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Tracking of India's natural resources by the Companies in India and abroad
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Production contracts shouldn't be tweaked by anyone: RIL
Production contracts shouldn't be tweaked by anyone: RIL
Energy major Reliance Industries today said that Production Sharing Contracts (PSCs) like the one it had signed for KG-D6 fields with the government should not be tampered with by anyone to maintain their credibility.
Addressing a conference on natural gas, RIL President (International Operations) Atul Chandra said exploration was a very high risk business and any modification in the PSCs - under which operators like RIL explore for oil and gas and get paid for their effort - would lead to loss of faith in the system.
His comments assume significance in view of the ongoing tussle between the Ambani brothers, Mukesh and Anil, over supply of gas from RIL's KG-D6 fields.
While Mukesh Ambani-led RIL says it is just a contractor under the PSC that also gives the government the right to approve gas sale price and fix users, younger brother Anil-run RRNL says the government role was limited only for the purpose of valuation of the gas and RIL had full marketing freedom.
Chandra said the PSC system in India was based on global industry practice where companies take the risk of investing in areas with no discoveries.
If they don't find any oil and gas, the money they spent is written off. But in case of a discovery, the hydrocarbon produced is shared between the companies and the government.
RIL, he said, was producing about 50 million standard cubic meters per day of gas from two fields in KG-D6 block and the output is expected to touch 80 mmscmd shortly.
Production contracts shouldn't be tweaked by anyone: RIL
Energy major Reliance Industries today said that Production Sharing Contracts (PSCs) like the one it had signed for KG-D6 fields with the government should not be tampered with by anyone to maintain their credibility.
Addressing a conference on natural gas, RIL President (International Operations) Atul Chandra said exploration was a very high risk business and any modification in the PSCs - under which operators like RIL explore for oil and gas and get paid for their effort - would lead to loss of faith in the system.
His comments assume significance in view of the ongoing tussle between the Ambani brothers, Mukesh and Anil, over supply of gas from RIL's KG-D6 fields.
While Mukesh Ambani-led RIL says it is just a contractor under the PSC that also gives the government the right to approve gas sale price and fix users, younger brother Anil-run RRNL says the government role was limited only for the purpose of valuation of the gas and RIL had full marketing freedom.
Chandra said the PSC system in India was based on global industry practice where companies take the risk of investing in areas with no discoveries.
If they don't find any oil and gas, the money they spent is written off. But in case of a discovery, the hydrocarbon produced is shared between the companies and the government.
RIL, he said, was producing about 50 million standard cubic meters per day of gas from two fields in KG-D6 block and the output is expected to touch 80 mmscmd shortly.
Pintu
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IIM study suggests deregulation of oil sector- Oil & Gas-Energy-News By Industry-News-The Economic Times
IIM study suggests deregulation of oil sector
28 Dec 2009, 1453 hrs IST, PTI
NEW DELHI: An Indian Institute of Management (IIM), Ahmedabad, study on the oil sector has suggested radical reforms, including complete deregulation, where private and public sector firms are free to price fuel as they deem fit.
"Reform of the oil sector is long overdue. The problems in the sector emanate from the structure of central taxes and the system of subsidisation through prices," the study said.
Currently, the government controls prices of petrol, diesel, domestic LPG and kerosene and compensates public sector firms through a complex mechanism that has squeezed out liquidity with the retailers and drained resources of upstream firms.
It gives oil bonds to make up for a part of the revenue lost on selling fuel below cost and asks upstream operators like ONGC to bear the rest. "The social and fiscal costs arising out of the current method of subsidisation, and taxation are very severe," it said
Suggesting radical reforms, the study said, "Complete deregulation of the sector allowing oil producers, oil refiners, marketing companies, and integrated operators to price their products as they deem fit" is needed.
It said the fiscal costs were very large and much larger than that reported in the budget since they do not include the costs of diversion and tax avoidance that result from differential pricing. "Thus in the case of kerosene the cost of delivering Rs 2000 crore to the BPL consumers was in excess of Rs 24,000 crore."
IIM study suggests deregulation of oil sector
28 Dec 2009, 1453 hrs IST, PTI
NEW DELHI: An Indian Institute of Management (IIM), Ahmedabad, study on the oil sector has suggested radical reforms, including complete deregulation, where private and public sector firms are free to price fuel as they deem fit.
"Reform of the oil sector is long overdue. The problems in the sector emanate from the structure of central taxes and the system of subsidisation through prices," the study said.
Currently, the government controls prices of petrol, diesel, domestic LPG and kerosene and compensates public sector firms through a complex mechanism that has squeezed out liquidity with the retailers and drained resources of upstream firms.
It gives oil bonds to make up for a part of the revenue lost on selling fuel below cost and asks upstream operators like ONGC to bear the rest. "The social and fiscal costs arising out of the current method of subsidisation, and taxation are very severe," it said
Suggesting radical reforms, the study said, "Complete deregulation of the sector allowing oil producers, oil refiners, marketing companies, and integrated operators to price their products as they deem fit" is needed.
