India plans to sell a 5 to 10 per cent stake in state-run energy explorer Oil and Natural Gas Corp in a deal that could fetch it as much as Rs 35,000 crore ($5.84 billion) at current market price, the Economic Times newspaper reported on Tuesday (8 July).The newspaper said the finance ministry had suggested a 5 per cent stake sale in ONGC in a draft proposal to a cabinet panel. The paper said it was not clear how much stake the government would eventually put on sale.It cited an unnamed government official as saying the process of hiring bankers would be started soon. The government owns nearly 69 percent of ONGC.An ONGC spokesman was not immediately available for comment.Prime Minister Narendra Modi's government is expected to announce plans for up to a record $11.7 billion of stake sales in state-run firms in its maiden budget on Thursday (10 July), as it looks to bolster state finances.(Reuters)
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Oil prices eased in Asia on Tuesday (8 July) as dealers await the resumption of disrupted Libyan crude exports, while ebbing fears about fighting in major producer Iraq also weighed, analysts said.US benchmark West Texas Intermediate for August delivery dipped 11 cents to $103.42 while Brent crude was down 19 cents at $110.05.Singapore's United Overseas Bank said prices remained under pressure as "fears of supply disruptions out of Libya and Iraq abated".Oil prices have tracked lower since Wednesday when Libya's interim Prime Minister Abdullah al-Thani said authorities had regained control of two export terminals blockaded by rebels.The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts have said.The sites are also thought to have up to 10 million barrels of oil in storage that could be released.Easing concerns over a possible supply disruption in crisis-stricken Iraq are also dampening prices.Islamist insurgents have overrun swathes of Iraq and are close to Baghdad following a lightning offensive since June 9, displacing hundreds of thousands of people and initially alarming global oil markets.After nearly four weeks of fighting with government forces, however, the group has yet to directly threaten the key oil-producing region in the country's south.Iraq is the second biggest producer in the 12-nation OPEC oil cartel, pumping 3.4 million barrels a day and possessing more than 11 per cent of the world's proven reserves. (Agencies)
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Dr Arup Roy Choudhury, the CMD of India’s largest power producing company, NTPC, brings out the paradox in India's electricity policy. On one hand the Central Electricity Regulatory Commission as well as the financing institutions are recommending increase in the power tariffs but there are no buyers for expensive power in the market. “The government should bring the cost of power down. Power, like any other commodity is a product and if it is not priced properly, it is not sold," says Choudhury. According to Choudhury, instead of increasing power tariffs, the power distribution companies should bring down the T&D losses to improve their financial condition. Choudhury also says that any increase in the price of natural gas will make it difficult for the already beleaguered gas-based power plants to sell their power.
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State-refiners have taken the unusual step of importing petrol as maintenance outages at some plants have created shortages of refined products in a number of regions, industry sources said.Hindustan Petroleum Corp Ltd (HPCL) and Indian Oil Corp (IOC) have so far bought a total of around 65,000 tonnes of petrol for prompt July delivery through tenders. The pair aim to import at least another 100,000 tonnes for July to August delivery.India is generally self-sufficient in petrol, but is sometimes forced to import additional due to refinery outages and increased demand over summer.HPCL has bought 35,000 tonnes petrol from Gunvor for July 15-19 deliveries, a source familiar with the matter said.The refiner has also reissued a tender to import a similar size cargo for July 3-10 delivery on the east coast, as it did not receive any offers in its previous tender, the source said.HPCL's imports have been triggered by a cut in supplies from its private joint-venture refinery HPCL-Mittal Energy Ltd (HMEL), which has been operating its 180,000 barrels per day (bpd) Bathinda refinery at a reduced capacity following a fire.HMEL will shut the refinery for four to six weeks from this weekend for planned maintenance, two sources said. HMEL supplies about 120,000-130,000 tonnes of gasoline a month to HPCL for local sales.An HMEL spokeswoman declined to comment, saying the company did not disclose operational details.IOC PurchasesFuel supplies from HMEL mainly meet demand in north India, where supplies are already under pressure due to a delay in the start-up of a hydrocracker and continuous catalytic reformer at Indian Oil Corp's (IOC) 300,000 bpd Panipat refinery.India's buying interest coincides with demand for the Muslim fasting month, which has boosted the Asian petrol crack - the premium for refining crude into motor fuel - to an 11-1/2 month high on Tuesday at $13.58 a barrel.IOC has already bought 33,000 tonnes of gasoline via tenders for deliveries this month and is in the market seeking similar volumes for July 20-22 deliveries, traders said."IOC may float another tender seeking supply of another 30,000-33,000 tonnes of gasoline for end-July to early August deliveries," said a source familiar with the matter."Demand for the fuel has