ONGC's cost of oil production double of OIL's expense in 2009-10

 The average cost incurred by Oil and Natural Gas Corporation (ONGC) on production of crude oil in Assam in 2009-10 was $52.51 per barrel, almost double of what sister PSU explorer Oil India Ltd spent on crude production in the state, Parliament was informed. 

ONGC produced 1.191 mn tonnes of crude from its fields in Assam in 2009-10, incurring a cost of $ 52.51 on the production of every barrel of oil, Minister of State for Petroleum and Natural Gas Jitin Prasada told the Rajya Sabha in a written reply. 

In contrast, OIL produced 3.54 mn tonnes of crude at a cost of $27.16 per barrel. 

He said in 2008-09, ONGC produced 1.223 mn tonnes of crude oil at a cost of $ 50.64 per barrel. In comparison, OIL produced 3.432 mn tonnes of crude at an average investment of $ 27.02 per barrel. 

To a separate question, he said 271.1 mn tonnes of oil and 384.9 billion cubic metres of natural gas reserves were accreted in the first three years of the XIth Five-Year Plan (2007-12). 

In the Xth Plan, 425.5 mn tonnes of crude oil and 688 bcm of gas reserves were accreted. 

"During the 10th Plan, Rs 39,439.61 crore has been spent on drilling of exploratory and development wells. During the first three years of the 11th Plan (2007-10), Rs 49,285.89 crore has been spent for the same," he added.

Aegis to invest upto Rs 4 bn to build oil terminal

Aegis Logistics will invest up to Rs 4 billion to build an oil terminal complex at Pipavav Port in Gujarat, it said in a statement. 

Aegis Logistics Ltd , provides logistics support to oil, gas and chemical industries. 

Aegis Logistics last year acquired the Indian unit of Royal Dutch Shell , Shell Gas (LPG) India Pvt Ltd, to help it enter new markets.

CIL in talks for buying stake in Aussie firm

s reached an advanced stage in its negotiations for buying stake in Australian company Peabody Energy Assets, a top company official said here Tuesday. 

The deal is likely to be for less than $200 million. 

"The two sides are now engaged in talks on pricing, and there also the differences are narrowing," Coal India chairman Partha Bhattacharyya told reporters. 

"We have Rs.39,000 crore of money in our balance sheet. We need to find some good investment opportunity. As an energy company, we have to do that as India being a developing country has a vast energy requirement. So we can't kept this amount locked," he said. 

The deal includes buying stake in a particular mine of the Australian company besides a long-term off-take arrangement, he said.

Jaitapur nuclear plant gets conditional nod

The Expert Appraisal Committee of the environment ministry has given a conditional clearance to the proposed Jaitapur nuclear power project in Maharashtra. 

Final clearance for the project, however, will be given only after the Atomic Energy Regulatory Board (AERB) approves it, since assessment reports studied by the environmental panel does not deal with the issues related to radiation. A final decision on the project will be taken by environment minister Jairam Ramesh after this. 

Experts and civil society groups like the Konkan Bachao Samiti are opposed to the project, expressing concerns about the radiological safety of the proposed 10,000 mw plant. 

In a nuclear plant, 70-80% of the environmental impact is on account of radioactivity. The National Environment Engineering Research Institute (NEERI), which prepared the environmental impact assessment report, accepts that it does not have expertise to examine issues of radiological aspects of the project. 

There are questions about the quality of the environmental impact assessment report prepared by NEERI. The report is understood to be based on generic and incomplete inputs and is incomplete on issues of radioactive hazard. It would appear that project developer Nuclear Power Corporation of India Limited (NPCIL) submitted generic information to NEERI for the report. 

Concerns over safety refuse to be allayed as NPCIL has only submitted a preliminary safety assessment report, that too for the Flamanville project in France as a sample to AERB. Since the preliminary safety aspect report specific to the Jaitapur Nuclear Power project is yet to be finalised and submitted to the atomic energy board, AERB approval process is yet to start. 

AERB is responsible for giving final approval on account of design of plant from the safety, radioactive emissions, storage and disposal of low, intermediate and high level radioactive waste by products and impact on radioactivity on environment during normal operation and extraordinary events and after the service life of the plant. 

Another cause of concern is the issue of reprocessing spent fuel. The EIA report is silent on this issue. NPCIL had informed the Konkan Bachao Samiti in a meeting in August that the spent fuel would be taken to another facility for reprocessing. 

“The environment ministry should ask for a fresh environment impact assessment report for the Jaitapur Nuclear power project based on the comprehensive inputs only after final approval from AERB,” the Konkan Bachao Samiti has suggested. 

