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Who will tap the shale gas in India?  

Booster Shot

As a potential source of cheap and environment-friendly natural gas, shale gas can revolutionise the global energy sector. More and more players outside North America - a pioneer in the business - seem to think so and want to be early birds to catch the worm. Reliance Industries Limited (RIL) sealed a far-sighted $1.35 billion deal on a US shale field, its second big-ticket investment in such assets in America. State-owned ONGC has a pilot project to drill wells in the Damodar basin. Neighbouring China too has woken up. Its largest state oil firm has engaged a Canadian company on possible joint stakeholding in exploitation of British Columbia's reserves. That two of the world's most energy-starved emerging economies have jumped on to the shale gas bandwagon is good news for global clean energy development.

Thanks to shale gas, the US has a gas surplus. Having drastically cut prices even while pushing green energy use, it's a ready example to emulate. Both Asian giants need to prune dependence on fossil fuels and contribute to reducing global greenhouse gas emissions. In India's case, imports service nearly 25 per cent of its gas demand, estimated to grow rapidly in the coming years. And, as the planet's fifth largest consumer of energy, it's burdened with a mammoth import bill for 70 per cent of oil needs. With sizeable estimated shale deposits in the Gangetic plain, Assam, Gujarat, Rajasthan and coastal regions, it can turn to shale gas in a big way since new drilling technologies have made extraction viable.
In this context, China has fashioned a memorandum of cooperation on shale gas with the US. This is expected to lead to transfer of know-how and technology to help it capitalise on huge domestic reserves. Unfortunately, despite talks on the subject, India hasn't pursued a similar partnership. Without the requisite technological expertise, the authorities will find it difficult to implement any national production blueprint. One major reason RIL has tied up with US companies is reportedly to acquire skills in the trade.

Also, India has no business-friendly policy on harnessing non-conventional energy sources. Firms can produce conventional oil and gas. But they have to keep their hands off, say, coalbed methane or shale gas even if they discover coal seams or shale deposits in their exploration blocks. This is patently absurd. India gets periodically trapped in politically fractious debates on fuel price rise or decontrol. Why not instead deal seriously with the structural challenges of energy hunger? Since gas can be a cheaper, cleaner alternative to oil, a promising resource like shale gas shouldn't lie untapped. The faster policy change enables seismic surveys to locate deposits and allows extraction as well as facilitates building of a gas distribution network throughout the country, the better for India's energy future.

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Will the diesel price be increased?  

Prime Minister Manmohan Singh on Tuesday said that diesel prices too will be freed from government control as part of "much-needed reforms" but LPG and kerosene will continue to be subsidised. He also rejected the Opposition criticism of last week's decision to hike fuel prices, which saw petrol prices being pegged to market rate.

"The fact that petrol prices have been set free, the same is going to be done to the diesel prices. (These are) much-needed reforms," he told journalists accompanying him on his way back home from Toronto where he attended the G20 Summit. The government on June 25 decontrolled petrol prices, resulting in a Rs 3.50 a litre increase in rates in Delhi, and raised diesel prices by Rs 2 a litre in preparation for an eventual decontrol. Diesel rates, at current prices, will rise by another Rs 1.50 if it is freed from government control.

The Prime Minister did not say by when the diesel prices will be decontrolled but said domestic cooking gas LPG and kerosene prices will continue to be regulated by the government. Last week, domestic LPG prices were hiked by Rs 35 per cylinder and kerosene rates went up by Rs 3 per litre, the first increase in the poor man's cooking fuel in more than 8 years, as part of a move to cut government's subsidy bill.

Even after the hike, kerosene is being sold at Rs 15.07 per litre below cost, while a 14.2-kg LPG cylinder is under priced by Rs 226.90. "And the adjustment that has been made in the prices of kerosene and LPG was also necessary, considering the very high amount of subsidy that is implicit in their pricing structure," he said. The Prime Minister was replying to a question on the government's decision Friday to effect an increase in the prices of petroleum products to cut losses for oil marketing companies and whether it indicated that the government was getting ready for tougher reforms and further deregulations. Courtesy: HINDUSTAN TIMES

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PSU oil stock updates  

Oil stocks continue to rally

Stocks of oil companies continued to rally on Monday as investors felt that revenues and profits of these companies, mainly the PSUs, will rise on the back of government's decision last week to free petrol prices and hike prices of diesel, kerosene and LPG. Analysts feel that the government decision could lead to re-rating for PSU oil companies as they now have greater leeway to fix petrol prices.

In Monday's relatively strong market, HPCL jumped 8% to Rs 433, while IndianOil gained 5.4% to Rs 398 and BPCL rallied 3.4% to Rs 642. Among other stocks from the sector, ONGC was up 3.2% to Rs 1,304 and Essar Oil ended 2.4% higher at Rs 141.

Oil & gas stocks also lifted market sentiment, and along with relatively stable global markets, gave BSE sensex a 200-point push which ended at 17,774.
Times of India, Mumbai, June 29, 2010

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Indian Oil Corporation to get Cairn crude  

IOC to get Cairn crude

IndianOil will start processing crude oil produced from Cairn India Ltd’s Rajasthan block at its Panipat refinery in Haryana early next month, a senior official at the state-owned refiner said. “Cairn is scheduled to start injecting the crude into our pipeline today or in couple of days, and it should reach the Panipat refinery in 10 days. So, we are hoping to start processing the crude early next month“, IndianOil director refineries B N Bankapur said. He said Cairn will pump crude from its own pipeline to IndianOil’s 1,174-km Mundra- Panipat pipeline at the latter’s terminal in Radhanpur, Gujarat, to transport it to the Panipat refinery. Cairn recently commissioned its 590-km pipeline from its Rajasthan Block in Thar desert to Salaya in coastal Gujarat, and is already delivering crude to private refineries from the pipeline.
Source: DNA, Mumbai, June 24, 2010

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On Shale gas reserves in India  

A new sense of energy

The most striking transformation of India’s energy sector is taking place not in nuclear or solar power, but in natural gas. The Krishna-Godavari offshore gas finds, the making of a national pipeline grid and, now, the first Indian venture into shale gas will dramatically change the energy profile of the country. Recent corporate moves in shale gas have been particularly dramatic. Reliance Industries has struck three multi-billion dollar deals with US shale gas firms this year alone. Even public sector oil firms have tied up with foreign firms in search of shale gas know-how.

Shale is a common rock formation often impregnated with oil and gas that, in the past, have been commercially too expensive to extract. This has changed following technological advances in the 1990s. A shale gas revolution has converted the US from gas importer into a gas-surplus
country. American gas prices have fallen so rapidly that in energy equivalent terms US gas is now as cheap as $12 barrel oil and about half the price that India has fixed for Krishna-Godavari gas. Shale gas is already shaking up the global system. Europeans see it as the means to break their dependence on Russian gas.

One reason India is rightly refusing Iran’s pricing mechanism for its future pipeline is that Tehran’s yet to understand that global gas prices are set to go southward for decades. Iran’s insistence that its gas price should be pegged to that of oil’s is patently absurd. The US, leaders in this technology, are cognisant that shale gas would reduce carbon emissions by pushing out dirty coal and potentially tame oil-rich irritants like Venezuela and Iran. In April, it offered to provide assistance to any country seeking to exploit its shale gas reserves.

Not unexpectedly, a hidebound New Delhi doesn’t even have an estimate of our shale gas reserves. What is known is that there are enormous shale deposits across north India, from Rajasthan to Assam, and as far south as Andhra Pradesh. On the basis of these deposits, most geologists believe India may be among the five largest shale gas reserve-holders in the world. But New Delhi is an obstacle in another way. Present exploration policies separate bidding for normal oil and gas from bidding for non-conventional gas sources. This means that an energy firm looking for oil and gas that stumbles on shale gas has an incentive to ignore or even hide its discovery. India’s private sector is nimbly jumping on to the shale gas bandwagon. India’s government needs to wake up to an energy revolution. After all, this is a change that has been going on for 20 years.

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Petrol price in different cities  

Petrol and diesel prices per liter at different cities of the country - in Mumbai petrol would cost Rs52.50 and diesel would cost Rs 39.88, Chennai Rs 52 for petrol and Rs 54 for premium petrol, in Delhi, petrol would cost Rs 47.93 and diesel Rs. 38.10, in Kolkata petrol would cost Rs 51.65 and diesel Rs 37.99, in Hyderabad petrol would cost Rs 53.24 and diesel Rs 38.96. (ANI)

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Petrol price Hike in Chennai  

Petrol and diesel prices per liter at different cities of the country - in Mumbai petrol would cost Rs52.50 and diesel would cost Rs 39.88, Chennai Rs 52 for petrol and Rs 54 for premium petrol, in Delhi, petrol would cost Rs 47.93 and diesel Rs. 38.10, in Kolkata petrol would cost Rs 51.65 and diesel Rs 37.99, in Hyderabad petrol would cost Rs 53.24 and diesel Rs 38.96. (ANI)

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Hike in Petrol price in Kolkata  

In Kolkata petrol would cost Rs 51.65.

