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Home min raises red flag over RIL-BP gas deal Petrol rates to go up by 27 paise, diesel by 15 paise Subsidised gas refills may be cut to 4 a year Petronet eyes U.S. LNG supplies, plans new plant RSMML to foray into city gas distribution

Issue 156 Friday 01 July 2011

Management is doing things right; leadership is doing the right things.

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Cairn-Vedanta deal gets govt nod; ONGC to have the last laugh

Ad hoc subsidy sharing hurts profitability, cash flow: ONGC Oil companies likely to cut ATF cost by Rs 350/kl ONGC could not have asked for more GMR speeds up work on Rs 26,000-cr Kakinada SEZ GAIL proposes naphtha cracker plant in PCPIR Pakistan, India: Petroleum committee fails to make progress AP CM seeks additional gas for power plants Crackdown on oil adulteration will continue Bharat Petroleum Issues Tender to Buy Crude Oil for September Petroleum dealers seek better protection system Octroi levied on natural gas not LPG: Civic body All fired up for petrol-free day

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Exploration s s
Alaska governor vows to accelerate state oil-drilling leases BG sees 8B bbls of oil equivalent in the Santos Basin offshore Brazil Canada seeks deep-water bids $7.5B investments in oil, gas exploration seen China introduces pubic tenders to promote shale gas exploration CNPC begins operations at Al-Ahdab oil field

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Saudis may back off in pumping 10 MB after IEA move

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Oil stock release looks chaotic, could backfire Worlds longest natural gas pipeline operationalised: China Oil prices back to levels before SPR release news Pertamina Gas eyes Qatar LNG S.Korea energy firms to invest $2 bln in Indonesia gas, power Saudis Need to Undercut Russia Gazprom Seeks India, China Gas Sales to Raise Exports, Diversify Pak-Iran projects gas not meant for domestic consumers OPEC to Cut Supply on Slower Asian Demand, Oil Movement Says OPEC oil output to rise in June - Reuters survey-UPDATE 1 Mitsubishi to sell Canada shale gas stake to KOGAS Russia and Norway may issue Arctic licences Natural gas futures turn positive after U.S. EIA data KOREA : Import duties on crude likely to be slashed JORDAN : Egyptian gas supply 'unstable' Gazprom Seeks Gas Sales in Asia to Diversify From Europe Pakistani official for early completion of Iran gas pipeline PAKISTAN : Large-scale gas loadshedding plan approved

Crude s s
Oil rises above $95 per barrel Oil mixed in Asian trade after Greek cuts Oil holds at $112 as inflation worries stir-UPDATE 6

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International Prices
Energy Prices Petroleum $/bbl) Nymex Crude Dated Brent WTI Cushing NYMEX price for Crude, Gasoline and Natural Gas Futures Price Change NYMEX Light Sweet Crude 1.88 $94.77 94.79 -0.63 ICE Brent 3.62 $112.40 111.41 -0.26 Gasoline NY Harbor 0.1201 $3.0097 95.42 0.65 Heating Oil NY Harbor 0.0945 $2.9202 NYMEX Natural Gas -0.039 $4.315 C&F Japan $ bbl US Stock 10/06/11 (million barrels) -ICE Futures Brent $/bbl Fuel Oil No.2 /gal 111.80 Nymex Future 293.89 ---Change Change vs. week vs. yr. 365.6 -3.4 2.4 Crude Stocks 215.1 0.6 -3.3 Gasoline Stocks 140.8 -0.1 -15.8 Distillate fuel oil 35.699 1.112 -9.431 Propane US working gas in underground storage (bcf) Data Released 16 June 2011 Region East West Producing Total lower Stock-June 10 Stock-June 03 1008 960 304 289 944 938 2256 2187 Base Oil Iran (FOB) Change 48 15 6 69 1240 1185 1360 1050 572.70-561.70 Butane 825 850 889.43 Product Stock

Unleaded Gasoline

Unleaded Gasoline c/gal 296.81 -Nat Gas $/MMBtu 4.37 -Base oil India (HPC) Incl. Excise duty Alprol N 12 (SN 70) Rs/liter 68.80 -Alprol N 32 (SN 150) Rs/liter 68.80 Alprol N 100 (SN 500)Rs/liter 69.80 Bright Stock (Rs/liter) 87.10 Base Oil USA (FOB) SN 150 1160 SN 500 1180 BRIGHT STOCK 1410 ----

SN 150 SN 500 BRIGHT STOCK RECLAIMED OIL (KUWAIT) Product Prices USD Arab Gulf HSFO 180 CST ($/mt) 597.70-586.70 HSFO 380 CST ($/mt) Naphtha Prices North West Propane Europe CIF ARA CARGOES 962.00 962.50 FOB Seagoing 810 CIF MED CARGOES 955.50 956.00 FOB ARA 825 ARAB GULF 832.86 Week Ending Quotations of Week Ending Basket 06/05 $114.56 18 13/05 $109.41 19 20/05 $107.42 20 27/05 $108.17 21 03/06 $110.52 22 10/06 $111.91 23 17/06 $111.32 24 24/06 $106.44 25

Month May11 May11 May11 May11 June11 June11 June11 June11

OPEC Reference Basket Price Ending Monthly Average Mar 11 Apr 11 May11 Month to date Avg. June11 Quarterly Average 1Q11 Qr. To date Avg. 2Q11 Yearly Average 2010 Yearly to date Avg. 2011

Basket $109.84 $118.09 $109.94 $110.01 $101.27 $112.68 $77.45 $106.79

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Crude Oil Stocks


Crude Oil Stocks (Million Barrels) Most Recent 29/04/11 U.S. East Coast (PADDI) Midwest (PADD II) Cushing, Oklahoma Gulf Coast (PADD III) Rocky Mountain (PADDIV) West Coast(PADD V) 366.5 12.0 106.0 40.5 180.2 16.0 52.3 06/05/11 370.3 12.4 106.0 41.6 181.6 16.1 54.3 13/05/11 370.3 13.3 103.6 40.0 181.4 15.8 56.2 20/05/11 370.9 13.1 102.4 40.1 184.0 16.1 55.3 27/05/11 373.8 13.6 102.8 39.9 185.9 15.9 55.6 03/06/11 10/06/11 369.0 13.9 100.8 38.9 183.2 15.2 55.9 365.6 12.8 97.9 37.8 183.9 14.9 56.1 Year Ago 11/06/10 363.1 11.9 96.1 37.6 178.5 17.8 58.8

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Daily Share Prices


As on close of 30-06-2011 Aban Offshore Ltd. Balmer Lawrie & Co. Ltd Bharat Petroleum Cairn Ind. Castrol India Ltd. Chennai Petroleum Engineers India Essar Oil GAIL India Ltd. Gujarat Gas Gujarat State Petronet Gulf Oil Corp. Ltd. Hindustan Oil Exploration Hindustan Petroleum Indian Oil Corp. Ltd. Mangalore Refineries Oil India Oil and Natural Gas Petronet LNG Reliance Industries Ltd. Tide Water Oil India Todays Closing 524.25 606.15 649.30 310.75 526.20 224.95 274.10 124.45 441.25 394.00 88.95 85.65 178.75 397.80 337.65 77.45 01.65 273.95 135.65 897.60 6925.65 Change absolute -2.65 -4.20 5.40 5.35 18.40 -1.15 -0.45 2.35 -1.00 0.25 0.95 0.00 1.70 -3.70 -0.50 1.25 -32.80 -4.50 -2.75 12.30 82.85 Todays High 535.00 611.00 657.00 313.00 534.80 229.15 276.80 124.90 446.00 397.75 89.60 86.15 182.30 401.50 343.50 77.90 278.45 139.00 899.95 Todays Low 521.00 602.25 630.50 304.50 507.50 221.50 272.15 121.05 438.50 390.00 88.00 85.00 175.85 389.85 333.55 75.75 273.00 134.85 887.15 52 week High 932.00 769.90 814.90 372.00 556.85 284.95 372.65 161.00 535.85 454.00 128.25 146.20 293.20 555.45 458.90 89.80 368.00 146.10 1187.00 52 week Low 490.95 499.05 530.00 285.00 380.00 184.00 259.20 94.65 411.35 289.00 84.20 71.00 155.50 307.00 290.00 55.00 1207.00 248.00 76.60 829.00

1335.00 1290.10 1635.00

7030.00 6875.00 10699.00 5670.00

MARKET WATCH BSE Sensex NIFTY DJIA NASDAQ MIDCAP Repo Rate 18845.87 5647.40 12261.42 2740.49 6854.05 152.01 Rs 1 $

CURRENCY WATCH 44.72 64.79 55.59 71.95 6.0% 6.50% 46.95 Rs. 1 Euro 72.73 Rs 100 Jap. Yen 11.18 Rs.1 Pound 21.71 Bank Rate 7.50% Reverse Repo Rte

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Cairn-Vedanta deal gets government nod; ONGC to have the last laugh

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Ministry of Petroleum and Natural Gas, New Delhi

All is well that ends well. The long-awaited approval of the Cairn Vedanta deal that comes after ten months is expected to leave its imprint on the oil and gas sector in more than one way. For one, the deal signifies the entry of the metal and mining group Vedanta Resources into the oil and gas sector even as it finally puts to rest the debate over whether investors in the sector can exit by selling out. Cairn Plc, the London listed Edinburgh company, that began its journey in India 15 years ago, is now selling off its Indian assets (will only hold a minority stake of 10 per cent) to take up exploration in Greenland. Finally, and perhaps most importantly, the government's decision to grant approval to the deal only if the obligations on royalty payments are reworked is set to open up a whole new debate on sanctity of contracts and policies. According to R S Sharma, former chairman of ONGC, who had led the opposition to the royalty provision, a conditional approval by the government would not do down well with investors. "This is against global practices. Although ONGC has a case as far as royalty payments are concerned, it should not have been linked to the approval," he said. The government's decision to give a conditional approval will raise questions, Sharma said. This deal will set a precedent as far as contractual sanctity is concerned. "Investors will tend to be more cautious when it comes to contracts with government," says Sanjeev Prasad of Kotak Securities . According to an oil analyst who has worked closely with Cairn, precedents of this kind where the government intervenes to extract its right is not known to happen in India. These are cases you hear of in Khazakstan or Russia and "investors will keep this in mind that a government approval cannot be taken for granted," he said. "The deal going through, however, will be a positive by itself," he added. Echoing similar sentiments Niraj Mansingka of Edelweiss Capital said that the one learning for the government would be to adopt full proof contracts that are not left to interpretations. "It should be the spirit of the contract that should matter, he said. But not all agree. Says S Narayanan former finance secretary and petroleum secretary: "The government is right to change the provisions. At that point, it was done to attract capital, now it is about sharing revenues." It is good that the new buyers, Vedanta, have agreed to share the royalty burden. A former finance ministry official who was closely associated with the royalty issue also conjured that ONGC had made a case for compensation of royalties much before the Vedanta deal. The cabinet's decision makes it clear that royalty will now have to be computed as a cost that will be shared by both the developers Cairn India and ONGC. This is a clear departure from the policy that was in place for blocks like that of Cairns. Royalty is a levy paid by the oil exploration company to the state government where exploration is carried out. According to the policy for 70-odd blocks given to government-owned companies before the National Exploration Licensing Policy (NELP) became the policy document for the sector and which hadn't yielded any finds. The government gave PSUs the option to allow private players to explore these blocks. The PSU would remain the licensee and have a right to 30% interest. This arrangement let a PSU transfer the exploration risk to its private partner. At the same time, in case of a strike, the PSU could partake of the gains. Barmer was one such block. After drawing nothing from it, ONGC gave it to Shell, which sold it to Cairn, which struck oil. Earlier this week, Vedanta and Cairn Energy reworked the deal terms and agreed to remove the non-compete provision and related non-compete fee of Rs. 50 per share. The total consideration payable for the 40% stake in Cairn India will now be reduced from US$6,651 million to US$6,023 million.