The proposed 10,000 mw nuclear power park will be set up near the Konkan coastal region in co-operation with French energy company Areva. There are only five other plants of this size in the world, and none of these have been commissioned. This raises issues of safety and waste disposal which have as yet not been addressed anywhere. 

On the other hand, the proposed Jaitapur project represents the actualisation of the civilian nuclear deals finalised by the UPA-I government. These factors make the decision before the environment minister tough. 

For its part, the environmental panel is understood to have stipulated some “stringent” conditions to counter adverse impact. However, civil society groups would argue that a clearance by the environment ministry at this stage is based on incomplete information.

India's JSW buys Canadian coal company

 Inc. made yet another foray into the resource-rich Canadian market with JSW Energy buying the Canadian coal company CIC Energy for $422 million, thereby giving it a significant foothold in the lucrative coal sector in southern Africa. 

JSW joins Aditya Birla Group, Vedanta and the Tata Group in entering Canada in the past two to three years. 

The deal at $7.42 a share has been given the green signal by the board of CIC Energy, which is listed in both Toronto and Botswana in southern Africa. In Botswana, CIC Energy operates the Mmamabula coal and power station project. 

The deal is JSW's second acquisition in the coal sector in southern Africa within a year. Earlier, the Indian company had acquired a stake in South African Coal Mining Holdings . 

The JSW offer to the Canadian company marks a 203 percent premium over the average trading price for CIC Energy shares on the Toronto Stock Exchange for the 30-trading day period ending Sep 14 - the day before the company received takeover proposal. 

However, the $7.42 per share offer is below the non-binding $7.75 that the Canadian energy company received last month. 

"We believe that the terms of this offer provide fair value for CIC Energy shareholders in the current environment," CIC CEO Warren Newfield said in a statement after the JSW offer. 

"With South Africa's increasingly apparent shift in energy policy the outlook for coal-based power producers looking to supply South Africa has weakened," Newfield added. 

While the Tatas own the iron-ore Millennium Corporation in Nova Scotia province, the Aditya Birla Group controls an iron ore mine near St. Johns. 

IT is becoming the efficiency lever for power utilities

Year 2005: Kolkata, and West Bengal, suffer from sharp and sudden power outages. And much of the fault lies with sloppy fault attendance, lack of automatic meters and monitoring systems and not the least, Bengal’s poor work culture. Adding to the frustration, consumers receive inflated bills and above all, collection offices have few bill payment counters. Plus, the accounting system is paper-based. 

2006-2010: During this phase, West Bengal State Electricity Distribution Company (WBSEDCL) — the power distribution utility — goes through a technology transformation. Five call centres are set up to handle the entire gamut of functions: from uploading new customer details to complaints to billing enquiries. Users making complaints get instant SMSes on how fast the fault is being rectified. Moreover, the state government installs 7,000 tathya mitras – e-kiosks integrated with 1,600 bill payment centres — set up. WBSEDCL is voted the second-best state-owned power distribution company and bags the Prime Minister’s award for technology initiatives. 

“EVERY complaint has been given a fixed time to be addressed to. For example, if it is a local distribution fault, the time limit is a maximum of four hours. Every time a complaint is made, an SMS is generated and gets delivered to a team waiting in a mobile van — the one nearest to the fault location,” says MK De, chairman, WBSEDCL. “We have appointed five third-party agencies who handle all calls, specially fault complaints,” he adds. 

So significant has been the technology-led change at WBSEDCL that its transformation has become a beacon for Delhi, Maharashtra, Gujarat and Andhra Pradesh, which are all modernising their IT systems to make power utilities more efficient. “The main concern of the government has been inadequate collection of bills and improper billings leading to leakages and losses. Some have been paying less than what they are consuming and others like the industrial consumers have been paying exorbitantly high prices,” Arvind Mahajan, head, energy and resources at KPMG said. 

“The problem, however, is not all distribution companies have the wherewithal to invest. But power agencies in Maharashtra, Andhra Pradesh and Madhya Pradesh are planning to rope in private players for improving collection and plugging leakages. Some are even looking at monitoring load on a real-time basis and planning to implement a combination of ERP packages, better billing systems and improved customer interfaces,” says Mr Mahajan. 

While experts say the total IT investment in the distribution sector could top Rs 3,000 crore over the two to three years, WBSECL itself is planning to invest Rs 600 crore in IT, spanning two years. Implementing an ERP package is part of this capital expenditure. The ERP system will cover accounting, human resources, stores and, project management functions. “We plan to call for bids soon. The system will make it easier for us to handle accounts leading to increased revenue earnings,” points out Mr De. 