not risen but availability is not there in some parts, mainly in north India," the source said.Sources said supply in northern India will come under pressure this month as BORL plans to shut the hydrogen unit for 7-10 days at it 120,000 Bina refinery in central India.State refiners, which have nation-wide fuel stations, swap refined products to cut transport costs. They also buy fuel from private players like Reliance Industries, Essar Oil, HMEL and Bharat Oman Refineries Ltd.The refiners may also have to import gasoil in anticipation of a possible drought that would boost demand for the fuel from the farm sector to run diesel-fired gensets for irrigation, a source at a private refiner said."Indian state refiners are running low stocks of gasoil... they approached us for additional gasoline and gasoil supplies but we cannot fully meet their demand as we have export commitments too," he said.(Reuters)
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The Securities Appellate Tribunal on Monday (30 June) upheld a Sebi decision rejecting Reliance Industries Ltd's application to settle alleged violations of norms to check fraudulent and unfair trade practices in the RIL-Reliance Petroleum merger case through a consent mechanism.The tribunal said Reliance's application is not maintainable because the new consent mechanism norms are applicable with retrospective effect. A full bench of the SAT, headed by presiding officer JP Devdhar, said the consent mechanism norms in the Sebi Act were amended with retrospective effect from April 2010.The ruling by the Securities Appellate Tribunal (SAT) marks a victory for the Sebi, which imposed its largest ever fine for an insider trading case on Reliance Petroinvestments Ltd last year over share transactions involving a separate company.Reliance has been contesting a show-cause notice from the Securities & Exchange Board of India (Sebi) in the case since December 2010 and from last year, the regulator's exclusion of the company from the new consent mechanism. The ruling was made by the Securities Appellate Tribunal, an independent quasi-judicial body that rules on appeals against orders passed by Sebi. Its decisions are binding, but can be appealed to the Supreme Court.Sebi had fined Reliance Petroinvestments Ltd Rs 11 crore ($1.83 million) last year, accusing the unit and parent company Reliance Industries of insider trading in a transaction involving a separate company.Pronouncing Reliance Petroinvestments Ltd (RPIL) guilty of violating the insider trading regulations with regard to its dealings in shares of Indian Petrochemicals Corp Ltd (IPCL) in early 2007, Sebi had said that RPIL made profits of over Rs. 3.82 crore through these trades.After taking into account the quantum and nature of the violations, Sebi had decided to impose a penalty of Rs. 11 crore on RPIL, which was listed as one of the promoter entities by IPCL itself in its regulatory filings as on March 31, 2006, the regulator said in its 17-page late night order. Once a subsidiary of Mukesh Ambani-led Reliance Industries Ltd (RIL), IPCL used to be a separately listed entity of the group, but was later merged with RIL and delisted from the stock exchanges.Sebi said in its order that its investigations into charges of insider trading norm violations by RPIL showed that the company was having control over IPCL as "promoter having control over the company with the total shareholding of approximately 46%".Further, RIL was shown as a 'person(s) acting in concert' with RPIL with regard to the shareholding of IPCL, Sebi said.Sebi said it conducted an investigation in the trading of the shares of IPCL during the period from February 22, 2007 to March 08, 2007. In the same case, Sebi had passed another order wherein it dropped the charges of violations of insider trading norms in IPCL shares against Manoj Modi and his wife. Modi is known as a close confidante of RIL chief Mukesh Ambani and held some senior positions at group entities in the past. But, Sebi said that the charges of insider trading violations could not be proved against Modi.Sebi's probe into the matter showed an irregular trading pattern in IPCL shares during the period under review, when two key announcements were made by the company -- one about an interim dividend payment and another regarding the amalgamation of IPCL with RIL.IPCL originally used to be a government-owned entity and was sold to RIL group during a disinvestment exercise.Sebi found that RPIL has violated the Prohibition of Insider Trading norms through its dealings in these shares while being in possession of "unpublished price sensitive information (UPSI) while trading in the scrip of IPCL prior to announcement of declaration of interim dividend and amalgamation of IPCL with RIL"."It is observed from the Investigation Report that RPIL received a dividend of approximately Rs. 1.28 crore and made a notional profit of approximately Rs. 2.54 crore (difference between acquisition cost of IPCL shares and market price of RIL shares on dealing dates based on average price)."Thus, the Noticee made a profit of approximately Rs. 2.83 crore when in possession of UPSI relating to declaration of interim dividend and amalgamation of IPCL with RIL."During the course of its inquiry, Sebi served a Show Cause Notice in January 2011, wherein RPIL and RIL were termed as 'insiders' on the basis of the shareholding patterns submitted by IPCL itself about their promoters and related entities.Besides, Mukesh Ambani was chairman of IPCL, as well as chairman and MD of RIL during the period under review, thus putting