Indian oil and gas major Reliance Industries said it had signed an agreement with Myanmar for a production sharing contract for two offshore blocks. Reliance Industries Limited (RIL) will be the operator of the blocks with a 96 per cent participating interest while United National Resources Development Services Co. Ltd, a Myanmar company, will hold the remaining stake. Reliance said in a statement its participation was in line with its strategy to expand its international asset base by investing in attractive oil and gas destinations. Both the blocks are located offshore in the Tanintharyi basin of Myanmar in water depths up to 3,000 feet and together encompass total area of 27,600 square kilometers. "RIL's participation is in line with its strategy to expand its international asset base by investing in internationally attractive oil and gas destinations. The company in this way will leverage its organizational capabilities and expertise to create value for the E&P segment," the Mukesh Ambani-run firm said. Myanmar is the latest country where the oil-to-telecom conglomerate is seeking to expand its upstream business after testing waters in nations such as Venezuela and Iraq. RIL had bid for three blocks in the Myanmar Offshore Block Bidding Round in 2013 and won two. While Myanmar, like India, offers a similar production sharing contract regime that allows recovery of all costs before sharing spoils, its contractual regime is much more attractive. Unlike Indian production sharing contracts where the work on an area begins with an exploration phase, Myanmar offers six months of preparation period, followed by up to 12 months of study period after which companies have an option to exit the block. This way they avoid incurring unfruitful expenditure and liquidated damages for not fulfilling work programme. The exploration phases begin after this study period. While Indian PSC provides for a two-year time from approval of development plan to tie up markets for natural gas and development to commence within 10 years of first discovery well, Myanmar allows an operator to retain a discovery for 7 years even after if it is not considered economical. Also, multiple extensions of one year are available. Oil produced in India can be sold at arms length price but gas can only be sold at a prior approved formula. In Myanmar, oil can be sold at arms length while natural gas can be sold at any price that can be realised from the market. (Agencies)
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Brent crude oil shot up nearly 6 percent on Thursday after Saudi Arabia and its Gulf Arab allies began a military operation in Yemen, although importers saw little immediate threat to supplies. The strike against Houthi rebels, who have driven the president from Yemen's capital Sanaa, could stoke concerns about the security of Middle East oil shipments. Oil prices jumped as traders and importers said they were worried the Saudi attack was a sign that fighting in the oil-rich Middle East was out of control and spreading. Brent futures had risen more than $3 a barrel to as high as $59.78 a barrel just before 0800 GMT, up almost 6 percent since their last settlement. U.S. crude was also up more than $3 at $52.35 a barrel. The risk from the attack in Yemen was heightened because the Houthis have received some support from Iran, Saudi Arabia's long-time rival for dominance in the Middle East. China's foreign ministry said on Thursday it was deeply concerned about the worsening situation in Yemen. Ministry spokeswoman Hua Chunying told a news conference that China urged all parties to act in accordance with United Nations Security Council resolutions on Yemen, and to resolve the dispute through dialogue. "The Saudis have taken military action because they have said the Houthis are getting support from the Iranians," said Li Guofu, director of the Centre for Middle East Studies at the China Institute of International Studies. "This is an indication that the war may gradually spread into a regional conflict. This is something the Chinese government is very much concerned about." ChokepointBeyond oil, the Middle East is also the world's biggest exporter of liquefied natural gas (LNG), from Qatar and also Yemen, but importers said they were not immediately worried. "Gas supply from Yemen has no disruption so far. We are not concerned given the supply surplus and weak demand currently," said Lee Sang-wook at Korea Gas Corp. Like oil, LNG prices have fallen by more than half in the last 10 months as surging output has been met with slowing economic growth, especially in Asia. With the global crude glut built up from U.S. shale oil and strong output from producers such as Russia, there is little immediate worry about any shortages developing. "Just because Saudi and others conducted air strikes doesn't mean the oil market becomes suddenly tight," said Masaki Suematsu, manager of the energy team at brokerage Newedge Japan in Tokyo, although he cautioned that the conflict could spiral further beyond the airstrikes. Some analysts said the strikes could lead to more stability in the region, if it resolved the conflict in Yemen. "If this is a prelude to a bigger operation in the Middle East, that may lead to some stability in the region," said Mari Iwashita, chief market economist at Tokyo's SMBC Friend Securities. Asian officials also said the fighting occurred near the Red Sea, waters that Arab Gulf supplies do not pass on their way to Asia. European importers may be more concerned as Arab producers have to ship oil past Yemen's coastlines via the Gulf of Aden to get to the Suez Canal. The waters between Yemen and Djibouti, at less than 40 km (25 miles) wide, are considered a "chokepoint" to global oil supplies by the U.S. Energy Information Administration and the region is heavily militarized by western navies. The United States and France both operate large military bases in Djibouti, and China also plans to open a base in the strategically well placed but small country in East Africa. NATO's anti-piracy fleet also operates from the Gulf of Aden. (Reuters)
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The one thing finance minister Arun Jaitley does not have to worry about much in this budget is how to meet the fiscal deficit target of 4.1 per cent. Much of that work is being done outside of the country: the Organisation of Petroleum Exporting Countries (OPEC) has decided to not reduce crude oil production. In the process, global crude oil prices are tumbling by the day. In the 200-odd days that Narendra Modi has been in power, the India basket of crude has fallen by almost 60 per cent from $108.05 a barrel (on 26 May) to $43.36 a barrel (on 14 January).
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India on Tuesday (2 December) raised excise duties on petrol by Rs 2.25 per litre and on diesel by Re 1 per litre with immediate effect, the finance ministry said in a statement to parliament.The increases, which follow similar hikes in mid-November, seek to take advantage of a slump in world oil prices to shore up government revenues without stoking inflation.A source familiar with the matter said the latest measures were expected to raise an additional Rs 4000 crore ($650 million) in the remainder of the fiscal year to the end of March 2015.(Agencies)
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Price of non-subsidised cooking gas (LPG) was on Monday (1 December) cut by a steep Rs 113 per cylinder and that of jet fuel (ATF) by 4.1 per cent as international oil rates slumped to multi-year lows.A 14.2-kg cylinder of non-subsidised LPG will now cost Rs 752, down from Rs 865 previously, in Delhi, oil companies announced today.This is the fifth straight reduction in rates of non-subsidised or market priced LPG, which the customers buy after exhausting their quota of 12 cylinders at subsidised rates, since August.In five monthly reduction, non-domestic LPG rates have been slashed by Rs 170.5 per cylinder, bringing the price at three-year lows.On similar lines, the price of aviation turbine fuel (ATF), or jet fuel, at Delhi was cut by Rs 2,594.93 per kilolitre, or 4.1 per cent, to Rs 59,943 per kl. This is the fifth straight monthly reduction in rates.This reduction follows a steep 7.3 pr cent or Rs 4,987.7 per kl, cut in prices on November 1.Since August, ATF prices have been cut by 14.5 per cent or Rs 10,218.76 per kl and rates have dipped below Rs 60,000 per kl level for the first time in three years.Brent, the benchmark grade for more than half of the world's oil, have dropped to USD 68.34 a barrel, the lowest level since October 2009. Prices declined 18 per cent last month and are 38 per cent lower in 2014.In Mumbai, jet fuel will cost Rs 61,695 per kl from today as against Rs 64,414.98 per kl previously. The rates vary because of differences in local sales tax or VAT.(PTI)
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