Taking technology intitiatives a step ahead, the state utility is planning to install wireless GSM-based meters at homes. The meters will automatically transmit reading from the meters to a control centre. In the first phase, the GSM meters will be installed for bulk consumers, whose consumption can be monitored on a real-time basis. 

“These would be for consumers like malls, electric arc furnaces and hotels where consumption is over Rs 30,000 per month,” says a senior state government official. The system will have an in-built alarm which will buzz if it notices any anomaly in power consumption. In that way, the GSM-based meters will keep a tab on power theft, a major bugbear for all power utilities across the country. 

NEW INITIATIVES 

The company will be also implementing a Rs 100-crore smart grid project on a pilot basis. The grid is likely to handle all business operations – procurement and supply of power as well as billing and accounting — simultaneously through a single electronic platform. It will allow power connections to be remotely disconnected in case the bills are not paid on time. 

A project — to be completed over the next two year — to introduce geographical mapping of entire electric network is on the cards too. With geo-location in place, an electronic control system will know if there are any faults and will make for faster fault finding. It will be faster for the company to allow load extensions and generation of quotation for new connections. Today, officials need to physically travel to the site to map these things — load and new connection. 

On a similar line, WBSEDCL — which has as many as 473 revenue units — is networking all the revenue centres by December, 2010. This link-up will allow introduction of a host of services like ‘any-branch bill payment’ and bill payments through text messages. 

To reduce bill payment queues further, the company is installing 450 cash-collections machines, which can be operated by the customers. It will also have a recorded voice system that will guide customers how to handle these equipment. A vendor will be in charge of the maintaining these machines and will earn commissions on the number of transactions the machines handle. 

“This system cannot be fudged. The call centre is run by a third party, which will have no interest in fudging the reports,” said a senior official from WBSEDCL. Another third-party agency has also been appointed to make regular test checks with consumers after the fault has been attended to. This is to make sure that the team in charge of fault repairs is not making a false report on the complaint to be attended. This external team will audit about 5-10% of all complaints. 

On the delivery side, WBSEDCL is also implementing a supervisory control and data acquisition (SCADA) package for monitoring power system faults. It will also be a load shedding management system that will control power load on a real-time basis depending on power availability and consumption. Right now, the command to carry out ‘load shedding’ — technical jargon for power cuts — is conveyed over phone from the main control room and there is a lag of a few hours.

Coal India third most valued firm in India

 State-run Coal India has become the third most powerful Indian company with a total market capitalisation (m-cap) of Rs 2,09,671.57 crore and is only lagging behind RIL and ONGC.

The coal behemoth added another feather to its cap last week when it replaced IT giant Tata Consultancy Services (TCS) to become the country's third most coveted firm.

CIL added Rs 7,611.21 crore to its valuation, which on Friday stood at Rs 2,09,671.57 crore.

According to market analysts, investors are optimistic about the stock and looking at the cash balance of the company it is likely that it may go for acquisitions either in the domestic space or overseas.

Meanwhile, the cumulative market valuation of the eight of the top-10 firms reduced by Rs 57,044.09 crore in the past week.

RIL, the country's most valuable firm, witnessed a wealth erosion of Rs 21,270.47 crore.

IOC beats RIL to be India's No 1 refiner

State-owned Indian Oil Corp (IOC) has surpassed Reliance Industries to regain its position as nation's biggest refiner after it completed expansion of its Panipat unit.

"We have this week completed expansion of our Panipat refinery (in Haryana) to 15 million tonnes (from 12 million tonnes)," IOC Director (Refineries) B N Bankapur said.

Before the expansion, IOC's eight refineries had a total crude oil refining capacity of 51.2 million tonnes a year and together with its subsidiary Chennai Petroleum Corp Ltd (CPCL), it had a combined refining capacity of 61.7 million tonnes.

After Panipat expansion, IOC group's refining capacity has increased to 64.7 million tonnes, ahead of 62 million tonnes of refining capacity that Reliance Industries has at Jamnagar in Gujarat.

IOC was the largest oil refiner in the country before Reliance started its 29 million tonnes a year only-for-exports unit adjacent to its 33 million tonnes a year plant at Jamnagar.

"This year have raised Haldia refinery capacity by 1.5 million tonnes to 7.5 million tonnes," Bankapur said.

IOC is mulling raising the capacity of its Koyali refinery in Gujarat to 16 or 18 million tonnes a year from current 13.7 million tonnes a year.

"We will conduct feasibility of raising Koyali refinery capacity to either 16 or 18 million tonnes in next 3-4 months," he said.

Also IOC has sought approval from Supreme Court to raise capacity of its 8 million tonnes Mathura plant to 11 million tonnes.

