Posts Tagged: bp
Oil exploration and production companies such as Reliance Industries and ONGC are expecting policy clarity and tax benefits from the first budget of the Modi government.
Most domestic upstream companies invested more in exploration overseas than in India because of the ambiguity over gas price and policy paralysis during the previous UPA government’s rule.
The explorers expect the tax holiday under Section 80-IB (9) of the income tax act to be extended to 10 years from seven years, from the year of commercial production.
This move, industry sources said, will encourage oil and gas exploration that requires heavy investments and involves risks as well as reduces the import bill.
Analysts said “in the initial few years there is hardly any profit to take advantage of the tax holiday. In the initial years, undertakings have larger expenditure to set off and, hence, the actual benefit of tax holiday does not flow to them”. >> Read More
BP has signed a $20bn deal to supply China with liquefied natural gas over 20 years starting in 2019.
Under the terms of the agreement, the UK oil and gas major will ship 1.5m tonnes of gas for Cnooc, the state-controlled Chinese energy group, per year
The annual volumes – equivalent to 72bn cubic feet – represent more than a tenth of the 13m tonnes imported last year by Cnooc, which is ranked as China’s leading and the world’s third largest LNG importer.
Bob Dudley, BP chief executive, said the deal would help China’s drive in switching more of its energy supply from coal to less polluting hydrocarbons.
“We are pleased to support China’s commitment to improving its air quality,” he said. The agreement was signed by company executives in London in the presence of David Cameron, UK prime minister, and Li Keqiang, Chinese premier. >> Read More
Eurozone bond markets have continued to come under pressure on Tuesday, pushing borrowing costs higher for the periphery in particular.
Portugal’s bond market suffered the most, with the benchmark 10-year yield climbing 10 basis points (bp) to a one-month high of 3.92 per cent – and sharply higher from a nine-year low of 3.43 per cent touched earlier this month.
Spain and Italy’s 10-year bond yields rose 4 bp and 7 bp to 3.04 per cent and 3.21 per cent respectively, while Greece’s climbed 5 bp to 6.66 per cent. But unlike in earlier sell-offs, the bonds of the eurozone’s “core” have also come under pressure on Tuesday.
The dip in European bond markets has baffled some analysts, who have expected yields to fall further as the European Central Bank prepares to ease monetary policy further in June – and possibly engage in outright “quantitative easing” later this year if inflation remains subdued. >> Read More
India’s lengthy election reached its final day on Monday, with the country’s financial markets hitting new highs on hopes of victory for pro-business opposition leader Narendra Modi.
But whoever becomes prime minister this Friday, the complex task of rebuilding trust with bruised global companies was underlined over the past week, as two major foreign investors began international arbitration appeals protesting against unfair treatment in Asia’s third-largest economy.
British oil major BP issued its challenge this weekend over a protracted gas pricing dispute, together with local partner Reliance Industries, the energy and petrochemicals conglomerate controlled by billionaire Mukesh Ambani.
BP’s move came just days after telecoms group Vodafone revealed last week that it had also filed an arbitration complaint in April, marking the latest stage of its seven-year battle with India’s government over a disputed $2.6bn tax claim. >> Read More
There is a common perception that Russia’s move on Crimea shows its strength. A closer examination suggests it is more complicated that it may seem. Like the bully at the school yard, the aggressiveness conceals weaknesses.
Simply put, Russia felt threatened and for good reason. The democratic coup in the Ukraine threatened a potentially strategic loss for Russia. For months, it had been using both carrot and stick to pressure Ukraine, Moldova and Georgia from shifting more to the EU. Reports indicate that Putin had drawn his own line on Ukraine and made it clear to the EU and US that Russia would not accept a Ukraine in unfriendly hands.
Yanukovych was brought to heel and at the last minute embarrassed and frustrated the EU (and by extension, the US) and struck a deal with Russia. A democratic coup toppled Yanukovych, and there are reasons to suspect that Europe and/or the US may have helped facilitate the political uprising. Among the first acts, the new government abolished Russian as the second official language.