Cabinet Minister
Shri S.Jaipal Reddy

Minister of State
Shri R.P.N Singh

Secretary
Mr. G C Chaturvedi Addl. Secretary & Fin. Advisor Mr. P K Sinha Addl. Secretary Mr. Sudhir Bhargava Jt. Secretary ( R ) Mr. L.N. Gupta Jt. Secretary (International corp.) Shri. Vivek Kumar Jt. Secretary (Expl.) Mr. D N Narsimha Raju Jt. Secretary (M) Shri Apurva Chandra Economic Advisor Dr. Archana S Mathur Director (Marketing) Shri U.C. Nangia Director (Refinery & Admin) Shri P K Singh Director (Exploration II) Shri Partha Sarathi Das Director (International corp.) P. Kalyanasundaram

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Directorate General of Hydrocarbons Director General Mr. S K Srivastava ***** Petroleum Conservation and Research Association Executive Committee Chairman Mr. S.Sundareshan Member Secretary Exec. Director PCRA Mr. Arun Kumar ***** Oil Industry Safety Directorate Executive Director Shri K V Seshadri ***** National Productivity Council President Sh. Anand Sharma (Union Minister for Commerce and Industry) Chairman Sh. Rajinder Pal Singh, IAS Director General Mr. N.C.Vasudevan *****

While the conclusion of the deal will come as a major relief to all stakeholders, the retail shareholder is expected to take a knock because of the new terms of the deal. Although there is a gain with uniform share price now for all, the royalty burden will shave off a part of the projected profits. "Estimates are that Cairn Plc led by Bill exploration dreams positive note after a each shareholder will take a hit of Rs 50 per share," Prasad said. Gammell will now be in a position to take forward the company's in Greenland while Anil Aggarwal of Vedanta can finally strike a while with a new beginning in oil and gas.

Home min raises red flag over RIL-BP gas deal The Ministry of Home Affairs (MHA) has raised concerns over Indias energy security with Britains petroleum giant BP acquiring 30 per cent equity in Reliance Industries (RIL) 23 oil and gas blocks, including the showcase KG-D6 gas fields. Though the MHA had given its security no objection certificate to the $7.2-billion share transfer, it said that the Central intelligence agencies had raised an alarm over BP exporting the gas from India and the new venture eating into state-run oil companies gas marketing business. It needs to be ascertained whether the NELP (New Exploration and Licensing Policy) contract had a provision for sale of assets and whether the RIL-BP deal would enable BP to sell/transport gas outside the country, said the MHA, adding that there were reports in the UK that BPs purchase could be an excellent contingency plan for the UK, given that its singular gas source is Ukraine. The June 1 note, which was approved by Home Minister P Chidambaram, also cautioned that the new alliance would spell trouble for state-run gas transporter GAIL India. The new player, backed by the financial strength of BP, could eat into a large chunk of GAILs pipeline transportation business, it added. The note said that the oil and gas PSUs, already burdened with the governments huge subsidy bill, would take a big hit in gas marketing if RIL-BP enters the segment in a big way. Oil and gas transportation by the private sector is bound to raise costs for the downstream units, it added. The MHA has asked the petroleum ministry to ascertain whether GAIL India or any other PSU could not be allowed to buy the 30 per cent stake in RILs assets. This position has been reiterated by the MHA in its letter dated June 27, confirming that it has given an unconditional security clearance to the deal but with directions to the petroleum ministry to address these concerns before approving it, sources said. Petroleum ministry officials said that RILs reason for the tie up is to leverage BPs deepsea technology to resolve sub-surface technical issues at its KG-D6 field, where production has fallen from 61.5 million standard cubic metres per day (mscmd) to about 48 mscmd. Petrol rates to go up by 27 paise, diesel by 15 paise NEW DELHI: The government today hiked petrol and diesel prices by a marginal Rs 0.27 a litre and Rs 0.15 per litre respectively following increase in the commission paid to petrol pump dealers. The government approved raising dealer's commission paid on petrol from Rs 1.218 per kilolitre to Rs 1,499 per kl, resulting in a Rs 0.27 per litre increase in retail price with effect from midnight tonight, an official said here. Similarly, the dealers' commission on diesel was hiked from Rs 757 per kl to Rs 912 per kl, resulting in a Rs 0.15 per litre increase in rates at retail level.

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Petroleum Federation of India (Governing Council) Chairman Mr. R S Butola Vice Chairman P Raghavendran Member Secretary Mr. A K Arora ***** Oil Industry Development Board Chairman Mr. G C Chaturvedi Member Secretary Mr. Arun Kumar ***** Petroleum & Natural Gas Regulatory Board (PNGRB) Chairperson Mr. L. Mansingh Infrastructure Member Mr. B.S. Negi Distribution Member Mrs. Sudha Mahalingam

Petrol, at present, is priced at Rs 63.37 per litre in Delhi and will from tomorrow cost Rs 63.64 per litre. Diesel, whose rates had last week been hiked by Rs 3 a litre, will cost Rs 41.27 per litre instead of 41.12 a litre. The official said the increase in dealers' commission is lower than 39.5 paisa hike recommended by an expert committee of the Ministry of Petroleum and Natural Gas. Similarly, the increase in commission on diesel too is lower than 17 paisa per litre increase suggested by the committee which was headed by Apurva Chandra , Joint Secretary (Marketing) in the Ministry of Petroleum and Natural Gas. Subsidised gas refills may be cut to 4 a year New Delhi: The Nandan Nilekani task force set up to evolve new ways of giving subsidy on fuel and fertilisers is set to advise the finance ministry to limit the supply of low-cost LPG to four cylinders a year to all consumers. The panel is also expected to recommend that the Union government should transfer subsidy on kerosene to state governments, which would identify the eligible beneficiaries. Currently, fuel retailers IOC, HPCL and BPCL supply kerosene below cost across the country and get compensated by the central government and upstream producers like ONGC, Oil India and GAIL (India). The panel, which is expected to submit an interim report to finance minister Pranab Mukherjee on July 5, is also expected to suggest that fertiliser subsidy should be given to farmers through retailers in the short term. This would prevent smuggling of this commodity across borders. In the next stage, subsidy could be directly transferred to them at the point of sale. As the first step, the task force has proposed to set up a software to track the sale of fertiliser till the retail level. The second stage would involve payment of a subsidy to retailers and the third stage would cover farmers with unique identification cards, said a person privy to the committee's deliberations. The recommendations would be implemented on a pilot basis by the ministries concerned under the supervision of the task force in the next six months. Fertiliser secretary Sutanu Behuria told FE: It is only an interim report and there are many finer issues to be settled. If the government (cabinet) thinks the recommendations are feasible, we will implement it. Former IOC chairman MS Ramachandran said: It makes perfect sense for the Union government to transfer kerosene subsidy to state governments, which could give it to eligible customers in a targeted manner. He, however, said that limiting LPG to four cylinders to all consumers irrespective of whether they are rich or poor, is not fair. In the case of LPG too, direct cash subsidy to the poor could be considered, Ramachandran said. The task force was asked to help the government track fertiliser movement all the way to farmers. It has to expand the existing fertiliser management system, which tracks the commoditys movement from plants and ports to 30,000-fertiliser warehouses across the country, to cover 2,30,000 licensed fertiliser retailers. Mathew Joseph, professor of economics at Four School of Management said: To make this plan work, the government should provide subsidy to marginal poor farmers through the land data available with the states. The retailers might not pass on the subsidy benefit to the farmers and this will not reach the people who need this subsidy. The Nilekani panel wants state authorities to administer the delivery of kerosene subsidy, while the Centre will provide cash compensation. Since the Centre does not have sufficient data on kerosene consumers, the panel is relying on the state distribution mechanism. Experts believe state distribution systems are faulty and hence will be unable to check leakages. SP Tulsian, investment advisor, said the adulteration of kerosene is largely due to the failure of administration and weak political will to check it. The system can only become effective if kerosene is provided at market price to the fair price shops and the cash subsidy is provided to the target consumers. The government has to evolve a fool-proof system to check the leakages.

*****

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Indian Oil Corp. Ltd. Chairman & MD Shri R. S. Butola Dir (Mktg.) Mr. G C Daga ***** Bharat Petroleum Corp. Ltd. Chairman & MD (Dir (Ref.) Shri. R. K. Singh Dir (Mktg.) Shri. K. K. Gupta Dir (Fin.) Mr. S K Joshi ***** Hindustan Petroleum Corp. Ltd. Chairman & MD & (Dir (Mktg.) Mr. S Roy Choudhury Dir (Fin.) Mr. B. Mukherjee ***** Oil & Natural Gas Commission Chairman & MD Mr. A K Hazarika Dir (Offshore) Mr. Sudhir Vasudeva Dir (Finance) Mr. D K Sarraf

The government last week hiked diesel price by R3 per litre, domestic LPG by R50 per cylinder and kerosene by R2 per litre, which would help the oil companies reduce their revenue loss by R21,000 crore. The government is also losing R49,000 crore due to tax cuts on petroleum products. Still, the remaining under-recoveries are pegged at R1,20,000 crore for FY12. As per the panels road map, every LPG connection holders number registered with oil marketing companies (OMCs) will be linked to his biometrics and the LPG delivery boy will verify it each time the cylinder is given. LPG subsidy is the difference between the price a customer pays and the international parity price. The subsidy will be provided to all households. According to a McKinsey report Inclusive Growth and Financial Security, published last October, an electronic platform for government payments will save the government around R1 lakh crore. Petronet eyes U.S. LNG supplies, plans new plant NEW DELHI - Petronet is talking to Cheniere Energy and Freeport for liquefied natural gas (LNG) supplies, Chief Executive A. K. Balyan said on Thursday, as the U.S. companies progress towards exports. Balyan added that a new LNG terminal, which Petronet plans for the east coast of India, would have capacity of up to five million tonnes a year. "We are in discussions with several major producers and we are keeping this option open now that whatever LNG we contract ... for the future can be brought in at any of our terminals" Balyan told reporters at an event. India is the world's eighth-largest importer of LNG and Petronet, partly owned by staterun firms GAIL, Indian Oil Corp and refiner Bharat Petroleum, is the major buyer. U.S. companies are looking to export to major importers for the first time in over forty years as the country's shale gas deposits give it flexibility for overseas sales. Cheniere received approval to export natural gas to such buyers in May but still needs a licence to be granted. Petronet already has a 10 million tonnes per year terminal at Dahej in Gujarat and plans another at Kochi. It currently gets 7.5 million tonnes of LNG per year from Qatar for Dahej and has a deal for 1.5 million tonnes per year from Australia's Gorgon project from 2014 for the Kochi plant. Petronet recently agreed an initial pact with Russia's Gazprom to annually buy 2.5 million tonnes of LNG. India needs gas to help power its electricity generation, fertiliser sector, city gas distribution and for industries and needs LNG imports as domestic production struggles to keep pace with demand. "India's current gas-demand scenario reveals that there is a wide gap between demand and supply and the same is set to widen in the coming years," G. C. Chaturvedi, Petronet's chairman, said in a speech on Thursday. He said India's current gas demand is around 179 million cubic metres a day (mmcmd), while local supplies are less than 140 mcmd. RSMML to foray into city gas distribution JAIPUR: The Rajasthan government owned mining company Rajasthan State Mines and Minerals Limited (RSMML) is firming up plans to foray into city gas distribution (CGD) business. The company through its wholly owned subsidiary Rajasthan State Petroleum Corporation (RSPC) is in talks with PSUs Gail Gas and Hindustan Petroleum Corporation Limited to form a tripartite joint venture for develop city gas distribution networks at different places in Rajasthan. "All the three entities have given in principle approval for the joint venture. The new entity will be created by the end of July this year. However, distribution of equity holding is yet to be decided," said RSMML managing director Akhil Arora. The new entity will supply piped gas to households, industries, commercial and transport sector.

