Tracking of India's natural resources by the Companies in India and abroad

Pintu

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This thread is dedicated to tracking of natural resources including Petroleum , minerals by the companies in India and by the companies abroad which may serve India's Interest




According to the Hindustan Times, Reliance Industries Ltd. announced start of Gas production from KG Basin.

The link and the report from the Hindustan Times are as follows:


RIL?s KG gas gets going, shares zoom- Hindustan Times

RIL’s KG gas gets going, shares zoom

Anupama Airy, Hindustan Times
New Delhi, April 02, 2009

First Published: 22:41 IST(2/4/2009)
Last Updated: 23:00 IST(2/4/2009)

Reliance Industries Ltd on Thursday announced the commencement of gas production from one of the world’s largest gas discoveries that took place in in 2002 in the Krishna-Godavari (KG) basin in the Bay of Bengal. With this, the country is expected to save $9 billion in annual energy import expenditure.

Gas production from Reliance’s $8.8 billion KG-D6 deepwater gas project, of which $5.4 billion has already been invested, is expected to transform India’s energy landscape by doubling the current level of indigenous gas production by 2010.

The news on commencement of gas production saw shares in Reliance Industries climb 5.3 per cent to close at Rs 1,662 on Thursday. The project is expected to generate $42 billion in revenues for Reliance over its life of 11 years. The government's share in the production would amount to a minimum $14 billion.

“Reliance has created history and has once again demonstrated its ability to implement complex projects at par with the best performance benchmarks in the world,” Reliance’s chairman Mukesh Ambani said.

At $ 4.2 per million British thermal unit, the KG-D6 gas is 25 per cent cheaper than the fuel produced by UK's BG-operated Panna/Mukta and Tapti fields in the Western Offshore and 20 per cent cheaper than liquefied natural gas (LNG) imported on long-term contracts.

The KG-D6 gas is also expected to substantially reduce India’s dependence on energy imports and bring down subsidy levels in the fertilizer, transportation and other sectors.

Petroleum Secretary RS Pandey said the D6 gas would help India reduce its crude imports by $9 billion a year, or about 10 percent of the import bill in 2008-09. At its peak level of 80 mmscmd (million metric standard cubic metres of gas per day), the production would amount to 44 percent of India’s current oil and gas production taken together, he said.

Besides doubling the nation's domestic gas production, the KG-D6 gas would substitute costly naphtha or imported LNG as fuel at power and fertiliser plants. The gas would also boost power supply from idle power plants starved of fuel and produce cheaper urea for agriculture. Reliance will pump gas at the rate of 2.5 million standard cubic metres of gas per day (mmscmd) to reach 10 to 15 mmscmd of gas in the next few days. By 2010, output from D6 will be increased to 80 mmscmd, doubling India’s gas production capability.

Gas from the KG D6 deepwater block will be piped to an onshore facility at Gadimoga --a small village in the East Godavari district of Andhra Pradesh, before it is delivered to the consumers. Reliance operates D6 with a 90% stake, with Canada's Niko Resources holding the remaining 10%.
 

Pintu

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The exciting fact is that $ 9 Bn will be saved by this.
 

Singh

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Even more exciting fact is : by end 2009 Reliance will take care of the shortfall that is at present over 60% of the demand and help the gas starved industries operate optimally.
 

Rage

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Nice!!!

Here's a BBC report on the same:



India extracts Bay of Bengal gas

By Chris Morris l BBC News, Delhi
Thursday, 2 April 2009


Reliance say that the gas will be a major boost for India

The Indian company Reliance Industries has started pumping natural gas from a massive deep-sea field in the Bay of Bengal off India's eastern coast.

Eventually it will almost double the country's natural gas output.

Just over six years after the deep-sea field known as D-six was discovered under the Bay of Bengal, the first gas has been pumped ashore.

Within a few days supplies will reach Indian fertiliser companies which have first call on this new source of gas.

