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Oct 2015

Krishna Godavari LNG Terminal Pvt Ltd continues to claim that it will fast track the development of the FSRU in Kakinada.
 8VGS says that it has moved the project from the planning boards to the mooring site at Kakinada Deepwater Port and the shipyards of Shanghai; China based Wison Offshore is the project’s vessel builder collaborating with HamworthyWartsila who are providing the regas technology.
 8The Project has two stages, Phase One providing a maximum send out rate of 1,000 mmscfd, while the second phase is slated for a service date tied to match market growth and will result in a doubling of the facility’s throughput capacity.
 8The start up date was end of 2014 but this has clearly been delayed. The public hearing is yet to take place and environment clearance is still some way off.
 The following are the project parameters of the FRU barge
 8Main Processing Control Room 
 8‘Triple Redundant’ Automated System Controls, most Advanced in Industry
 8LNG Discharge to Regas  Storage Vessel  (FSU)  and to Regas Module
 8Most Efficient Boil-Off Gas Handling, Vapor Return and Minimal Flaring 
 8On Board Power Generation & Additional Features serve to Minimize Traditional FSRU Technology Issues
 8Highly Stable LNG Discharging and Regasification Platform; No Requirement of   Vessel-to-Vessel or Ship-to-Ship LNG Transfer /Processing.  
 8Availability Vs Weather Events is 93% to 95%: Robust Regas System Can Easily Recover Production Due to Weather Events.
 The mooring system will have the following characteristics:
 8The site will have low wave heights and stable water conditions  
 8Required fabrications and connectivity points will be on the mooring structure 
 8Easy hook-up and release system for LNG vessels and the FRU Barge
 8Lower maintenance and easier operations.
 Click on our Reports section for more. Details
Finally, the public hearing for land acquisition and environment clearance of the much touted LNG Floating Storage and Regasification Unit (FSRU) at the Kakinada port is expected to take place soon before its TOR deadline of December 15, 2015 lapses.
8The project is backed by the little known VGS group which has floated a company dubbed Krishna Godavari LNG Terminal Pvt Ltd to set up the FSRU.
8The bifurcation of Andhra Pradesh took up time and the company's application for conducting a public heating to the Andhra Pradesh Pollution Control Board (APPCB) in May, 2014 took time to process.
8The consistent follow-up is now producing results, and the hearing is coming up.
8Though the main unit will be offshore, the company has asked for five acres of land onsite the port for supporting infrastructure facilities.
8The question now is how serious is this VGS group about setting up the FSRU.
8The information on the group is scanty. In its website it claims to be partners with Cavallo Energy in a holding company in the US which has been working successfully to craft strategies with upstream partners holding significant assets in the liquefied natural gas (LNG) markets. The phone number given in the environment ministry applications has a lady answering it, saying it is a "wrong number".
8One news paper report claims that it has a tie up with Exmar of Belgium for the project
8"In association with its partners who are active in North America, Europe and Asia, VGS is now poised to move the company into a preeminent position in India’s exploding energy marketplace," the website claims but it is not clear who its partners are.
8"VGS Cavallo sees the opportunity in the ‘US Gulf Region LNG to East Coast India Regas Terminals’ equation and has large reserve and project footprints on the two continents, with the ability to bring top tier industry players into participation," the website goes on to add.
8So, who exactly are the promoters? Or is it just an agency or a trader whose job is to sell a project to promoters, particularly shale oil producers in the US desperately looking for markets in India?
More clarity is clearly required on this front.
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Oilex however still has to sort out some "issues" with its partner GSPC, over some "outstanding payments" before funds can be released for the 2015-16 work programme.
8The issues have not been spelt out.
8The company will also inform the market if any material change to the management committee's approved 2015/16 work program and budget occur in due course of time.
8The contracting and procurement process for the 2015-16 drilling campaign is moving towards its competition but final approvals are still not forthcoming for  award the major contracts.
Oilex said that it has taken advantage of the new pricing paradigm to bring down costs.
8An estimated 60 to 90 days is required for drilling rig mobilization, and although spudding of the first well was scheduled for Q4 2015, this may slip into Q1 2016.
8Tendering for the fracture stimulation, flow back and testing services has also commenced.
These field activities will only commence upon completion of the special tight reservoir core analysis that will be undertaken in North America during H1 2016 following core recovery from Cambay -78H and 80H wells.
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Having successfully raised $ 30 million in funds, Oilex, the operator of the Cambay onland block, is now focusing on creating value through increasing production and cashflow in India while also striving to bring down costs and develop additional hydrocarbon production from legacy wells at Cambay.
 8The Cambay-73 well continues to produce gas for the low pressure market in the immediate vicinity of the field at 26 boepd with 100% availability.
 8A temporary pipeline from a new well Cambay-77H site to Cambay-73 production facility has been completed as part of a gas gathering system to assist in meeting market demand. 
 8Subsequent to the installation of a production tree and production tubing, Cambay-77H will be connected to the temporary pipeline to service.
 8In addition, subsequent to the installation of a production tree and production tubing, Cambay-77H will be connected to the temporary pipeline to service the low pressure market via Cambay-73, without having to construct a dedicated low pressure production facility at the Cambay-77H site.
 8Moreover, Cambay-60, which is completed in the Oligocene (OS II) formation, as a conventional reservoir, may be connected to the low pressure gas market via the Cambay-73 facilities.
 8In all three legacy wells in the conventional reservoir have also been connected to this pipeline and provide additional gas to the low pressure market via the Cambay-73 production facility.
 8After the initial phase of the work over program is complete, the combined production from Cambay gas and condensate wells, via Cambay-73 facilities, is anticipated to be 130 to 170 boepd.
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While its drilling programme is on hold on account of outstanding issues with GSPC, Oilex's work-over campaign at Cambay has commenced with the mobilization of the rig to Cambay-19z, an oil producer from the Eocene
 (EP IV) formation, which is a conventional reservoir..
 8Cambay-19z is located approximately 1.4 km to the west of Cambay-77H.
 8The work-over campaign is targeting both oil and gas production which will make a contribution to generating operating cash flow so that the overall cash flow turns positive.
 8The work-over includes removal and cleaning of the production tubing and repositioning the down hole pump to improve well deliverability.
 8However delivery of components from overseas will determine the sequence and conjunction of optimizing rig time.
 8In addition, assessment of other wells continues such that the portfolio of work-over candidates is continually "hi-graded".
 8Completion of the work-over program is expected before commencement of drilling operations at Cambay-78H or Cambay-80H.