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Reliance Industries Limited Chairman & MD Mr. Mukesh Ambani Executive Director Mr. PMS Prasad President (Refinery Business) Mr. P Raghavendran ***** Essar oil Limited Chairman Mr. Shashi Ruia Vice Chairman Mr. Ravi Ruia CEO(Energy Business Group) Mr.Naresh Nayyar ***** GAIL India Limited Chairman & MD Mr. B C Tripathi Dir (Fin.) Mr. P K Jain Dir (Proj) Mr. R D Goyal Dir (HR) Mr. S L Raina Dir (Mktg.) Mr. Prabhat Singh *****

"We are conducting surveys to identify cities where the combination of all the four activities provides us the viability. Taking off from where the gas transmission network ends, we would provide the last-mile access to end-users through smaller pipelines. We will select and bid for cities after Petroleum and Natural Gas Regulatory Board (PNGRB) opens new bid for CGD," he said. Of the three partners, GAIL Gas will provide pipeline infrastructure, HPCL will provide extensive dealer and distributor network for LPG while the state government entity would take care of land availability and better understanding of the industrial sector and its demand for gas. The promoter company of this proposed entity - GAIL Gas - is already into this business in the state. At present, it is supplying gas to around 60 households and a dozen commercial institutions in Kota. It has also laid pipelines in Bhiwadi and Neemrana industrial areas for the industrial supply. "Association of state utility and HPCL would brighten the prospects and expand the horizon of the business," he said. Apart from Rajasthan, GAIL is also forging partnership with various state governments like Karnataka, Kerala, Maharashtra, Andhra Pradesh, West Bengal, Orissa, and Tamil Nadu among others for CGD business. The company owns and operates more than 8,600 km of gas pipeline with a capacity of transmission of 170 million standard cubic metres of gas per day. Ad hoc subsidy sharing hurts profitability, cash flow: ONGC Opposing the present ad-hoc fuel subsidy sharing mechanism, state-run Oil and Natural Gas Corp (ONGC) has said its profitability and cash flows will be seriously impacted if the government forces it to bear one-third of marketing companies' revenue loss on fuel sales. Oil and gas producers like ONGC have to make good one-third of the revenues that retailers lose on selling diesel, domestic LPG and kerosene at governmentcontrolled rates. ONGC gives discounts to IOC , BPCL and HPCL on crude oil it sells to them to make up for losses on fuel sales. "The upstream companies' share of under-recoveries (revenue loss) has been increased from one-third (33.33%) to 38.75% for the year 2010-11 and 46.89% for Q4 of FY-11," ONGC Chairman and Managing Director A K Hazarika wrote to Oil Secretary G C Chaturvedi. As a result, ONGC's net realisation on crude oil sales translated into just USD 38.75 per barrel, the lowest in the last eight quarters, he said. "It has not only adversely affected our profits and cash flows, but also investor sentiment, reflected in fall in market capitalisation from Rs 265,520 crore to Rs 228,860 crore, i.e. by 14%." Hazarika said ONGC should get a net crude price of USD 58-60 per barrel to meet its planned capital investments of Rs 30,000 crore and so, the upstream companies' share should be just 25% if crude oil prices rise above the USD 100 per barrel mark. Upstream firms ONGC, Oil India and GAIL India should be asked to bear one-third of underrecoveries if crude oil stays under USD 70 per barrel. But if it touches USD 75 a barrel, their share should come down to 30%. This share should progressively fall to 25% if crude touches USD 100. "If the formula of one-third under-recovery being passed on to upstream companies during the year 2011-12 when the crude prices are likely to remain over USD 100 per barrel is continued, this would have serious impact on the profitability and cash flows of upstream companies," he wrote. Upstream firms contributed Rs 30,297 crore out of the total revenue loss of Rs 78,189 crore in the 2010-11 fiscal. Of this, ONGC's share was Rs 24,892 crore. In a detailed 11-page note plus four annexures, Hazarika said ONGC's net price realisation will be USD 37.95 per barrel if one-third of the Rs 206,816 crore revenue loss arising at the USD 120 a barrel crude price is to be borne by upstream firms.

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Shell India Limited Chairman Mr. Vikram Singh Mehta ***** Castrol India Ltd. Chairman Mr. Navin Kshatriaya ***** Chevron Petroleum President Mr. John Digby Chevron Lubricants Managing Director Mr. Akhil Kumar ***** British Gas India Pvt. Limited Chief Executive Mr. Frank Chapman ***** Caltex Gas India Pvt. Ltd. Chief Executive Officer & GM (S & A) Mr. S. Ramasubramanian ***** Total Oil India Pvt. Ltd. Country Chairman & Managing Director Mr. B. Vijay Kumar

At a USD 100 per barrel crude price, the upstream share will be Rs 45,150 crore, of which ONGC will have to chip in Rs 37,096 crore and its net crude price realisation will be USD 46.26 per barrel. Alternatively, he suggested that the government impose a special oil tax or windfall tax to take 20-80% of incremental revenues accruing over and above the crude oil price of USD 60 per barrel. Hazarika said for every dollar hike in crude oil prices, the increase in under-recovery or revenue loss is Rs 3,440 crore. Of this, the upstream share is Rs 1,146.67 crore according to the one-third subsidy sharing formula. ONGC contributes 82.16% of the upstream share. Hazarika said the levy of a special oil tax has been recommended by expert committees headed by B K Chaturvedi in June, 2008, and by Kirit S Parikh in August, 2009. "Ministry of Petroleum and Natural Gas is requested to notify a fair and transparent mechanism for sharing of under- recoveries, wherein under-recoveries of oil marketing companies are allocated among all parties in such a manner that a part of increase in crude price is retained by upstream oil companies to meet increased cost of production and to meet existing and future plans and obligations," Hazarika wrote. Oil companies likely to cut ATF cost by Rs 350/kl State-run oil marketing companies are likely to cut aviation turbine fuel(ATF) cost by around Rs 350 per kilolitre, say oil ministry sources. There could be another sharp ATF price cut on July 16 if oil remains at the same level. Oil marketing companies like Bharat Petroleum, Hindustan Petroleum and Indian Oil revise ATF price every fortnight depending on the global crude oil prices. Currently ATF is being sold at over Rs 51,000 a kilolitre in Mumbai and Delhi which is nearly 70% higher then what the commodity costs in Malaysia or any Middle East and Gulf regions. Airlines like Jet Airways , Kingfisher Airlines and SpiceJet along with other carriers are collectively lobbying to get a uniform sales tax structure pan India Andhra Pradesh, Kerala and Rajasthan are the only states which pay 4% tax on the commodity. Currently, Delhi pays around 20% tax on ATF, Mumbai pays 24%. Sales tax on ATF varies from 4% to as high as 34% in various states. Meanwhile, after announcing the Q4 results of FY11, airlines had said their profits had dented over 20% due to the spiraling fuel cost and airlines could not pass on the burden to end-consumers in the form of higher fares. If the trend continues, we will have to pass on the burden to our customers but it will be done gradually, Sudheer Raghavan, Jets chief commercial officer had said in the earnings call in May. If oil companies announce a downward revision in ATF price, airlines companies will not have to pass the burden of excess cost to passenger in the lean travel season which begins from July and lasts till September. However, on June 15, state-owned oil firms had hiked jet fuel or ATF prices by 2.4% in step with the firming international rates. Fuel cost accounts for 40% of the airlines' operating cost. ONGC could not have asked for more The 11-month wait, says state-run Oil and Natural Gas Corporation (ONGC), has been worth it. After the government today cleared the $6-billion deal between Anil Agarwalowned Vedanta Resources and Cairn Energy, though with stiff riders, ONGC said it could not have asked for more.

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Chennai Petroleum Corporation Limited (CPCL) Managing Director Mr. K Balachandran ***** Balmer Lawrie & Co. Ltd. Managing Director Mr. S K Mukherjee ***** Oil India Limited Chairman & MD Mr. N.M.Borah Dir (E&D) Mr. B.N.Talukdar ***** Petronet LNG Limited CEO & MD Dr. Balyan Dir (Tech) Mr. C S Mani Dir (Fin.) Mr. A Sengupta ***** Numaligarh Ref. Ltd. Managing Dir. Mr. Dipak Chakravarty Dir (Fin.) Mr. Nilmoni Bhakta

The approval came with a pre-condition that royalty is cost-recoverable for the Barmer field in Rajasthan. If so, royalty is made cost recoverable, it would first be deducted from the sale proceeds of oil before profits are split between the partners and the government. This implies that Cairn India, which owns a 70 per cent stake in Indias largest onshore field, will have to pay royalty at a rate of 20 per cent on produce. Cairn India derives 90 per cent of its revenue from the Barmer field. ONGC, with a 30 per cent stake in the Rajasthan oilfields, has been paying the entire royalty on the output. It has been objecting to the Cairn-Vedanta deal, saying its approval is a must for Cairn to sell a controlling stake in its Indian arm to Vedanta. We would have gone on and on with our payment. But this change will now allow us to earn. Now, if we make payment at the beginning of the year, we will be able to get our share from the sales, said a senior ONGC official, who is also a board member. The ONGC board will have to clear the deal once Cairn India seeks it after accepting the governments conditions. The member said this development was the biggest positive for the companys upcoming follow-on public offer (FPO). This boosts the investors confidence. We will now be able to go ahead with our roadshows, he said. The board is all set to file the red herring prospectus for its proposed Rs 11,500-crore FPO. The government is selling five per cent, or 427.77 million shares. The FPO will hit the market in three weeks from the filing of RHP. Bank of America Corp, Nomura Holdings, HSBC Holdings Plc, JM Financial Services, Citigroup Inc and Morgan Stanley are managing it. GMR speeds up work on Rs 26,000-cr Kakinada SEZ Bangalore-based infrastructure firm GMR is fast-tracking its proposed special economic zone (SEZ) in Kakinada, Andhra Pradesh. It has initiated talks with possible anchor tenants for the multi-product, port-based SEZ, and will kick-start work on the physical infrastructure like roads, water and port connectivity in the next few months. The estimated investment potential into the SEZ by various companies is in the range of Rs 6,000-30,000 crore. We have already acquired all of the 10,000 acre land required for the SEZ. We will be investing Rs 3,000-4,000 crore in developing the SEZ, said CEO S G K Kishore. GMR expects to spend around Rs 2,000 crore for developing and operating the port. GMR has a 51 per cent stake in the project, which is promoted as a part of Andhra Pradeshs Petroleum, Chemicals and Petrochemical Investment Region, which extends along the east coast from Visakhapatnam to Kakinada. The rest of the stake are held by IL&FS, Kakinada Sea Ports and Andhra Pradesh Industrial Infrastructure. GMR is currently meeting domestic and international companies interested in setting up shops. The infrastructure major also said it was close to finishing the design, master planning of the port. It also proposes to set up a liquefied natural gas (LNG) terminal within the SEZ, for which it plans to rope in interested equity investors. Among the projects envisaged in the SEZ are refinery projects, petrochemical units, ports and possibly an LNG terminal. Kakinada, which is strategically close to the natural gas belt in the Krishna-Godavari basin, is also close to a number of gas-based power projects coming up in the area. GMR itself has a natural gas-based 388.5-megawatt (Mw) project in Vemagiri, which it is expanding by 768 Mw.