It is a big moment for Reliance Industries, which is owned by one of the world's richest men, Mukesh Ambani.

The company says the gas field will reach peak production by the end of this year.

And according to government officials the new gas supplies will then help India reduce its crude oil imports by about $9bn a year.

India has chronic energy shortages and growing demand in a sector which is still tightly controlled by government regulations and official pricing policies.

A big new supply of clean energy will be a welcome boost for consumers and it may also be a sign that the government recognises that the free market needs to play a bigger role in India's energy policy in the future.


http://news.bbc.co.uk/2/hi/south_asia/7980099.stm
 

musalman

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what is the daily production?
 

nitesh

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Guys can we start a thread something like

"Tracking natural resources" or sorry I am not able to think of right name right now so that we can track the new discovery or any thing happening regarding our enrgy secutiy.

Please suggest a name will make it sticky
 

Pintu

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TRACKING OUR NATURAL RESOURCES

How it will do, Nitesh ?
 

Pintu

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Auction of Oil and Gas blocks

The Telegraph reports that India launched biggest auction of Oil and Gas.

The link and the report from The Telegraph follows:

http://www.telegraphindia.com/1090410/jsp/business/story_10802176.jsp


Drill starts for fresh oil hunt
OUR SPECIAL CORRESPONDENT
R.S. Pandey in New Delhi on Thursday. Picture by Ramakant Kushwaha

New Delhi, April 9: India today launched its biggest auction of oil and gas blocks at a time when global players are slashing exploration and production budgets because of recession.

“There were options either to go ahead or sit tight. The most effective antidote (to the recession) is the generation of economic activity. One should not halt something which is an ongoing process,” petroleum secretary R.S. Pandey said at the launch of the eighth round of the new exploration and licensing policy (Nelp-VIII).

However, Pandey said the government might not allocate any block if it received a poor response. “If the response is poor, we have the option not to allocate, and if it is good, we will offer another 30-40 blocks in the next phase,” he said.

Of the 70 blocks on offer, 24 will be deep-water, 28 shallow-water and 18 onland. They are spread throughout the country, including two in Bengal.

“About 30 per cent of the blocks are from the previous rounds and about 10 are from the nomination blocks (pre-Nelp phase),” Pandey said. The government has also put up for bidding 10 coal bed methane blocks.

The bids will close on August 10, and the contracts are expected to be signed in four months.

Given the jittery market sentiment, energy analyst Arvind Mahajan of KPMG felt mostly Indian players would participate in the auction. Global majors such as Royal Dutch Shell, Exxon Mobil and ConocoPhillips have revisited their growth plans and cut their investments in exploration and production.

“This is the best time to get exploration assets. It will be available more easily. So, I think there will be medium to aggressive bidding,” V.K. Sibal, director-general of hydrocarbons, said.

For the first time, the government is offering blocks in the western Andaman region, which is close to the hydrocarbon-rich areas of Indonesia and Myanmar.
 

Yusuf

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After the Reliance find, Im sure there will be lots of people lining up to hunt for oil and gas. Its vital for our energy security that we have home made stuff rather than import. Also saves us a lots of Dollars. God its at 50 right now. Ouch!!
 

Pintu

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You are right Yusuf , if all is well this will be very fascinating, not only the successful drilling in huge oil & gas reserves save the billions of dollars needed for import but also will pave the way for end of dependence from other country.

Regards
 

Pintu

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Govt may join battle on KG gas to defend policy- Oil & Gas-Energy-News By Industry-News-The Economic Times

Govt may join battle on KG gas to defend policy


17 Jun 2009, 0612 hrs IST, Rajeev Jayaswal & Soma Banerjee, ET Bureau

NEW DELHI: The government, which will be earning close to $9 billion from RIL, as part of its profit share, is likely to intervene in the RIL vs RNRL case yet again, as the Bombay High Court order puts a huge question mark on its gas utilisation policy.