Petrol and diesel prices per liter at different cities of the country - in Mumbai petrol would cost Rs52.50 and diesel would cost Rs 39.88, Chennai Rs 52 for petrol and Rs 54 for premium petrol, in Delhi, petrol would cost Rs 47.93 and diesel Rs. 38.10, in Kolkata petrol would cost Rs 51.65 and diesel Rs 37.99, in Hyderabad petrol would cost Rs 53.24 and diesel Rs 38.96. (ANI)

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Updates on petrol price in Mumbai  

Petrol and diesel prices across the country increased on Friday, as the Union Government decided to deregulate fuel prices.

Petroleum Secretary S Sunderesan, said the under recoveries on the part of oil marketing companies for petrol would have been 7,000 cr. and for diesel 23,000 cr. for the whole year if their prices would not have been decontrolled.

Petrol and diesel prices per liter at different cities of the country - in Mumbai petrol would cost Rs52.50

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Petrol Price in Delhi after price rise  

Petrol and diesel prices across the country increased on Friday, as the Union Government decided to deregulate fuel prices.

Petrol and diesel prices per liter at different cities of the country -
in Delhi, petrol would cost Rs 47.93

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Govt hikes petrol, diesel prices  

Govt hikes petrol, diesel
NEW DELHI: Government has decided to raise petrol and diesel prices, Oil Minister Murli Deora said on Friday, as part of a plan to move towards a market-determined fuel price regime.

While petrol prices go up by Rs 3.73 per litre, diesel has been hiked by Rs 2 per litre. LPG also goes up by Rs 35 per cylinder. Kerosene prices, however, will not be market-driven, say sources.

The decision follows a ministerial panel meeting on freeing up petrol prices and cutting subsidies on diesel, kerosene and cooking gas, to help rein in the fiscal deficit, which is projected at 5.5 percent of the gross domestic product in 2010/11 and free up revenues for other programmes.

The move will help boost profits of state-run oil firms that have been losing revenue from government-set lower prices.

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On succession plan for public sector units  

Centre yet to identify candidate to head IOC

Mumbai, June 22 The Centre has still not zeroed in on a candidate to take charge as Chairman of IndianOil even though the office has been lying vacant for four months now.Mr S. Behuria's tenure came to an end in February when it was widely believed that he would get an extension till he turned 60. The acting Chairman, Mr B.M. Bansal, who is also Director (Business Development), is scheduled to retire in January.In fact, most of his colleagues on the IOC board are nearing their retirement and will be making an exit over the next 12-18 months. Effectively, this means that none of them can take charge as Chairman since they would at least need two years remaining in their tenure to qualify.For instance, the Director (Human Resources), Mr V.C. Agrawal, will be retiring next month while the Director (Finance), Mr S.V. Narasimhan, is due to retire in April 2011. The Director (Refineries), Mr B.N. Bankapur, follows soon with the Director (Marketing), Mr G.C. Daga, retiring in September 2011. The Director (Pipelines), Mr K.K. Jha, is scheduled to step down in January 2012.

Top priority
The top priority, of course, is filling up the Chairman's post and names of potential candidates have been doing the rounds for months now. These included Mr S. Roy Choudhary, Director (Marketing) of Hindustan Petroleum Corporation, now due to take charge as Chairman and Managing Director of the company. The other was Mr R.K. Singh, Director (Refineries) of Bharat Petroleum Corporation who, in all likelihood, is the company's next CMD.More recently, other names have been added to the list including one from a top private sector oil company and another from a PSU. It is this long wait that has had people within IOC wondering what is in store for the maharatna.“It is not as if work has stopped as a result but it would be a great help if it is known who the next Chairman is,” sources said. In fact, the delay has led to questions being asked on the entire process of denying extensions to CMDs. What began with the late Subir Raha continued with Mr S. Behuria and, if rumour mills are to be believed, also with Mr Ashok Sinha of BPCL, which apparently prompted him to call it a day. Incidentally, both Mr Behuria and Mr Sinha are graduates of the Indian Institutes of Management.

Within oil industry circles, officials wonder why no interview for the IOC Chairman's post was called earlier when it was known that the vacancy would fall in February. “The pattern of not having a succession plan in place is just becoming the norm in the public sector,” they said.The reason why IOC's case is often highlighted is that it is India's largest oil refining and marketing company which is now getting into a host of other areas such as exploration and production, and petrochemicals. “The need of the hour is to have an able captain who will be around for a few years to steer the ship,” sources said.

Ideal age
It is again on this subject that questions arise on the ideal age of the Chairman. Overseas, some of the biggest names have Presidents who are in their late 60s and even their 70s with the idea of putting their experience to optimal use.The downside to this is that in a country like India, such a move could effectively deter any youngster of staying on in a company for too long.“Any new recruit aspires to be a CEO one day. If he/she figures out that will never happen despite their competence, they would just pack up and leave,” an industry observer said. For a company with nearly 35,000 employees, that is the last thing IOC would want.
….by…Murali Gopalan / The Hindu Business Line

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Rise in sales of aviation turbine fuel by 39 per cent  

IOC, BPCL log 39% jump in ATF sales

JET fuel sellers such as Bharat Petroleum and IndianOil are into big business these days. Their sales of aviation turbine fuel have grown over 39 per cent thanks to rise growth in air traffic. Domestic airlines carried 211.38 lakh passengers from January to May as compared with 170.66 lakh in the year-ago period, registering a 22 per cent surge in passenger traffic.

BPCL sold 88,711 kilolitre (kl) of ATF during March-May, 39 per cent more than 63,746 kl sold in the same period previous year. Similarly, IOC recorded an 8 per cent hike in ATF sales in the past three months. It sold 325,000 kl to 330,000 kl of ATF in the past three months as compared with 305,000 kl in the year-ago period.

However, for Hindustan Petroleum ATF sales came down to 58,000 kl in May from 62,000 kl in the previous month. "We have seen a negative trend in our ATF sales because we lost an international client," said HPCL marketing director S Roy Choudhury. The company couldn't bag the Emirates account this year.

HPCL did not divulge its exact ATF sales in the past three months and a year ago period even after repeated phone calls made by Financial Chronicle.

Petroleum companies have reported higher sales notwithstanding a rise in the ATF price. On June 15, IOC hiked ATF prices by 1.7 per cent i.e. Rs 688 to Rs 40,192 per kl in Delhi. On June 1, oil companies had cut ATF prices by 7 per cent to Rs 39,504 a kl.

Aviation industry experts believe ATF consumption will go up further as airlines are getting back to routes and frequency expansion.

In the ATF market, IOC is the largest oil marketing company with over 60 per cent market share, while BPCL holds 21 per cent and HPCL 16 per cent.

Financial Chronicle, Mumbai, June 22, 2010

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China's third largest solar panel manufacturer intends to enter the Indian solar energy market  

Chinese co Trina eyes Indian solar energy market

M Ramesh

Chennai, June 21

Changzhou Trina Solar Energy Company, a Chinese company listed on the New York Stock Exchange, intends to enter the Indian solar energy market. Business Line learns that Trina has signed an agreement with Chennai-based GEMAC Energy Ltd for entry into the Indian market.

Trina Solar Ltd operates as an integrated solar-power products manufacturer in China. The company integrates the manufacture of monocrystalline ingots, wafers and solar cells for use in its solar module production.

Trina is said to be China's third and the world's eighth largest solar panel manufacturer. Last year, it shipped solar panels worth 800 MW, nearly double that of the previous year.

The agreement with GEMAC gives the Indian company rights to market, execute and carry out maintenance of solar power projects in India, both grid-connected and off-grid.

The company would be interested in looking at ‘building integrated photovoltaic' projects, where the solar panels are fixed to the outer walls of the building, generating enough electricity for the building's needs.

Trina specialises in this line of business.

The company has designs that fit in with the buildings, so that the panels enhance the aesthetics of the construction. Software parks are a potential market for this business.

GEMAC officials did not want to comment on the tie-up with Trina. However, the company had earlier told journalists of its desire to get into the non-conventional energy business, mainly solar and wind projects.

The officials instead said that GEMAC had finalised plans to implement a 30 MW wind farm for which it had leased 600 acres of land in Tirunelveli district in southern Tamil Nadu.

The company is looking for a partner for this project.


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IndianOil markets 5-kg commercial LPG cylinders in Chennai and its suburbs  

5-kg commercial LPG cylinders soon

IndianOil will soon start marketing 5-kg commercial LPG cylinders in Chennai and its suburbs.

The cost of the light weight and affordable cylinders will be determined by the market. The smaller version, like the 19-kg commercial cylinders, will not be subsidised.