Mangalore Ref. Pet. Ltd. Managing Dir. Mr. U K Basu

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GAIL proposes naphtha cracker plant in PCPIR

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Cairn India Ltd. Chief Executive Officer & MD Mr. Rahul Dhir General Manager Crude Mktg. & International Trade Mr. Karunakaran Hari ***** Tata Petrodyne Ltd. Chairman Mr. M. A. Pathan Executive Director & CEO Mr. Anupam Mathur ***** Adani Group Executive Chairman Gautam S. Adani Managing Director Rajesh S. Adani *****

Gas Authority of India Limited (GAIL) has proposed to set up a naphtha cracker plant in the Petroleum Chemicals and Petrochemicals Investment Region (PCPIR) coming up on the Andhra seacoast. Citing the intent of GAIL and its subsequent negotiations with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) regarding the proposed plant, chief minister N Kiran Kumar Reddy requested Union Petroleum Minister S Jaipal Reddy to issue directions for the expeditious execution of the project. The project was discussed at length by the team of senior officials of the state government with the representatives of GAIL. APIIC is working closely with the the organisation for creating the required infrastructure for the project. This project is crucial for the development of the PCPIR and will make it a hub for the entire east coast in the country, the chief minister said in his letter. He assured the Petroleum Ministry that the state government would extend all support to make it a reality, according to a release from the Chief Ministers Office. When contacted, state-owned APGas Infrastructure Corporation (APGIC) officials said GAIL was keen on setting up downstream processing units starting with naphtha cracker plant. The actual investment and other details of the projects are yet to be finalised, according to the officials. Pakistan, India: Petroleum committee fails to make progress KARACHI: Pak-India working committee, formed to promote bilateral cooperation in the petroleum sector, has not made any substantial progress because of absence of private sector from the body, a trade official said. The Indian petroleum sector has expressed keen interest in exporting petroleum products to Pakistan and has offered to lay a 180km pipeline at its expense, said India-Pakistan Chamber of Commerces executive committee member Khurram Saeed while speaking to the media at the Federation House on Thursday. He said the participation of private sector in negotiations was necessary for promotion of trade in the petroleum sector and a formal proposal would be sent to the government. He said NL Mittal Group of India was interested in exporting petroleum products to Pakistan through a 180km pipeline from Bhatinda to Wagah border. The group is eager to make heavy investment. He said Pakistan could fulfill its needs of petroleum products economically and conveniently by importing from India and for that petrol and jet fuel should be added to the positive list prepared for trade with Delhi. Diesel is already included in the list. Saeed said India produced 180 million tons of petroleum products compared to its consumption of 150 million tons and exported the surplus to the US and Iran. Pakistan can easily meet its deficit of 10 million tons from India, which will cost less in terms of freight. Muneer said official trade between Pakistan and India had dropped from $3.5 billion to $1.8 billion while indirect trade through Dubai and Singapore was double that figure. AP CM seeks additional gas for power plants Chief minister N Kiran Kumar Reddy today urged Union ministers to decide in favour of converting the fall back supply of 3.22 mmscmd (million metric standard cubic metre per day) gas into firm allocation at the ensuing EGoM meeting. This, he said, would ensure that the gas-based power projects in the state operate at full capacity. The chief minister wrote separate letters with similar request to Union ministers Pranab Mukherjee, SushilKumar Shinde and S Jaipal Reddy.

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Gas power projects with a total capacity of about 2770 Mw have been in operation in the state. However, they are running at 75 per cent plant load factor (PLF) since the fall back supply of 3.22 mmscmd of natural gas was stopped from November last year on account of the fall in Reliance Industries' K-G D6 wells. This has resulted in a net generation loss of 600 Mw per day. Reddy stated that the gas power projects had started operating at 75 per cent PLF after the petroleum ministry directed RIL to supply the available natural gas to only priority sector projects in the country. In the light of the above, I request you to kindly decide in the ensuing EGoM meeting for conversion of the fall back supply of 3.22 mmscmd to firm allocation. Upon allocation of firm linkage all the gas power projects in the state will continue to ensure full supply to the state since 100 per cent power generated accrues to AP discoms who are the only distribution licensees of power in the state, the chief minister said in these letters. Crackdown on oil adulteration will continue Two days after the Pune rural police seized five tankers of adulterated oil and five empty tankers allegedly used for mixing from Kharabwadi near Chakan industrial estate, Sandeep Karnik superintendent of police (Pune rural) has said such seizures will continue as and when the inputs come to police. Karnik said, We know oil mixing is covertly done in some parts in Pune. Our effort is to curb these illegal activities. On Tuesday night, the Chakan police got a tip-off that some tankers carrying adulterated oil would come to Kharabwadi. Five of the tankers that were seized were empty. In five others, oil used in foundries and light diesel oil (LDO) with suspected adulteration was found. Police sent the samples for testing and said cases would be registered based on the test reports. Police suspect the empty tankers were used for mixing oil. All the drivers of the tankers managed to escape, police said. Police are now trying to trace the original owners of the tankers. Bharat Petroleum Issues Tender to Buy Crude Oil for September Bharat Petroleum Corp., Indias second-largest state-run oil refiner, is seeking to buy low- sulfur crude cargoes of as much as 1 million barrels each for loading in the first half of September, according to documents received by Bloomberg News. Details of the Mumbai-based refiners requirements are: ----------------------------------------------------------Crude: West African, North African, Caspian, Asian Loading: Sept. 1 to Sept. 15 Quantity: Cargoes of 500,000 to 1 million barrels Price: Free-on-board basis, Dated Brent Offers close: Part 1 - Expression of interest: July 4 Part 2 - Submission of offers: July 5 Validity: July 6 Petroleum dealers seek better protection system Nashik, Members of Maharashtra Petrol and Diesel Dealers' Association have demanded that petroleum suppliers Indian Oil, Bharat Petroleum and Hindustan Petroleum install a more effective locking and GPS on tankers for stopping in-transit pilferage. The Association demanded that decision on this be taken by July 9, or its members would stop taking deliveries. Office-bearers of the Association, led by Veeren Patel, met officials of the three companies at Manmad, and highlighted incidents of theft at Dhotane and Dahegaon Shivar last week, in which oil mafia are suspected to be involved. The Association pointed out that such thefts continue despite the crack-down on mafia following the murder of additional collector Yashwant Sonawane in January.

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Octroi levied on natural gas not LPG: Civic body

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The corporators demand for duty cut on LPG fell flat on its faces after it was revealed that the civic body did not charge any octroi on it. Instead, 3% octroi is charged on natural gas. We dont charge octroi directly on LPG, but on natural gas. LPG and compressed natural gas (CNG) are the byproducts of natural gas, said a senior civic official on condition of anonymity as he is not authorised to speak to the media. During the civic standing committee meeting held at the civic headquarter on Wednesday, corporators from across party lines demanded that the Brihanmumbai Municipal Corporation (BMC) waive off octroi on LPG to give relief to consumers. This comes after the central government recently hiked the price of LPG by Rs50. Rahul Shewale, chairman of the standing committee, said, If not on LPG, then BMC should stop charging octroi on natural gas. Even a Re-1 cut would make a difference to the customer. He added, The civic administration is gathering information and working on how the citys LPG consumers would benefit by the cut, he said. However, an official from the octroi department claimed that even if the BMC waived off the 3% octroi on natural gas, it would make a negligible difference on the total cost of the LPG cylinder. Also, it would not be possible to ascertain whether citizens are really getting any kind of relief, he said. Meanwhile, the Communist Party of India activists protested against the price hike on Thursday. Even the Nationalist Congress Party, one of the ruling alliances in the state, and the Bharatiya Janata Party are agitating against the price hike of petroleum products.Similarly, workers from Maharashtra Navnirman Sena had carried out a symbolic janaza in Dongri area on Tuesday. All fired up for petrol-free day With petrol prices rising every day, the citys youth have taken it on themselves to bring about a change, since its their pockets that are being affected. Today has been touted as No petrol day and people have been invited to join the cause anonymously on a networking site. More than 92,000 people, have already registered and Hyderabad seems to be supporting the cause wholeheartedly. I buy petrol for my bike from my pocket money. With prices rising almost every month it is becoming almost impossible to budget my expenses. I got an invite from friends on Facebook and decided to join the movement, says engineering student Rohit Chenna Reddy. Echoing his sentiments, Shilpa Kothari, a marketing executive adds, I have asked my friends to switch to diesel cabs for the day. We also plan to commute short distances by cycling. It will be a petrol-free day. The movement reminds one of the Meter Jam event that takes place in Mumbai every two months, to end the monopoly of autorickshawwallahs, who refuse commuters at a whim. The Internet is huge when it comes to advocating causes among the youth, says Election Reddy, a core-member of the Youth for Better India. Though participants are keen to support this event, Vishal Sethi, CEO of Meraevents.com says, I changed to a diesel car because it was economical. Now, the prices of all fuels have gone up and a days strike really does not affect the oil companies or the policy makers. Moghny Khan says, I will be cycling tomorrow. Switching to a diesel car is not the solution because it is no longer cheap. Participants of the event on the networking site hope that lawmakers sit up and take notice.

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Alaska governor vows to accelerate state oil-drilling leases

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Vowing to have the trans-Alaska pipeline pumping as much as 1 million barrels of oil a day by the end of the next decade, Alaska Gov. Sean Parnell said Thursday that he'd be aggressively promoting new leases on state land. Parnell, a Republican who's been critical of the pace of oil and gas development on federal lands in the state during the Obama administration, said his major concern was keeping the 800-mile trans-Alaska pipeline full enough of oil to keep it operational. A study released Wednesday by the pipeline's operator, Alyeska Pipeline Service Co., found that the aging pipeline can be operated safely at levels as low as 350,000 barrels a day, but only if the company addresses some of the problems of low flow, including corrosion and ice and wax buildup. It's been averaging 596,433 barrels a day this year, down from its 2 million gallon-a-day peak at the height of the state's oil boom. "We've got to arrest that decline and fill that pipeline," Parnell said. Parnell said he'd be heavily promoting leases on 14.7 million acres of state land, where Alaska can better control the speed of development. Among the more puzzling offerings to be available in the state's annual October lease sale: parcels in the state waters of the Beaufort Sea, off the coast of the Arctic National Wildlife Refuge. The state has offered leases previously in the three-mile zone it controls offshore from the vast refuge, but none is active, and there's been little action in nearly two decades. Most of the recent offshore development in Arctic Alaska has focused on prospects in the federal waters of the Chukchi Sea to the northwest. On Thursday, Dan Sullivan, the state's commissioner of natural resources, said the state wasn't deliberately provoking the federal government by offering leases in state waters off the coast of what's considered a national environmental symbol. The state and the congressional delegation have been particularly upset about delays in air-quality permits that have held up Shell's exploratory drilling in the Beaufort Sea, as well as a dispute with the Army Corp of Engineers that's delayed construction onshore of a bridge in the National Petroleum Reserve Alaska. Parnell also has been active in a coalition of governors that's pressing the federal government to pursue offshore drilling more actively on the outer continental shelf. His remarks came at a news conference at the U.S. Chamber of Commerce's "Institute for 21st Century Energy." Parnell appeared over a video link. Sullivan, who's made several trips to Washington lately to press for more oil and gas development in Alaska, attended the news conference in person. Already, the Obama administration has said it will speed up leasing in the National Petroleum Reserve Alaska, and state officials and the congressional delegation have met with the White House about accelerating exploration in the Arctic. Interior Secretary Ken Salazar said Thursday that the administration's approach in the federal waters of the Arctic had been to proceed, but to do so with "full cognition of the risks that are ever-present in the Arctic." Salazar said he was unfamiliar with the state's leasing plan as presented Thursday, but he reiterated the Obama administration's commitment to keeping the Arctic National Wildlife Refuge off limits to development. Environmentalists say they're puzzled by some of the state's lease offerings, and that most of the parcels highlighted Thursday already are offered up for lease each October. Athan Manuel of the Sierra Club, who's long monitored the environmental battles over ANWR, called it an "aggressive" but "desperate" move on the part of a state worried about keeping oil - and revenue - flowing through the pipeline.

