Rosneft has offered stakes in its two east Siberian oilfields to Oil and Natural Gas Corp, two Indian sources with direct knowledge of the matter said, as the sanctions-hit Russian company looks beyond Western firms to develop its vast resources. The sanctions imposed on Russia by the United States and Europe to punish Moscow for its incursion into Ukraine, have cut Rosneft's access to Western financing and technology. Rosneft has offered an up to 49 percent stake in Yurubcheno-Tokhomskoye and 10 percent share in Vankor field to the state-run ONGC, said the source familiar with the discussions. "They need money and want to hire partners. They want to demonstrate to the U.S. and Europe that there are partners available for them," said one of the sources. ONGC would firm up its decision on participation in the two projects before the planned visit of Russian President Vladimir Putin to Delhi in December, this source said, adding the two fields are in geologically challenging areas. The European Union has imposed sanctions on Russia's finance, defence and energy sectors and has frozen the assets of some 140 Russian and Ukrainian individuals and companies over Moscow's role in Ukraine. The sources declined to be identified because of the sensitivity of the matter. Rosneft declined to comment. Rosneft's chief Igor Sechin, a close ally of Putin, has been on the U.S. sanctions list since April. Rosneft itself was added to the list in July. Production at Yurubcheno-Tokhomskoye will start in 2017. The field is to supply Asian markets via the East Siberia-Pacific Ocean pipeline and feed a yet-to-be-built petrochemical plant in Russia's Far East. In a major about-turn, given the Kremlin's long resistance to allow its powerful neighbour access to such deposits, Putin last month said he welcomed the idea of China joining the prized Vankor field. Vankor project is vital for Rosneft to meet its growing commitments to supply Asian markets, above all China. Rosneft is preparing to more than double oil exports to China to over 1 million bpd, seeking to secure market share and billions of dollars in pre-payments. (Reuters)
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Coal India Ltd's divestment process should begin immediately after the Diwali festival on Oct. 23, Manoj Joshi, joint secretary of financial markets in the Finance Ministry, said on Wednesday.The government wants to sell a 10 per cent stake in the state-owned company this fiscal year ending March 31 as part of many divestments aimed at bolstering its stressed finances.(Reuters)
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The government has signed a memorandum of understanding with a group of companies to build the country's first ever offshore wind power project as part of New Delhi's pledge to increase renewable energy sources. The 100 megawatt plant will lie off the coast of Gujarat and be partly financed by state subsidies. The company, for which MoU was signed between the Ministry of New and Renewable Energy and other partners, will undertake detailed study based on the inputs received from pre-feasibility studies and necessary steps for implementation of the project. The consortium includes National Thermal Power Corporation (NTPC), Power Grid Corporation of India Ltd (PGCIL), Indian Renewable Energy Development Agency (IREDA), Power Finance Corporation (PFC), Power Trading Corporation (PTC) and Gujarat Power Corporation Ltd (GPCL). Renewable energy sources such as solar and onshore wind farms currently generate less than 2 per cent of India's energy needs, with coal fuelling the generation of around three fifths and gas and hydropower most of the remainder. Prime Minister Narendra Modi, who oversaw the launch of several solar power plants in Gujarat when he was chief minister of the state, has said India needs to expand its renewable energy capacity to help meet rapidly growing demand. Union Renewable Energy Minister Piyush Goyal said the project is a "great opportunity in the development of renewable energy resources in the country." It has been proposed to provide subsidy for setting up of evacuation and transmission infrastructure of the offshore wind power to the main land, besides provide financial support for carrying out studies such as wind resource assessment, Environment Impact Assessment (EIA), oceanographic survey and Bathymetric studies. The renewable energy ministry would also assist in obtaining clearances involved during the implementation of the project. "Partnerships should be built with Defence, Coast Guard and Shipping to ensure seamless and time bound approval process," Goyal said. (Agencies)