The gas policy, which was put in place soon after the government approved RIL’s price of $4.2 per unit as per a directive by the empowered group of ministers (eGoM), provides for fertiliser companies to get the gas first, followed by power plants that are sitting on idle capacity for want of gas. This allocation policy has been the basis to provide gas to RIL’s first set of consumers. However, this policy will not hold good if RIL gives the gas to RNRL.

The court order directs RIL to sell gas to RNRL, which in turn will sell it to its affiliate, Reliance Power. At present, R-Power does not have any gas-based plant; therefore, the company has two options: either to use it as fuel for the proposed power plant at Dadri, which is yet to come up, or to buy an existing one. And, selling gas to a new power plant is not allowed under the present gas utilisation policy.

Moreover, if RIL has to give 28 mmscmd to RNRL, it will be left with very little gas from its first block of 40 mmscmd gas meant for existing fertiliser and power plants as mandated by the government. It is this contradiction that may force the government to step in.

The government had earlier intervened in the dispute in October last but then withdrew two months later, after the court directed that third-party gas sales could start. What is although not clear is how the government will intervene in the case, which is now likely to be taken to the Supreme Court.

Senior petroleum ministry officials, who spent a large part of the day trying to understand the implications of Monday’s high court order, said that allocating gas to RNRL will be against the basic principles of the gas allocation policy. The court has directed RIL to sell 28 million standard cubic metres of gas to Reliance Natural Resources at $2.34 per million British thermal unit (mmBtu).

Speaking to ET , petroleum & natural gas minister Murli Deora said: “We are studying the judgement and the government will take the steps which are in the best interest of the nation.” According to one of the officials in the oil ministry ET spoke to, the impact of the court’s order will be conveyed to the eGoM, chaired by Pranab Mukherjee, and the group would decide on the future course of action.

“The government has specified distribution of the scarce natural resource in certain order in the best interest of the nation. It will defend its gas utilisation policy in an appropriate manner,” the official said, requesting anonymity.

The government will protect its share of profit and ensure that priority of gas allocation set by the eGoM is not disturbed. “Fertiliser sector will be worst hit and that would hamper the country’s agricultural growth,” he said.
 

Pintu

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ONGC struck more Oil and Gas it may narrow Demand Supply Gap siginificantly

ONGC scores hat-trick on gas discoveries- Oil & Gas-Energy-News By Industry-News-The Economic Times

ONGC scores hat-trick on gas discoveries
23 Jun 2009, 0211 hrs IST, Rajeev Jayaswal & Soma Banerjee, ET Bureau

NEW DELHI: India’s biggest oil explorer ONGC has struck oil and gas in three new blocks, one of these finds its most significant in decades and holding the promise of significantly narrowing the energy-starved country’s demand-supply gap in the natural gas sector.

The gas find at Krishna Godavari (K-G) basin off the Andhra coast could prove as rich as the Reliance Industries’ D-6 block, which, at its peak, is expected to double India’s current natural gas output. The other two discoveries included an oil find in Charada-3 offshore block in Cambay basin and oil and gas find in Matar in Vadodara district, both in Gujarat.

ONGC chairman RS Sharma confirmed the three discoveries, but declined to elaborate on the size of these finds. But a senior official in the company, who requested anonymity, said the K-G basin find could have an estimated reserve of 10 trillion cubic feet (TCF) of gas.

Even the Charada-3 oil find was “significant”, the official said, calling it “a large accumulation spread in about 8 km of area.” The success in Matar was notable as the block was earlier awarded to a combine of Niko Resources and GSPC, which didn’t have much success in finding hydrocarbons, the ONGC official said.

“We have notified the finds to the Directorate General of Hydrocarbon (DGH). If the approvals come in, it would take about three to four years for production from these fields to begin,” ONGC chairman and managing director RS Sharma told ET NOW in an exclusive interview.

The head of the DGH, VK Sibal said his organisation was still to ratify ONGC’s finds. “We are going through the case and we will take a call soon,” he said.

