Global Crude oil price of Indian Basket was US$ 36.80 per bbl on 09.03.2016
Global Crude oil price of Indian Basket was US$
36.80 per bbl on 09.03.2016
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$ 36.80 per
barrel (bbl) on 09.03.2016. This was lower than the price of US$ 37.07 per bbl
on previous publishing day of 08.03.2016.
In rupee terms, the price of Indian
Basket decreased to Rs 2482.93 per bbl on 09.03.2016 as compared to Rs 2495.94
per bbl on 08.03.2016. Rupee closed weaker at Rs 67.46
per US$ on 09.03.2016 as against Rs 67.34 per US$ on 08.03.2016. The table
below gives details in this regard:
Particulars
|
Unit
|
Price on March 09, 2016
(Previous
trading day i.e. 08.03.2016)
|
Pricing
Fortnight for 01.03.2016
(12 Feb to
25 Feb, 2016)
|
Crude Oil
(Indian Basket)
|
($/bbl)
|
36.80 (37.07)
|
30.61
|
(Rs/bbl
|
2482.93 (2495.94)
|
2096.17
|
|
Exchange
Rate
|
(Rs/$)
|
67.46 (67.34)
|
68.48
|
****************
Cabinet approves Pradhan Mantri Ujjwala Yojana -
Scheme for Providing Free LPG connections to Women from BPL Households
The Cabinet Committee on Economic Affairs, chaired
by the Prime Minister Shri Narendra Modi, has approved Pradhan Mantri Ujjwala
Yojana - Scheme for Providing Free LPG connections to Women from BPL
Households. Under the scheme, Rs 8000 crore has been earmarked for providing
five crore LPG connections to BPL households. The Scheme provides a financial
support of Rs 1600 for each LPG connection to the BPL households. The
identification of eligible BPL families will be made in consultation with the
State Governments and the Union Territories. This Scheme would be implemented
over three years, namely, the FY 2016-17, 2017-18 and 2018-19.
This is the first time in the history of the country that the Ministry of Petroleum and Natural Gas would implement a welfare scheme benefitting crores of women belonging to the poorest households.
In our country, the poor have limited access to cooking gas (LPG). The spread of LPG cylinders has been predominantly in the urban and semi-urban areas with the coverage mostly in middle class and affluent households. But there are serious health hazards associated with cooking based on fossil fuels. According to WHO estimates, about 5 lakh deaths in India alone due to unclean cooking fuels. Most of these premature deaths were due to non-communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer. Indoor air pollution is also responsible for a significant number of acute respiratory illnesses in young children. According to experts, having an open fire in the kitchen is like burning 400 cigarettes an hour.
Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas.
In this direction, Finance Minister in Budget speech on 29.2.2016 had announced a budgetary provision of Rs. 2000 crore for 2016-17 to provide deposit free LPG connections to 1.5 crore women belonging to the Below Poverty Line (BPL) families. Further, the Budget announced that the Scheme will be continued for two more years to cover 5 crore households.
This is the first time in the history of the country that the Ministry of Petroleum and Natural Gas would implement a welfare scheme benefitting crores of women belonging to the poorest households.
In our country, the poor have limited access to cooking gas (LPG). The spread of LPG cylinders has been predominantly in the urban and semi-urban areas with the coverage mostly in middle class and affluent households. But there are serious health hazards associated with cooking based on fossil fuels. According to WHO estimates, about 5 lakh deaths in India alone due to unclean cooking fuels. Most of these premature deaths were due to non-communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer. Indoor air pollution is also responsible for a significant number of acute respiratory illnesses in young children. According to experts, having an open fire in the kitchen is like burning 400 cigarettes an hour.
Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas.
In this direction, Finance Minister in Budget speech on 29.2.2016 had announced a budgetary provision of Rs. 2000 crore for 2016-17 to provide deposit free LPG connections to 1.5 crore women belonging to the Below Poverty Line (BPL) families. Further, the Budget announced that the Scheme will be continued for two more years to cover 5 crore households.
