period before a permanent shutdown to three years after approval by French nuclear safety authority ASN. The 1,800 MW Fessenheim plant in northeastern France was commissioned in 1978 and is scheduled to stop production this year following a 2012 election campaign promise by President Francois Hollande.

Source: Reuters

DEWA seeks bids for 200 MW concentrated solar power plant

January 23, 2017.

The Dubai Electricity and Water Authority (DEWA) is seeking bids from potential companies for the development of 200 MW concentrated solar power (CSP) power plant. The CSP power plant will be the fourth phase of the 5 GW Mohammed bin Rashid Al Maktoum Solar Park, which is said to be the largest single-site strategic solar energy project. Being developed on Independent Power Producer (IPP) model, the solar park is estimated to cost AED50 bn ($13.6 bn) and is scheduled to be completed by 2030. The 13 MW first phase of the solar park was commissioned in 2013. The 200 MW second phase is planned to be operational by 2017 followed by 800 MW third phase by 2020. Earlier in 2016, DEWA selected Masdar-led consortium for the development of third phase of the solar park following its lowest bid of power generation price. The solar park is designed to contribute to the Dubai Clean Energy Strategy 2050, which aims to generate 7% of its total power from clean energy sources by 2020.  The target is planned to increase to 25% by 2030 and 75% by 2050.

Source: Energy Business Review

DATA INSIGHT

Fossil Fuel Consumption by Power Sector

Year

Coal Consumption (Million Tonnes)

Alternate fuel used (Kilo Litre)

Naptha

High Spirit Diesel

2013-14 489.4 306632.4 526.6 2014-15 530.4 253906.9 637.1 2015-16 545.9 107640.5 665.3 2016-17 (till Oct’16) 330.2 9200.0 71.0

Natural Gas Consumption by Power Sector

Note: Fossil fuel consumption given above is for the power plants (Utilities) monitored by Central Electricity Authority. MMSCMD: Million Metric Standard Cubic Meter Per Day

Source: Lok Sabha, Un-starred Question No. 4635 for Ministry of Power

Publisher:

Baljit Kapoor

Editorial advisor:

Lydia Powell

Editor:

Akhilesh Sati

Content development:

 Vinod Kumar Tomar

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