India currently imports almost 80% of its energy needs, and analysts say that many more new finds may be needed to satiate the burgeoning appetite for energy in the rapidly growing economy.

ONGC, one of India’s earliest and pre-eminent oil firms, had its last major discoveries in the 1980s when it discovered oil and gas off the Mumbai coast.

More recently, that discovery has been eclipsed by the Reliance gas discovery in 2002, now estimated to have reserves of 11.5 TCF. Widely regarded as India’s biggest gas discoveries to date, production from Reliance's D-6 field is set to double country's current gas production of about 89 million standard cubic meter per day (MMSCMD) at its peak.

Shares in state-run ONGC, India's second most valuable company by market value, closed 1.6% down at Rs 1,010 on the BSE on Monday, tracking a weak overall market.

The share price fall came on a day ET, quoting senior government officials, reported that ONGC was likely to be among firms that could in the future have to pay royalties on the basis of their sale price of oil and gas instead of the now prevalent well-head value.

For India's largest oil and natural gas explorer, the discoveries couldn't have come at a better time. ONGC, like most of its global peers, is constantly replacing its old and depleting reserves of oil and gas with new discoveries.

"We made almost 23 discoveries last year and our reserve-to-replacement ratio is almost 1:4, as compared to global averages of 1:1," ONGC chairman Mr Sharma said.

All the three blocks on which ONGC, in which the government has a near 80% stake, has struck oil and gas were given to the company without competitive bidding. The blocks were awarded before the government launched its policy of inviting private and foreign players to bid for oil and gas fields under its new exploration licencing policy (Nelp).

Analysts say ONGC's discoveries could positively impact investor perception of India's hydrocarbon reserves, especially since it comes two months ahead of the next round of bidding for oil and gas blocks under NELP-VIII..
 

Pintu

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State should get priority in KG basin oil: CM - Hyderabad - City - NEWS - The Times of India

State should get priority in KG basin oil: CM
TNN 21 July 2009, 01:49am IST

HYDERABAD: Even as the Ambani brothers are wrangling over the spoils of the KG basin, the state chief minister Y S Rajasekhara Reddy on Monday made a plea that the state should get royalty or profit share from the off shore resource of oil and natural gas.

Speaking at the meeting he had with the members of 13th Finance Commission, Reddy urged it to give a serious thought and see that justice was meted to the state in this regard. He said state was being subjected to great injustice as it does not enjoy any priority in allocation or pricing. "Extreme interpretation of constitutional provisions about off shore resources should not be invoked to deny people of our state their due share, he said."

Claiming that the state government was midway in implementing large infrastructure projects, the chief minister Y S Rajasekhara Reddy asked the 13th Finance Commission to give a serious thought on how to make more resources available. "Keeping them on hold for whatever reason is not in the national interest," he said.

Among other demands were increase in percentage of central taxes to 50 percent from present 30.5 percent, special grant for irrigation projects as they contribute more towards national food security, and amend the rule of borrowing limit of 3 percent of the GSDP for fiscal deficit.

The chief minister said, short fall on account of revenue receipts is estimated to be around Rs 8,000 crore from the budgeted estimates while there will be a short fall of Rs 10,000 crore on account of capital receipts thus posing a big resource gap. The enhancement of fiscal deficit eligibility to 4% is a small concession.

Another important submission made by him was in regard to the fiscal deficit. He said the 12th Finance Commission had fixed the limit of 3% of GSDP for fiscal deficit, which broadly means the net borrowings of states for the year. As revenue receipts to GSDP vary from state to state, allowing all states to borrow at 3% is not correct. He said Andhra Pradesh and West Bengal have same population and same GSDP of Rs 3.50 lakh crore but revenue was Rs 62,000 crore as against West Bengal's revenues of Rs 35,000 crore. This anomaly needs to be corrected, he added.

Expressing concern over increasing trend towards centralisation as seen from the reduction in share of state plan outlays and increase in centrally sponsored schemes, cesses and levy of surcharges, Reddy asked the commission to arrest this tendency. He said it should also consider compensating states in case of delays in fixation of royalties on major minerals.