***
Decision on Marketing including Pricing freedom for the gas to be
produced from Discoveries in High Pressure-High Temperature, Deepwater and
Ultra Deepwater Areas
The
Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri
Narendra Modi, has approved a proposal to grant marketing including
pricing freedom for the gas produced from High Pressure High Temperature,
Deepwater and Ultra Deepwater areas. The marketing freedom so granted would be
capped by a ceiling price arrived at on the basis of landed price of alternative
fuels.
The
policy guidelines would be applicable to future discoveries as well as existing
discoveries which are yet to commence commercial production as on 1.1.2016.
However, in case of existing discoveries which are yet to commence commercial
production as on 1.1.2016, if there is pending arbitration or litigation filed
by the contractors directly pertaining to gas pricing covering such fields,
this policy guideline shall be made applicable only on the conclusion/
withdrawal of such litigation/ arbitration and the attendant legal proceedings.
All gas fields currently under production will continue to be governed by the
pricing regime which is currently applicable to them.
The
ceiling price in US $ per mmbtu (GCV) shall be the, lowest of the (i) Fuel oil
import landed price (ii) Weighted average import landed price of substitute
fuels (0.3 x price of coal + 0.4 x price of fuel oil + 0.3 x price of naphtha)
and (iii) LNG import landed price, whichever is lower.
The
landed price-based ceiling will be calculated once in six months and applied
prospectively for the next six months. The price data used for calculation of
ceiling price in US $ per mmbtu (GCV) shall be the trailing four quarters data
with one quarter lag. Director General of Petroleum Planning and Analysis Cell
(DG, PPAC) under the Ministry of Petroleum and Natural Gas will notify the
periodic revision of gas price ceiling under these guidelines.
Production Enhancement:
The
decision is expected to improve the viability of some of the discoveries already
made in such areas and also would lead to monetization of future discoveries as
well. The reserves which are expected to get monetized are of the order of 6.75
tcf or 190 BCM or around 35 mmscmd considering a production profile of 15
years. The associated reserves are valued at 28.35 Billion USD (1,80,000 Crore)
The country’s present gas production is around 90 mmscmd. Besides, these there
are around 10 discoveries which have been notified and whose potential is yet
to be established.
Employment Generation:
The
decision is expected to result into monetization of the 28 discoveries
mentioned above which can result into substantial investment by the
contractors.
There
would be substantial employment generated during the development phase of these
discoveries and a part of it would continue during the production.
ONGC has estimated that in the
development of discoveries in the block KG-DWN-98/2, there would be deployment
of 3850 direct skilled labours. Besides, these there would be around 20,000
persons required during the construction phase. GSPC presently in the
block KG-OSN-2001/3 is deploying around 690 personnel in the block.
Transparency
and Minimum Government and Maximum Governance:
Government
will not interfere in the price fixation for every block covered under the
policy.
Provision
of ceiling to balance the requirements of consuming sectors
Incentivize upstream investment and not
getting into unnecessary details.
***
Policy for the Grant of Extension to the Production
Sharing Contracts signed by Government awarding small, medium sized and
discovered fields to privateJoint Ventures
The Cabinet Committee on Economic Affairs, chaired
by the Prime Minister Shri Narendra Modi, has approved a policy for grant of
extension to the Production Sharing Contracts for small and medium sized
discovered fields. This extension policy deals with 28 fields. Of these 27
fields (small and medium sized fields) were awarded as a result of two rounds
of bidding during 1991 to 1993, and one (PY-3) was separately put to bidding as
discovered field. For many of these fields the recoverable reserves are not
likely to be produced within the remaining duration of contract period of these
PSCs. Further, in certain fields where additional recovery of hydrocarbons can
be obtained only through capital intensive Enhanced Oil Recovery / Improved Oil
Recovery (EOR/IOR) Projects, the payback period would extend beyond the current
duration of PSC.