"We plan to launch the 5-kg commercial cylinder within a month," an IOC official told The Hindu on Thursday. The launch of the small cylinder, he added, was part of the strategies to curb misuse of the heavily subsidised 14.2-kg domestic cylinder. Tea stalls, roadside eateries and small commercial establishments, who find the price of 19-kg cylinder prohibitive are expected to prefer the 5-kg cylinder.

May cost Rs. 300

The small cylinder is expected to be priced around Rs.300 each. Commercial LPG, at the prevailing price of 19-kg cylinder, inclusive of Value-Added Tax and dealer commission, works out to nearly Rs.60 a kg. The price per kg of the subsidised LPG is a little over Rs.22, thus making the 14.2-kg an attractive proposition for tea stalls and eateries.

Besides Chennai, the 5-kg commercial LPG cylinders will be launched in 9 other cities across the country.
Hindu, Chennai, June 18, 2010

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MIC Electronics signs MOC with IOCL  

MIC Electronics signs MOC with IOCL

Hyderabad based company, MIC Electronics Limited announced its Memorandum of Collaboration with IndianOil in a function held in Delhi last evening.

Executive Director, IOCL, Dr. R K Malhotra and General Manager, IOCL, Mr Anup Kacker, who were present at the event, expressed their pleasure at the collaboration. "Together, our main objective will be the Study and Development of Combined Solar and LED Light Source Based Products as well as Projects for Foray into Green and Energy Efficient Technologies Demonstration" Said Dr. R K Malhotra.

"LED and Solar Power are basically facets of the same technology" Explained Mr Anup Kacker. "Our collaboration aims to resolve a lot of technological issues, while conserving power at the same time."

Both, MIC Electronics Limited and IndianOil have successfully initiated pilot marketing of solar based LED lanterns on a commercial scale in few select state offices of IOC Marketing Division. Their Memorandum of Collaboration aims to further improve the quality of the already marketed solar lantern, develop new variants of the same as well as many other new generation products having complimentarity with solar energy or with energy efficiency and to jointly undertake assignments for customers in India and abroad utilizing the expertise and the facilities available to each of them. The collaboration will focus on combining LED with solar power.

"It is a matter of great pride to us to be associated with Indian Oil Corporation" said CMD, MIC Electronics, Dr M V Ramana Rao.
...For the complete article, log on to the portal

Business Standard, New Delhi, June 21, 2010

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Managing the spillover of an oil spill  

Managing the spillover of an oil spill

An oil spill in the Gulf of Mexico has been grabbing the attention of four States in the south of the US, apart from lawmakers and senior administration officials. Environmentalists fear the spill's effects on the region's fragile ecosystem will be devastating. The company has been taking various remedial measures that have cut the flow. But the spill is expected to stop fully only when relief wells are dug, sometime in mid-August. BP has not been in a particularly shining light in its response. Reports suggest that weeks before the explosion, the company had taken measures to cut costs, which may have led to the disaster. Moreover, company estimates of the amount of oil spilling have been seen as being consistently underestimated. About two million gallons a day of oil are gushing out. The CEO, Mr Tony Hayward, in appearances before Congressional committees investigating the disaster, did not know much that you wondered what he was being paid to do. For the US, the previous record oil disaster was when the tanker Exxon Valdez spilt 10.8 million gallons off the coast of Alaska in 1989. In the last nine weeks, the current spill has already eclipsed that one.
Oil industry insiders were put in charge of regulating this industry (much like finance industry insiders running the Treasury). As always, this disaster has stirred politicians to make their usual calls for the country to be less oil-dependent and the need to embrace a clean energy future. The US President, Mr. Barack Obama, has announced a moratorium on off-shore oil exploration. One can expect more regulation, but we should not get our hopes up as, like in the case of financial services, industry insiders are the ones chosen to regulate the industry.
Court delay
The President joined the fight with fighting words, including “Oil spill is assaulting our shores” and “We will make BP pay for the damage it has caused”. Then, he and his officials negotiated with the top management of BP and made them commit to put $20 billion (Rs 90,000 crore) over the next four years in an escrow fund that would pay damage claims, clean up the spill, compensate people (like fishermen) whose livelihood has been affected and so on. An additional $100 million has to be deposited into a fund that would support unemployed oil workers. A panel would adjudicate claims but unhappy individuals will retain their right to go to court. But let us not forget that after the Exxon Valdez disaster, the company concerned managed to stretch the cases through courts for 19 years till it got the Supreme Court to slash the punitive damages by one-fifth from $2.5 billion (Rs 11,250 crore).In the BP spill, the Government has hastened to add that this fund is not a cap on liabilities, meaning that the company may be expected to pay more. The US media, while giving due coverage to the BP oil spill, has also been reminding us of an ongoing disaster many times the size of the BP situation that has been taking place in Nigeria.
In the oil-rich Niger delta, a New York Times report says, oil spills averaging 11 million gallons a day has been happening every year for 50 years. Oil spills from operations of Exxon Mobil and Royal Dutch Shell (due to corroded pipelines, theft and sabotage) have devastated vast swaths of coastline and mangrove forest, among others, with the fishermen and local residents being forced to relocate. The Nigerian army, who guard these operations, has put down protests. Some protestors, like Ken Saro Wiva, have been executed. Oil is too important for the Nigerian economy, or rather the personal bank accounts of Nigerian leadership, for them to challenge the companies. The US, which gets about 10 per cent of its oil requirements from Nigeria, has also stayed silent. One would hope that the US, with its demonstrated concern for the environment and taking of responsibility, would move swiftly to settle another issue where it is directly involved.
Agent Orange
During the Vietnam War, over 35 years ago, the US Government dumped about 20 million gallons of Agent Orange and other herbicides over parts of Vietnam, Laos and Cambodia as a defoliant, to remove the forest cover that was protecting the opposition fighters. Over 5 million acres of forest were decimated and dioxin, a toxic chemical used in the defoliant, is said to have seeped into soil and water systems, and led to thousands of deaths and births of children with disabilities. US veterans and those of its allies in the war (Australia, Canada) have received some compensation in US courts. But, ironically, these courts have dismissed claims from Vietnamese victims and have ruled that the US Government (and also the companies as sub-contractors) has sovereign immunity. A recent estimate to clean contaminated sites is just $300 million (Rs 1,350 crore), a tiny fraction of one per cent of the amount that BP has been required to set apart.
I, for one, will not blame the US for using a different standard when it comes to what happens within its own shores. Just like people, governments act in their own self-interest (and morality be damned), which is to put the interests of its own people at the top. I would only hope that other countries take a similar view when it comes to protecting the interests of their own citizens.(The author is Professor of International Business and Strategic Management at Suffolk University, Boston, US.

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IKF Green Fuels Ltd plans to set up two new bio-fuel refineries in India  

IKF Green Fuels to set up two refineries.

Kolkata, June 17 ::: IKF Green Fuels Ltd, the 100 per cent subsidiary of the city headquartered IKF Technologies Ltd, plans to set up two new bio-fuel refineries in West Bengal and Gujarat by December at an investment of Rs 50 crore, according to the Chief Executive Officer, IKF Technology, Mr Mukesh Goyal. The new facilities would help scale up its annual production from 9,750 tonnes now to about one lakh tonnes by March 2011, he said. The investments would be funded from the money raised last year through Global Depository Receipts, he added.
“We are in talks with the respective State Governments for land near major ports as we are evaluating possibilities of importing palm oil from Malaysia as an alternative to jatropha,” Mr Goyal said.IKF has 10,000 hectares under jatropha cultivation in contract farming model in Rajasthan, Gujarat, Meghalaya, Maharashtra, Karnataka and Madhya Pradesh. The area of cultivation would be scaled up to one lakh hectares soon to cater to the requirements at the new facilities, he said.
The company has an agreement with Indian Oil Corporation for technology transfer and supply of bio-fuel. Nearly 10 per cent of the IKF's turnover now comes from the bio-fuel segment.IKF Technology is eyeing acquisition of a US-based 50- to 100-seater BPO by March 2011, Mr Goyal said. “We are looking at shelling out up to $5 million for the acquisition and are evaluating about 20 proposals,” he said. The company now has overseas subsidiaries in Frankfurt, Dubai and South Africa. The IKF Group plans to recruit 4,000 people in 2010-11, up from its present workforce of 2,000, Mr Goyal said. It is also planning to enter e-education business in the rural regions soon, he added.
Manish Basu..the HINDU BUSINESS LINE newspaper

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State-owned IndianOil (IOC) and Hindustan Petroleum Corp (HPCL) signed contracts with Reliance Industries to buy natural gas  