 8Subsequent to Cambay-19z, the rig will move to any one of 4 locations as follows:
 -- Cambay-20, which is an oil producer, currently on self-flow that requires a down-hole pump to improve deliverability
 -- Cambay-70, located adjacent to Cambay-77H pad, a gas and oil producer from Eocene formation
 -- Cambay-60, it has been tested for gas and condensate but never put into production
 -- Cambay-77H, obviously to remove the frac tree and install production tubing and tree
 Click on our Reports section for more. Details
Oilex's much awaited Bhandut-3 is expected to commence its production well before end of December 2015 with a plateau production between 100 to 130boepd.
 8Till now 40% of field work is complete and it is expected be complete by November 2015.
 8According to the production test results, Bhandut-3 well's internal deterministic estimate of 2C contingent resource was upgraded from a previous internal estimate to 425MMscf (170MMscf Oilex net) as on 21 August 2015.
 8However now an independent reserve assessment has also been initiated to support Oilex’s upgraded internal estimate.
 8The commissioning of Bahndut-3 well will help the company to supply gas to the local market and hence generate cash flow from the previously idle asset.
 Click on our Reports section for more. Details
Gas marketing activities which started during the month August.
 8The marketing activities will mainly focus on the following:
 -- Expanding the low pressure market adjacent to the field. Response has been positive for switching from biomass energy to clean natural gas
 -- Assessing the high pressure market for accepting lower rates (~5MMscfd) associated with Cambay-78H and Cambay-80H
 8Moreover, market discovered prices for gas remain reasonably firm compared to the policy formula price despite distressed LNG cargos in the spot market.
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Oilex seems to be enthused by the success of its operations in Cambay basin in Gujarat.
 8Of importance is its success with the Cambay-73 well
 8In all the duo have two other hydrocarbon bearing wells Bhandut-3 and Cambay-77H. 
 8Oilex is the operator and it plans to to drill between 100 to 200 wells in the block 
 8The investment plan is ambitious: between $800 million and a massive  $2.4 billion over a period of 10 years.
 8The production potential of the block is pegged between 75 million barrels of oil equivalent (boe) to 150 million boe over a 10-year period.
 8The block is likely to produce gas between 50 mmscf/day to 150 mmscf/day.
 8The revenue from the field is estimated between $3.8 billion to $7.6 billion over the 10-year tenure.
 Click on Reports for more Details
“Intended Nationally Determined Contributions” INDCs) for greenhouse emissions have come in from 150 countries in preparation of the 21st Conference of the Parties (COP21) – to be
 held in Paris in December 2015
 8The countries that have submitted pledges account for around 90% of global economic activity and almost 90% of global energy-related GHG emissions today.
 8The full implementation of climate pledges will require the energy sector to invest  $13.5 trillion in energy efficiency and low-carbon technologies from 2015 to 2030, representing almost 40% of total energy sector investment.
 8Around $8.3 trillion is needed to improve energy efficiency in the transport, buildings and industry sectors, while much of the remaining investment is to decarbonise the power sector. More than 60% of total investment in power generation capacity is projected to be for renewable capacity, at $4.0 trillion, with one-third of this being for wind power, almost 30% for solar power (mainly solar photovoltaics) and around one-quarter for hydropower.
 8While OECD countries absorb 60% of energy efficiency investment ($5 trillion), non-OECD countries absorb a greater share of the investment in low-carbon technologies ($2.7 trillion).
 Comment: There is a massive business opportunity in all of this and Indian firms are competent to handle the challenge of catering to this segment. Within India itself, the opportunities will be huge and a Made in India thrust in this direction will provide the right encouragement. Perhaps a preferential buying policy for state procurement of some of these technologies will provide the requisite boost. Adequate preparation is needed and a broad strategy is to be adopted, along with tax breaks, for some of the work to be done locally to cater to a global market.
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The pumping of huge volumes of Partially Hydrolysed Polyacrylamide Polymer (PAM) into the Mangla field has its adverse environmental and health implications.
 8Acrylamide is absorbed by animals and humans via ingestion or inhalation or through the skin. Extensive efforts have been made to assess human exposure to acrylamide by monitoring several metabolites excreted in the urine as well as products resulting from biological alkylations by acrylamide, and the results are not good.
 8On the basis of numerous studies, the International Agency for Research on Cancer has classified acrylamide as “carcinogenic to humans”
 8Then again, workers exposed to acrylamide exhibited symptoms of peripheral neuropathy, suggesting that the compound is a human neurotoxin.
 8Feeding water solutions of acrylamide (50-200 ppm) to female and male rats prior to breeding and through the gestation and lactation period (up to 10 weeks) produced disruptions in mating, interference with sperm ejaculation, depression in body weight gain and food intake, and depression in pup body weight at birth and weight gain during lactation.
 8The pumping of 400,000 barrels of barrels of polymer solution per day into the geological gut of Rajasthan and possibly another 200,000 barrels per day in Bhagyam will have a dramatically adverse impact on the environment in Rajasthan.
 8The point is whether the state government and the central government have the wherewithal to assess the kind of damage that is being caused.
 8What are the environmental parameters under which such massive flooding programmes have been alloweed.
 8These are questions that need more clarity before the damage becomes paermanent.
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During the quarter ended 30th September, 2015, the Company's Dahej terminal has operated at around 120% of its name plate capacity.
 8Despite a reduction in the offtake under the long term quantities over the corresponding quarter last year, the total volume regasified at the Dahej Terminal during the quarter ended 30th September, 2015 was 154 TBTU which is highest ever volume processed in any quarter.
 8The work for expansion of Dahej LNG terminal from 10 MMTPA to 15 MMTPA is going on as per schedule and it is expected that this capacity expansion will be completed by end of the year 2016.
 8The company has initiated the process for selection of EPC contractors for further expansion of the Dahej terminal to 17.50 MMTPA.
 8During 2014-15, the Dahej Terminal handled 154 LNG cargoes and supplied 520.78 TBTUs of re-gasified LNG in India.
 8As many as 2666 LNG road tankers were loaded and dispatched during the year.
 8Kochi terminal, however handled only 2.70 TBTU of LNG and primarily served two consumers in the vicinity of the terminal the BPCL refinery and FACT.
 8The profit before tax of Rs. 361 crore in quarter ended 30th September, 2015 is an increase of about 43% over the previous quarter of Rs. 253 crore.
 8The reason for this significant increase in profit before tax over the previous quarter is higher volumes processed at the Dahej Terminal and better efficiency.
 8However, the profit before tax of Rs. 361 Crore in the second quarter is a 9% decrease over the corresponding quarter of the last year of Rs. 397 Crore.
 8The primary reason for this decline in profit over corresponding quarter last year is lower recovery of costs on account of reduced offtake under the long term gas supply contracts with the offtakers.