The Government share of Profit Petroleum during the extended period of contract shall be 10% higher for both small and medium sized fields, than the share as calculated using the normal PSC provisions in any year during the extended period and hence will vary from year to year based on Investment Multiple (IM) /Post Tax Rate of Return (PTRR). During the extended period of Contract, the royalty and cess shall be payable at prevailing rates (of nomination regime). Royalty and cess will be payable by all the contractors in proportion to their participating interest. This will lead to additional government revenue of Rs. 2890 Crores on account of additional royalty and cess as compared to present concessional regime in these blocks.
Besides these fiscal terms and conditions, the policy brings out detailed guidelines regarding pre-requisites for grant of extension, criterion for evaluation of request, time frame for consideration of request, duration of extension, seat of arbitration etc.
Production Enhancement:
The policy for PSC extension will lead to production of hydrocarbons beyond the present term of PSC. The reserves which are likely to get monetized during the extended period are of the order of 15.7 MMT of oil and 20.6 MMT of Oil Equivalent of gas. The reserves associated with this field would lead to monetization of reserves worth USD 8.25 Billion (around 53000 Crore). The monetization of these reserves would require an additional investment of USD 3 to 4 Billion.
Employment Generation Potential:
The extension of these contracts is expected to bring extra investments in the fields and would generate both direct (related to field operations) and indirect employment (related to service industry associated with these fields).
The extension of contracts would also envisage that the present employment levels in these fields are maintained for a longer period of time.
Presently, medium sized fields are employing around 300 personnel for field operations while for small sized fields this would be around 40 to 60 persons.
The investments in these fields may also lead to construction and laying of facilities which would employ several unskilled labourers, over and above the skilled labourers.
Transparency and Minimum Government and Maximum Governance:
With a view to enable the E&P companies to take investment decisions for exploitation of the remaining reserves this extension policy has been approved so as to grant extensions in a fair and transparent manner.
The policy aims at bringing out clear terms of extension so that the resources can be expeditiously exploited in the interest of energy security of the country and improving the investment climate.
The Government share of Profit Petroleum during the extended period of contract shall be 10% higher for both small and medium sized fields, than the share as calculated using the normal PSC provisions in any year during the extended period and hence will vary from year to year based on Investment Multiple (IM) /Post Tax Rate of Return (PTRR). During the extended period of Contract, the royalty and cess shall be payable at prevailing rates (of nomination regime). Royalty and cess will be payable by all the contractors in proportion to their participating interest. This will lead to additional government revenue of Rs. 2890 Crores on account of additional royalty and cess as compared to present concessional regime in these blocks.
Besides these fiscal terms and conditions, the policy brings out detailed guidelines regarding pre-requisites for grant of extension, criterion for evaluation of request, time frame for consideration of request, duration of extension, seat of arbitration etc.
Production Enhancement:
The policy for PSC extension will lead to production of hydrocarbons beyond the present term of PSC. The reserves which are likely to get monetized during the extended period are of the order of 15.7 MMT of oil and 20.6 MMT of Oil Equivalent of gas. The reserves associated with this field would lead to monetization of reserves worth USD 8.25 Billion (around 53000 Crore). The monetization of these reserves would require an additional investment of USD 3 to 4 Billion.
Employment Generation Potential:
The extension of these contracts is expected to bring extra investments in the fields and would generate both direct (related to field operations) and indirect employment (related to service industry associated with these fields).
The extension of contracts would also envisage that the present employment levels in these fields are maintained for a longer period of time.
Presently, medium sized fields are employing around 300 personnel for field operations while for small sized fields this would be around 40 to 60 persons.
The investments in these fields may also lead to construction and laying of facilities which would employ several unskilled labourers, over and above the skilled labourers.
Transparency and Minimum Government and Maximum Governance:
With a view to enable the E&P companies to take investment decisions for exploitation of the remaining reserves this extension policy has been approved so as to grant extensions in a fair and transparent manner.
The policy aims at bringing out clear terms of extension so that the resources can be expeditiously exploited in the interest of energy security of the country and improving the investment climate.
*****
Hydrocarbon Exploration and Licensing Policy (HELP)
The
Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Hydrocarbon
Exploration and Licensing Policy (HELP).