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Petrol price was on Tuesday cut by 54 paisa a litre, but the first reduction in diesel rates in over five years was put off until the return of Prime Minister Narendra Modi from the US. State-owned oil firms, which skipped raising rates on September 16 even though their cost had gone up, cut prices in view of the downward trend in international markets. Petrol price was reduced by 54 paisa a litre without including local sales tax or VAT, with effect from midnight tonight. After accounting for the incidence of local sales tax, petrol rate in Delhi was reduced by 65 paisa to Rs 67.86 per litre, according to Indian Oil Corp (IOC), the nation's largest fuel retailer. In Mumbai, petrol price was cut by 68 paisa to Rs 75.73 per litre. Petrol price was last cut by Rs 1.50 a litre, excluding state levies, on August 31. That reduction in Delhi came to Rs 1.82 per litre. Alongside, the price of non-subsidised 14.2-kg cooking gas LPG cylinder, which consumer buy after exhausting their quota of 12 subsidised bottles in a year, was cut by Rs 21 to Rs 880 in Delhi. However, a reduction diesel rates, the first since January 2009, was put off till Modi's return from the US as the Oil Ministry felt it did not have a clear mandate to reduce rates post the January 2013 decision of the Cabinet to raise prices by 40-50 paisa a litre every month. Petrol price was cut as it is a deregulated product needing no government intervention. Softening international oil rates has meant that diesel under-recovery or the difference between retail price and its imported cost was wiped out and there was an over-recovery of 35 paise a litre from September 16. This over-recovery is now about Re 1 a litre. Oil Minister Dharmendra Pradhan is believed to have already written to Modi on the emerging scenario. Also, the ministry has written to the Election Commission seeking their concurrence for the price decrease in view of state assembly elections in Maharashtra and Haryana. A decision will be taken after Modi's return, they said. Sources said the Oil Ministry is of the view that while the Cabinet Committee on Political Affairs (CCPA) on January 17, 2013, allowed a monthly increase in diesel price of 40-50 paise per month to wipe out the under-recovery, it wasn't envisaged that there would be over-recovery. It wants to reduce diesel price to protect state-owned oil companies' market share, which may be lost to private retailers who would be selling diesel in tandem with international prices. This would be the first reduction in diesel rates in over five years. Diesel rates were last cut on January 29, 2009 when they were reduced by Rs 2 a litre to Rs 30.86. Since then rates have only increased as international oil prices climbed. Since January 2013, diesel prices have been raised by up to 50 paise a litre every month to eliminate under-recoveries. Like diesel, state-owned oil companies had also not changed petrol rates on September 16 though it warranted a 54 paise increase as its benchmark gasoline rates had firmed up in international market. This is perhaps the first time that retail prices of diesel in India are higher than global rates. Oil companies calculate the desired retail selling price of petrol and diesel on 1st and 16th of every month based on average international benchmark price and rupee-dollar exchange rate. As per this practice, a revision is due today. Originally, petrol and diesel prices were deregulated in April 2002 when NDA government was in power. Administered pricing regime, however, made a back-door entry towards the end of NDA regime in the first quarter of 2004 when crude prices started inching up. Congress-led UPA controlled rates as international oil prices went through the roof. In June 2010, however, it freed petrol price from its control and rates have since them moved more or less in tandem with cost. In January 2013, the UPA decided to deregulate diesel prices in stages through monthly 50 paise a litre increases. Rates were last raised on August 31 after which losses have been wiped out. Rates have cumulatively risen by Rs 11.81 per litre in 19 instalments since January 2013. (PTI)