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BG Group sees 8B barrels of oil equivalent in the Santos Basin offshore Brazil

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BG Group has increased its mean total reserves and resources in the Santos Basin offshore Brazil to 6 billion barrels of oil equivalent, with an upside potential of 8 billion barrels of oil equivalent. With company's existing discoveries in the Santos Basin accounting for 96 percent of the resources, BG has doubled its best estimate for reserves in the region based on internal analysis of drilling, appraisal and other data now available. BG Group has drilled 29 wells across its discoveries in the Santos Basin, as well as performed 19 drillstem tests. Additionally, the extended well tests (EWTs) of the Lula Sul and Guara, as well as the FPSO on Lula, have helped to increase the company's knowledge of the Santos Basin. "The doubling of our estimated Santos Basin mean reserves and resources is clearly significant and demonstrates the continued rapid evolution of our understanding of these enormous discoveries," said Sir Frank Chapman, BG chief executive. "Robust economics and solid progress with the fast-track development program will see gross installed production capacity rising steadily to reach more than 2.3 million barrels of oil equivalent per day by 2017." BG holds interest in five blocks in the Santos Basin, including 30 percent of BM-S-9, which contains the Guara, Carioca, Abare and Iguacu discoveries and prospects. BG has 25 percent of BM-S-10, which holds Parati and Macunaima, as well as 25 percent of the BM-S-11, which has the Lula, Cernambi and Iara discoveries and prospects. BG also has 20 percent interest in BM-S-50, which contains several prospects, including Sagittario, and 40 percent of BM-S-52, with has the Corcovado discovery. Canada seeks deep-water bids Only players with recent deep-water drilling experience need apply to the Nova Scotia Offshore Petroleum Board for the gig, however. The board today issued its Call for Bids NS11-1 which consists of eight deep-water parcels off the province on Canadas Atlantic coast. The board will only accept bids from companies that have experience in the drilling of exploration wells in water depths greater than 800 meters in the past ten years, a statement read today. Board chief executive, Stuart Pinks, wrote: This Call for Bids includes deep-water parcels located in a largely unexplored area of Nova Scotias offshore. A recent analysis provides strong evidence that this area could have significant oil potential, he continued. The parcels are located in a geological region that contains many large undrilled structures that could trap oil or gas. Bids must be submitted by 10 January next year with the public invited to submit comments on the process by 20 December this year. $7.5B investments in oil, gas exploration seen The government expects $7.5 billion worth of investments in oil and gas exploration when 15 petroleum blocks are eventually awarded, Energy Secretary Jose Rene Almendras said. Almendras said the Department of Energy expects investors to spend $500 million on each service contract. The DOE yesterday launched the latest contracting round for petroleum contracts. Not one of the 15 blocks on the auction block is outside Philippine territory, he stressed. Almendras said the Philippines remains "heavily unexplored." He said that based on earlier studies, of the total petroleum resource potential of the country, only 10 percent has been explored.

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"I think from the perspective of competitiveness, our neighbors and the rest of the world are not staying back in pursuit of hydrocarbons. Everybody is trying to rush exploration and development as fast as they can because the price is right. The present petroleum pricing is very encouraging for such investments," he said. "So we wanted to make sure that we dont want to run out of investors and resources. There are only so many oil rigs out there. If they dont get them here, theyll go somewhere else," he added. Three onshore and 12 offshore petroleum blocks with a total area of more than 10 million hectares located in Northwest Palawan, East Palawan, and Sulu Sea basins are being offered. The DOE said none of the contracts to be offered are in disputed areas.The DOE awarded nine service contracts in 2006. Four were awarded in 2005. China introduces pubic tenders to promote shale gas exploration BEIJING, China's Ministry of Land and Resources will open a second public tender for the sale of shale gas prospecting rights later this year after its first tender sale held on Monday, the Shanghai Securities News said in a Thursday report. The second public tender may open the sector partially to foreign companies, the report quoted an unnamed source as saying. As an attempt to better manage the country's oil and gas resources, the ministry tries to promote the shale gas mining industry and change the energy structure through tender sale, the report quoted experts as saying. According to the report, the first public tender offered sales of shale gas prospecting rights in four regions, including southwest China's Guizhou Province and the municipality of Chongqing. Bidders for the first public tender included the country's leading oil producers PetroChina, Sinopec and the China National Offshore Oil Corp. The bidding results will be made public in July, according to the report. CNPC begins operations at Al-Ahdab oil field LOS ANGELES, China National Petroleum Corp (CNPC) began operations of the first phase of Iraqs Al-Ahdab oil field, according to Chinese official media. Al-Ahdab is expected to produce 25,000 b/d of oil in the first 3 years and 115,000 b/d in 6 years as stipulated in the $3 billion contract signed with Iraq's Ministry of Oil in 2008. The project is the first major oil development agreement with an international firm since the fall of Saddam Hussein in 2003. It revived a 1997 contract that granted China exploration rights in Al-Ahdab. The current Al-Ahdab contract is a service agreement, which allows CNPC to charge a service fee of $6/bbl that will decline to $3/bbl. But the agreement nonetheless provided the Chinese an entry into Iraq ahead of Western majors as part of their effort to develop the high-end oil market in the Middle East. In 2009, CNPC signed an agreement along with BP PLC to increase production at Iraq's biggest oil field, Rumaila, while a consortium led by PetroChina signed a 20-year agreement to develop Iraqs Halfaya oil field. Saudis may back off in pumping 10 MB after IEA move Saudi Arabia may not increase crude oil output to 10 million barrels a day in July as it intended, as the International Energy Agency's planned stockpile release of 60 million barrels will keep the market well supplied during the month, analysts say. Analysts surveyed by Bloomberg now expect Saudi Arabia to increase output in July to 9.5 million barrels a day from around 9 million in June to meet its international commitments, while meeting local demand that is expected to rise this summer due to a surge in electricity use.

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Saudi Arabia aims to fulfill Oil Minister Ali al-Naimi's pledge to raise production to help calm oil markets, after members of the Organization of Petroleum Exporting Countries disagreed this month over his proposed 1.5 million barrels-a-day increase in the group's output. Al-Hayat newspaper, citing senior OPEC officials, reported after the meeting that the kingdom will boost output to 10 million barrels a day in July, the highest level in more than two decades. Now, analysts say this may not be the case after the IEA's planned stockpile release of 60 million barrels over 30 days, or 2 million barrels a day. Barclays Plc analysts led by Paul Horsnell said in an e- mailed note yesterday that the use of strategic petroleum reserves, particularly when Saudi Arabia has restated its commitment to supply customers with the crude they need, may result in fewer oil exports from Saudi Arabia in the coming months. If this release is not coordinated with Saudi Arabia, the Saudis will cut production to neutralize the effect of the release, Anas Alhajji, chief economist at Irving, Texas-based NGP Energy Capital Management, said in an e-mail today. Saudi Oil Production The IEA's move will give the Saudis sometime before they need to increase output to that high level, said Jarmo Kotilaine , chief economist at National Commercial Bank , Saudi Arabia's largest lender in terms of assets. Kotilaine said in a telephone interview that Saudi Arabia intended to boost oil production to more than 10 million barrels a day by July, which would be the highest level in more than 25 years. Ongoing efforts by Saudi Arabia to dramatically boost output might prove counterproductive, he added. Saudi extraction has come to rely heavily on water injection, which will ultimately curb potential production, he said. Moreover, the high sulfur content in Saudi oil means that the costs of refining it are higher than elsewhere, so the market may not take most of the additional output the kingdom is planning to pump, Kotilaine said. While Saudi oil output will increase, one has to distinguish between the local and international drivers, said John Sfakianakis, chief economist at Riyadh-based Banque Saudi Fransi. Output will increase due to local demand but Saudi Arabia would find it hard to supply more oil for the global market, given current supply fundamentals and global demand, he said. IEA, Saudi Arabia Coordination Market supplies will become tighter if OPEC doesn't increase production, and while Saudi Arabia will definitely raise its output, that will take time, IEA Executive Director Nobuo Tanaka said in Beijing on June 25. IEA's planned stockpile release of 60 million barrels over 30 days, or 2 million barrels a day, is less than a quarter of Saudi Arabia's output, and below the Middle Eastern nation's spare production capacity, based on data compiled by Bloomberg. Noe van Hulst, secretary general of the International Energy Forum said that the IEA's stockpile release must have been made in coordination with large producers such Saudi Arabia. I'm not surprised to see such a move from the IEA, as discussions on replacing supplies from Libya were eminent in recent months, he said in a telephone interview yesterday. Coordination between producers and consumers was also intense and everyone is working closely. Analysts such as Alhajji say Saudi Arabia must have known of the IEA move in advance. There are indications that the release might have been coordinated with the Saudis, Alhajji said. The main issue after the IEA release of 60 million barrels is to see whether companies will use all of it, as historical records show that only a portion of the release is sold or swapped, Alhajji said.