IOC, HPCL in pact with RIL for KG gas

State-owned IndianOil (IOC) and Hindustan Petroleum Corp (HPCL) have signed contracts with Reliance Industries to buy natural gas to replace costlier liquid fuel at their refineries. IOC has signed a Gas Sale and Purchase Agreement (GSPA) for buying 0.8 mmscmd of gas from RIL's eastern offshore KG-D6 fields, while HPCL has inked a pact for 0.2 mmcmd, officials at the state-owned firms said. KG-D6 gas will replace crude oil or fuel oil that IOC and HPCL use for production of hydrogen at their refineries. IOC would use the gas at its Koyali refinery in Gujarat, while HPCL would take the fuel at its Mumbai unit, they said, adding that supplies are likely to begin in a week's time. Originally, IOC was allocated 1.6 mmcmd of KG-D6 gas for use at its Koyali and Mathura refineries, but the agreement for the Mathura unit could not be signed due to sales tax issues with the Uttar Pradesh government.
Economic Times, New Delhi, June 17, 2010

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IndianOil and government of Tamil Nadu to set up a gas storage terminel near Ennore port  

IOC to build gas storage terminal

IndianOil along with the government of Tamil Nadu will invest Rs 10,000 crore to set up a gas storage terminal near the Ennore port with an installed capacity of five million tonnes per annum. The project also envisages laying a pipeline network to distribute 20 million cubic feet of gas per day and building a power plant.
India Business Journal, Mumbai, June 16, 2010

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IOC Naphtha for Haldia Petro  

IOC Naphtha for Haldia Petro

Haldia Petrochemicals Ltd may source naphtha from IndianOil's Paradip refinery, which is expected to commence production in another two years.

"Haldia Petrochemicals (HPL) has expressed interest in sourcing naphtha from the Paradip refinery. We will hold further discussions and carry out the feasibility study," K.K. Jha, director (pipelines) of IOC, told The Telegraph.

The proposal is at an initial stage, he said, adding that IndianOil would have to lay a dedicated 330km pipeline from the refinery to the petrochemical complex in Haldia.

Haldia Petro had earlier this year announced the completion of its Rs 1,230-crore capacity expansion project - Supermax. The project enhances the capacity of HPL's naphtha cracker unit by nearly 30 per cent to 6.7 lakh tonnes from 5.2 lakh tonnes.

The Bengal government and The Chatterjee group are the major shareholders in HPL.

The Haldia proposal comes at a time IOC is planning to set up a petrochemical complex along with the refinery at Paradip.

Jha said the refinery would produce enough naphtha to meet the in-house needs of the petrochemical complex and demands of HPL. However, he did not disclose the amount of naphtha being sought by HPL.

Faced with a resource crunch, IOC had divided the Paradip refinery and petrochemical project in 2008. In the first phase, it planned to go ahead with the 15-million-tonnes refinery to be commissioned in March 2012.

It had put the petrochemical project on hold because of volatility in global crude oil prices, economic downturn and mounting revenue losses for selling petroleum products below costs.

However, in the last board meeting, IOC revived its plans for the petrochemical project.

"We had kept the petrochemical project on hold. Now with the company's finances showing better prospects, we have to take a decision on when to start the project again," IOC chairman B.M. Bansal said.

The petrochemical project will cost Rs 22,300 crore.

According to IOC director (refineries) B.N. Bankapur, "The timeline for the petrochemical project will be worked out soon. We had planned a one-million-tonne petrochemical plant. There will not be any change in the configuration of the plant."

IOC has so far invested Rs 6,000 crore in this refinery-cum-petrochemical project.
Telegraph, Kolkata, June 14, 2010

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Cairn India started crude oil supply through its newly built pipeline  

NEW DELHI: Cairn India on Tuesday announced that it had started crude oil supply from its Mangala oilfield in Rajasthan to private sector Reliance Industries and Essar Oil through the newly built heated and insulated crude oil pipeline. RIL, Essar beneficiaries
Till now Cairn India shipped crude oil via road to the Gujarat coast for onward journey to Mangalore Refineries and Petrochemicals Ltd (MRPL) and RIL's Jamnagar refinery. The company has now completed the 590-km pipeline from Rajasthan to Salaya in Gujarat that has enabled the sale of crude oil to Essar's Vainer refinery in the State. The 14-million tonnes a year Vadinar refinery has contracted 30,000 barrels a day (bpd) of Mangala crude oil.
Cairn, which is now producing around 60,000 bpd of oil from Mangala, said sale to Indian Oil Corporation was expected to commence soon. “The company and Oil and Natural Gas Corporation (ONGC), its 30 per cent partner in the Rajasthan block RJ-ON-90/1, have commenced sales through the world's longest continuously heated and insulated crude oil pipeline,'' Cairn said in a statement here.
The 590-km long Barmer to Salaya section of the Barmer to Bhogat pipeline (670 km) is now operational with oil supplies having commenced to the private refineries from the delivery point at Salaya.
Source- Hindu

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IOC is Sparkling bright  

Sparkling bright

At a time when the government is actively considering a decision on deregulating fuel prices, investors should consider taking exposure to the industry. And what better stock to invest in than the industry leader, Indian Oil (IOC), particularly when it is attractively valued compared to its peers.


IOC operates eight refineries across the country with a total refining capacity of nearly 50 million tonne per annum. The company controls nearly 55% market share in retail sales of petroleum products. It is also a leading producer of downstream petrochemicals such as linear alkyl benzene (LAB) and purified terephthalic acid (PTA) in India. The company recently commissioned 1.5 mtpa naphtha cracker and downstream units to produce polyethylene and polypropylene at Panipat. IOC controls a 52% stake in Chennai Petroleum, which has two refineries with a total capacity of 10.2 mt. It has also picked up stake in 12 domestic E&P blocks, which include 2 CBM blocks, apart from 9 blocks overseas. It has been losing heavily due to the government's policy to control retail prices petrol, diesel, kerosene and LPG despite rising crude oil prices.

Growth drivers

The government's intent to act upon Kirit Parikh committee report is the most important growth driver for the company, which will emerge the biggest beneficiary of deregulation. The Centre's recent decision to revise APM gas prices and its aim towards cutting the fiscal deficit are indications that it is serious about decontrolling the retail fuel prices - at least to a certain extent, if not fully - that can reduce the industry's under-recovery burden. While the government continues to dither on price revisions, IOC has been expanding its nonoil portfolio, which contributed an insignificant Rs 360 crore to its FY10 profits. Its naphtha cracker and petrochemicals complex can go a great way in augmenting this.(Courtesy: Economic Times, New Delhi, June 14, 2010)

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Non-woven cotton carbon absorbent wipes for oil spill  

Oil spill: Indian-origin scientist offers a solution
In the form of non-woven cotton carbon absorbent wipes
Fibertect is different from cotton absorption technologies in its combination with carbon
Fibertect is all-natural,100 p.c. biodegradable and one sheet can be wrung and reused five times
Houston: As British Petroleum struggles to contain the oil spill in the Gulf of Mexico, an Indian-origin scientist from Texas University has created a special cotton fabric that can clean up crude oil up to 40 times its weight and help in cleaning efforts. Seshadri Ramkumar, Associate Professor of the Texas Tech Institute of Environmental and Human Health, has created a non-woven, environment-friendly cotton carbon absorbent wipes called Fibertect. “Cotton fibre contains 0.5 per cent wax, which enables it to soak up 40 times its weight.”“The chemistry of cotton makes it the ideal material for oil absorption with its waxiness, strength when wet, absorption capacity and ability to biodegrade,” said Professor Ramkumar, who described his discovery as “a blessing in an ironic situation.” “The synthetic booms soak up only a third of what cotton absorbs and are not biodegradable. You take those plastics and where do you put them? In landfills. They will stay put forever, “he added. “Add chemicals and it could absorb up to 70 times its weight,” he said.
All-natural way::::::::::Through his research with non-woven cotton, Professor Ramkumar may have found an all-natural way to absorb oil from spills. Rather than spending money and effort on containment structures and synthetic materials, he recommends utilizing cotton.“We are the only ones.. to my knowledge...focused on taking cotton to oil absorption using non-woven technology,” he said. Unlike apparel production, there is no need to go through the expensive processes of dyeing, bleaching and weaving the cotton. One cotton product Professor Ramkumar invented last year was Fibertect, a commercially sold non-woven decontamination wipe that absorbs toxic chemical substances. This is significant because now that the oil has reached the coastline, the non-woven cotton technologies could be doubly beneficial.
“Any wildlife rehabilitation that will occur we believe could be assisted with the Fibertect invention as well as other non-woven applications from his lab,” said Ronald Kendall, founding director of Tech's environmental institute.“There are just so many applications of Professor Ramkumar's technology to take cotton and turn into products that we never even thought of before,” he added. Several million feet of booms, lightweight tubes used to recover oil, have already been tossed into the ocean, according to the National Oceanic Atmospheric Administration. What makes Fibertect different from other cotton absorption technologies, however, is its combination with carbon. It is a three-layer design consisting of a top and bottom layer of cotton to absorb oil and a middle layer of carbon that absorbs hydrocarbons and harmful carcinogenic vapors released from the oil.
Why absorption needed?:::::::::::Professor Ramkumar said his unique use of activated carbon fabric in oil clean-up is extremely beneficial because the toxic vapours could potentially destroy ecosystems and cause cancer in humans if they are not absorbed. Professor Ramkumar said he and other researchers are simply taking what nature provides and applying it in new ways.“Mother Nature has given cotton wax to protect it,” he said.“The natural wax on the cotton helps to hold the oil together. So, wax has affinity towards oil, and then the carbon has affinity towards vapour, it holds the vapour.” Because Fibertect is all-natural, unlike synthetic plastic booms previously used to clean oil spills, it is 100 per cent biodegradable and one sheet can be wrung and reused up to five times. According to, the only cleaning method currently being used by BP is dispersants, which is an aerial spraying technique. Samples of Fibertect have been sent to the BP but no decision has been made on whether or not to use it. — PTI

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LPG pipeline from Paradip to Durgapur  

Durgapur gas pipeline move

State-owned IndianOil (IOC) plans to set up an LPG pipeline from Paradip to Durgapur at a cost of Rs 700 crore.