Underlining on the need for increase in state's share of central taxes, CM said that horizontal distribution should have 30% weightage for population, 15% for area, 20% for per capita income distance, 10% for tax effort and 25% for infrastructure and social sector spending. He further pleaded for a

foolproof mechanism for compensation states for loss due to introduction of goods and service tax (GST) from April 1, 2010. Tax devolution should be the main channel and grants should be residual and that specific grants should be given to the states like Andhra Pradesh for its flagship programmes.
 

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Cairn turns on oil tap in India

Barmer, August 29
Prime Minister Manmohan Singh today inaugurated production from the country's biggest oil find in more than two decades and said India offered "a very good" climate for foreign investment in the sector.

Speaking at the beginning of oil production from Cairn India's on-land Mangala oilfield, he said the historic event reflected that a “very good climate has been created for foreign investment.” “ I invite investors from all over the world (to invest in the oil and gas sector) ...The investment climate is positive. We are committed to facilitating (such investment) and providing all assistance,” he said.

India has offered 70 oil and gas exploration areas and 10 coal bed methane (CBM) blocks - the largest ever auction of oil and gas exploration areas in the country - in the eighth edition of New Exploration Licensing Policy.

Singh described the beginning of oil production as the “beginning of a new era” for India and Rajasthan. The oilfield will facilitate a more prosperous state and economic development.

Cairn India has started production from the Mangala field - the largest of 25 discoveries made by Cairn in the Barmer Basin. First oil was evacuated via trucking to the Gujarat coast for onward transport to MRPL, one of the government-nominated buyers.

The oil production will gradually ramp up to a peak output of 1,75,000 barrels per day over the next two years. At this point, oil production from Rajasthan oil fields will account for over 20 per cent of India’s domestic oil output.

Petroleum Minister Murli Deora said the gas discovery in the Krishna Godavari basin by Reliance Industries and the oil find in Barmer demonstrated that India was a hydrocarbon rich.

Oil production from Mangala would save around 7 per cent in crude oil import bill, he said.

“Cairn has invested about Rs 10,000 crore in the area. The total investment in this project will be more than Rs 20,000 crore. The Central government would get Rs 46,000 crore as its profit petroleum revenue over the life of the project. The government of Rajasthan would get Rs 12,000 crore as royalty for the first five years of the project,” he said.

Cairn India chairman Bill Gammell said development of the oil field in five years from discovery was reflective of the investor friendly environment in the country. — PTI
 

Pintu

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Cairn's gusher to cut oil imports by 20% - India - NEWS - The Times of India

Cairn's gusher to cut oil imports by 20%
TNN 30 August 2009, 02:01am IST

MANGLA (Barmer): For Rajasthan, it may be a big step. But for India, it was a giant leap towards energy security when PM Manmohan Singh on Saturday turned the wheel of `Fortune' -- a valve -- to allow the first gush of black gold from Cairn's Mangla field, the country's biggest oil discovery in over two decades.

"Growth of a nation needs to be fuelled with energy and with this oilfield becoming operational, Rajasthan will contribute to the development of the nation,'' Singh said after opening the valves. Mangla is the first of a triplet of Cairn's discoveries in Rajasthan -- Bhagyam and Aishwaraya being the other two -- to come on stream.

Bill Gammell, chairman of Cairn India's Scottish parent, said being able to bring the field into production in just five years from discovery sets an example for the world that India provides one of the best conditions to do business. Mangla will start with 30,000 bpd (barrels per day) and is expected to reach 205,000 bpd by 2011.

At this level, it will save roughly 7% of India's import bill, which could be in the range of $8-9 billion, cut import dependance by 20% and help Rajasthan earn Rs 9.5 crore in revenue per year. No wonder, chief minister Ashok Gehlot said it was a matter of pride for the state that "We will be the leading oil producers for the country''.