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Oil stock release looks chaotic, could backfire

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LONDON - Just a week after the West's energy watchdog announced the release of millions of barrels of oil, forcing a drop in the oil market, prices are almost back to where they were and analysts say the policy is chaotic and could backfire. Far from depressing prices and rescuing a fragile economic recovery in the industrialised world, the release of strategic oil stocks is piling more misery on refiners, and has raised expectations of increased supply that may not be realised. The release by the International Energy Agency (IEA) is badly coordinated, oil traders say, and may not be completed. "In a couple of days the IEA plans for release of 60 million barrels of oil have moved from looking well planned and thought through, to illconceived and poorly organised, except perhaps in the United States," said Philip Wiper, director of brokers PVM Oil Associates. IEA officials were not immediately available for comment. Oil prices tumbled immediately after the announcement of the stocks release on June 23 as funds sold, forcing North Sea Brent crude futures down almost $7 per barrel on the first day and down to a low of just above $102 by Monday. Four days later, prices have snapped back above $113 and are still rising with traders saying the "IEA effect" has been almost completely absorbed and discounted by the market. Strategists and analysts say one key problem with the IEA release is that it is being disbursed in various different ways and by many different organisations. Some of these are very well organised, others are not. In the United States, the Department of Energy (DOE) has already started a tender process to sell 30 million barrels of crude from the Strategic Petroleum Reserve and details of the locations, timing and qualities included were clear almost immediately after the first announcement. Traders say the disbursement of these crudes, mainly light and low sulphur grades well liked by the market, is likely to have the desired effect on the market, dampening crude prices, especially if the DOE sells the oil aggressively. "NO OBLIGATION" Arrangements in many of the other 27 IEA member states are quite different. In Europe, many of the oil stocks released will be oil products, some of which are already abundant. "Out of the remaining 30.6 million barrels, we see less than 8 million barrels being pushed into the market,"said Lawrence Eagles, global head of oil research at JP Morgan and a former IEA official. "The method of sale, and the lack of guidance on refilling, work against the barrels being used." Traders and end-users are not obliged to buy the oil being released from stocks, and many do not expect to. British firms holding emergency oil stocks have no obligation to tender or release them, a spokesman for the Department of Energy and Climate Change (DECC) said on Thursday, indicating the oil may never leave storage tanks. "They have an obligation now (to hold stocks) and we are releasing them as part of that obligation. If they don't sell it, they don't sell it," said DECC spokesman Cameron Ramos. Analysts say many of the IEA stocks are unlikely to be sold unless they are priced well below the market. "I see no need for sales in the United States as supplies are not tight there at all. I wouldn't be surprised if the 30 million barrels won't be retrieved completely," said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt. Uncertainty over the release of oil products into the market could depress refining margins and cut supplies to customers in some regions, Eagles said. "Refining margin volatility caused by the lack of clarity on the IEA release volumes risks reducing, rather than supplementing, European product supplies," he said. Wiper at PVM says the full amount of 60 million barrels is "certain not to appear in the market". This would be reassuring for Abdullah al-Badri, secretary general of the Organization of the Petroleum Exporting Countries, who on Monday demanded an immediate halt to the IEA action designed to force down crude prices. "It's perhaps not so surprising that we've turned a full price circle. It's not surprising either that OPEC Secretary General al-Badri seems much more relaxed."

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Worlds longest natural gas pipeline operationalised: China

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The pipeline, which linked Turkmenistan with southern China, will boost supplies to the countrys booming industrial zones in Shanghai, Guangzhou and Hong Kong. The pipeline will have one trunk and eight branches. Three branches have been completed and the other five will be finished next year. The pipeline starts in Huoerguosi on the China-Kazakhstan border, 670 km northwest of Urumqi, capital of Xinjiang Uygur Autonomous Region. The annual natural gas transportation capacity of the pipeline is expected to be 30 billion cubic meters. It is designed to provide stable gas supply for at least 30 years. Liao Yongyuan, deputy general manager of China National Petroleum Corporation (CNPC), said the project would optimise the countrys energy consumption structure benefiting about 500 million people. As of May 28 this year, the already finished lines had delivered 10 billion cubic meters of natural gas to about 18 provincial regions and about 100 million people, Mr. Liao said. It is expected to help ease strained natural gas supply in the Pearl River Delta and the Yangtze River Delta. And it is planned to be connected with natural gas lines already in use, resulting in a network totalling 40,000 km of gas pipelines, state-run Xinhua reported. Oil prices back to levels before SPR release news HOUSTON, Crude oil prices continued to climb June 29 with crude escalating 2% in New York, back to levels prior to the International Energy Agencys announcement of the pending release of 60 million bbl from members emergency petroleum reserves. Just a week ago, IEA announced it would release the crude and product from emergency reserves in an effort to drive down oil prices. Now the flat price is already back to its pre-IEA level, and Brent has regained most of its premium to West Texas Intermediate, said Olivier Jakob at Petromatrix, Zug, Switzerland. From the price action, we have to conclude either that the supply and demand is so tight that 30 million bbl of sweet oil release from the US Strategic Petroleum Reserves does not matter or that the futures markets are disconnecting from the reality of the physical markets, he said. Brent futures regaining most of its premium to WTI remains for us a very intriguing phenomenon when the Brent 2011 backwardation has disappeared, the Light Louisiana Sweet (LLS) premium to WTI is eroding, and the physical premiums for Forties or West African crude oil are falling to the pre-Libya levels. We find it difficult to currently attach anything to the relative strength of Brent futures vs. WTI futures, Jakob said. Paul Horsnell, managing director and head of commodities research at Barclays Capital in London, said, After an initial fall, prices have rallied. The back of the curve has risen, given that the release is primarily a way of borrowing oil from the future into the present because the strategic reserves will ultimately be replaced. Overall, we see the IEA action as being well motivated, but a shot in the dark; in our view, the impact on oil politics and on market perceptions raises the danger of some significant distortions. Cumulative loss of Libyan production now stands at 182 million bblprimarily dieselrich light crude bound for Europe, Horsnell reported, adding, The first IEA release is one third of that amount, split across regions and between crude and products. A larger-than-expected drop in the weekly report of US petroleum inventories also helped boost crude prices, said analysts in the Houston office of Raymond James & Associates Inc. Progress towards staving off a European debt default [in Greece] lifted the broader market (with the Dow Jones Industrial Average and the Standard & Poor's 500 Index up 1%). Energy stocks outperformed, given the strength in crude, they said.

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Meanwhile, natural gas fell 1% after the Energy Information Administration reported strong monthly production data for April and May and forecasts for current hot weather to moderate next week. Natural gas was lower while crude and the broader market were roughly flat in early trading June 30. US inventories EIA reported commercial inventories of benchmark US crude (excluding US SPR stocks) fell 4.4 million bbl to 359.5 million bbl in the week ended June 24, well past the Wall Street consensus for a 1.5 million bbl draw. Gasoline stocks dropped 1.4 million bbl to 213.2 million bbl in the same period, against market expectations of an 800,000 bbl increase. Finished gasoline stocks decreased while blending components increased. Distillate fuel inventories rose 300,000 bbl to 142.3 million bbl, short of the 1.1 million bbl build analysts anticipated (OGJ Online, June 29, 2011). On June 30, EIA reported the injection of 78 bcf of natural gas into US underground storage during the week ended June 24, below Wall Streets consensus for an input of 81 bcf. It increased working gas in storage to 2.4 tcf, down 243 bcf from the storage level in the comparable week last year and 63 bcf below the 5-year average. Refining stocks saw a nice boost from the draw in gasoline with a smaller than expected build in distillates. Notably, Cushing, Okla., inventories fell by 500,000 bbl and are nearly on par with levels from last year, Raymond James analysts said. On the demand side, distillate demand rebounded from its recent slide (up 3.9% for the week) but remains down nearly 8% from a year ago. Total petroleum demand and gasoline demand fell from a week ago. While gasoline demand is up slightly year-over-year, total petroleum demand is down 3% year-over-year, they said. EIA revised down total US petroleum demand in April by 437,000 b/d, with most of the revisions coming from lower demand than first estimated in gasoline (down 304,000 b/d) and distillates (down 189,000 b/d). Demand for petroleum products excluding LPG was down 450,000 b/d in April vs. a year ago (down 2.7%) and is the lowest demand for a month of April since 1997, Jakob reported. For January-April, he said, US demand for petroleum products excluding LPG was unchanged from a year ago, down 232,000 b/d vs. 2009, down 1.2 million b/d vs. 2008, and down 1.7 million b/d vs. 2007. Gasoline demand was at the lowest level for a month of April since 2002, said Jakob. The strong downward revision to gasoline demand is only half of a surprise since the US Highway Administration had shown vehicles miles of travel dropped 2.4% in April vs. a year ago, showing the first drop outside of winter months since 2008. Prices have a verified impact on demand, and [this is] something to keep in mind as flat price is currently trying to rebound towards the April price levels. Jacob surmised, If the US domestic demand is not recovering from the economic crisis levels of early 2009, the US refineries continue to compensate the lack of domestic demand with increased exports. Exports of distillates in April at 873,000 b/d were a match to the record levels set in October of last year. On a distillates yield of 28.1%, US refineries were running 3.1 million b/d of crude oil in April to produce distillates for exports. He said, Given that domestic demand is dead, running too hard for distillate exports would create an imbalance in the domestic gasoline market, but that is offset by an increase in gasoline exports that is also starting to trend higher. US gasoline demand in April is down 450,000 b/d vs. 2007, but US gasoline exports are higher by 360,000 b/d vs. 2007.

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Energy prices The August contract for benchmark US sweet, light crudes climbed by $1.88 to $94.77/bbl June 29 on the New York Mercantile Exchange. The September contract advanced $1.86 to $95.32/bbl. On the US spot market, WTI at Cushing was up $1.88 to $94.77/bbl. Heating oil for July delivery increased 9.45 to $2.92/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month rose 12.01 to $3.01/gal. The new August front-month contract for natural gas dropped 3.9 to $4.32/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., was up 3.6 to $4.38/MMbtu. In London, the August IPE contract for North Sea Brent crude escalated by $3.62 to $112.40/bbl. Gas oil for July jumped by $32.50 to $923.25/tonne. The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes gained $2.60 to $106.19 bbl. OPEC also revised its June 27 average basket price down by a penny to $101.55/bbl. Pertamina Gas eyes Qatar LNG PT Pertamina Gas is in talks with Qatar Gas Transport Co, Petroliam Nasional and Royal Dutch Shell to import liquefied natural gas for an LNG receiving terminal in Indonesias Central Java province, Gusti Azis, director of operation at Pertamina Gas, or Pertagas as the company is also known, said in Jakarta yesterday.Qatar Gas, Petronas and Shell have expressed interest to invest in the receiving terminal, Azis said. S.Korea energy firms to invest $2 bln in Indonesia gas, power JAKARTA, Korea Electric Power Corp (KEPCO) will lead a group of South Korean energy firms and Indonesian utility PLN to invest $2 billion in gas and power projects in the Southeast Asian country to help secure gas supply as competition for demand heats up. The South Korean group plans to develop projects from gas fields to power plants, Indonesian director for oil and gas Evita Legowo said at a forum in Jakarta between officials from the two countries' energy ministries and South Korean companies. "The investment is estimated at around $2 billion, but the figure is not final yet. KEPCO will not be alone, it will bring its partners," Legowo said. "Earlier, KEPCO wanted to utilise LNG for this project, but they could not get the supply. Then we see that in West Java, there are several gas fields that they may use for the projects. We will arrange a special meeting between KEPCO and PLN." A KEPCO spokesman in Seoul said the company, together with state-run Korea Gas Corp (KOGAS) and Korea National Oil Corp (KNOC), had proposed a feasibility study for the $2 billion project. The project will include development of small and medium-sized gas fields, compressed natural gas (CNG) transport facilities and a 750-megawatt power plant in Banten province, a KEPCO official said in a forum presentation, adding that the overall development will require more than $2 billion. Investors in the CNG project will include state utility KEPCO, KOGAS and KNOC, while investors for the power plant will involve KEPCO and Indonesian state utility Perusahaan Listrik Negara (PLN), the official said. Other projects include an ammonia production plant with a capacity of 600,000 tonnes per year (tpy), of which 400,000 tpy will be exported to South Korea and 200,000 tpy retained for domestic consumption. The gas from the fields and CNG facilities is for the ammonia plant and the power plant, both of which are expected to be located in Banten province, on West Java, the KEPCO official said, adding that the developers are doing a study for the CNG project and selection of gas fields. Construction of the CNG project is expected to run from 2012 to 2014, while the development of gas fields is from 2012 to 2014. The power plant construction is from 2012 to 2015, while the construction of the ammonia production plant is from 2013 to 2015, the official added.