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The Tamil Nadu government on Friday announced a populist "Amma Cement Scheme" under which it will procure cement from private manufacturers and sell them at Rs 190 per bag in the wake of possible increase in rates of the key construction component.The scheme, named after Chief Minister J Jayalalithaa, who is addressed as "Amma" (Mother) by her supporters, follows similar efforts like the Amma Canteen and Amma Mineral water, all low-cost initiatives.Jayalalithaa said she had recently discussed with officials the situation regarding production of cement from the state and supply from outside.The erstwhile united Andhra Pradesh contributed about 4-4.5 lakh tonnes of cement for Tamil Nadu's monthly average use of 17-18 lakh tonnes, but the companies there had now hiked the prices by Rs 80-100 per bag, she said."Subsequently, the supplies to Tamil Nadu had reduced to around 1.50 lakh tonnes to 3 lakh tonnes, creating a favourable situation for the private manufacturers here to increase price of cement," she said in a statement.Therefore, she had directed officials to roll out the "Amma Cement Scheme" aiming to benefit the lower and middle classes, wherein the government will procure two lakh tonnes of cement from private manufacturers every month and sell them through all urban and rural local bodies at Rs 190 per bag.Beneficiaries are eligible for a maximum of 750 bags for 1500 sqft, and the cement could be bought by submitting the government approved building plan or the road plan, she said.Those wanting to buy cement for repair and renovation are eligible for 10 to 100 cement bags, she said.Tamil Nadu Cement Corporation will be the nodal agency while the scheme will be implemented by Tamil Nadu Civil Supplies Corporation and Rural Development Department through their 470 godowns, the Chief Minister said.The scheme will also cover the state's Green House and Central government's Indira Awas Yojana, she said adding, it will help ease the burden of lower and middle class in constructing a house.(PTI)
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JSW Energy Ltd said on Thursday it had agreed to buy three operating power plants from Jaiprakash Power Ventures Ltd, as it looks to expand its portfolio beyond coal and lignite-based plants.JSW Energy, controlled by billionaire Sajjan Jindal, will acquire two of Jaiprakash's three hydropower plants in Himachal Pradesh and a thermal power plant in Central India, the company said in a statement.The three plants together have a combined capacity of 1,891 megawatts, according to the statement.Jindal, speaking to a television channel, said that the financial terms of the deal were still being worked out, but the deal was "probably the largest in India's power sector to date".In July, a consortium led by Abu Dabhi National Energy Co pulled out of a $1.6 billion deal for the two hydropower plants, citing a change in business strategy.Like many power and infrastructure companies, Jaiprakash, and parent Jaiprakash Associates Ltd, have been trying to sell assets to pay down the large debts they racked up before a prolonged economic slowdown squeezed revenues and hit profitability.The JSW announcement comes a day after Jaiprakash said its deal to sell its hydropower business to Reliance Power Ltd had collapsed due to a "difference of commercial aspects".The news of the Reliance deal falling through sent Jaiprakash Power's shares down 14 percent, while parent Jaiprakash Associates shares plunged 19 percent on Thursday.Local television channels had earlier reported that JSW was buying all three of Jaiprakash's hydropower plants.(Reuters)
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Time is running out for India's aging state-run oil refineries as the new government of Prime Minister Narendra Modi looks set to free up diesel prices and open the gates to private sector competition.These refineries, commissioned mostly in the 1950s and 1960s during India's early industrialisation push, are inefficient and costly to maintain compared to their modern counterparts on the coast mainly operated by private companies.Their outdated machinery prevents them from using cheaper imported heavy crude as feedstock. They are also largely situated in remote and landlocked areas, restricting their potential to export fuel products.These factors have put a lid on refining margins, which appear set to narrow further with increased competition.The government may soon deregulate the diesel market so that it no longer needs to subsidise state-run refiners for selling the fuel at below-market prices. The move to market-based pricing is expected to bring the return of private refiners such as Reliance Industries and Essar Oil, threatening to erode the market share of the dominant state-run refiners.The competition will trim already slender margins. Gross refining margins, a key industry measure of profitability, of the aging refineries are below $3 a barrel, the ministry of petroleum and natural gas data shows.The older, state-run refineries, which account for a quarter of the nation's 4.3 million barrels per day fuel capacity, may be forced to reduce throughput or even seek federal monetary support. That, ironically, may upset the government's goal of supplying more diesel to counter falling local coal output and a growing electricity deficit."State refiners have to invest heavily and urgently