State-run Indian explorer Oil and Natural Gas Corp (ONGC) aims to commence commercial drilling for shale gas next year, its chairman said."We hope to take up at least 10 wells for parameters this year and to start commercial drilling next year," Sudhir Vasudeva told reporters.India approved a policy to allow state-owned companies to start exploration for shale oil and gas last month, as the world's fourth-biggest energy consumer moves slowly to seek alternatives to expensive oil imports.Of about 356 blocks held by ONGC and Oil India, India's upstream regulator has said 176 could hold shale resources.India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand, according to the US Energy Information Administration.(Reuters)
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The unearthing of the allocation scam and the findings of the CAG have brought the coal industry to its knees. The spate of deallocations and the ongoing CBI probe that followed have played havoc with production and hit supply to power producers. A lowdown...Click here to view graphicCompiled by Moyna; Graphic by Prashant Chaudhary(This story was published in BW | Businessworld Issue Dated 21-10-2013)
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Brazil's state-led oil company, Petroleo Brasileiro SA, and its Indian partners have made a "beautiful" oil discovery off Brazil's northeast coast and it will produce a minimum 100,000 barrels of petroleum a day starting in 2018, the company's chief executive officer said on Friday. Maria das Graças Foster, the chief executive, declined to say how big the discovery is but said it was an important new oil "province" for Brazil and that its large potential reserves would create a rush of jobs and activity to the area that will need to be managed carefully. On 27 September, Reuters exclusively reported that the discovery, centered on the SEAL-11 offshore exploration block, likely holds more than 1 billion barrels of oil and that the region will soon become Brazil's biggest new oil frontier. The SEAL-11 block is 60 per cent-owned by Petrobras and 40 per cent-owned by IBV Brasil, a 50-50 joint venture between India's Bharat Petroleum Corp (BPCL) and Videocon Industries Ltd. "In 2008 we decided to do a very extensive investigation of the area, and the results we have got have been very good," Foster told reporters at company headquarters in Rio de Janeiro. "This is a beautiful discovery, beautiful discoveries." In addition to light, high-quality crude oil, the region has important quantities of gas, she added. Two prospects in the area, known as Farfan and Muriu, are expected to be developed as a single or integrated unit, with at least one floating production, storage and offloading ship (FPSO) producing oil and gas from the area in 2018, Foster said. Foster said that was the minimum outlook for the area based on spending in the company's $237 billion 2013-2017 investment plan drawn up before the latest drilling and tests in the area. If confirmed, the new find could make the region the country's biggest new oil frontier since the government unveiled the massive subsalt discoveries off the coast of Rio de Janeiro and Sao Paulo states in 2007. Refinery PlansFoster also said that Petrobras is totally reforming its plans to build two low-sulfur diesel refineries in Brazil's northeast. The so-called premium refineries planned for the states of Maranhao and Ceara were showing signs they would not be profitable. The Maranhao refinery is expected to cost about $20 billion to build. Petrobras, however, has reworked the projects with the help of U.S. based consultants, Foster said, and those projects are now looking stronger. The company hopes to start putting the refineries out to tender as early as March, she said. The company is also in talks with a Chinese company to take a stake in the Maranhao project, Foster said. The project could lead to the Chinese partner taking a majority stake, she added.(Reuters)
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The overseas unit of Indian state explorer Oil and Natural Gas Corp plans to raise $1.5 billion to refinance a bridge loan that it expects to finalise soon to buy a 10 per cent stake in Mozambique's Rovuma gas field from Videocon group."Currently the market conditions are good. We have time of about one year, but we will refinance the bridge loan in three to four months," ONGC Videsh finance director S.P Garg told reporters.ONGC, along with state firm Oil India, acquired a 10 per cent stake in the Mozambique gas field from Videocon for $2.48 billion. ONGC separately acquired another 10 per cent stake in the block from Anadarko Petroleum Corp for $2.64 billion later.(Reuters)
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The cabinet has approved auction of coal blocks to private companies, Coal Minister Sriprakash Jaiswal said on Tuesday, enabling the government to allot coal mining licences through competitive bidding for the first time.Coal mining licences used to be allocated on recommendations of a panel of top bureaucrats across ministries, but the federal auditor censured the process last year saying it lacked "transparency" and probably deprived the government of billions of dollars of potential revenue between 2004 and 2011.India relies on coal to fuel more than half of its power generation, but state-run monopoly Coal India Ltd, that accounts for around 80 percent of the country's output has been unable to dig out coal fast enough to feed the country's growing power demand.(Reuters)