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   Details
The chief executive officers of 10 of the world’s largest oil and gas companies has taken steps to limit global average temperature rise to 2 degrees centigrade.
 8The Oil and Gas Climate Initiative (OGCI) is a CEO-led, voluntary, oil and gas industry initiative that aims to catalyze practical action on climate change through best practice sharing and collaboration. All together they provide almost a fifth of all oil and gas production and supply nearly 10% of the world’s energy.
 8OGCI countries includes, BG Group, BP, Eni, Pemex, Reliance Industries,Repsol, Saudi Aramco, Shell, Statoil and Total.
 8The OGCI member companies has already taken significant actions to reduce their GHG footprint, with combined GHG emissions from their operations reducing by around 20% over the past 10 years.
 Key areas where companies will focus includes the following:
 -- Efficiency: optimizing efficiency of their own operations; improving the end-use efficiency of their fuels and other products; and working with manufacturers and consumers to improve the efficiency of road vehicles.
 -- Natural gas: contributing to increasing the share of gas in the global energy mix, ensuring it results in significantly lower lifecycle emissions than other fossil fuels for power generation; eliminating ‘routine’ flaring and reducing methane emissions from their operations.
 -- Long-term solutions: investing in R&D and innovation to reduce GHG emissions; participating in partnerships to progress carbon capture and storage; contributing to increasing the share of renewable in the global energy mix.
 -- Energy access: developing projects to provide people with access to energy in partnership with local and national authorities and other stakeholders.
 -- Partnerships and multi-stakeholder initiatives: seeking opportunities to accelerate climate change solutions by working collectively or individually in industry and other initiatives.
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In India Schlumberger is one company that everyone knows.
 8It bags most of the complicated oil and gas contracts but the world's No. 1 oilfield services company is currently going to one of its worst times in its history.
 8The company has cut jobs and more importantly, it does not see business improving until 2017.
 8According to Schlumberger, 2016 will be a bad year. Exploration and production spending is expected to fall for a second consecutive year in 2016, a first since the 1986 down-turn.
 8Schlumberger, whose comments are closely watched for a glimpse into industry trends, said the first quarter of 2016 would be weaker than the current quarter as customers tighten purse strings further, hurting the usual year-end sales of software, products and multi-client licenses.
 8So the slump is not over yet for oil field contractors. Details
Chinese President President Xi Jinping's current trip to Britain is likely to see the unveiling of BP Plc and China's CNPC strategic alliance to develop oil resources in Iraq and other regions, as Britain and China seek to tighten economic ties.
 8The pact, one of several high-profile deals to be signed during Jingping's trip will aim to bolster cooperation between the two companies in Iraq, where they are developing the giant Rumaila oilfield. Rumaila, in southern Iraq, is the world's second-largest oilfield and produced 1.34 million barrels per day in 2014, according to BP's website.
 8The two companies will also seek to expand into new joint ventures in other parts of the world, according to the sources. No clear production or investment targets are expected to be included in the deal. .State-owned China National Petroleum Corp is Asia's largest oil producer and parent of PetroChina Co Ltd. BP will also seek to use the alliance to expand its operations in China, which have been limited mainly to a fuel retail joint venture. Its peers Royal Dutch Shell and Total have natural gas operations with CNPC.
 Comment: It is not known yet whether Indian Prime Minister Narendra Modi's trip will include a deal like that of BP and CNPC. Modi will showcase India's soft power through an addresses at Wembley stadium, where a crowd of 60,000 NRIs are expected,"Very few leaders can fill the Wembley Stadium," quipped UK Prime Minister David Cameron. But while this is going to be impressive, Modi will also need to wrap up a few big deals like Xi Jingping will do in London. The soft power must be backed with some big deals. And that's when Modi's trip will be termed as a big success. Details
Is ethanol blending the right solution for India?
8May be not, claims a research paper. At a time when both land and water are limited, it is controversial that India will be using these precious resources to produce fuel rather than food.
8Growing sugarcane and corn requires fertilizers and pesticides whose production generates greenhouse gases.
8In addition, fertilizer and pesticide overuse leads to groundwater pollution and loss of agricultural fertility.
8To produce ethanol, the harvested crops must go through a carbon-intensive production process, which reduces the energy balance of ethanol, which is the difference between the energy generated by ethanol and the energy required to produce it.
8While ethanol causes less particulate pollution, it does produce carbon dioxide on combustion.
8When the environmental costs from all these impacts are added up, ethanol begins to look a lot less green than it has been thought to be.
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 Details
The way Saudi Arabia operates is to pamper its citizenry with lavish benefits and cushy government jobs. In times of uncertainty, such as during the Arab spring, workers are handed pay rises and bonuses. The last big payout, after the coronation of King Salman in February, cost more than many governments spend in a year.
8Oil-rich Saudi Arabia is used to big bills. But for the past year the kingdom has aimed to keep the price of oil low by increasing production in an effort to undermine rivals and gain market share.
8As the price has collapsed, so too has government revenue, some 90% of which comes from export of crude oil.
8The result is a budget deficit that is expected to exceed 20% of GDP this year.
8There are now creeping signs of parsimony in the kingdom and grand projects are being shelved. Since July, Saudi Arabia has borrowed some $15 billion from its citizens through local bonds, its first issuance of debt since 2007.
8But kingdom’s wealth gives it some capacity to absorb the fiscal shock.
8In the past year it has burned through over $80 billion of its foreign reserves, but it still has over $650 billion left.
8Public debt, which was around 100% of GDP in 1999, is now a paltry 2%.
8So don't count on Saudi Arabia folding up anytime soon. Its war on the US shale oil producers can go on for some more years, until they are brought to their knees.
8For Saudi Arabia it could well be a fight to the finish. Details
Is the government on the right track when it aggressively pushes for blending of ethanol with petrol?
 8Thanks to persistent ethanol shortages and differential state policies, even the 5 per cent ethanol target has been difficult to achieve.
 8It is unlikely that existing sugarcane production will be sufficient to satisfy the demand for ethanol even in bumper years, the research reports says.
 8Increasing the area under sugarcane means that we will need to either clear forests for plantation or divert existing cropland towards sugarcane production. Unsurprisingly, this is likely to have a negative impact on food security as well as the environment.
 8Focusing on corn as ethanol source may not be entirely successful either. It takes more energy and expense to convert corn to ethanol.
 8It is now proven that ethanol does not have the same energy value as petrol. Studies also indicate that ethanol use lowers mileage and this is important issue in countries like India.
 While ethanol can definitely be a part of India's energy mix, it is difficult to consider it entirely green or as a solution for the country's energy needs.