IOC's refining capacity would rise to 80 million tonnes by 2012 after it commissions a 15 million tonnes a year unit at Paradip refinery in Orissa.

Bids for 4000 MW power project in Orissa to be delayed:Shinde

Government on Thursday said invitation of bids for a 4,000 MW ultra mega power project in Orissa would be deferred for the fourth time on environment issues . 

"It (bids for Orissa UMPP) will get delayed by about a month or so," Power Minister Sushil Kumar Shinde said. 

The last date of submission for bids for the Bedabahal UMPP in Orissa was November 30. 

But the Ministry of Environment and Forests (MOEF) is yet to give clearances for the coal blocks--Meenakshi, Meenakshi-B and Dip side of Meenakshi -- allotted for the project. 

The Power Ministry wants to complete its homework on the projects like -- forest clearance of the coal blocks for the project -- before inviting the initial bids. 

"I dont want developers to come and complain (about any discrepancy) later," he added. 

MOEF classified 'no-go' areas as the zones where mining activity could not take place as it would have adverse impact on the environment. 

One of the coal mines for the project fall under the 'no-go' category. 

Bidding process for another such project at Sarguja in Chhattisgarh has already been delayed by two months from its prior date of November 8 due environment concerns, as the coal mines allotted for the project also fall under the 'no-go' category. 

Government plans to add about 1,00,000 MW of power, of which a lion's share would be contributed by such UMPP projects. 

It has awarded four such projects so far, three of which are at Sasan (Madhya Pradesh), Tilaiya (Jharkhand) and Krishnapatnam (Andhra Pradesh). 

Tata Power is developing the fourth project at Mundra in Gujarat.

Tata Power to invest around Rs 5,000 cr in wind energy by 2017

Ratan Tata-led Tata Power aims to have at least a 25 per cent of its power generation or around 8,000 MW from clean sources by 2017 and will invest around Rs 5,000 crore in wind-energy alone, a top company official said. 

"We have set ourselves a target to achieve 25 per cent of our total generation from clean sources by 2017. These will comprise wind, solar, hydro, geo-thermal and gas. In wind-power alone, we will be investing around Rs 5,000 crore," Tata Power's executive director-strategy & business development, Banmali Agrawala, said in Mumbai. 

The company, which presently has a little over 200 MW of wind capacity, plans to give a strong thrust to wind-energy as "it is the most commercially viable and established form of renewable energy," he said. 

The company is presently in the process of rolling-out 150 MW and an additional 750-800 MW will be added at the rate of around 100-150 MW annually through to 2017. 

It costs around Rs six crore for generating 1 MW of wind-power presently, Agrawala said. 

In solar, the company aims to have 300-400 MW capacity by 2017. The first steps will be taken by end-this year with the commissioning of a 3 MW plant at Mulshi in Maharashtra, he said. 

Tata Power is also all set to sign a Power Purchase Agreement (PPA) with the Gujarat Government for a 25 MW plant to be commissioned by end-2011. 

"This plant will be set up in Mithapur on land owned by Tata Chemicals and we hope to sign the PPA by end-this month," Agrawala said. 

In geo-thermal, Tata Power is already engaged in a 240 MW project in Indonesia in a joint venture with Origin of Australia, which it plans to commission in five-years. 

Tata Power and Origin hold a 47.5 per cent stake each with the balance held by a local company. 

"We are eyeing another 600-700 MW in Indonesia and also other markets with a good geo-thermal potential by 2017. Apart from Indonesia which lends itself to geo-thermal, we feel there is a great potential in Africa and we plan to scout for assets there as well," Agrawala said. 

It costs around $3.5 million to generate 1 MW of power (geo-thermal) and while Agrawala would not give any investment figure, going by the above, it could entail a total investment of between Rs 8,500-9,000 crore for the 600-700 MW. 

"We would like to work with our partner, Origin, not only in Indonesia but also in other markets as well," he said. 

For gas-based power, Tata Power has applied for gas allocation, he said, adding that the company possesses the expertise in this field and has also zeroed-in on potential sites. 

"We are presently fine-tuning our plans here," he said. 

Pricing of gas is still an issue and there needs to be a greater clarity on policies. Once these issues are sorted out, we will go full-steam ahead on gas," Agrawala said. 

On hydro, in which the Tata Group has been present for nearly a century, the company is contemplating bidding for a clutch of projects in Himachal Pradesh, Tata Power's Executive Director-Operations, S Padmanabhan, said. 

Tata Power, which now has a capacity of 447 MW in hydro, is presently engaged in constructing a 114 MW plant in Bhutan in a joint venture with the Bhutanese Government. It is also developing an 800 MW plant in Nepal in a joint venture with Norway's SN Power .