The 680 km pipeline is likely to be constructed by September 2012.

"The company board in its last meeting has approved the project. We will be taking up the financial clearance in October-November board meet," K.K. Jha, director (pipelines), told The Telegraph.

The pipeline will facilitate the transportation of LPG from IOC's Paradip refinery to bottling plants at Balasore, Budge Budge, Kalyani and Durgapur. From Balasore and Durgapur, LPG will be taken to bottling units in Bihar, Bengal and Jharkhand.

"The Paradip refinery, which is expected to be commissioned by March 2012, is likely to operate in full capacity by September and will produce 500 thousand metric tonnes of LPG. We will like to have the pipeline by then to transport the gas to the bottling plants," Jha said.

The ground-level survey has been done, and the board has cleared the feasibility report. IOC will take about 30 months to set up the pipeline. Jha said the pipeline would not only reduce the time to transport cooking gas but also bring down the logistic cost.

The pipeline will offer a major competitive advantage to the PSU in its bid to streamline and optimise operations. The firm has completed the Rs 1,420-crore Paradip-Haldia pipeline set up to transport 11 million tonnes of crude per year from Paradip to the refineries at Haldia and Barauni.

Insurance cost

The insurance cost of oil firms is set to rise exponentially following the oil spill in the Gulf of Mexico, ONGC chairman R.S. Sharma said. "This spill is going to be a game changer. We anticipate that our insurance premium next year will rise exponentially," he said.

ONGC had insured its offshore assets for a premium of $30 million before the Gulf of Mexico incident. He said the figure would have been "three-times more" if it was fixed after the disaster.

The firm had brought down the insurance premium for its offshore assets by around 20 per cent this fiscal, though valuations rose 8 per cent.

Telegraph, Kolkata, June 10, 2010

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Huge spending planend by Oil companies  

Oil companies plan huge spending

S. Sundareshan, Union Petroleum Secretary, at a press conference in Kochi on Friday.
KOCHI: Public sector oil marketing companies will spend Rs.1,000 crore over three to four years to strengthen the marketing network and infrastructure in Kerala. The investment included Rs.30 crore for setting up a new 60,000-tonne capacity bottling plant in Kozhikode by Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd., said S. Sundareshan, Union Secretary for Petroleum and Natural Gas, here on Friday. He was addressing a press conference after meeting top oil industry officials to review the progress of work on LNG terminal and related facilities here. He said that oil marketing companies had been encouraged by the growth of the Kerala market, where cooking gas penetration was 80 per cent compared to the national average of 50 per cent. Over 60 lakh households in Kerala had LPG connections. Fifty per cent held double bottle connections.
Gas market :::::::: Cooking gas market was growing four to five per cent a year while petroleum market in the State was growing 14 per cent and the diesel market six to seven per cent. Kerala was an important segment for the oil companies, said Mr. Sundareshan. He said that the work on the LNG terminal would be completed in the first quarter of 2012. GAIL (India) Ltd., formerly Gas Authority of India Ltd., will invest Rs.2,600 crore for laying pipeline for natural gas in the State. These include supplies to Fertilizers and Chemicals Travancore and a sub-sea line to NTPC's Kayamkulam power generation facility. GAIL has floated tenders for the pipeline project and it is expected to be ready by the end of 2011.In the second phase, GAIL will link the Kochi LNG terminal to Mangalore with a diversion to Bangalore. This phase is expected to be completed by the end of 2012.Mr. Sundareshan said that Petronet LNG was not immediately looking to set up a power generation facility near the LNG terminal on Puthuvype Island. The arrival of LNG in Kochi would help the State set up new power generation facilities. The State had proposed setting up of such a facility in North Kerala, he said. Meet to discuss price::::On the price front, the Petroleum Secretary said that the Group of Ministers was meeting again next week to discuss the issue.
…from the pages of THE HINDU newspaper.

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On Post of CEO's in PSUs  

Create separate post of CEO in PSUs, says ONGC chairman

Oil and Natural Gas Corporation (ONGC) head R S Sharma has demanded the creation of a separate post of CEO in public sector companies to avoid a conflict of interest arising from the responsibility being vested with the chairman. According to the corporate governance guidelines issued by the Ministry of Corporate Affairs, a committee comprising the majority of independent directors and the chairman is to determine the performance of “individual directors, as well as the board as a whole,” Sharma said. “In case the board is headed by the CEO (chairman also having the executive responsibility, as is the case in PSUs), a conflict of interest is inherent,” he wrote to the Public Enterprises Selection Board (PESB).

He suggested that the chairman should be non-executive or the role and offices of the chairman and CEO should be separated. Sharma also demanded that the number of independent directors on PSU boards be reduced to one-third, as the board becomes “too large to manage” if filled with 50 per cent independent directors. According to Sebi guidelines, 50 per cent of the company’s board should consist of independent directors and the market regulator does not recognize government nominee directors on the PSU board as independent directors. “For compliance with Sebi guideline, the board becomes too large to manage. Too many opinions become cumbersome in the process of decision-making in the board meetings,” ONGC Chairman and Managing Director R S Sharma said.“The situation is actually an overland for the board functioning,” he wrote.ONGC has not been able to meet the guideline as the oil ministry has not cleared the names of independent directors to be appointed on its board for years. The company now wants the strength of independent directors in case of public sector units to be reduced from 50 per cent to one-third.
Press Trust of India…news agency

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Sail, ONGC and IOC ask for appointment of independent directors  

ONGC, IOC press for independent directors to enjoy Maharatna status
The Economic Times…newspaper.

NEW DELHI: State-owned blue chip firms Sail, ONGC and IOC have asked their respective administrative ministries to fast-track appointment of independent directors on their boards so that they can enjoy their new Maharatna status. The government has conferred the prestigious navratna status — based on size and performance of a public sector undertaking (PSU) — to four companies. But only the NTPC board has been able to enjoy enhanced financial powers that comes with the status. Others do not have required number of independent directors on their boards to enjoy this status. Maharatna status gives more operational autonomy to PSUs allowing its board to clear projects up to Rs 5,000 crore without seeking government approval.

“We’ve communicated our concern to the ministry seeking immediate resolution. If we are not able to exercise the powers under the new category, there is no point in being called a Maharatna,” said an IOC official. Steel maker SAIL currently has only two independent directors. It ideally needs 12 independent directors as per clause 49 of Sebi’s listing agreement. “It is for the government to decide on appointment of new independent directors for SAIL,” the newly appointed SAIL chairman CS Verma said. Meanwhile, ONGC has also demanded that the number of independent directors on PSU boards be reduced to one-third as board becomes "too large to manage" if filled with 50% independent directors. As per Sebi guidelines, 50% of the company board should comprise independent directors. The market regulator also does not recognize government nominee directors on PSU board as independent directors. "For compliance to the Sebi guideline, the board becomes too large to manage. Too many opinions become cumbersome in the process of decision making in the board meetings," ONGC chairman R S Sharma said.