Four
main facets of this policy are:
i. uniform license for exploration and production of
all forms of hydrocarbon,
ii. an open acreage policy,
iii. easy to administer revenue sharing model and
iv. marketing and pricing freedom for the crude oil and
natural gas produced.
The
decision will enhance domestic oil & gas production, bring substantial
investment in the sector and generate sizable employment.
The policy is also aimed at enhancing transparency and reducing
administrative discretion.
The uniform licence will enable
the contractor to explore conventional as well as unconventional oil and gas
resources including CBM, shale gas/oil, tight gas and gas hydrates under a
single license. The concept of Open Acreage Policy will
enable E&P companies choose the blocks from the designated area.
Present fiscal system of production sharing based on
Investment Multiple and cost recovery /production linked payment will be
replaced by a easy to administer revenue
sharing model. The earlier contracts were based on the concept of
profit sharing where profits are shared between Government and the contractor
after recovery of cost. Under the profit sharing methodology, it became
necessary for the Government to scrutinize cost details of private participants
and this led to many delays and disputes. Under the new regime, the Government
will not be concerned with the cost incurred and will receive a share of the
gross revenue from the sale of oil, gas etc. This is in tune with Government’s
policy of “Ease of Doing Business”.
Recognising the higher risks and costs involved in
exploration and production from offshore areas, lower royalty rates for such
areas have been provided as compared to NELP royalty rates to encourage
exploration and production. A graded system of royalty rates have been
introduced, in which royalty rates decreases from shallow water to deepwater
and ultra-deep water. At the same time, royalty rate for onland areas have been
kept intact so that revenues to the state governments are not affected. On the
lines of NELP, cess and import duty will not be applicable on blocks awarded
under the new policy. This policy also provides for marketing
freedomfor crude oil and natural gas produced from these blocks. This
is in tune with Government’s policy of “Minimum Government –Maximum
Governance”
***
Award of Ratna and R-series Fields
The Cabinet Committee on Economic
Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved
cancellation of the Letter of Award dated 12.03.1996 issued in favour of
consortium of M/s. Essar Oil Limited and M/s. Oil Pacific UK Ltd awarding the
medium sized discovered field of Ratna& R-Series and decided to revert the
Ratna and R-Series Fields to ONGC.
These Fields were planned to be awarded under the Discovered Field Policy of the Government announced during 1992 - 93 in the wake of economic liberalization. It was envisaged that the development of these fields through private sector / joint sector development by signing the Production Sharing Contract (PSC) would facilitate in creating additional value for the country from such projects. However, the PSC in respect of these Fields could not be signed during last two decades owing to number of reasons and the intended contribution of the Ratna and R-series fields in achievement of overall policy objective could not be attained.
The Government noted that in the intervening period of more than twenty years there have been substantial changes in the terms and conditions prevalent at the time of issue of Letter of Award dated 12.03.1996.
Considering huge financial stakes for the Government in terms of the statutory levies accruing from crude and natural gas production from these fields and with an overall objective of increasing domestic hydrocarbon production by expeditious development of these fields, the Government decided that the Fields may be reverted back to the original licensee, ONGC, who had initially developed these fields partially and operated and obtained production from these fields till 1994.
These Fields were planned to be awarded under the Discovered Field Policy of the Government announced during 1992 - 93 in the wake of economic liberalization. It was envisaged that the development of these fields through private sector / joint sector development by signing the Production Sharing Contract (PSC) would facilitate in creating additional value for the country from such projects. However, the PSC in respect of these Fields could not be signed during last two decades owing to number of reasons and the intended contribution of the Ratna and R-series fields in achievement of overall policy objective could not be attained.
The Government noted that in the intervening period of more than twenty years there have been substantial changes in the terms and conditions prevalent at the time of issue of Letter of Award dated 12.03.1996.
Considering huge financial stakes for the Government in terms of the statutory levies accruing from crude and natural gas production from these fields and with an overall objective of increasing domestic hydrocarbon production by expeditious development of these fields, the Government decided that the Fields may be reverted back to the original licensee, ONGC, who had initially developed these fields partially and operated and obtained production from these fields till 1994.
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