There was a realistic fear (on the part of Russia) that the new government would move to retract the 2010 agreement that arguably was struck under duress, to renew and extend the Russia’s lease on the Sevastopol naval base. The lease, first struck by Yeltsin was to expire in 2017. Fisticuffs broke out in the Ukrainian parliament over the issue that eventually led to a 25-year extension of the lease. >> Read More
The chances of Reliance Industries’ (RIL) partners BP and Niko Resources getting a higher price for gas from the D1/D3 fields in the KG-D6 block have taken a hit with the government modifying its affidavit in the Prashant Bhushan case in the Supreme Court.
While the earlier affidavit of February 20 quoted the Cabinet Committee on Economic Affairs (CCEA) as having decided “that Contractor (RIL, BP and Niko consortium) shall be allowed to sell the natural gas…at the revised price formula…on the basis of the Bank Guarantee (BG) provided by RIL…”, the new affidavit seeks to draw a distinction between RIL, BP and Niko.
The affidavit, filed on February 25, cites the original affidavit and instead of “Contractor (RIL, BP and Niko consortium)” simply talks of “Contractor” without now mentioning RIL, BP and Niko.
On the face of things, this should not make a difference since all the firms are defined as “contractor” in the production-sharing contract, but it matters since the oil ministry bureaucrats have taken the view that since only RIL is party to the arbitration with the government — the government has withheld payments to the consortium on grounds it was hoarding gas — only it could get the higher Rangarajan-formula-based price from April 1. >> Read More
With new gas price announcement being held hostage to technicalities, British energy giant BP and Niko Resources of Canada have told the oil ministry that they are party to the arbitration initiated by Reliance Industries Ltd. (RIL) on KG-D6 gas production lagging targets.
Niko Resources and BP, which partner Mukesh Ambani-promoted Reliance Industries Ltd (RIL) in the KG-D6 block, might not get to increase the price of gas produced from the block, in spite of Cabinet intervention. According to a senior government official, to avail of higher prices, the two companies will need to furnish bank guarantees and be part of the arbitration process initiated by RIL against the government.
The issue now threatens to impact gas buyers, since sales and purchase agreements signed by RIL are valid only till the end of this month.
The Cabinet Committee on Economic Affairs (CCEA) had on December 19 last year decided to allow RIL to almost double the price of natural gas produced from KG-D6 from April 1, provided the company gave a bank guarantee to cover its liability if charges of hoarding gas against it were proved. The officials clarify this bank guarantee will apply only to RIL, as it is the only company that has gone ahead with the arbitration.
“Though the bank guarantee will soon be notified by the law ministry, there are certain technical difficulties. Till both BP and Niko become part of the arbitration process, they won’t be allowed to draw higher gas price. Also, Cabinet had cleared the bank guarantee for RIL alone,” said an official. >> Read More
Having reversed the falling output at KG-D6, Reliance Industries and its partner BP plc will quadruple production at the eastern offshore fields to around 40-45 million standard cubic meters per day by 2020.
With addition of a well this month jacking up output by 2.5 mmscmd to 13.7 mmscmd, RIL-BP is repairing shut wells that will help further raise output to 16 mmscmd.
“At the end of 2013 we were producing around 11 mmscmd of gas (from KG-D6). With the (well) interventions that we are doing right now and also the fact that the oilfield (the block) which is producing most of its oil and now we are getting ready to blow down the gas in that. All this together, we hope to at least increase the production by another 50 per cent (to about 16 mmscmd),” BP India head Sashi Mukundan said.
He said new fields in the KG-D6 blocks will start coming on stream from 2018 and “we get all the right support and approvals from the government then we hope to quadruple our production by 2020.”
The Bay of Bengal KG-D6 fields, which began gas production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress led to shutting down of more than one-third of the wells. >> Read More