 8Rather than increase the area under sugarcane production, perhaps India would be better served by focusing on more research on indigenous fuel substitutes. For example, when it comes to biodiesel, jatropha (which can be cultivated on wastelands) has attracted a great deal of attention.
 8However, a great deal of planning is needed before India can be in a position to increase the use of green fuels as an alternative to conventional petrol and diesel.
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 Details
It is impossible to bet how oil prices are going to behave going ahead.
8There are a confusing number of signals coming out from all over the world.
8A strong signal that is emanating from the US of a possible tightening of prices.
8And the best indicator of this is that hedge funds have raised their net long wagers on oil for a second week, betting prices had bottomed even as crude markets fell anew on fears that record OPEC pumping will worsen a global crude glut
8U.S. crude prices had tumbled almost $3 a barrel on Monday in oil's worst selloff in over a month, but fund managers still boosted their net longs by 7 percent.
8This contrary movement is confusing but the bets are that markets will get firmer going ahead. Details
For reference purposes the website carries here the following data updated as on October 20, 2015
 8Crude Oil Price Movements
 8World Oil Demand & Supply
 8Oil Demand/Supply Ratio
 8Oil Supply: OPEC & Non-OPEC
 8Crude Oil Output
 8Oil Demand: World
 8Oil Demand: World, OECD, Non-OECD
 8Oil Demand: G7
 8Oil Demand: Europe
 8Oil Demand: Asia, OPEC, Middle East
 8Oil Demand: Asia
 8Oil Demand: FSU & Eastern Europe
 8Oil Demand: Latin America
 8Oil Supply: OPEC
 8Oil Supply: Non-OPEC Americas
 8Oil Supply: Non-OPEC Europe
 8Oil Supply: Non-OPEC Africa/Middle East
 8Oil Supply: Non-OPEC Asia
 8Oil Supply: Big Producers
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The crude oil market is exuding dramatic developments of the kind never seen before.
 8While OPEC remains united in flooding the world with as much crude supply as is possible, within the group itself, intense competition is on for market share.
 8And this is being done by one country discounting crude supplies vis a vis competing countries within the OPEC.
 8Kuwait is undercutting Saudi Arabia by the most on record and Iraq is also selling its oil more cheaply than the group's biggest member.
 8Qatar is pricing cargoes at the biggest discount in 27 months to competing crude from Abu Dhabi.
 8The battleground is the Asia-Pacific region, which will account for about 34 percent of global oil demand in 2015, according to the latest monthly report by the International Energy Agency. China alone will be responsible for more than a quarter of consumption growth next year, the Paris-based group forecasts.
 8Iraq's selling its Basrah Heavy grade $3.70 a barrel below Saudi Arabia's Arab Heavy variety is the biggest discount since April when Iraq started marketing the oil.
 8Qatari crude is $1.20 a barrel cheaper than Abu Dhabi's Murban, the most since official selling prices were set for June 2013
 Comment: How exactly are Indian public sector buyers adapting to the changed environment? Are they taking advantage of the discounts or are they sticking to staid old public sector ways? Is the Indian basket flexible enough to encompass the rapid developments in the market? Do the refineries have the flexibility to switch to crudes that offer greater discount? Details
The joint venture platform is a classical way of delivering value in oil and gas projects. And there are several kinds of JVs to chose from.
 8But when relationships go wrong, they can be extremely disruptive, particularly to project schedules. Decision making can come to a dead end.
 8Aside from the disruption of the core business, arbitration and legal proceedings can be costly and time-consuming distractions for the management of both the JV and the parent organizations.
 8But risk of failure can then be reduced by focusing on a few essentials.
 Click on Reports to figure out where you can get help on how to form such JVs and more importantly how to keep them going. Details
Given that domestic natural gas prices will apply for CBM gas from RIL's blocks, the company is going ahead with production start up in its Sohagpur block but the enthusiasm is missing.
 8Phase-1 activities of CBM field development is nearing completion. First gas is expected by the end of 3Q FY16.
 8More than 105 well-sites have been handed over to operations, which are ready to flow in gas.
 8Mechanical completion of GGS-11 is completed and Ready for start up (RFSU) is expected by mid 3Q FY16. Drilling and completion of GGS-11 wells is completed and infield pipeline laying has been completed.
 8In GGS-12, more than 65% of production holes have been drilled and infield pipeline laying is in  progress.
 8Meanwhile, the Shahdol-Phulpur gas pipeline work to evacuate the CBM is progress well, the company claims.
 8Land acquisition has been completed for all critical installations. Right of use for total scope of 302  kms has been handed over to pipeline construction contractors.
 8Total 299 kms of pipeline laying activity has been completed. All river and canal crossings are completed.
 8Compressor station installation and other construction work is in progress to facilitate gas evacuation.
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Nothing highlights the story of the Indian gas industry better than RIL's performance in the D-6 block.
 8The 2Q revenues from domestic E&P operations was a mere Rs 1,166 crore.
 8Lower prices coupled with decline in output has brought the EBIT down to Rs 56 crore
 8Crude output was down 24% while gas was lower by 9%.
 8Valiant efforts are being made to stem the decline, and two workover wells have come to production, adding around 1 mmscmd to output but cleary this is not enough.
 8Appraisal efforts are continuing in the D-6 block, with two Drill Stem Testing (DST) operations in discovery wells of D29 and D30 have been completed.
 8While this has lead to a better understanding of the flow potential, investment is on holding, pending a favorable gas price.
 Click on Reports for more Details
So where is the gas story in India headed?
 8Is there any light at the end of the tunnel?
 8Both ONGC and RIL have made it clear that at current prices it does not make sense at all to put deepwater gas into production.
 8ONGC;s baord has put its investments in the KG Basin deepwater wells on hold.
 8But the irony is that even if prices are freed, the current spot LNG price may make production in India still unviable.
 8The government it is believed is thinking of freeing gas prices altogether but will that come too later in the day?
 8Eventually, whether the deepwater gas in India flows out into the surface will depend on how resilient the shale gas industry is going to be in the US.
 8If Henry Hub prices continue to remain low in the foreseeable future, spot LNG prices in India may not rise enough to make Indian gas viable, for eventually the price at which the Amercians pump gas out of their shale plays will impact global prices all around.
 8The story is said best by GSPC's gas production from the KG-OSN-2001/3 block. This is the latest deepwater blocks to go on stream. The company has kept gas production on trial basis from its three deepwater wells for amny months now, for at current prices production is just not viable. In the meanwhile, accumulating interest payments and the need for high investments are making the inventors in the block very nervous.
 8In any case, any "premium" on the existing gas price will do nothing for the block.
 8Leave alone that, production may not even be viable, given the massive investments made in the block, if gas prices are freed altogether, for spot LNG prices as of now will be lower than the cost of production in the block.