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RACE FOR INDONESIA GAS, COAL Indonesia has recently attracted investment interest in energy and mining from Asian countries eager to secure resources, especially natural gas and coal to fuel their economic growth. This week, Japan's Sumitomo and Mitsui inked a deal with Indonesia's energy watchdog BPMigas to develop gas projects from its marginal fields, with state-run Japan Bank for International Cooperation (JBIC) agreeing to fund the gas projects prepared by the two firms. Pri Agung Rakhmanto, a Jakarta-based energy analyst at the Reforminer Institute, said Japan and South Korea's recent deals to develop marginal gas fields in Indonesia were part of the two countries' efforts to guarantee gas supply. "I believe that there is nothing free in energy deals. Japan and Korea enter both upstream and downstream projects and this shows that they want to ensure Indonesia will continue to export gas to the two countries," Rakhmanto said. Other than traditional Northeast Asian buyers of liquefied natural gas (LNG), India as well as Indonesia and Malaysia are turning to imports to feed local demand, stoking already strong prices. Indonesia and Malaysia are the world's second- and third-biggest LNG exporters. Rakhmanto added that by having control at processing facilities, the investors can endorse terms that include LNG export as one option in the projects. Japan's Mitsubishi Corp acquired in January a 20 percent stake in the Senoro-Toili natural gas field in Indonesia for $260 million, a step that allows the trading house to be involved in the LNG project from upstream to downstream. The upstream investment followed Mitsubishi's investment in the Donggi-Senoro LNG project worth $2.8 billion via a joint venture. Loss-making KEPCO, which bears annual fuel costs of 18.6 trillion won, with LNG and coal accounting for 43 percent each, oil 9 percent and nuclear the rest, has also invested in two Indonesian coal mining projects -- one with Adaro Energy and the other with Bayan Resources -- to secure 10 million tonnes per year. KEPCO's shares ended down more than 1 percent on Thursday, while KOGAS slid 4.8 percent, underperforming the wider market's 0.3 percent rise . Saudis Need to Undercut Russia SINGAPORE Top exporter Saudi Arabia is struggling to sell more crude to Asia because rival producer Russia has taken an expanding share of the world's fastestgrowing market. To get an edge in the competition with Russia and ship more barrels into Asia, the Saudis will have to take the next painful step in reducing global oil prices slashing their own. The kingdom has ignored opposition from fellow OPEC members and moved to boost oil supplies to cool prices that have slowed economic growth. Most of any increase in Saudi supplies would flow eastward to feed rapid Asian economic expansion. Russian supply to northeast Asia is almost five times more than in 2008 as crude flows through the East Siberia-Pacific Ocean (ESPO) pipeline. "Not only will the Saudis need to amend official selling prices to a level that would entice refiners, but you may also see competition from alternatives," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas in London. "And if ESPO keeps building up, the pressure keeps on growing." A glut in North American crude markets has made it unprofitable to send ESPO crude to the U.S. West Coast, leaving more supply in Asia. The United States typically absorbs the surplus. The emergency release of oil stocks by International Energy Agency members Japan and South Korea, two of the region's top consuming nations, is adding even more oil to the market. With so much crude on offer, refiners have been reluctant to sign up to buy more from Saudi Arabia.

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ESPO is also higher quality than most Saudi crude, giving refiners that lack capacity to process heavier crude little incentive to buy more Arab grades. Oil pumped through the ESPO pipeline has changed the game in Asia, previously almost captive to Middle East sellers. Russia sells 300,000 barrels per day to China, while another 600,000 bpd can be shipped to the Pacific and onto the Americas and even Europe. OPEC member Saudi Arabia and independent producer Russia pump almost a quarter of the globe's crude, each holding a similar share of about 10 million bpd. While the Saudis have restrained output since the financial crisis with OPEC agreements, Russia's nonalignment has allowed it to pump freely. Russia is pumping ESPO crude directly to China through a new pipeline section that opened this year, obviating the need for some imports from Saudi Arabia. In addition, rising exports of East Siberian oil through the Pacific port of Kozmino have gained acceptance among refiners on three continents. "The waterborne nature of ESPO from Kozmino is allowing Russia to target northeast Asian markets that it could not reach economically before, and it's also better quality than most of the Saudi crude," said John Vautrain, director at Purvin & Gertz energy consultants in Singapore. Five ESPO cargoes due to load in Kozmino by early August have yet to be sold as the arbitrage to the U.S. West Coast remains closed. More supplies are adding to that surplus this week, with tenders for late-August and early-September lots. The release of crude from the Strategic Petroleum Reserve in the United States may keep the arbitrage closed. Tightness for Brent-related grades in Europe because of Libya's civil war and wide discounts for crude priced off the Dubai benchmark, including ESPO, have created unprecedented opportunities for East Siberian cargoes to move as far away as Spain, at least on paper. "The ESPO quality is closer to the Libyan crude," a trading source familiar with purchases of Saudi crude said. "It's also attractive versus crude from West Africa, which is linked to more expensive Brent." The discount of Dubai crude to Brent widened to $9.20 a barrel on June 15, the biggest since October 2004, less than a week after the Saudis signaled they would increase supplies to Asia. That discount prompted RepsolYPF, Spain's largest oil company, to buy a cargo of ESPO blend. The competition for market share in Asia is the latest in a long tussle between the two giants of the oil producing world. Moscow provoked the ire of some OPEC members after failing to deliver on pledges to trim output in line with record cuts by the Organization of the Petroleum Exporting Countries in late 2008. "There has never really been much cooperation between Russia and OPEC," said Greg Priddy, global oil analyst at Eurasia Group in Washington. "The Saudis have never expected Russia to cooperate or share their burden as a swing producer." Gazprom Seeks India, China Gas Sales to Raise Exports, Diversify Gazprom, Russias gas export monopoly, is seeking sales agreements with India, China and South Korea to expand its markets, increase export volumes and ensure stable cash flow. These are the countries where we are now holding intense negotiations about new long-term contracts, Chief Executive Officer Alexei Miller said today at the gas producers annual meeting in Moscow. Its hard to overemphasize the significance of this work. Gazprom, the worlds biggest gas producer, signed preliminary agreements with three Indian companies for liquefied natural gas this month, while failing to reach an agreement on pipeline supplies with China National Petroleum Corp. before Chinese President Hu Jintaos visit to Russia. The company, which has sent tankers of LNG to India, China and South Korea from its Sakhalin-2 project, aims to supply 14 percent of the global market for the liquid fuel by 2030.

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The expansion will boost export volumes by at least 50 percent, reducing Gazproms dependence on Europe, its biggest market by revenue, Miller said. The company plans to continue increasing volumes to Europe, where it supplied 23 percent of demand at the end of last year, he said. Shipments to Europe and Turkey may reach 155 billion to 158 billion cubic meters this year and export revenue will probably rise to a record, Miller said. Total exports reached $36.6 billion in the first five months of the year, putting Gazprom in track to beat a 2008 record of $81.6 billion, Deputy CEO Alexander Medvedev said on June 20. Export volumes have risen 26 percent in the first half of the year, or by 26.6 billion cubic meters, Miller said. Gazprom wont make significant changes in its long-term gas supply contracts after holding talks with European consumers, Miller said. No radical changes in the contract system are expected or planned, Miller said. The company will maintain so-called takeor-pay clauses and a link to oil and product prices in the agreements, he said. Pak-Iran projects gas not meant for domestic consumers: Secretary ISLAMABAD, Secretary Ministry of Petroleum and Natural Resources Muhammad Ejaz Chaudhry said on Thursday domestic consumers would not be able to afford Pak-Iran projects gas. Briefing National Assembly Standing Committee on Petroleum and Natural Resources that met here with Talib Hassan Nakai in the chair, the secretary said the gas from Pakistan-Iran gas pipelines cost around Rs 8.50 per unit which could be used for power generations, Industries and fertilizers. He said that government had two option to meet the countrys growing energy needseither to import or explore new hydrocarbon resources to ensure availability of electricity and gas in the country. He said that Pak-Iran project would start supply from 2014 and adding if it got late then gas crisis would multiply. About the LNG project the secretary said progress was being made and 17 international bidders had shown Expression of Interest in supply of energy and gas to Pakistan. The committee was informed that presently the country was facing gas shortfall of 2.5 billion cubic feet against demand of 6 billion cubic feet. He said if the situation continues to persist the gas loadshedding could be extended from two days. The secretary said the SSGC and SNGPL had recovered Rs 4 billion during the last 48 days and disconnected around 370 illegal connections in two months, mainly in Punjab. The secretary informed that 90 percent of gas development programmes were being completed under the PM schemes while 10 percent belonged to the SSGC and SNGPL. The committee took serious view about the mal-practices of provision of 500 CNG connections despite ban imposed in 2007. The MD OGDCL Asif Sindhu said Rs 600 million budget had been allocated for the development schemes in next financial year and Rs 310 million was spent on development schemes in Balochistan last year. The committee also showed concern over constant increase in prices of petroleum products. The committee recommended that report should be presented about illegal grant of CNG connections. The body also recommended that ban on MNAs gas development schemes should be lifted in order to provide the basic facility to their respective areas. The committee was attended by Nawab Ali Wassan, Mian Abdul Haq Alias Mian Mitha, Khurram Jehangir Wattoo, Mir Ahmadan Khan Bugti, Syed Anayat Ali Shah, Ch Muhammad Barjees Tahir, Mir Muhammad Hanif Abbasi, Begum Shahnaz Sheikh, Abdul Waseem, Syed Haider Ali Shah, Muhammad Usman Advocate, Sh Aftab Ahmad, Nazar Muhammad Gondal and Rana Afzaal Hussain.

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OPEC to Cut Supply on Slower Asian Demand, Oil Movements Says

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OPEC will cut oil shipments through to the middle of July as Asian refiners reduce imports while conducting seasonal maintenance work, according to tanker- tracker Oil Movements. The Organization of Petroleum Exporting Countries will ship 22.7 million barrels a day in the four weeks to July 16, down 0.7 percent from the period to June 18, the consultant said in a report. The data, which excludes Ecuador and Angola, does not reflect any change in OPEC output in response to the International Energy Agencys release of emergency stockpiles, Oil Movements said. Demand is diminished relative to what might have been expected and its mainly happening in the east, Roy Mason, the founder of Oil Movements, said by telephone from Halifax, England. Theyre getting towards the peak of the maintenance season in the east, so it may be a temporary lull. The Paris-based International Energy Agency, an adviser to 28 oil-consuming nations, said June 23 its members will offer 60 million barrels of oil, the first deployment of strategic stockpiles in five years, after OPEC failed on June 8 to announce a plan on making up for halted Libyan exports. Saudi Arabia pledged that day to keep consumers supplied in the absence of an OPEC accord. Shipments from Middle Eastern producers, including non-OPEC members Oman and Yemen, will drop 0.9 percent to 17.44 million barrels a day in the period, the report showed. Crude on board tankers will average 485.44 million barrels in the four weeks, down 0.8 percent from 489.41 million barrels in the period to June 18, Oil Movements said. Oil Movements calculates shipments by keeping a tally of tanker-rental agreements. Its figures exclude crude held on board ships as floating storage. OPECs members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the groups quota system. OPEC oil output to rise in June - Reuters survey-UPDATE 1 LONDON, OPEC oil output is expected to rise in June mainly due to extra oil from Saudi Arabia, Kuwait and the United Arab Emirates, a Reuters survey found on Thursday. Supply from all 12 members of the Organization of the Petroleum Exporting Countries is expected to average 29.45 million barrels per day (bpd) this month, up from a revised 29.1 million bpd in May, the survey of oil companies, OPEC officials and analysts found. The extra supply from the Gulf OPEC members will be welcomed by consumer nations concerned about the impact of oil prices well above $100 a barrel <LCOc1> on economic growth and inflation. But output may be lower than expectations. Industry sources said Saudi Arabia was expected to boost production to almost 10 million bpd this month, but analysts said there was no sign yet of demand for that much crude. "I have seen no evidence that Saudi customers have requested that much extra oil and I don't believe they will produce to simply fill oil tankers," said Paul Tossetti, senior energy adviser at PFC Energy. "Nevertheless, the Saudis are serious about plugging the gap in third-quarter crude supply to meet higher refining runs." Output is rising from the Gulf OPEC members following the group's failed meeting on June 8, when seven members of the 12-nation OPEC blocked a Saudi-led proposal to increase its output targets. Supply is still lower than before the Libyan crisis reduced output from what used to be Africa's third-largest producer. OPEC in January pumped 29.63 million bpd, the most since December 2008, according to Reuters estimates.

