Global crude oil price of Indian Basket was US$ 56.76 per bbl on 24.02.2015

Global crude oil price of Indian Basket was US$ 56.76 per bbl on 24.02.2015

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 56.76 per barrel (bbl) on 24.02.2015. This was lower than the price of US$ 57.39 per bbl on previous publishing day of 23.02.2015.

In rupee terms, the price of Indian Basket decreased to Rs 3535.01 per bbl on 24.02.2015 as compared to Rs 3568.51 per bbl on 23.02.2015. Rupee closed weaker at Rs 62.28 per US$ on 24.02.2015 as against Rs 62.18 per US$ on 23.02.2015.

The table below gives details in this regard:

Particulars	Unit	Price on Feb 24, 2015 (Previous trading day i.e. 23.02.2015)	Pricing Fortnight for 16.02.2015 (Jan 29 to Feb 11, 2015)
Crude Oil (Indian Basket)	($/bbl)	56.76 (57.39)	52.70
Crude Oil (Indian Basket)	(Rs/bbl	3535.01 (3568.51)	3258.97
Exchange Rate	(Rs/$)	62.28 (62.18)	61.84

Daily Crude oil price- 25.02.2015

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Price difference between Atf And Petrol and Diesel

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Petrol and Diesel are primarily automotive fuels used in vehicles while Aviation Turbine Fuel (ATF) is used in aircraft turbines. The applications of automotive fuels and aircraft fuel are totally different and hence, comparison with respect to superiority of these fuels over one another cannot be made. The comparison, if any, can only be made for fuels having the same application and governed by the same specification.

The basic selling price of ATF, Petrol and Diesel are governed by the prices of the respective product prevailing in the international oil market.

As on 01.02.2015, Retail Selling Price (RSP) of ATF in cheaper than Petrol and Diesel primarily due to higher excise duty levied by the Central Government on Petrol and Diesel in comparison to ATF.

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Recommendations Submitted by PNGRB on Marketing Margin

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Petroleum and Natural Gas Regulatory Board (PNGRB) has submitted its recommendations to Ministry of Petroleum & Natural Gas (MoP&NG) on 20.01.2015

PNGRB has recommended a range of Rs. 150-200 per 1000/SCM as a marketing margin for domestic gas being supplied to fertilizer & LPG plants. The recommendations of PNGRB are under examination in MoP&NG. After a decision is taken in the matter, the same will be intimated to the Department of Fertilizers.

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Steps to increase storage capacity for oil

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Government, through Indian Strategic Petroleum Reserves Limited (ISPRL), is setting up Strategic Crude Oil Reserves with storage capacity of 5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam (storage capacity: 1.33 MMT), Mangalore (storage capacity: 1.5 MMT) and Padur (storage capacity: 2.5 MMT) to enhance the energy security of the country. Besides, in order to further increase the Strategic Crude Oil storage capacity, ISPRL through Engineers India Limited, has prepared a detailed feasibility study for construction of additional 12.5 MMT of strategic crude oil storages in Phase-II.

The capital cost for construction of 12.5 MMT of strategic crude oil storage in Phse-IIis approx. Rs 13216 crore based on March, 2013 prices. The cost of filling 12.5 MMT of crude oil based on the current price of crude oil ($ 55.19 per bbl and the current exchange rate ( Rs 62.43 / $ ) is Rs 31570 crore. Thus the total investment required for increasing the storage in the country by 12.5 MMT in Phase-II is aroundRs 44786 crore.

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Long Term Strategy to meet Shortage of Petroleum Products

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Government is aware of the expected shortage of petroleum products in the country and has taken a number of steps to enhance availability in consultation with experts. The following important steps, amongst others, have been taken by the Government to enhance domestic production and reduce dependence on imported fossil fuels:

· New pricing guidelines for domestically produced natural gas approved to incentivize exploration and production of natural gas in the country.
· Project for re-assessment of hydrocarbon resources in all sedimentary basins of India taken up.
· Appraisal of unappraised areas of all sedimentary basins of India taken up.
· Policy on non-exclusive multi-client speculative survey for assessment of unexplored sedimentary basins adopted.
· Improved Oil Recovery (IOR) / Enhanced Oil Recovery (EOR) implemented by Exploration and Production (E&P) companies for enhancing oil recovery from fields.
· Policy for exploration and production of CBM and also shale oil & gas are being implemented.
· Policy framework for early monetisation of hydrocarbon discoveries under PSC regime approved.
· Policy for exploration in Mining Lease Areas approved.
· Conservation measures to curtail waste of scarce energy adopted.
· New and renewable energy applications being promoted.

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Revival of Strategic Storage Project

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Government, through Indian Strategic Petroleum Reserves Limited (ISPRL), is setting up Strategic Crude Oil Reserves with storage capacity of 5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam (storage capacity: 1.33 MMT), Mangalore (storage capacity: 1.5 MMT) and Padur (storage capacity: 2.5 MMT) to enhance the energy security of the country. Besides, in order to further increase the Strategic Crude Oil storage capacity, ISPRL through Engineers India Limited, has prepared a detailed feasibility study for construction of additional 12.5 MMT of strategic crude oil storages in Phase-II.