 8That is the state affairs in the Indian gas industry as of now. Details
The story is far more disappointing on the natural gas production front.
 8Output in  September, 2015 was 2750 MMSCM which is 6.53% lower than the target for the month and only 0.88% higher than the production during the corresponding period of last year.
 8Cumulative natural gas production during April-September, 2015 was 16448 MMSCM which is 5.56% lower than the target for the period and 2.14% less than the production last year.
 8This is happening when there was expectation of a rise in output.
 8This is one area where price signals have an impact. The government's inability to provide a market price has choked off investments and projections of supply increases in the future are likely to be revised dramatically downwards. 
 8The fact that there is a delay in the commencement of production in one deepwater well in ONGC's eastern offshore is an indication that gas prices may not be favorable enough for early commencement of supply even though investments have already been made to get the well to produce.
 8Then again, the announcement of the abandonment of the Tapti field after under performance of six recently drilled wells has come as very bad news indeed.
 8The D-6 block's performance has been sub par for a long time now. New sidetracking jobs have not given the desired results. The associated gas output from the MA field in the block has been far from satisfactory.
 8Of particular significance is the dramatic 14.05% lower-than-the-target performance in September by Oil India Ltd and a 9.24% under performance in April-September, 2015. The reasons are apparently technical, on account of lower off take by captive buyers in Assam but nevertheless this is a huge set back.
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Private and JV production makes up a reasonably significant portion of total domestic crude output. Of the total output of 18681 TMT in April-September, 2015-16, PSC fields make up 5790 TMT.
8But production has been stagnating and there is no major upside immediately at hand.
8September output is 3.21% lower than the corresponding period last year and 0.69% lower for April-September, 2015.
8Clearly, production in India is price inelastic as is evident from the fact that output hasn't changed much despite the fact that crude prices have more than halved over the last one year.
8But the future really does not have any big surprises in store.
8In the immediate context, output has been flat on account of underperformance by Cairn India in Rajasthan and in the Ravva field. Hopefully output will pick up in both going ahead.
8RIL's performance has been sub par in the KG-D6 block and this is unlikely to change anytime soon.
8Then again, there is natural decline in the Panna Mukta field and this neutralizes increases elsewhere.
8GeoEnpro production in Kharsang has been lower on account of sand ingress
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The inner malice is illustrated by the dramatic fall in OIL India Ltd's output.
 8It is down a massive 10% from target for September and 6.44% lower for the April-September period.
 8The PPAC pins the shortfall to bandhs, blockades and floods but there is more to it than meets the eye.
 8There is a general sense of frustration in the OIL head office in Duliajan over the ham handed manner in which the government is handling the selection of a chairman to the company.
 8OIL has mostly been run by people --  mostly of Assamese origin -- who know the peculiar socio-political circumstances in Assam. For its the bandhs and the ebb and flow of militancy that determine production in the oil fields of Assam.
 8Unless someone understands the local dynamics well, the company's performance is bound to suffer. A rank outsider will not be able to do his job, as he will not be in a position to understand the dynamics on the ground. He also faces the prospect of sabotage from within the company.
 8The shabby treatment suffered by Rupshikha Saikia Borah, the company's finance director, for having been selected once by the PESB only to be rejected by the PMO, has not gone down well within the rank and file of  the company.
 8In fact, the people of the North Eastern state take a disproportionately xenophobic interest in who is the chairman of OIL, perhaps because there is pride in what is the only functioning and profitable enterprise to be headquartered in the state. In the past, dissenting voices were raised by outfits like the All Assam Students Union as and when a non-Assamese is selected as the chairman.
 8And in this case, the rejection of an Assamese woman, who would have been the first woman CEO of an E&P company, did not go down well at all in the state, and also among the Assamese dominated rank and file of the company..
 8Further, without a fulltime chairman in place, there is no one available to direct the affairs of the company to keep production going under what is a volatile situation on the ground.
 8To some extent, the general disaffection amongst the rank and file has also had an adverse impact on production figures.
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The news is not good on India's E&P front.
 8Production is going down somewhat too sharply for comfort and in parts the government is to be blamed for it.
 8September 2015 data shows that crude production is well below par across the board.
 8ONGC's output is 2% lower than target. Offshore output is down on technical grounds and the crucial Cluster-1 field has run into trouble and so has the WO-16 cluster field. Power shutdowns and more water cuts are other reasons for the shortfall.
 8More worryingly however, Oil; India Ltd has recorded a 10% fall in output from what has been targeted.
 8Then again, private and JV production is down 5% from target and is lower by 3.2% from the corresponding month last year.
 8Cumulatively too, the picture is not rosy. During the April-September period, Oil India's output is 6.44% lower than target and 3.4% less than the corresponding period last year. JV output higher too lower than last year's production.
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Refinery production during September, 2015 was pegged at 18.042 MMT which is 0.45% lower than the target for the month and 0.48% higher than the production during corresponding period of last year. Cumulative refinery production during April-September, 2015 was 112.600 MMT which is 2.31% higher than the target for the period and 3.65% higher than the production during corresponding period of last year.
 8PSU Refineries’ production during the month was 9.733 MMT which is 1.76% lower than the target for the month and 1.60% lower than the production achieved in the corresponding month of last year. Cumulative refinery production of PSUs during April-September, 2015 was 60.671 MMT which is 1.50% higher than the cumulative target and 2.79% higher than the production during the corresponding period of last year.
 8Production in JV refineries during the month was 1.526 MMT which is 51.50% higher than the target for the month and 136.38% higher than the production achieved in the corresponding month of last year. Cumulative refinery production in JV refineries during April-September, 2015 was 8.529 MMT which is 27.30% higher than the cumulative target and 59.11% higher than the production during the corresponding period of last year.
 8Production in private refineries during the month was 6.783 MMT which is 5.92% lower than the target for the month and 8.58% lower than the production achieved in the corresponding month of last year. Cumulative refinery production in private refineries during April-September, 2015 was 43.399 MMT which is 0.41% lower than the cumulative target and 1.93% lower than the production during the corresponding period of last year.
 8Out of the total, refineries which were below target were IOC's Guwahati, Gujarat, Haldia, Mathura and Digboi refinery, BPCL's Mumbai refinery, CPCL's Manali refinery, MPRL's Manglore refinery and Essar OIl Ltd's Vadinar refinery.
 8However,crude throughput at IOC's Barauni, Panipat and Bongaigaon refinery, BPCL's Kochi refinery, HPCL's Mumbai and Visakh refinery,CPCL's Narimanam refinery, NRL's Numaligarh refinery, ONGC's Tatipaka refinery, BORL's Bina refinery, HMEL's Bhatinda refinery, RIL's Jamnagar refinery and SEZ all exceeded their planned targets.