both the companies under same management, while RPIL held more than one-third of total voting power of IPCL at that time.Also, RIL held the entire share capital of RPIL through two wholly owned subsidiaries.It was also stated in the show-cause notice that "RPIL was conceived by the management of RIL for the sole purpose of acquiring shares at the time of disinvestment by the Government in favour of RIL."Further, it is observed that during the period June 9, 2006 to February 26, 2007 RPIL has not dealt in the shares of IPCL but all of sudden started buying the shares of IPCL from February 27, 2007, that is just before the major announcement of declaration of the interim dividend and amalgamation of IPCL with RIL," the notice said.In its reply submitted in February 2011, RPIL sought an opportunity of inspection of all documents/information relied upon in the notice and an opportunity for the same was granted to the company by Sebi's Investigating Authority on October 18, 2011. However, the company later claimed that it was not shown all the documents.Later in November, 2011, the company, however, filed for settlement of the case through Sebi's 'consent mechanism'. However, Sebi rejected this plea after due consideration and informed RPIL about the same in November 2012.Sebi said in its order that RPIL did not reply to its show-cause notice in spite of lapse of more than one-and-a-half years, after which it called the company for personal hearing on October 22, 2012, after submit its reply by October 15, 2012.The company, however, sought a short extension of time to submit its reply and for the personal hearing. Later in November 2012, the reply was submitted to Sebi, wherein the company rejected the various charges made against it for violation of insider trading norms.After taking into account the relevant facts and regulations, and the submissions made by the company, Sebi, however, concluded that RPIL had indeed violated the insider trading norms and was liable to be penalised for the same."From the Investigation Report it is noted that RIL holds the entire share capital of RPIL through two of its wholly owned subsidiaries. As per the Annual Report of RIL for the year 2005-06, RPIL is shown as an 'associate companies and joint ventures'," Sebi said.Besides, the purchase of shares of IPCL by RPIL was financed by Reliance Ventures Ltd (RVL) through an interest free loan, Sebi said, while adding that RVL was a wholly owned subsidiary of RIL.Sebi further said that K Sethuraman, group company secretary of RIL, represented on behalf of RPIL before it, wherein it said that the orders for buying IPCL shares were placed by one Ashok C Jain, who is an employee of RIL."It is also pertinent to mention that Sethuraman was the contact person on behalf of RIL for interacting with the legal advisor, valuers, financial advisors, etc., in the matter of merger of IPCL with RIL," Sebi said."Therefore, in view of the above findings, the charge of insider trading against the Noticee (RPIL) as per regulation... stands established," the Sebi order had said. (Agencies)
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At least 15 people were killed and 18 injured when a massive blaze raged through a village in Andhra Pradesh's East Godavari district following a blast in an apparently leaking gas pipeline on Friday (27 June) morning."Bodies of 13 people charred in the incident were recovered from the gutted houses. Two others succumbed to their burn injuries while undergoing treatment at different hospitals," Amalapuram DSP M Veera Reddy told PTI.18 injured people were shifted to different hospitals in the district, another police officer said, adding the deceased include five women, three girls and a boy.The leaping flames from the state-run Gas Authority of India Limited (GAIL) pipeline at Nagram village in Mamidikuduru Mandal of the district quickly swept through nearby houses and coconut plantations, leaving behind a trail of destruction."The blast and subsequent blaze which started around 5 AM spread swiftly engulfing houses, coconut farms and vehicles parked in the vicinity. In 15 minutes everything was gutted," the police officer said.The fire got apparently triggered when a tea shop vendor lit up a stove, setting off a blast, IGP North Coastal Zone Atul Singh said.A GAIL official, however, quoted its Chairman B C Tripathi as saying, "The exact cause of the blast is not immediately known. After an inquiry only we will get the details and cause of the blast."An 18-inch pipeline feeds gas to Lanco's Kondapalli power plant near Vijaywada.Petroleum Minister Dharmendra Pradhan has ordered a high-level inquiry headed by a Joint Secretary in his ministry. The probe panel will have officials of Oil Industry Safety Directorate, NDMA and Hindustan Petroleum Corp Ltd (HPCL) as members but GAIL and ONGC, from whose fields gas was being supplied, have been kept out of it.The Andhra Pradesh Chief Minister Chandrababu Naidu has also ordered a probe.The blaze occurred barely a few hundred metres from ONGC's Tatipaka Refinery located at the village."The gas pipeline has been shut. Fire has been controlled. This is a very serious situation and I have ordered a high-level inquiry into the incident," Pradhan, who is scheduled to visit the scene, told reporters in Delhi.Petroleum Secretary Saurabh Chandra, GAIL Chairman B C Tripathi and ONGC Chairman D K Sarraf are scheduled to accompany him.President Pranab Mukherjee, Prime Minister Narendra Modi and Congress chief Sonia Gandhi have condoled the loss of lives in the tragedy.Modi has announced an ex-gratia