Demand for Gas Utililisation Policy Welcomed
The suggestion of Anil Ambani Group for a gas utilisation policy has been welcomed by the Petroleum Ministry. The Group has also suggested withdrawal of all cases pending in the courts in which it had sought half of the outputs from the offshore KG Basin. It is expected that this should the pave way for a fair allocation of the fuel to all sectors.
"If they are serious about their demand for gas utilisation policy, we welcome it. For that to happen, they should first withdraw all cases in various courts where they had by virtue of a private family agreement claimed ownership of atleast half of the 80 million standard cubic meters per day of gas to be produced from KG-D6. Unless that happens, how can anyone decide how much gas can be allocated to different sectors like power, fertilizer, steel etc," a top Petroleum Ministry official said.
The Petroleum Ministry comments came in response to Anil Ambani group company Reliance Energy Director J P Chalsani demanding a gas utilisation and pricing policy be put in place before deciding on the pricing of gas from KG-D6 fields of Reliance Industries.
"According to Anil Dhirubhai Ambani Group's own presentation to us in June, power sector worldwide consumes 31 per cent of gas. If for argument sake we were to apply the same principle here, only 24 mmscmd out of the 80 mmscmd gas from KG-D6 would be available for the entire power sector that includes state-run firms like NTPC, Dabhol project, ADAG and other private projects. The remaining gas would be split in between other users like fertilizer plants, refineries, steel units and other factories," the petroleum ministry official said. "But if ADAG is to squat on 40 mmscmd as part of a private family
agreement, to which the entire nation and its economy cannot be held hostage to, how is this utilisation policy possible.
The official said ADAG lacked basic understanding of the contracts signed under the Parliament-enacted New Exploration Licensing Policy (NELP) wherein the gas
utilisation policy has been mentioned only to bestow upon the Government a right to dictate the usage of gas in domestic market (not allow exports) and not for allocation of the same between different sectors. "If the Government was to decide which sector is to get how much gas then what is the use of giving the investor freedom to market to fuel/"
Meanwhile, Reliance Industries' challenged Chalsani's assertion that the company was targeting exorbitant return of up to 225 per cent the KG-D6 investments saying its investment of 5.2 billion dollar investment can be audited by independent consultant.
A Reliance Industries official said its capital expenditure was the lowest in a similar gas field anywhere in the world. The finding and development (F&D) cost of KG-D6 at 4.98 dollars per barrel of oil equivalent (boe) was lower than Exxon Mobil's 5.75 dollars per boe F&D cost for Kizomba field, Chevron's 7.2 dollars per boe cost for Frade field, Shell's 9 dollars per boe cost for Perdido field and 11.73 dollars per boe for BHP Billiton's Shenzi field.
He challenged Chalsani's assertion for a regulated price for gas since consuming sectors like power and fertilizer were regulated, saying in the exploration and production business model, as inputs (rig cost and services) are deterministic at market prices, and
outputs probabilistic, no regulated price regime can provide adequate risk-reward balance.
"By making such comments, the ADAG is only showing off its lack of knowledge about E&P business," he said.
Related Tags: petroleum, ambani, nelp, adag, gas utilization
Your Article Search Directory : Find in Articles
Recent articles in this category:
- The No. 1 Rule For Projecting Confidence - Speak With Authority
One of the most important characteristics a person can project in a business setting - or any situat
- After the Autumn Checkout European Debt Crisis and U.S. Brewing Rebound
In the commotion caused by the Fed on interest rates come to an end, the "disastrous" for the euro a
- Advantages Of Arcade Game Rentals
There are many different advantages to arcade game rentals. Most people need something to release th
- A General Primer on Truck Cargo Nets
In modern highways it is quite rare to see truck cargo nets in action, this is because they are usua
- The United States Will Burst More Severe Financial Crisis
Not long ago, suddenly announced that the central bank to raise interest rates, the interest rate hi
- Niche Marketing Profits - 3 Easy Steps to Finding a Profitable Niche Market Income in 10 Minutes
Like most beginners I was having a very difficult time trying to find a niche market to earn extra m
- The Importance of Hospitality Management Consulting Firms Toronto
Businesses and the managers that help guide any business are in a constant state of improvement and
- New Keynesian Theory Label
2010 winner of the Nobel Prize in Economics three theories have been labeled as "New Keynesian" labe
- Federal Reserve Pouring Money QE2 Unpredictable Fortune
U.S. economist Milton Friedman proposed a "throw the cash from a helicopter" view, while the practic
- Fiscal Consolidation Should no Longer Delay
British Chancellor of the Exchequer George Osborne today announced fiscal consolidation policy, shoc
Most viewed articles in this category:
- Common Financial Problems to Avoid
One must first change their habits and not procrastinate. American Consultants Inc at offers key fi
- How a Bad Hire Can Hurt Your Business
What's worse - hiring the wrong person or not hiring anyone at all? Companies can become almost des
- Joel Comm Is Dr. Adsense
What is Adsense? If you are new to making money online and net marketing, you may not know what Ads
- 5 Steps For A Dynamic Wealth System Online
Recipe: Opportunity + knowledge + Dynamic Wealth System + Your Action = Massive Success!!! Step 1
- How To Stop Foreclosure
Losing your house to a foreclosure can be very scary. There are times when circumstances are ou
- How to Always Pitch A Strike
As business owners, we are always working on new ways to convince people to become customers, client
- Membrane Diffuser Solutions for Wastewater Treatment Systems
In the aeration basin of a typical wastewater treatment plant there are both organic and inorganic m
- Another Year Hating Your Job or Loving Life?
Copyright © 2007 Mary Foley I've come to the conclusion that to be successful - really successf
- Dyestuff Industry In India And China
World demand for dyes and organic pigments to touch $10.6 billion in 2008According to a study on dye
- Cma-cgm Case : the Series of Lawsuits Continues in Syria, Lebanon, Egypt, France, England and the United States
Damietta company case : The series of lawsuits continues in Syria, Lebanon, Egypt, France, England a