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The production of petroleum products across the industry during September, 2015 stood at 17.988 MMT, representing a 1.05% decline over the planned monthly target of 18.180 MMT.
 8Of the total production, 17.796 MMT came from the refineries, while the remaining 0.383 MMT came from fractionators.
 8The products produced from refineries were down by 0.81% of its target, the production from fractionators' was down by a major 12.17%.
 8However the production of petroleum products by public sector refineries during the month of September stood at 9.235 MMT, which was 015% higher than the planned target of 9.220 MMT.
 8The JV refineries also surpassed their target by 55.92% during the month, thereby producing 1.471 MMT, as against the planned production of 0.943 MMT.
 8The production by private sector refineries were however lower than their target by 9%. The private refineries produced 6.945 MMT during the month as against the planned target of 7.632 MMT.
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   Details
During the month of September, 2015 refinery capacity rose up from the target by 2.35%, which is more than what was achieved in the corresponding month in last fiscal when planned utilization exceeded the planned target by 1.58%.
 8Total prorated installed capacity for the month stood at 17.628 MMT, while the actual crude throughput came to 18.042 MMT.
 8Cumulatively too, capacity utilization during the April-September 2015, period was lower than planned utilization by 4.71% with actual crude throughput standing at 11.26 MMT as against the prorated installed capacity of 10.75 MMT.
 8However, the public sector maintained a prorated installed capacity of 9.841 MMT during September but the actual crude throughput came to 9.733 MMT, indicating a 98.90% capacity utilization.
 8The private sector, with a prorated installed capacity of 6.557 MMT, generated a crude throughput of 6.783 MMT, thereby utilizing 103.45% capacity during the month.
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Pet coke is not a product that is environment friendly.
 8The rise in demand for imported pet coke arises out of RIL's massive gasification programme in its Jamnagar refinery coming on line, and this is expected to use half of India's own petcoke production.
 8Petcoke usage is now increasingly avoided by countries around the world. The US remained the world's largest producer of the commodity, accounting for 46% of global output. The lion's share of US petcoke production is carried out in the US Gulf Coast area The region's output is expected to increase in the coming years, as more heavy crude is imported from Canada. However, increasing regulation and criticism over petcoke storage in the US -- with it mostly stored in open facilities -- is making US refineries eager to export their petcoke.
 8Now that the Chinese are having relook at pet coke's environmental impact, the Indian government too needs to formulate stringent environmental standards for pet coke usage.
 8Overuse must be curbed.
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India is likely become one of the largest pet coke importers in the world because of lax regulations.
 8China and India are the key importers of pet cole but Chinese imports are likely to drop off because stringent environment control regulations that are now coming up and are to be implemented from 2016.
 8The Chinese are also likely to severely limit the threshold level of sulphur allowed in pet coke along with high penalties for going above this threshold.
 8Global petcoke production grew at an average annual rate of 3.7% between 2003 and 2013, with about 120 million tonnes produced currently
 8Data shows that in 2014 India accounted for 12% of US petcoke exports, on a par with Japan.
 8India also produces its own petcoke, with production reaching 12 million mt in 2013, up from 11 million mt in 2012. 
 8Looking forward, Indian petcoke imports are expected to carry on increasing, potentially reaching 10 million mt/year by 2017 mainly on account of lax environmental regulations.
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In what is expected to come a massive blow to Mahanagar Gas Ltd MGL), the PNGRB has quashed a complaint lodged by the CGD entity for declaring the transportation tariff charged by ONGC for supply of gas through the Uran-Trombay gas pipeline.
8MGL had argued that ONGC did not have to locus standi to charge a transportation tariff as it was a dedicated pipeline and had been in existence for a long time.
 8ONGC had billed GAIL a total of Rs 174 crore in pending tariff payments.
 8GAIL in turn raised a demand for Rs 74 crore on MGL because a large portion of the gas ferried in this pipeline went to MGL.
 8The regulator has held that ONGC was the authorized entity operating the pipeline and it is entitled to charge a tariff rate for transportation of gas. And a tariff rate is applicable from the date of authorization of the pipeline.
 8MGL will have the right to appeal and it is quitely likely that it will do do.
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Now that price ceilings have been removed for marginal fields, the government is possibly contemplating the next step of freeing the price of gas for NELP players as well.
 8The timing is right by some yardstick, as the landed price of spot LNG, which is now the benchmark price, is reasonably low.
 8But the point to note is that there will still massive jump in the price of gas from the current controlled level of $4.2/mmbtu as determined by the pricing formula.
 8Will the government be willing to take the leap, given the politically volatile situation in the country.
 8Then again, the the bulk of the gas is now going to the fertilizer sector.
 8So in effect, a price hike will pinch the government directly by way of a higher subsidy bill.
 For fertilizer companies a gas price increase is not good news, even if the price is a pass through under the subsidy scheme. This is because the government usually delays the payment of subsidies, and fertilizer companies have to resort to bank loans to meet working capital requirements until the subsidy is dispensed, usually after a long delay. A higher gas price will entail taking larger working capital limits. The negative point is that the government does not pay for the interest burden on these loans.
 8The finance ministry will gain by way of higher revenues from a higher price of gas, but is the government ready yet to free the price of gas?
 8The next few weeks are going to be crucial on deciding which way the wind will blow.
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Pertinently, neither OIL nor ONGC nor any other public sector company is barred from bidding for these marginal fields.
 8In that sense, the marginal fields that are owned by these companies may go back again to them if they decide to bid aggressively for them.
 8No one knows these fields better than the companies themselves.
 8Therefore, the companies would know which fields to bid for and which not to.
 8There is an argument that the public sector do did not work on these fields because the price was not remunerative. That is clearly not the case for crude fields but a case could be made out for gas fields, wherein the price elicited was not the market price.
 8Now that the price has been freed, it is likely that the NOCs would like to bid aggresively for these fields now.
 8The point however to note is that freeing the price of gas does not necessarily mean that the gas can fetch a high price. The ceiling will be definitely be the landed price of spot gas in the market.
 8Additionally, these fields, being isolated, will face an evacuation problem.
 8There are a few limitation that are going to hamstring some companies from bidding very aggressively. For one, the revenue share has to be ascertained beforehand, and that is difficult without actually doing real E&P work on the field. Based on available data handed over from a databank, it may not be possible for a bidder to figure out what the optimal government take should be.
 8Revenue limitation on account of low crude and gas prices will mean there will be a reasonable amount of risk still involved in these fields.
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The government has finally notified the new Marginal Field policy.
8Operators will be allowed to sell both crude oil and gas through a transparent bidding process on arms length basis.