The Expenditure Finance Committee, in its meeting held on 20.1.2015, has recommended an amount of Rs. 2500 crore for filling the crude in Visakhapatnam cavern against the 12th Plan outlay of Rs.4948 crore under Gross Budgetary Support Scheme of Ministry of Petroleum & Natural Gas for Indian Strategic Storage Programme for storage of crude oil by ISPRL. Rs. 2448 crore has been approved to be used for filling strategic part of caverns being constructed at Mangalore and Padur.

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Minimizing cases of arbitration

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that DGH has submitted suggestion for improving the dispute resolution mechanism such as - encouraging Conciliation proceedings; examination by Multi Disciplinary Team and Executive Committee of DGH on potential litigations; timely appointment of arbitrators by the Government; appointing arbitrators having domain expertise; delegating powers to DGH to create its own panel of law firms/advocates; delegation of powers for fee approval to the Executive Committee of DGH; vetting of the proposals by Advisory Committee for referring the matters to Sole Expert/Conciliation.

The details of cases of disputes with explorers pending with arbitrators are as under;

S.No.	Particulars
1.	Reliance Industries Limited, British Gas Exploration Pvt. Ltd vs. UOI
2.	Reliance Industries Ltd. vs. UOI (Four Blocks KG-OSN-97/3, KG-OSN-97/4, MB-OSN-97/1, GK-OSN-97/1)
3.	Reliance Industries Limited vs. UOI KG-DWN-98/3
4.	Reliance Industries Limited vs. UOI (KG-DWN-98/3 pricing guidelines issue)
5.	Videocon Industries Limited vs. UOI
6.	Assam Company India Limited vs. UOI
7.	Hindustan Oil & Exploration Company VS. GOI
8.	NIKO Resources VS. UOI
9.	Cairn Energy vs. GOI – Ravva PSC

Prompt actions is being taken in all the cases by Government for early resolution as per the provision of the PSC. The Government has recently come out with a Policy Framework for Relaxation, Extensions and Clarifications at the Development and Production Stage under the PSC Regime for Early Monetization of Hydrocarbons Discoveries, through which many issues pertaining to different blocks have been resolved.

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Efforts made for Future Natural Gas Requirements

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Government has taken several steps to improve the availability of gas in order to meet the country’s future natural gas requirements. These include revision in the price of domestic natural gas, intensification of domestic exploration and production activities through New Exploration Licensing Policy (NELP) rounds, development of shale gas policy framework, research and development of gas hydrate resources in the country, import of Liquefied Natural Gas (LNG), exploring possibility of transnational gas pipelines, clearance for exploration and development of some NELP blocks, exploration in the Mining Lease Area with certain conditions and acquisition of overseas oil and gas assets.

India is currently pursuing the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project to receive natural gas supply from Yolotan Osman (Galkynysh) fields in Turkmenistan. The length of the proposed pipeline is 1814 kms with a capacity of 90 Million Standard Cubic Meters per Day (MMSCMD) of natural gas in which India and Pakistan’s proposed share is 38 MMSCMD each and that of Afghanistan is 14 MMSCMD.

Two Government level agreements, viz., Gas Pipeline Framework Agreement (GPFA) and Inter-Governmental Agreement (IGA) were signed amongst the participating countries in December 2010. The Gas Sales and Purchase Agreement (GSPA) was signed between the buyers and the seller on 23.5.2012 and the Operations Agreement which deals with the issues of gas nomination, metering and allocation at delivery point was also signed on 8.7.2014. During the 20th Steering Committee Meeting held in February 2015, timelines were discussed for identification and selection of Consortium Leader and gas is expected to flow in pipeline within 3 years from the date of induction of Consortium Leader.

Natural Gas procured through TAPI transnational pipeline project is envisaged to bridge the gap between demand and supply of natural gas to consumers in various sectors.

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Supply of Piped Domestic Gas in Bihar

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Piped Natural Gas (PNG) forms part of the City or Local Natural Gas Distribution (CGD) network. Petroleum & Natural Gas Regulatory Board (PNGRB), has been established under PNGRB Act, 2006. PNGRB grants authorization for City and Local Area Natural Gas Distribution Networks ( PNG is a part of CGD network) in accordance with the provisions of the said Act and the PNGRB (authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Network) Regulation, 2008.

PNGRB has identified 8 Districts/ Geographical Areas (GAs) in Bihar viz. Barh Bihar, Begusarai, Gaya, Gopal Ganj, Patna, Saran, Siwan and West Champaran for inclusion in the future bidding rounds for grant of authorization to develop CGD networks, depending on the natural gas pipeline connectivity/natural gas availability. Natural gas pipeline connectivity/ gas availability for Bihar is envisaged through the Central Government authorized GAIL’s Jagdishpur-Haldia pipeline (JHPL).