It said the fiscal costs were very large and much larger than that reported in the budget since they do not include the costs of diversion and tax avoidance that result from differential pricing. "Thus in the case of kerosene the cost of delivering Rs 2000 crore to the BPL consumers was in excess of Rs 24,000 crore."
Pintu
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http://timesofindia.indiatimes.com/...elines-for-TN-by-2012/articleshow/5706938.cms
Three gas pipelines for TN by 2012
TNN, Mar 21, 2010, 03.51am IST
CHENNAI: Tamil Nadu will get three gas pipelines by 2012 to increase availability of gas in the state, petroleum secretary S Sundareshan said on Saturday. Southern India was short of gas when compared to the west and the north, he said.
According to Sundareshan, the country's flagship natural gas company, Gail (India) Ltd, would be laying one pipeline between Bangalore and Chennai. Reliance Industries Ltd will be putting up pipelines between Kakinada and Chennai and another between Chennai and Bangalore. The company has been authorised to execute the projects, he said. The Kakinada-Chennai line will be later extended to Thoothukudi.
GAIL will also be executing the Dhabol-Bangalore pipeline with connectivity to Goa, Kochi-Mangalore pipeline with connectivity to Bangalore, and the Haldia-Jagdishpur pipeline. Reliance will be executing the Kakinada-Haldia pipeline.
"Gas production has increased by 60% to 70% in the last one year. Last year was important for GAIL, which is involved in exploration and production of natural gas, as it commenced production in two important oil fields. Gas production from the Krishna Godavari basin has increasd by 60 million standard cubic metre per day," Sundareshan said.
"All the pipelines to the south will be ready by mid 2012. With this, the pipeline connectivity will come to the south. There is no need for any concern now," he said, adding that the ministry had held discussions with Reliance and GAIL on the implementation of the project. There is also a provision to connect Madras Fertilisers Ltd, Southern Petrochemicals Industries Corporation (SPIC) and Chennai Petroleum Corporation Ltd, he said.
He said the ministry was also looking at increasing the coverage of LPG connections in the country. Tamil Nadu has LPG coverage of 73%, which is expected to increase by 10% every year, he said.
The refining capacity of crude of the oil marketing companies was also being increased from 178 million tonnes currently to 256 million tonnes by 2012. "The domestic consumption is only 134 million tonnes. We have a surplus capacity of 40 million tonnes. By 2012, this surplus would touch 100 million tonnes," Sundareshan said.
On the India-Pakistan-Iran pipeline, he said India has offered to have bilateral talks with Iran on two issues price of oil delivered at the Indian border and the point of delivery. "At this moment, the price formula offered by Iran is quite high for us," he said.
Three gas pipelines for TN by 2012
TNN, Mar 21, 2010, 03.51am IST
CHENNAI: Tamil Nadu will get three gas pipelines by 2012 to increase availability of gas in the state, petroleum secretary S Sundareshan said on Saturday. Southern India was short of gas when compared to the west and the north, he said.
According to Sundareshan, the country's flagship natural gas company, Gail (India) Ltd, would be laying one pipeline between Bangalore and Chennai. Reliance Industries Ltd will be putting up pipelines between Kakinada and Chennai and another between Chennai and Bangalore. The company has been authorised to execute the projects, he said. The Kakinada-Chennai line will be later extended to Thoothukudi.
GAIL will also be executing the Dhabol-Bangalore pipeline with connectivity to Goa, Kochi-Mangalore pipeline with connectivity to Bangalore, and the Haldia-Jagdishpur pipeline. Reliance will be executing the Kakinada-Haldia pipeline.
"Gas production has increased by 60% to 70% in the last one year. Last year was important for GAIL, which is involved in exploration and production of natural gas, as it commenced production in two important oil fields. Gas production from the Krishna Godavari basin has increasd by 60 million standard cubic metre per day," Sundareshan said.
"All the pipelines to the south will be ready by mid 2012. With this, the pipeline connectivity will come to the south. There is no need for any concern now," he said, adding that the ministry had held discussions with Reliance and GAIL on the implementation of the project. There is also a provision to connect Madras Fertilisers Ltd, Southern Petrochemicals Industries Corporation (SPIC) and Chennai Petroleum Corporation Ltd, he said.
He said the ministry was also looking at increasing the coverage of LPG connections in the country. Tamil Nadu has LPG coverage of 73%, which is expected to increase by 10% every year, he said.
The refining capacity of crude of the oil marketing companies was also being increased from 178 million tonnes currently to 256 million tonnes by 2012. "The domestic consumption is only 134 million tonnes. We have a surplus capacity of 40 million tonnes. By 2012, this surplus would touch 100 million tonnes," Sundareshan said.
On the India-Pakistan-Iran pipeline, he said India has offered to have bilateral talks with Iran on two issues price of oil delivered at the Indian border and the point of delivery. "At this moment, the price formula offered by Iran is quite high for us," he said.
Cairn India discovers more oil in Rajasthan block
[video]http://economictimes.indiatimes.com/videoshow/5714890.cms[/video]
[video]http://economictimes.indiatimes.com/videoshow/5714890.cms[/video]