 8The government take will be through a revenue based linear scale.
 8Royalty rates applicable under New Exploration Licensing Policy (NELP) regime will be adopted in the Policy for Marginal Field of ONGC and OIL.
 8No cess will be imposed.
 8The contract duration be a maximum of twenty (20) years from the effective date (effective date is the date of PEL/ML grant/ transfer /signing of deed) or till the economic life of the field as submitted by bidder along with development plan in the bid, whichever is earlier.
 8The contract can be extended for another 10 years and more if needed.
8A Management Committee (MC) will be constituted with representatives from Government/DGH and contractor.
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The website carries here, for reference purposes, the latest snapshot of India's oil and gas data prepared by the PPAC. The following details are carried in the document which can serve as a ready reckoner:
 8Import/Export of Crude Oil and Petroleum Products
 8Production of Petroleum Products
 8Major Petroleum Products Pipelines in India
 8Consumption of Petroleum Products, Petroleum Products Demand  and GDP, Diesel Consumption by sectors
 8Number of LPG Distributors of the PSUs
 8Element wise explanation of Price Build up of Domestic LPG
 8Selling Price of Diesel for Bulk Consumers in Metros
 8Weightage of Petroleum Products in Wholesale price index (WPI)  Impact of Increase in Retail Selling 8Price of Major Petroleum Products on Inflation
 8Demand Projections of Petroleum Products for 13th Five Year Plan
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A total of three underground pipelines are planned in this project.
 8One stretch will consist of 11.5 km pipeline to transport the unprocessed gas from proposed GGS location at well sites to proposed GPP location.
 8Another stretch of pipeline will be laid from the GPP to the Buyer’s off take point of the GGS at Kusijan to transport processed gas.
 8During the processing of gas at the GPP, condenstate oil is also expected which will be transported to the IOCL refinery at Digboi through an underground pipeline.
 8IOCL has already laid one pipeline in this area and the proposed pipeline for HOEC project is planned to be laid in the ROU of existing IOCL pipeline.
 8Major land use in either side upto 500 m of the proposed pipeline RoW are tea gardens, human settlements, small patches of industrial areas, agricultural lands, and reserve forest land.
 8These pipelines shall be constructed conforming to international and Indian standards as per best industry practice
 8All the pipelines will be buried with an earth coverage of a minimum 1.0 meter depth.
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 The Gas Processing Plant (GPP) was initially propsoed to be located in a paddy field of the Golai village of Tinsukia district at a distance of approximately 11km away from the boundary of the Dehing Patkai Wildlife Sanctuary (DPWLS) and 200m from NH -38 and Tinsukia–Ledo railway line of North East Frontier Railway.
 8However, due to constraint of land availability at the identified location in the Goali village, the GPP location was then shifted and proposed at a distance of approx. 8.5 km away from boundary of wild life sanctuary.
 8Based on the concerns understood by HOEC during the Public Hearing and appraisal of the proposal at state level for wildlife clearance, HOEC will site the GPP out of the elephant corridor but in absence of demarcation of the corridor boundary, it is difficult to assess the location of GPP with respect to the corridor.
 8HOEC is also co-ordinating with the forest and wildlife departments of Assam as well as the district administration, to seek the boundary demarcation of this Elephant Corridor.
 8HOEC has meanwhile also identified two alternatives location for GPP at Aughbandha and Borapowai villages.
  8In absence of timely demarcation of this elephant corridor, GPP will be sitde at one of the identified alternative locations.
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 HOEC will have to careful while working on the drilling programme because of the sensitive environmental zone in which the bock is located.
 8The Existing Dirok 1 and Dirok 2 wells are located within the Dirok Tea Estate. The Dirok Garden and and the Lekhajan Tea Gardens are located inthe  north and south of these well locations respectively.
 8Dehing Patkai Wild Life Sanctuary occupies the south-west part of the study area around Dirok 1 and Dirok 2 and the wells are located about 0.24 km from the sancuary boundary.
 8Proposed well namely Dirok 5 will be located approximately 700m northeast from the existing Dirok 1 and 2 well location.
 8Dirok 4, an existing well and the proposed GGS will be located at the same well site.
 8Like other existing and proposed wells, the site is within the Dirok tea estate.
 8Proposed Dirok 7 will be located at an approximate distance of 950m in the north-east side of Dirok 4 and the proposed GGS. The well is located at the plantation area of the Dirok Tea Estate.
 8Existing Dirok 1 and 2 well and proposed Dirok 6 well will be located at distances of 700m in south-west side and 600m eastern side respectively.
 8Proposed Dirok 6 well is located in the tea plantation area within Dirok Tea Estate and three tea gardens namely Margherita, Dirok and Lekhajan Tea Gardens are located at North- East and West of the proposed well location respectively .Proposed Dirok 5 will be located approximately 60 m north west from the proposed well side.
 8The proposed Driok 7 well will again be located within the Dirok Tea Estate and approximately 500m north from Dirok Tea Estate tea processing factory.
 8Existing Dirok 4 and proposed GGS will be located approximately 1 km distance in south-west direction.
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 The power requirements at the site for the development and construction phase will be met by DG Sets.
 8It is anticipated that four diesel-engine generators, each with a capacity of 670 KW, will be sufficient for rig operations. Three generators will be used at a time and one will be kept on standby.
 8A 134 KW generator will be made available for lighting at the residential camp and for other emergency requirements.
 8One 450 KVA DG set will be used for construction and operation of the GGS. Three 670 KW DG set will be used during construction of the GPP and two 600 KVA captive gas generators will be installed during the operation phase of GPP.
 8The fuel consumed will mainly be diesel used by rigs, various equipments, and vehicles operating to transport goods and supplies to the site. |
 8During the drilling phase, the consumption of diesel is estimated to be about 4.5-5 KLD. Out of this, a major part comprising about 85% will be consumed by the rig and about 15 % will be required for the campsite.
 8About 15-20 KLD diesel will be required during the construction of the GGS and GPP.
 8There will be provisions for storing of about 7 days of fuel back up which means storage of about 35 KL.
 8The fuel will be provided by the drilling contractor and transported to site through tankers.
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 Hindustan Oil Exploration Company Limited (HOEC) has chalked out a plan to conduct a series of development activities in its AAP-ON-94/1 block in the Tinsukia district of Assam, with the cost pegged at Rs. 550 crore.
 8Presently, the JV consortium of the bock comprises of Hindustan Oil Exploration Company Ltd (HOEC), Oil India Ltd (OIL) and Indian Oil Corporation Ltd (IOCL). HOEC is the operator and OIL is the licensee of the Block. The participating interest of the JV consortium in the development phase is as follows: HOEC (26.882%), OIL (44.086%) and IOCL (29.032%).