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Oil PSU shave lost Rs 156,000 crore to subsidies  

Say goodbye to oil PSUs

In six years, they've lost Rs 156,000 crore to subsidies

Government spinmeisters will have you believe that while no decision on freeing up oil prices could be taken on Monday due to a lack of quorum of critical ministers, things will work out at the next meeting of the Empowered Group of Ministers (EGoM). This is so much pie in the sky. If Cabinet ministers like Mamata Banerjee indicated their opposition to the proposed hike by not being there, there is no reason why they’ll be there the next time around, more so since Ms Banerjee is now more powerful after the West Bengal municipal elections. In any case, UPA chief Sonia Gandhi has pretty much sealed the fate of the Kirit Parikh report, which was to be the focus of the discussions, by saying the government should not mull a cut in subsidized kerosene sold through the public distribution system — a 20 per cent cut in such supplies was a critical recommendation of the Parikh committee. So, it’s safe to assume the government has pretty much blown the big chance it had to reform the oil sector. How serious this is can be seen from the Parikh simulations which show that, in another decade, you can say goodbye to the oil sector PSUs. In the six-year period from 2003-04 to 2008-09, the total under-recoveries in the sector were a whopping Rs 299,000 crore, of which Rs 157,000 crore was paid by the oil PSUs. For the year 2021 alone, according to the Parikh projections, the under-recoveries are expected to be of the same order of Rs 157,000 crore (how much oil PSUs will pay of this depends on government policy). And that’s assuming oil prices are at $80 a barrel, if they increase to even $100, the under-recoveries for that year will rise to Rs 279,000 crore. There’s no point looking at them for oil prices beyond $100 since in that case even the strong-hearted will go faint.

Such losses are obviously critical since oil PSUs’ closing down, or not being able to invest as a result of the losses, will mean their ability to supply future needs will be severely curtailed — after all, which investor and which banker will invest in a company whose bottom line is in serious trouble and is at the mercy of government policy. But what really takes the cake is that the logic used for not raising prices goes way beyond the usual rhetoric of protecting the poor. Raising petrol prices to ensure there are no subsidies (at $80 a barrel) will increase costs for two-wheeler owners by Rs 50 per month on average across the country — surely this is not an unfair burden. While kerosene touches Ms Gandhi’s heart so dearly, Parikh points out that just 1.3 per cent of rural households use kerosene for cooking — if it is being used for lighting primarily, then this should reduce over time since the government is also subsidizing rural electrification for the poor through another programme. In any case, since rural incomes have risen 60 per cent after kerosene prices were last raised in 2002, a 60 per cent hike in prices is neutral. Similarly, domestic LPG prices can be raised by the hike in urban per capita incomes — even if you keep prices to 2003-04 levels (when the LPG subsidy was a huge Rs 5,523 crore), this still justifies a price hike of over Rs 200 per cylinder. Parikh makes similarly rational arguments for reducing diesel subsidies — higher prices will encourage a shift to railways which is more energy-efficient, for instance. Whether the government wants to listen, however, is a critical question. There should be, after all, even limits to populism.
Credit: Business Standard

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Updates on Parikh report  

Parikh report sinks six fathoms deep………S Gangadharan / DNA

Even as oil marketing companies continue to bleed — the first quarter is certain to be a financial disaster for them — the empowered group of ministers, headed by the Union finance minister, Pranab Mukherjee, opted not to bite the bullet.The status quo is clearly untenable and yet the much-hyped meeting opted to have another confabulation soon, pleading that more discussion was needed to take a call on a revision in the prices of sensitive petroleum products.This reasoning is both flawed and flimsy because the recommendations of the Kirit Parikh committee are before this group, embodying the contours of what the thrust of the petroleum policy should be.
And, in terms of timing, circumstances are propitious in that the crude prices, despite the predictable two-sided movements, are basically soft and certainly below the historic highs of the previous year. The inflationary potential is, of course, there, but the price of inaction will be even more onerous on the fiscal as well as the entire oil industry.Apart from the cryptic announcement that the issue would be considered soon, there is no explanation as to why even a half-measure - like some hikes in the prices of auto fuels and kerosene as well as LPG- was not resorted to. Is politics behind this dithering?One has all along suspected that the setting of the Kirit Parikh panel was an attempt to buy time. The government had sat over this report for well over four months and even the constitution of the empowered ministerial group appeared to be an exercise in superfluity as only decision was needed to be taken on its key findings, if not in toto, then to the extent deemed expedient. Sadly, even this was not forthcoming.

Not that the recommendations were sweeping in nature. The report wanted to transit to a stage of nil under-recoveries in petrol and diesel by freeing them from administered control, while mooting an increase of Rs 6 per litre in PDS kerosene and at least Rs 100 in the price of one LPG cylinder, with future hikes linked to per capita income in agriculture in regard to the former and overall per capita GDP in regard to LPG.As in previous occasions, the government had chosen to dither but with a difference; this time, though, even a limited upward revision in the selling prices of petro goods was deferred, with far less justification as the roadmap was already before it.This delay has grave implications for both the health of the fisc and the oil majors. The budget has, in fact, pruned the petroleum subsidy to a mere Rs 3,108 crore for 2010-11 - already, this has been exceeded by the huge payout to oil companies towards under-recoveries for the preceding year - and now, the subsidy bill is set to mount.Similarly, the finances of oil marketing companies are seriously affected by under-recoveries as Centre only partially makes good their losses and they are heading for financially turbulent times.

The simple arithmetic, enshrined in the Kirit Parikh committee report, is very revealing.At $80 per barrel of the Indian crude basket and the exchange rate of $1 = Rs 47, it said that the selling price of petrol should be Rs 51.66 per litre in stead of the ruling price of Rs 44.72 ( at Delhi ), of diesel Rs 39.92 in stead of Rs 32.92, of kerosene Rs 30.76 in stead of Rs 9.23 and of LPG Rs 535.42 per cylinder in stead of Rs 281.20.In April, the monthly average price of the Indian basket stood at $.84.13 per barrel, that is higher than the March average of $78.02.With the exchange of the rupee vis-a-vis the dollar around the level of Rs 47 per dollar, the financial woes of the oil companies are slated to worsen and the fiscal will also come under pressure.
It is a hallowed British tradition that when the government is unable to come to grips with a problem, it appoints a committee to delve into the issue so as to buy time.Our British masters have left our shores for good but the system we have inherited from them, comes handy even now to delay a solution.The government has not covered itself with glory in its handling of the pricing policy for petroleum products. Let us be blunt — nothing worthwhile will come out of the labours of the Kirit Parikh committee

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PSU's picking up executives from Private companies  

IOC poaches pvt sector executives
S. P. S. Pannu / Mail Today….newspaper..

RIL and Haldia Petro staff join govt- run oil co for job security. PUBLIC sector giant Indian Oil Corporation ( IOC) has succeeded in turning the tables on the private sector by picking up executives from Reliance Industries Ltd ( RIL) and Haldia Petrochemicals for executing its ambitious expansion plans in the downstream petrochemicals business. The normal trend has been for private companies like RIL to build its business in the oil and gas sector by poaching on the huge talent pool of the public sector. This has been true both for the upstream oil and gas exploration segment where RIL is known to have lured executives from ONGC with the offer of higher salaries as well as the downstream refining sector for which talented executives were picked up from companies like Indian Oil Corp ( IOC).

Similarly, Essar Oil had also succeeded in hiring senior executives from public sector companies like Bharat Petroleum Corp Ltd ( BPCL) for its downstream business.IOC director ( human resources) V. C. Aggarwal told MAIL TODAY that the public sector company had managed to wean away 60 to 70 experienced engineers from private sector RIL and Haldia Petrochemicals.

He said the complete team is in place at Panipat and apart from these experienced engineers some youngsters had also been recruited. Senior officials are of the view that the new pay scales of the blue- chip public sector companies compare well with that of the private sector in real terms along with the various facilities that are thrown in. According to SAIL director ( personnel) B. B. Singh, the greater job security in the public sector is a major attraction for those wanting to switch jobs from the private sector. “ Another reason could be the desire to relocate to a geographical place of one’s choice,” he added. A senior ONGC official said job satisfaction in the public sector in a comparable position vis- à- vies the private sector is much higher. He pointed out that several officials who had left ONGC to join RIL have come back to their old jobs in the public sector upstream oil giant.

There are others who wanted to come back but only a select few with the requisite skills have been hired, he added.Aggarwal said IOC hires around 600 executives every year out of which 450 to 500 are engineers across various disciplines such as chemical, mechanical and electrical engineering streams. Apart from direct campus recruitment from the Indian Institute of Technology (IIT), the company is also hiring from other leading engineering colleges. Another 200 engineers will be recruited through the GATE test put in place by the human resources ministry.“ Some executives for the finance and marketing will also be selected but IOC is not keen on IIM graduates who come with an attitude,” a senior IOC official said.

IOC has made its largest investment in the petrochemicals business by pumping in Rs 14,400 crore for setting up a naphtha cracker and downstream polymer units at its Panipat refinery which went onstream last month. It is also planning a huge petrochemicals unit at its Paradip refinery complex on the Orissa coast.IOC had lost out to RIL in the takeover of Baroda- based public sector petrochemicals company IPCL. This had resulted in the Ambani- run company further consolidating its position as the dominant player in the business, which makes products such as polyester fiber and plastics. The petrochemicals industry entails the further processing of products such as naphtha, olefins, benzene and xylene that are produced in a refinery after processing crude oil. This value addition enables an oil company to increase its profits from the same barrel of crude oil that it has purchased for producing petrol, diesel and LPG.