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The cabinet approved its shale gas and oil exploration policy on Tuesday, 24 September, a minister said, but gave no further details.India, the world's fourth-largest consumer of energy, could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of the country's gas demand, according to the U.S. Energy Information Administration.But production from shale remains a long way off for India, which relies on imports for much of its energy needs.(Reuters)
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Goa's shipping industry, which is struggling to survive after the last year's ban on mining and export of iron ore, is pinning hopes on alternative cargoes to salvage their sinking business. The shipping industry in the State was catering to 90-odd mining leases before the temporary ban came into force. The central government has been encouraging the shift of cargo from roads to sea transport to reduce carbon footprint and also pressure on highways infrastructure. This has given a new lease of life to Goa's barge (ship) industry. "Nationally, there is shift of cargo from road-rail to shipping. You can also get carbon credit for such shift," Atul Jadhav, President, Goa Barge Owners Association, told PTI. The barge industry is looking for incentives to assist the logistics and transport industry achieve sustained and long-term shift from road freight to short sea and inland waterway transportation. Jadhav said the Kerala government has already started giving per tonne per kilometre subsidy to shippers for the cargo shift from road to waterways. He said the Centre can offer similar subsidy for the barges in Goa, which are left without cargo since September last year, when mining leases were suspended and iron ore exports from the state came to a halt. The fate of 400-odd barges, which generally operate in Goa's rivers, is hanging in balance, waiting for the Supreme Court to allow iron ore export. Jadhav said the barges from Goa can venture into deep sea and collect mining cargo from bigger vessels once the Ministry of Shipping declares waters up to four nautical miles off Goa shore as "partially smooth waters". The vessels can operate in the deep sea only when an area is declared as "partially smooth water", he said. Atul Pai Kane, Chairman, Confederation of Indian Industries (CII) Goa Chapter, said once these issues are settled, cargoes like cement, steel and coal can be transported with the state through barges instead of roads. "Two companies have already sought permission from the government to construct jetties in inland waters," he said. (PTI)
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GMR Infrastructure has sold its majority stake in a highway project for about $35 million, as debt-laden companies step up sales of some assets to boost earnings in a sector struggling with a weak economy. GMR, one of the country's best known infrastructure groups, whose interests span airports to power plants, said it had sold its 74 per cent stake in Ulundurpet Expressways to the India Infrastructure Fund of IDFC Ltd. It is the company's second sale in less than six months and more could be in the pipeline, GMR officials said. The deal will give GMR, whose outstanding debt was at $5.7 billion as of end June, an equity infusion of $35 million and also take about $73 million worth of consolidated debt off its books. The sale of GMR's 73 km (45 mile) highway in the southern coastal state of Tamil Nadu is the latest example of Indian infrastructure companies selling or trying to sell stakes in projects in order to reduce their debts. India sees ramping up the construction of new roads, power plants and ports as crucial to making its businesses more internationally competitive and lifting economic growth out of its worst slowdown in a decade. But the private sector's efforts to build new projects have been derailed by problems ranging from coal and gas supply shortages in the power sector to a throttling bureaucracy and a lack of bank funding in the roads sector. A drop of nearly 13 percent in the value of the rupee so far this year has also raised the cost of servicing dollar loans for companies. That has tipped companies into losses and forced them to sell off assets to reduce the debt pile. "We at GMR Group, continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets," said Madhu Terdal, the chief financial officer of the GMR Group, in a statement. Its rival GVK Power and Infrastructure Ltd has asked lenders to reschedule loans worth more than $200 million to its power business and is looking to sell a stake in a unit that runs airports in Mumbai and Bangalore. Lanco Infratech Ltd is trying to sell stakes in its power plants. India's Jaiprakash Associates Ltd last week announced the sale of its cement plant in Gujarat state to UltraTech Cement Ltd. GMR shares ended up 2.1 per cent on Tuesday, outperforming a flat broader market. (Reuters)
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