Cairn's oil project has raised people's expectations in the region and the long-time demand of having an oil refinery managed to get the PM's backing. Oil minister Murli Deora said, "The PM has on Saturday instructed me to pursue this case (refinery) seriously and I assured him of the same.''

Gehlot and Cairn officials expressed the hope that the matter of taxes will be resolved amicably. "It's a matter of the development of our state, hence we will pitch for value added tax and I am sure the Union minister (Deora) will meditate,'' Gehlot said.
 

Pintu

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Oil riches

Oil riches
Sarath Chelluri / Mumbai September 07, 2009, 0:49 IST

The start of oil production at Mangala fields will boost revenues of Cairn India

In the last one month, Cairn India’ stock witnessed smart gains not only on the back of a rise in crude oil prices but also on the commencement of crude oil production from its Rajasthan block. Cairn gushed its first oil from the Mangala field – its biggest discovery, which along with Bhagyam and Aishwarya are capable of producing as much as 20 per cent of India’s total oil production at peak output. The oil flow assumes significance as Cairn’s June quarter performance was below par due to a volume drop from its mature assets. In the next couple of quarters, increased crude oil production would see robust growth in revenues as well as cash-flows. Nevertheless, the crude oil outlook would also have a bearing on Cairn’s financials.

June results

The oil production from its mature fields of Cambay and Ravva is on a natural decline and was down by 7 per cent and 4 per cent, respectively in June 2009 quarter as compared to March quarter. The impact would have been more, but for the q-o-q increase in realisations (up 21 per cent) which helped Cairn to stem major revenue losses in the June quarter.

However, on a y-o-y basis, with average crude oil realisation down by 46 per cent in June quarter to around $ 51/ barrel, sales were down 49 per cent. The reported net profit (after exceptional items) was down by two-thirds y-o-y to Rs 45.4 crore, on the back of a past profit-petroleum that was due to government from Ravva. However, this is a one-time exceptional item and thus, provides solace.

Going ahead, a higher levy of cess from Rs 927 a tonne to Rs 2,575 a tonne or any imposition of land tax from the state government may affect profitability in future. Nevertheless, expect profits to double in 2009-10 from what they were at the end of 2008-09 led by higher volumes.

Mangala push

While Mangala’s oil production may stand at a modest 30,000 barrel per day (bpd) to begin with, the total output from Rajasthan-based fields (including Aishwariya and Bhagyam fields) is expected to jump by over seven-fold by 2011. The government has earmarked public sector refiners to lift around 2.5 million tonnes (MT) of crude oil (equivalent to 60,000 bpd) by March 2011 from Mangala fields that is expected to reach at least 125,000 bpd or 6.25 million tonnes. MRPL and IOC’s crude oil offtake would be 0.2 MT each, while HPCL’s crude off-take expected to reach 0.3 MT. Further, IOC’s off-take is expected to touch 1.5 MT by March 2011.

Regarding pricing, Rahul Dhir, MD and CEO, Cairn India says, “We are pleased to have concluded pricing negotiations with MRPL and IOC for the initial quantities of crude from Rajasthan, which currently represents a 10 to 15 per cent discount to Brent prices.” With only 2.5 MT allocated out of expected production of 6.25 MT by first half, 2010, government may allow private refiners like Reliance, Essar Oil to buy Cairn India’s Rajasthan crude in the event of public sector firms do not lift the entire output. Thus, Dhir adds, “As we ramp up production, the government will be able to nominate buyers,” further suggesting that they would not curtail production for lack of buyers. In case of no major delays in finding takers, expect the company’s revenues to rise substantially by 2011-12 on the back of increased volumes.

Conclusion

At Rs 259.70, the stock trades at a PE of 9 times its estimated 2010-11 earnings. While the upside appears limited (10 per cent), unresolved issues of cess and local taxes are an overhang. However, any major discoveries at its exploratory assets or a perk up in crude oil prices can prove positive.
 

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