EARLIER TREND :::: RIL is known to have lured ONGC executives with higher pay packages in the upstream sector whereas for the downstream refining sector, talented staff were picked up from state- run oil companies.Essar Oil had succeeded in hiring top brass from PSUs such as Bharat Petroleum Corp Ltd.

NEW TREND:::::For expansion plans in both upstream and downstream biz, IOC managed to wean away 60 to 70 experienced engineers from pvt sector giants RIL and Haldia Petrochem. The new pay scales of the blue- chip govt cos compare well with that of the pvt sector in real terms along with the various facilities. The greater job security in the public sector is a major attraction. Another reason could be the desire to relocate to a geographical place of one’s choice. ‘ — B. B. Singh, Director ( personnel), SAIL ‘

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Ritual to rejuvenation  

Can we go beyond the ritual to rejuvenation?

Another World Environment Day is set to pass with the ritual noises in the media and by a few organizations planting some more saplings. There is a Water Day, an Ocean Day, a Forestry Day… even an International Day for the Preservation of the Ozone Layer! But the Ecological Debt Day and an Earth Overshoot Day take the cake! I wonder sometimes what you do on the World Conservation Day, the Biosphere Day or the International Day for Biological Diversity?! It is hard not to be cynical. How can celebration of one day [or some days] in a year make a change to the devastation that we continue to cause? Staggering plunder The wholesale plunder of our ecosystems is so staggering that this 2,500-year old ‘Christian civilization' will have to die in probably the next 200-400 years — just as the Indus, the Egyptian, the Mesopotamian, the Sumerian, or the Babylonian civilizations died. Always for that one reason of devastation of forests, damage to soils, and a blight of floods that destroyed ability to grow food. The conclusion is inescapable. There have been many gurus of the ecological world who have stated matter-of-factly and with resignation that by the end of the century we should only see about 20 per cent of the current population if the tipping point is reached for the planet not to support us anymore.
Remember, the planet will go on. It has many more eons of life of its own. It is we who utilize, consume, convert, burn or clear-fell nearly 40 per cent of our total natural resources every year, whose life and living is going to be jeopardized. Just one species — our own — out of about 8 million species [if we go by Hindu lore, or 5 million species if you go by scientific understanding of today] is directly and indirectly wreaking all the havoc. Our perception and understanding of the quality of life and what should be standard of living have been our nemesis. We can't accept a simple, austere life and yet live with dignity. So, we consume. Our population will peak perhaps at 8 billion by 2050.But do we have enough water, forests, land or minerals to support the hunger for products? If our standard of living across populations even doubles in the next 40 years, we will quadruple our impact on the world's natural resources — which is a physical impossibility. We have reached the diminishing point already. The bad news is that the pollution and carbon dioxide (CO {-2}) emission levels that we have let loose on the planet in the last 40 years is going to impact us only in the next 40 years, for the complex nature of ecosystems and change in the atmosphere takes that long to impact us. Forty years is just a flash in the geological scale of time, though it seems far away for most of us even as we read this.
The way to go::::::::::::Is there a message for any of us on another Environment Day that we celebrate? There isn't any actually. We can only salvage our conscience by doing a few things. Look around at the numbers of cars and buildings that have begun to use air-conditioning in just the last five years to realize that we are not getting to be conscious or penitent in what we are doing to heat up the atmosphere. We don't care what damage we do as long as it is not in our backyard. That's what we think. What does it take to realize that there is no single backyard or no single home? The entire world is our backyard and if we don't know how to protect it, we don't have a backyard.
The world's mean temperature has risen by about 0.26 degrees centigrade in the last 30 years. It is a slow rise, nearly imperceptible to the human mind, unless we are mapping across multiple micro-regions of the world in a gigantic exercise of coordination to validate that scary bit of information of the warming of our planet. But there is reason and there is hard fact to believe this bit of vital data. If you sit in an air-conditioned room and reduce or increase the temperature by just 1 deg. C, you will see what it means as impact. Imagine the effect when it happens around the world and on a scale that is so large that there is hardly anything you can do to control. So what do we do? We need to declare a war of sorts in a way that every government and every citizen, corporate or individual, will have to take this up on a footing that's never been imagined or conceived before. We can't wait for legislation, but legislation can't wait for governments either to bring about such changes in managing simple things in our—from water to energy to the way we manage our wastes. What can we do to stop this anarchy on use of oil or coal or gas?
Human civilizations ::::::::::Natural and human history accounts are full of examples in which animals or humans exceeded carrying capacity and went into steep declines, or even extinction. All human civilizations died because of their excessive consumption and their lack of respect for the environment. These were civilizations that were far wiser than we have been. The Babylonians had the death penalty for felling of trees as part of the Hammurabi code. The difference between animals and ourselves is that the resources used by animals in such times of convulsive change continue to remain grasses, trees, and shrubs and they eventually return. Nearly all the resources we are exploiting as humans will not. We are the only species that depend for our life-sustenance on more than the food we take from Earth. In fact, the food we take claims only 3 Kcal of energy, while our per capita energy use is at 100,000 Kcal in India. The figure for the average American citizen is at 230,000 calories. It takes very little to understand that maximizing yield cannot be achieved while you preserve the health of any habitat. The food of our industrial civilization is not just food: fuel, water, electricity, and cars, also serve as ‘foods’. What is really making it helpless is our political and commercial unwillingness to examine these limits to carrying capacity on a universal scale. It's even more unbelievable that there is absolute agreement on what it means at the local level and yet we have our political leaders and bureaucrats squabbling at climate change meetings on who will step back what as consumption when they know that there is before us, only the inevitable dance to death of this civilization.
………by……….Chandrashekar Hariharan…….WORLD ENVIRONMENT DAY - A Business Line feature..(The writer is CEO of the green buildings pioneer, Biodiversity Conservation India, Ltd (BCIL), Bangalore)

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Indira Gandhi’s contributions in the field of environment  

An eco-visionary par excellence

The first United Nations Conference on the Human Environment began on June 5, 1972, and it is to commemorate this historic conclave that the day is marked as World Environment Day ever since 1973. Olaf Palme was the Swedish Prime Minister then and, therefore, was obliged to be present. The only other Head of State to attend was Indira Gandhi. It was my friend Tariq Banuri at the UN who placed Gandhi’s participation at the Stockholm summit in its larger setting. In a conversation, he said that four events have shaped the modern discourse on environment. The first was the publication of Rachel Carson’s Silent Spring in 1962. The second was the publication of Paul Ehrlich’s Population Bomb in 1968. The third was the release of Limits to Growth by the Club of Rome in early-1972, and the fourth was Indira Gandhi’s speech at Stockholm in which environmental issues were, for the first time, situated in their larger developmental context. Apparently, in recognition of her contribution in Stockholm, the first choice for locating the new United Nations Environment Programme (UNEP) was New Delhi but ultimately it was headquartered in Nairobi.
My own appreciation of Gandhi’s contributions has been deepened over the last year. I knew of Silent Valley and how single-handedly she saved that rainforest. But the Valley was only one instance of her zeal. It is to her we owe a slew of legislation: the Wild Life Protection Act, 1972, Project Tiger (1973), the Forest Conservation Act, 1980 and the Coastal Regulation Zone Notification, 1991. That her mind was on saving India’s natural heritage is revealed by an extraordinary event — her writing to Kedar Pande, the then Chief Minister of Bihar, in July 1972 from Shimla conveying her displeasure on how forests were being felled in that state, even as she was negotiating the Shimla Pact with Zulfiqar Ali Bhutto. To Gandhi, environmental preservation meant more than pollution control or saving endangered species. She had a much broader conception and that is why she set up the Delhi Urban Arts Commission. One of her directives in this regard given in 1982 is worth quoting in full: “Maharashtra Government should be asked to ensure that on the Nhava and Elephanta islands no commercial or building activity of any description is allowed and positive steps are taken to green them and if necessary convert them into parks with birds, wildlife etc.”
Only a biography will unravel the well-springs of Gandhi’s contributions in the field of environment. Perhaps this biography will draw our attention to the influence of her parents, particularly her mother who, in her own words, “used to tell me of the links between all creatures”. Perhaps, her reading habits had something to do with it. Then perhaps, her fascination with Tagore’s poetry and her stint at Shantiniketan itself moulded her thinking. Perhaps it could be her enduring love for the wondrous eco-system of Kashmir that she shared with her father that shaped her love for nature. Perhaps it was her friendship with people like Salim Ali that influenced her actions. Whatever it was, India owes her a debt of gratitude.
We are now being forced to make tough political choices in different sectors like power, mining and industry to make the inevitable trade-off between environment and development explicit. Almost three decades ago, Gandhi made one such choice in regard to Silent Valley and protected that biodiversity-rich region. This June 5, we can do no better than to resolve to use her as a talisman as we strive to sustain high economic growth not at the cost of our environment and biodiversity in its myriad forms but while protecting and regenerating them.
……….byJairam Ramesh…….June 05, 2010….. Jairam Ramesh is Minister of State for Environment and Forests

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Is India prepared for oil spill?  