relief of Rs two lakh from the PM's Relief Fund for the next of the kin of those killed."My thoughts (are) with the families of those who lost their lives in the GAIL pipeline fire in AP. (My) prayers (are) with the injured," Modi said.Pradhan For Setting Up Statutory Safety Body For Oil & Gas Industry With more than a dozen people killed in a deadly fire at a gas pipeline in Andhra Pradesh, Oil Minister Dharmendra Pradhan expressed shock at the lack of a statutory body for formulating safety measures for the oil and gas industry.The Oil Industry Safety Directorate (OISD), under the Petroleum Ministry, carries out safety audits of oil and gas installations, besides formulating and standardising procedures and guidelines for design, operation and maintenance.However, the body lacks statutory authority.The then Oil Minister S Jaipal Reddy had in August 2012 suggested giving statutory powers to OISD but the proposal has not materialised so far."When I came to this Ministry, I was shocked to learn that there is no statutory authority for safety and security.This is a concern," Pradhan said here.The new government, he said, would work towards giving statutory powers to OISD, which currently is only a recommendatory body.The fire at state gas utility GAIL India's pipeline this morning follows a minor fire at HPCL Mittal Energy Ltd's Bhatinda refinery earlier this month. No one was injured in the fire at Bhatinda refinery.Six people had died and 36 were injured after a gas leak at steel maker SAIL's plant in Chhattisgarh on June 12.In August last year, a fire at Hindustan Petroleum Corp Ltd's (HPCL) Vizag refinery in Andhra Pradesh had killed 30 persons.A dozen persons were killed in a fire at Indian Oil Corp's (IOC) Jaipur oil depot on December 29, 2009.In 2005, 24 persons lost their lives when a giant platform of Oil and Natural Gas Corp (ONGC) in Mumbai High caught fire following a supply vessel colliding with it.(Agencies)
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Reliance Industries on Wednesday (18 June) said it will invest Rs 1.8 lakh crore across businesses in the next three years and launch the much-awaited 4G broadband services in 2015 as it looks to break-into top 50 companies of the world. RIL Chairman Mukesh Ambani, the world's richest energy billionaire, unveiled his vision to achieve in next three years what the firm had done in 37 years of its listed history.Addressing the 40th annual general meeting of RIL, Ambani said Rs 1,80,000 crore will be invested in margin-enhancing petrochem units, expansion of energy business, opening more retail stores and roll-out of telecom business. RIL's telecom arm Reliance Jio Infocomm, which is the only company to have nationwide permits for 4G services, will start rolling out broadband services in the coming months. Here's a look at how the Reliance investment will pan out in the next 3 years(nfographics made by Shokinder Goyla)
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The Ministry of Power has fast-tracked the process of setting up new power transmission lines in the country by approving nine projects with an aggregate cost of Rs 12,500 crore. The projects would be open for the private sector and companies would be invited for tariff based biddings.The decision to approve such a huge investment for the next three years was taken after the newly incumbent NDA government got a feedback from the stakeholders of the Power sector that the country lacks transmission capacity.In May and June, southern and north Indian states suffered power cuts of more than 7-10 hours a day, despite power being available in the country.The transmission projects will benefit several states such as Haryana, Chhattisgarh, UP, MP, Maharashtra etc, by enabling high capacity 765kv lines carrying up to 2100MW each apart from construction of new 765/400kv substations.The new projects will help evacuate power from power stations such as 660MW Sipat of NTPC, 1600MW Gadarwara, 1320 MW Sassan UMPP.Congestion will also be reduced in Haryana Region by the strengthening of the Northern Transmission system.In the last five years, while power generation capacity has grown by 50%, transmission capacity has only increased by 30 per cent.According to a Ficci report released in 2013, in the power transmission sector, a competitive bidding process was mandated for all future projects from January 2011. Although private players have participated in 15 project bids since then, there are inherent disadvantages that the private players face as compared to their government owned Power Grid Corporation. “There is transmission constraint in certain regions of the country. For example. Chattisgarh (which is called the W3 Region) has added huge generation capacity in the last 7-8 years. Transmission evacuation capacity has not matched up with the generation capacity addition, leading to constraints, " said Debasish Mishra Senior Director, Consulting, Deloitte."Similarly the inter-regional transmission capacity to south is very limited, resulting in surplus capacity in certain Regions such as W3 and East and deficit in South. The move to boost invest in transmission systems will give a boost to the Indian power sector" added Mishra.These projects were mainly stuck in the approval process in the government since last several months. The approval to go ahead with implementation was granted immediately.At present, India has a transmission capacity of 38,000 Mw, which would reach 66,000 MW by 2017 a capacity addition of 28,000 over the next three years.
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