 8Following successful discovery of natural gas in the Dirok field in the block, the government has approved development activities in the block
 8The objectives of the proposed development activities are summarized as below:
 -- To put three existing wells into production, drill and complete three new development wells to produce hydrocarbons from the Dirok field;
 -- Setting up a new Gas Gathering Station (GGS) and a Gas Processing Plant (GPP) with handling capacity of 20 million standard cubic foot per day (mmscfd) of natural gas.
 -- Laying of underground pipelines to transport natural gas from wells to the GPP via the GGS.
 -- Laying underground pipelines to transport natural gas from GPP to an OIL (Oil India Limited) operated existing GGS at Kusijan.
 -- Laying underground pipelines to transport oil condensate from the GPP to the existing IOCL refinery at Digboi.
 8Due to existing infrastructure of OIL for gathering and transmission of gas in the area and demand for gas from the Assam gas cracker, there is a ready demand for gas in the area.
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India is considering deregulating the price of natural gas extracted from local fields, following petitions from producers of the fuel that the current tariff is too low to support exploration and production costs, people familiar with the plan said.
8The government is studying the possibility of allowing producers to set the price in consultation with customers, according to two people, who asked not to be identified because the talks are confidential.
8Market rates can be set for gas extracted from 69 small fields due for auction by the end of the year, Oil Minister Dharmendra Pradhan said on Sept. 2.
8Explorers in India including Reliance Industries Ltd. and its international partner BP Plc, state-run Oil and Natural Gas Corp. and Gujarat State Petroleum Corp. have been seeking independent pricing, arguing that current prices make new investments unviable. Raising local gas output is key to reviving industries such as fertilizer and power that have had to cut capacity use for lack of the fuel.
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8Vedanta Resources plc will announce its results for the half year ended 30 September 2015, on
 Wednesday, 4 November 2015.
 8PNGRB has rescheduled the open house discussion for finalization of initial unit natural gas pipeline tariff of Dabhol-Banglore natural gas pipeline network of GAIL.from October 21 to 29 as the date was not found suitable by some key stakeholders who wanted to attend the meeting
 
   Details
 ONGC is planning a study on the benefits of pit less drilling in its ongoing exploration activities in the Assam asset.
  8Pit less drilling involves the removing and treating of drilled solids, with the wastes collected in a modified steel catch tank adjoining the mud tanks at a drilling site.
  8The system is further equipped with a mud de-watering system consisting of a chemically enhanced centrifuge package. Once the solids and liquids are separated, cuttings are dried and packed in paper bags.
  8The effluent and mud are treated through dewatering  and effluent treatment  to recover water that can be reused for preparation of mud and for cleaning purposes.
  8Objectives of carrying out this system are:
  -- Pit less drilling involves drilling without the need for an open pit, and thus eliminates unsightly and hazardous pits.
  -- A decrease in the land need in sensitive and hilly areas.
  -- Elimination of the risk of damaging underground pipelines and utilities.
  -- Reducing water consumption by as much as 80%.
  -- Reduction of truck traffic associated with the transporting drilling wastes.
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The VLCC market for crude has caused cheer in an other wise depressed marine freight market.
 8It is now making good sense for the owners of the 21 VLCCs built between 1995 and 1996, which have reached or are about to reach their 20th year and 4th SS/DD, to get their 5 year ex-tension.
 8Overall sentiment remains bullish for the sector, while with Saudi Crude Producon expected to stay at levels well above 10 million barrels/day, and the winter season approaching, the arguments for firm demand  and negligible scrapping in the following months remain plenty.
 8VLCC rates have reached levels above $100,000/day, it was certainly difficult to  contain enthusiasm from washing over the market, despite the fact that the rest of the segments witnessed rate decreases across the board.
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There is also now serious talk of now allowing the exploitation of oil and gas reserves so as to be able to arrest a dramatic increase in global temperatures.
 8Studies are now showing that if temperature change has to be restricted, a large part of the world's oil and gas reserves will have to go unexploited.
 8This is a very significant and real risk that Indian oil and gas industries must now begin to face.
 8Every Indian company must deploy a strategy team to look at such risks and diversify its own portfolio of high carbon assets.
 8Given the huge boost to renewal energy, companies such as ONGC and RIL should tap this high growth area and work decisively in that direction.
 8Even at full market pricing, it is now becoming increasingly evident that some of the deepwater oil and gas assets held by ONGC and RIL may remain unexploited because they are financially unviable.
 8The dynamics of the oil and gas industry has changed in such a manner that these assets may in fact remain unviable to take out in the foreseeable future.
 8For many of today's companies to survive, asset diversification should become a compelling need.
 RIL's assets are currently has a very high hydrocarbon footprint but this is changing with its investments in the telcom and related sectors.
 8The rapidity of this change will be much faster going ahead, if the company has to adjust to changing times.
 8The same holds true for public sector companies as well, not just in the upstream but also in the downstream sector.
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It is time for Indian hydrocarbon companies to begin looking at the high carbon assets that they are carrying in their portfolios in world that has become increasingly conscious of the environment impact of firms with high carbon footprints.
8For many large institutional investors are gradually turning away from such portfolios not because of ethical reasons alone but also on sound financial grounds.
The return on investment in the last three years on less carbon intensive assets has been higher and this trend is likely to continue well into the future.
8For big investors such as pension funds, some of the strategies already incorporated include divesting holdings in high-carbon-emitting corporations, tilting a strategy in favor of companies with low carbon footprints, or using thematic indices that provide exposure to environmentally themed sectors.
8While some strategies take a strong approach to eliminating carbon footprints, others have shown they can provide high carbon reduction without significant tracking error.
8Hence, even if fears of carbon regulations do not materialize during the given investment timeframe, these strategies would have returns comparable with the benchmark.
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 Punj Lloyd has won the EPCC contract for building thef Coker LPG treating unit and its associated facilities at IOCL's Paradip Refinery in Odisha, The prroject is worth Rs 367 crore.
  8This is the second order which Punj Llyod won at Paradip refinery.
  8The project mainly involves detailed engineering, procurement, construction and the commissioning of the Coker LPG treating unit.
  8The first order comprised of 12 process units all on EPC basis, which are now in the final stages of completion.
  8Punj Lloyd had also recently announced that it had won the EPCC Package 2 at Haldia refinery in West Bengal from Indian Oil Corporation Ltd (IOCL) for the Sulphur Block.
  8The group has extensive experience in almost every process unit including delayed coker, visbreaker, hydrogen and hydrocracker, sulphur block and MSQ up-gradation.
  8With this new win, the group’s order backlog stands at Rs 21,833 crores.
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