Spill oil, pay Rs 5 crore to get away in India

On World Environment Day, Business Standard tracks the hazards in which India’s citizens live and how to get out of them. The BP oil spill in the Gulf of Mexico, which has substantially eroded the market capitalization of a century-old company, has put a question mark on India’s preparedness to tackle such environmental disasters. Despite witnessing some of the worst industrial accidents in the country, there is a mere Rs 5-crore liability cap irrespective of the extent of damage to life and environment.

If the relief announced by the collector exceeds the amount payable under the insurance policy purchased by the owner or exceeds the liability of the insurance company, the government’s environment relief fund (ERF) is to be utilized for paying claims. Incidents like that of the BP spill, radioactive cobalt leak in New Delhi and the fire at Indian Oil’s depot in Jaipur a few months ago have brought to the forefront the question of who pays and how much is paid. The little known Public Liabilities Insurance Act (PLIA) is the only law that tackles the issue at present, though the government plans to enact the Civil Nuclear Liability Bill to take care of industry concerns on capping the liabilities. “As far as oil exploration and production in India is concerned, the production sharing contracts signed between the companies and the government are silent on the issue of liability. In the US, the contracts have a clause limiting the liability,” said M B Lal, former chairman and managing director, Hindustan Petroleum Corporation. Lal headed a committee that went into the cause of the Jaipur fire that killed 11 persons.

Parliament enacted PLIA in January 1991. “Under this Act, victims of a hazardous industrial accident are entitled to compensation at prescribed levels, without providing any proof of negligence. The maximum compensation under the Act, however, is limited to a measly Rs 25,000, although the right of a victim to claim larger damages under any other law is expressly reserved,” said Shweta Bharti, senior partner at law firm Hammurabi and Solomon. Moreover, to ensure prompt payment of compensation to victims, the Act requires all hazardous enterprises to obtain sufficient insurance cover and provides for an independent machinery administered by the district collector for the filing for and adjudication of claims. “The rules framed under the PLIA limit the liability of an insurer to Rs 5 crore for every accident,” added Bharti. The Act provides for immediate relief to persons affected by accidents occurring while handing the notified hazardous substances. For this purpose, the owner of the industrial unit handling such hazardous substances is required to obtain one or more insurance policies. In case the amount of relief awarded by the collector exceeds the amount payable under the insurance policy purchased by the owner, or exceeds the liability of the insurance company, ERF is to be utilized for paying claims, said Environment Minister Jairam Ramesh in reply to a Parliament question.

The lack of clarity on the issue and low statutory coverage is a blessing in disguise for companies operating in India and can prevent the financial trouble that BP is currently facing, though the larger issue of who is responsible remains unaddressed. The lack of seriousness with which India tackles damage to environment and health is borne out by the fact that even after 26 years the clean-up of the 1984 chemical disaster at the Union Carbide factory in Bhopal is still to be executed. The accident had left thousands dead.NGOs feel there is lack of implementation of laws on industrial disasters. In the case of the US, which has stringent environmental regulations, BP is under political pressure to control the leak that has spread across the Gulf of Mexico and has threatened the livelihood of nearby areas. President Barack Obama has even proposed a six-month moratorium on offshore drilling. Lal said India has a lesson to learn from the BP spill, especially since technologies are getting more complex. “Unless standards are upgraded, it will be difficult to nip a disaster in its bud,” he said. Suneel Pandey, fellow at TERI, added that even though there is enough regulation in place, there is delayed implementation, so much so that the fire at the IOC depot in Jaipur took 10 days to be put off.

Kirtika Suneja & Jyoti Mukul / Business Standard…newspaper……

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Would the Government allow oil cos to fix petrol prices?  

Govt may allow oil cos to fix petrol prices ________________________________________
The Empowered Group of Ministers, headed by the Finance Minister, Mr. Pranab Mukherjee, is scheduled to meet on Monday.
New Delhi, June 6…With the softening of international crude oil and product prices, the time is right and the stage is set. But will the Government take the plunge and give oil companies a free hand in deciding the retail prices of auto fuels? The Empowered Group of Ministers (EGoM) headed by the Finance Minister, Mr Pranab Mukherjee, is scheduled to meet on June 7.It is expected to take a decision on petroleum products pricing. The other members are the Petroleum and Natural Gas Minister, Mr. Murli Deora; the Home Minister, Mr. P. Chidambaram; the Railway Minister , Ms Mamata Banerjee; the Chemicals and Fertilizer Minister , Mr. M.K. Alagiri; the Road and Highways Minister, Mr. Kamal Nath; and the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia.
Rs 3 hike likely ::::The public sector oil marketing companies (OMCs) sell petroleum products below the market price, and in order to ensure that they recover at least the cost, a minimum hike of Rs 3 a litre on both petrol and dieselis required. The selling at below-cost has also led to private players such as Reliance Industries Ltd and Essar crying foul as the business had become uncompetitive.The buzz is that petrol prices would be set free while a more conservative approach on diesel will be adopted by proposing a phased hike .The Government is expected to reserve the right to intervene when international prices go up sharply. It also wants to impress upon the State Governments that they should not levy sales tax on any incremental retail price increase. Whether the EGoM will also take a call on LPG retail prices is not certain.
Kirit Parikh report::::The panel is expected to consider the Kirit Parikh Committee report that had suggested total deregulation of petrol and diesel prices and increase in kerosene and cooking gas prices proportionate to the rise in household incomes. Currently, the Sales Tax/VAT on diesel ranges from a low of 9.24 per cent in Haryana and to as much as 26 per cent in the Mumbai-Thane belt of Maharashtra. For petrol, the corresponding tax rate is the lowest at 18 per cent in Orissa and goes as high as 33.62 per cent in Punjab. The presence of the two key allies - Trinamool and the DMK – in the EGoM, makes it easier for the Government to take this crucial decision.
…Richa Mishra…from the pages of HINDU BUSINESS LINE newspaper.

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Ethanol blending schemse  

Ethanol blending scheme trips on pricing hurdle

NEW DELHI: The government's much-vaunted Ethanol Blending Programme (EBP) continues to hang fire despite a group of ministers (GoM) headed by finance minister Pranab Mukherjee endorsing a price of Rs 27 per litre last month. The Cabinet is yet to take a decision on the contentious issue over which the petrochemicals department has registered serious objections, although it was to come up before it in the last fortnight. "Contrary to suggestions, there has been no conclusive decision on ethanol pricing by the Cabinet yet," a fertiliser ministry official told ET. Consequently, the "interim" price for ethanol is yet to be officially notified. It is only after this is done that the expert panel headed by Planning Commission member Saumitra Chaudhury is likely to start its work on long-term "remunerative" pricing for ethanol.

Ironically, food and agriculture minister Sharad Pawar pre-emptively indicated that the "long-term" price was likely to be lower than Rs 27/litre. He also urged the sugar industry to produce more ethanol to fetch "a good price," besides allowing farmers a good price for their sugarcane. The ministry views the EBP as a means to saving subsidy in sugar industry bailouts in cane glut periods. In May, Mr Pawar said that a reconstituted GoM, including non-conventional energy minister Farooq Abdullah, endorsed an early April decision to hike ethanol price to Rs 27/litre from the Rs 21.50/litre paid for the earlier supply contracts. Ironically, the higher suggested price was despite the fact that sugar prices worldwide have dropped 46% this year on fears of a supply glut. At an earlier meet held on April 6, Pranab Mukherjee had agreed with the agriculture minister on the issue of pricing, contending that the chemicals sector should pay this same rate for ethanol in the new supply contracts. Mr Mukherjee suggested priority to the EBP programme.

Mr Mukherjee had also said that should the landed cost of imported ethanol be higher than Rs 27/litre, the chemicals industry should take up its demand for the reduction of import duty (so that prices would be reduced) on industrial alcohol with the commerce ministry separately. "The fact is, currently the landed price of imported ethanol is around Rs 27/litre. Should the duty on industrial alcohol be slashed from 7.5% to zero after imported prices go up, they will still be able to access ethanol at a slightly lower price than Rs 27/litre," a sugar industry official said.
The inordinate delay over kickstarting the new supply contracts for the much vaunted EBP of the government comes even as questions have begun to arise from various quarters over the basis on which both the government and the industry have projected sugar output close to 25 million tonnes in 2010-11. 
..from the pages of The Economic Times.

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