to upgrade refineries to ensure adequate margins otherwise those with less than $3 a barrel gross refining margin could become unviable," said B.N. Bankapur, former head of refineries at IOC.India, the world's third-biggest crude oil importer, will decide whether to end government control of diesel pricing after polls in two states next month. A recent drop in crude prices and support for the move from top policy officials have raised the chances of the reforms getting the nod.The move comes as the Modi government seeks to curb a ballooning subsidy bill and mend strained public finances in a sluggish economy.Diesel makes up nearly half of India's fuel consumption and its usage is set to rise as Modi wants to boost the employment-generating manufacturing sector to push up economic expansion.Government-set selling prices for the state-run refiners, who also market fuel through their retail outlets, have led to revenue losses, and delays in payments of subsidies have sometimes squeezed the cash flows of the refiners.So the possibility of diesel deregulation has been viewed positively by analysts, with shares of state-run refinersIndian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp surging in the range of 60 per cent to 93 per cent in 2014.By comparison, the Sensex is up just 25 per cent.State-run refiners, however, have served the government's social agenda in past expansions. And protected by subsidies, the refiners focused on building their network of retail outlets rather than on upgrading and modernising.The government estimates state refineries need a hefty $13 billion of investments to upgrade facilities and produce cleaner fuels.Amid new competition, state refiners will find it tough to come up with investments needed to upgrade their old refineries, said Suresh Sivanandam, senior analyst at consultant Wood Mackenzie.Waiting In The WingsAn end to price controls may lure Reliance, which runs the world's biggest refining complex in Jamnagar coast inGujarat, and Essar back into the retail market.Reliance and Essar made a successful foray into retail fuel sales a decade ago before government subsidies to state-run refiners forced them out. Executives of both firms said they will finalize their retail plans once the government's stance on diesel deregulation is known.But Reliance has already initiated efforts to build a new 400,000 bpd refinery in India. Domestic sale of products from its export-focused 580,000 bpd refinery is uncompetitive due to heavy taxes.Apart from refining margins, state fuel retailers earn a marketing profit of about $3-$4 a barrel, a key source of revenue because of high volumes. Competition from the private refiners will erode that, oil industry analysts say."Within 2 years of deregulation state refiners' market share could shrink to about 75 percent, leading to a hefty decline in marketing margin. And then the inefficient plants will begin to pinch the companies," said S. Thangapandian, executive director at Dubai-based trading firm Gulf Petrochem.(Reuters)
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Adani Mining on Thursday took a step closer to the development of a A$2.2 billion ($1.94 billion) coal mining project in Australia after the federal government approved construction of a rail haulage line. The Australian unit of Adani Enterprises needed the approval of Environment Minister Greg Hunt to proceed with the 300-km (186-mile) line, after last month gaining clearance from the state of Queensland. Known as the North Galilee Basin Rail project, it is being designed to connect collieries owned by Adani and potentially other developers in the largely unpopulated Galilee Basin to the east coast port of Abbot Point. Despite analyst views that Adani's project would be unprofitable at current coal prices, the company remains committed to pushing ahead with it to supply power stations in India. India is home to the world's fifth-largest coal reserves but still needs to resort to imports as state-owned Coal India, which accounts for about 80 percent of the country's output, frequently falls short of its output target. "Today's approval is a significant milestone in the life of our integrated mine, rail and port project, helping transition from approvals to the build phase," said Jeyakumar Janakaraj, Adani Mining chief executive. Environmental groups have protested against Adani and Indian company GVK Hancock developing mines in the Galilee Basin as it could require dumping sand within the boundaries of the Great Barrier Reef to allow for the expansion of a nearby coal port. Earlier this month, Adani and GVK Hancock agreed to resubmit proposals offering alternative dumping sites on land. (Reuters)
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