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Increase in Arbitration Cases of Oilfield Disputes

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Government of India has entered into 310 Production Sharing Contracts (PSCs) so far in Pre-NELP field & exploration bidding rounds and NELP exploration bidding rounds out of which 150 contracts are presently operative. 21 arbitration cases have been initiated with regards to the contracts in the last 15 years, i.e. 5 cases during the period 2001-2005, 6 cases in 2006-2010 and 10 cases in 2011-2015.

DGH has submitted suggestion for improving the dispute resolution mechanism such as - encouraging Conciliation proceedings; examination by Multi Disciplinary Team and Executive Committee of DGH on potential litigations; timely appointment of arbitrators by the Government; appointing arbitrators having domain expertise; delegating powers to DGH to create its own panel of law firms/advocates; delegation of powers for fee approval to the Executive Committee of DGH; vetting of the proposals by Advisory Committee for referring the matters to Sole Expert/Conciliation etc.

The said proposals of DGH shall be approved, if they are in conformity with the views of Ministry of Law & Justice as well as in conformity with the provisions of PSCs.

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Achivements of OVL in its Operations Abroad

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that ONGC Videsh Limited (OVL) has stake in 36 oil and gas projects in 17 Countries. Currently, it produces oil and gas from 13 Assets, in 4 Assets hydrocarbons have been discovered and are at various stages of development, 17 Assets are at various stages of Exploration and there are two pipelines assets.

The performance of OVL during the last three years is as under:-

(Rs. in million)

Particulars	FY’12	FY’13	FY’14
Turnover (Net Revenue)	223,473	175,578	217,772
Profit Before Tax	51,166	66,826	69,888
Profit After Tax	27,212	39,291	44,453

OVL’s cumulative investment up to 31st March, 2014 was USD 22.60 billion of which 60% has been financed through internal accruals.

OVL acquired two offshore exploration Blocks 127 and 128, in Vietnam offshore as Operator with 100% Participating Interest under Production Sharing Contracts (PSCs) with effect from 16th June 2006. Subsequently, OVL has surrendered Block 127, after fulfillment of PSC obligations and Govt. of Vietnam approved the block relinquishment on 25th March 2011. OVL continues to hold Block 128. The exploration period for the same has been extended up to 15th June 2015.

Further, no hurdle is being faced by OVL by in its Vietnam operations.

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Improving Refineries of IOCL, BPCL and HPCL

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Indian refineries have adopted modern technologies for production of petroleum products and continuously upgrade the technologies in line with their requirements and international trends.

Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited have recently undertaken a number of initiatives for upgradation and modernization of their refineries. Details of such initiatives/projects are given as under:

Name of the Company	Refinery	Project undertaken/proposed to be undertaken
Indian Oil Corporation Limited	Haldia	● Distillate Yield Improvement Project to improve the distillate yield of refinery from 67.2 to 71.4% wt. and to increase in HS crude processing from 61.4% to 82.4% including heavy crude processing up to 29% wt.
Bharat Petroleum Corporation Limited	Mumbai	● Replacement of Old Crude and Vacuum Distillation Units with an Integrated Crude/Vacuum Distillation Unit to enhance safety and mechanical integrity ● Conversion of existing Catalytic Reforming Unit (CRU) to an Isomerisation Unit to produce 100% Euro IV MS ●Setting up of a Diesel Hydro Treatment(DHT) Unit to produce 100% Euro IV Diesel
Hindustan Petroleum Corporation Limited	Mumbai	●Propane De-asphalting Unit(PDA) revamp for increasing the capacity by 168 Thousand Metric Tonne using ROSE Technology ●New Fluid Catalytic Cracking Unit(NFCCU) for processing of high Conradson Carbon Residue feed stock. ●Diesel Hydro Treater(DHT) for the quality upgradation of raw HSD to BS-IV compliant HSD ●Diesel Hydro Desulphirisation (DHDS) Isotherming for HSD quality upgradation and capacity enhancement

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Plan to Reduce LPG Gas Connections

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Public Sector Oil Marketing Companies (OMCs) have reported that they are not planning to reduce the number of LPG connections in the country except blocking those suspect duplicate domestic LPG connections which do not meet the Know Your Customer (KYC) norms.

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Under Exploration of Sedimentary Oil Basins

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that India has 26 sedimentary basins and deep offshore areas upto Exclusive Economic Zone (EEZ) covering an area of 3.14 million square kilometers. As of now about 48% of the basinalarea have been appraised.

A number of sedimentary basins have either no/or scanty data and require additional geo-scientific data coverage and analysis for proper understanding.

To address the issue the Government is taking the following steps

i. A project to reassess hydrocarbon resources in all sedimentary basins of India has been initiated.

ii. A project for appraisal of unappraised areas of all sedimentary basins of India has been initiated.

iii. A policy on non-exclusive multi-client speculative survey for assessment of unexplored sedimentary basins through Service Providers is being implemented.