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OPEC has not officially changed its output policy since cutting output by a record 4.2 million bpd in December 2008 to 24.84 million bpd for 11 members, all except Iraq. Since the June 8 meeting, OPEC officials have acknowledged the target of 24.84 million bpd was no longer valid since actual supply was so much higher. Mitsubishi to sell Canada shale gas stake to KOGAS TOKYO: Mitsubishi Corp, Japan's biggest trading house, said on Thursday it has agreed to sell a 5 per cent stake in a Canadian shale gas project to state-run Korea Gas Corp (KOGAS), a move that may lead to exports to South Korea. The project currently aims export LNG to Japan. KOGAS is the world's biggest LNG buyer, controlling all imports to South Korea which is the world's second-biggest importer of LNG after Japan. After the deal, Mitsubishi's holding in the Cordova Embayment project in British Columbia will fall to 30 per cent. A Mitsubishi spokesman declined to comment on the value of the deal. Other stakeholders are Penn West, with 50 per cent while the staterun Japan Oil, Gas and Metals National Corp (JOGMEC), Chubu Electric Power , Tokyo Gas and Osaka Gas each hold 3.75 per cent. Russia and Norway may issue Arctic licences Russia and Norway may start granting licences to develop offshore deposits in the Barents Sea and the Arctic Ocean in 2013-14 under a bilateral sea border agreement, Russias Natural Resources Ministry said The Russian-Norwegian agreement on delimiting the sea border and co-operation in the Barents Sea and the Arctic Ocean will come into force on July 7, 2011. A ministry spokesman said the agreement offered new opportunities for the oil and gas industry in the northern regions. The spokesmans comments came after bilateral talks on the prospects of geological works in the area. The two countries intend to set up consortia to develop promising offshore deposits. Russia improves links with US and China The consortia will face severe environmental conditions, a shortage of infrastructure and various technological problems. The ministry is working out the legal terms of shelf development regulation, and trying to improve the tax regime for raising investment in shelf projects. Natural gas futures turn positive after U.S. EIA data Forexpros Natural gas futures erased losses on Thursday, retreating from a three-day low after the U.S. Energy Information Administration said natural gas inventories fell less-than-expected last week. On the New York Mercantile Exchange, natural gas futures for August delivery traded at USD4.362 per million British thermal units during U.S. morning trade, jumping 1.25%. It earlier rose as much as 1.45% to hit a daily high of USD4.372 per million British thermal units. The contract traded at USD4.316 prior to the release of the EIA data. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 24 rose by 78 billion cubic feet, after increasing by 98 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to rise by 80 billion cubic feet. Stockpiles advanced by 63 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a buildup of 77 billion cubic feet. Total U.S. natural gas storage stood at 2.432 trillion cubic feet. Stocks were 243 billion cubic feet less than last year at this time and 63 billion cubic feet below the five-year average of 2.495 trillion cubic feet for this time of year. The report showed that in the East Region, stocks were 124 billion cubic feet below the five-year average, following net injections of 55 billion cubic feet.

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Stocks in the Producing Region were 105 billion cubic feet above the five-year average of 865 billion cubic feet, after a net injection of 10 billion cubic feet. In the West Region, stocks were 44 billion cubic feet below the five-year average after a net addition of 13 billion cubic feet. At 2.432 trillion cubic feet, total working gas was within the five-year historical range. Prices were down earlier as fears over a disruption to supply eased after a tropical storm in the Gulf of Mexico didn't appear likely to threaten production. Elsewhere, light sweet crude oil futures for delivery in August eased down 0.13% to trade at USD94.95 a barrel, while heating oil for August delivery added 0.17% to trade at USD2.941 per gallon during U.S. morning trade. KOREA : Import duties on crude likely to be slashed The Korean government is seeking to scrap the 3 percent import duty on crude oil in order to reduce burdens on motorists, who will face an increase in gasoline and diesel prices late next week. Minister of Knowledge Economy Choi Joong-kyung made the remarks Thursday in a press conference held at the ministry before he visits African countries together with President Lee Myung-bak this weekend. ``The overall taxation system on petroleum products will be reviewed only when the crude oil price hits $130 per barrel. We have confirmed this several times, said Choi who took charge of the ministry earlier this year. ``Instead, we could do away with the tariff on crude oil, which amounts to 3 percent. That would be possible in consultation with related ministries considering gasoline and diesel prices are about to rise. The Ministry of Knowledge Economy (MKE) pressed local refiners hard, leading them to trim gasoline and diesel prices by 100 won per liter in early April. The temporary pricing policy will expire on July 6. This prodded industry watchers to worry that the end of the temporary discounts will overly weigh on domestic households, which are already suffering from inflation amounting to more than 4 percent this year. `Once we eliminate the 3 percent tariff, the government will see its tax revenue go down by around 110 billion won every month. Hence, related government agencies such as the Ministry of Strategy and Finance (MOSF) are concered, Choi said. ``However, tax revenue has been rising substantially as of late thanks to high oil prices. Subsequently, I think that we could abolish the 3 percent tariff. He did not specify how long the tariff would be jettisoned if such a step is taken. Crude oil prices climbed to a record high of around $145 per barrel in the summer of 2008 but they plunged to about $40 in early 2009 at the peak of the global economic crisis. But they have been on the increase since then to above $100 and now moves in the $110 range. Asked about electricity charges, the 54-year-old life-time bureaucrat insinuated that the rates would not increase by more than 4 percent this year as he said the uptick might have to be within in the governments 2011 inflation target of 4 percent. The MKE has strived to link electricity rates to the values of raw materials such as coal and crude oil, which would cause them to go up because raw material prices have been rising in recent years. But Choi hinted that the ceiling on the increase would be 4 percent. JORDAN : Egyptian gas supply 'unstable' AMMAN - Jordan is receiving reduced natural gas supplies from Egypt as energy officials in Cairo attempt to hammer out a long-awaited amended pricing agreement. According to the National Electric Power Company (NEPCO), the Kingdom is currently receiving 50 million cubic feet (MMcf) of Egyptian gas, well short of the 250MMcf stipulated in a 12year agreement between Cairo and Amman and down from 100MMcf earlier this month.

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The supply so far has not been stable, and we hope to reach a final agreement to raise the amounts next week, NEPCO Director General Ghaleb Maabrah told The Jordan Times. On Thursday, Minister of Energy and Mineral Resources Khaled Toukan travelled to Cairo to discuss with his Egyptian counterpart outstanding legal issues preventing the full resumption of gas supplies, which the Kingdom relies upon for 80 per cent of its electricity generation needs. We want to ensure quantities at sufficient supplies and it looks like both sides are converging, Toukan told The Jordan Times. It is believed that the new agreement brings to an end a favourable pricing structure under which Amman received gas from Egypt at less than half of international market prices. Energy officials hope to conclude the amended deal, which has been in the works for over two months, by mid-July, ahead of the August peak in electricity demand. Cairos demand for a new agreement came after an April 27 attack on the Arab Gas Pipeline in the Sinai disrupted supplies and forced the Kingdoms power plants onto their heavy fuel oil reserves at an estimated cost of $3 million per day. The unreliability of Egyptian gas supplies has forced energy officials in Amman to consider the import of liquid gas, with plans in place to construct an offshore terminal in the port of Aqaba by 2013. Amman has received several expressions of interest from international firms in the terminal project, including Royal Dutch Shell, British Petroleum, Lemont/General Electric and Egyptian firm Al Fajr. Gazprom Seeks Gas Sales in Asia to Diversify From Europe OAO Gazprom, Russia's natural-gas export monopoly, is seeking sales agreements with India, China and South Korea to diversify from the European export market and ensure stable cash flow. "These are the countries where we are now holding intense negotiations about new long-term contracts," Chief Executive Officer Alexei Miller said today at the gas producer's annual meeting in Moscow. "It's hard to overemphasize the significance of this work." Gazprom, the world's biggest gas producer, signed preliminary agreements with three Indian companies for liquefied natural gas this month, while failing to reach an agreement on pipeline supplies with China National Petroleum Corp. before Chinese President Hu Jintao's visit to Russia. The company, which has sent tankers of LNG to India, China and South Korea from its Sakhalin-2 project, aims to supply 14 percent of the global market for the liquid fuel by 2030. Gazprom will hold its next round of negotiations with China about a supply contract next month, Miller said. Disagreements on pricing remain, with Gazprom insisting on parity with Europe, Miller told reporters today in Moscow. Gazprom is ready to start building a gas pipeline through the Altai region to China once a contract is signed, he said. The expansion will boost export volume by at least 50 percent, reducing Gazprom's dependence on Europe, its biggest market by revenue, Miller said. The company plans to continue increasing exports to Europe, where it supplied 23 percent of demand at the end of last year, he said. Shipments to Europe and Turkey may reach 155 billion to 158 billion cubic meters this year and export revenue will probably rise to a record, Miller said. Total exports reached $36.6 billion in the first five months of the year, indicating Gazprom may beat a 2008 record of $81.6 billion, Deputy CEO Alexander Medvedev said on June 20. Export volume has risen 26 percent in the first half of the year, or by 26.6 billion cubic meters, Miller said.

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Gazprom won't make significant changes in its long-term gas supply contracts after holding talks with European consumers, Miller said. "No radical changes in the contract system are expected or planned," Miller said. The company will maintain so-called takeor-pay clauses and a link to oil and product prices in the agreements, he said. Gazprom may reach pre-crisis gas production levels in 2012 rather than 2013, Miller said. He forecast that the company's earnings before interest, tax, depreciation and amortization may reach $60 billion this year. Pakistani official for early completion of Iran gas pipeline Islamabad, IRNA A senior Pakistani Petroleum Ministry official on Thursday called for the early completion of the multi-billion Iranian gas pipeline and said that delay would further complicate Pakistan's energy crisis. Secretary Ministry of Petroleum and Natural Resources Muhammad Ejaz Chaudhry said Iran-Pakistan project would start supply from 2014 adding that if it got late then gas crisis in the country would be worsened. Briefing National Assembly Standing Committee on Petroleum and Natural Resources that met here with Talib Hassan Nakai in the chair, the secretary said the gas from Pakistan-Iran gas pipelines could be used for power generations, Industries and fertilizers. He said the gas currently used by the industry would be diverted to the consumers use. Pakistan faces acute gas shortage and the government on Thursday announced a gas load-management schedule, under which gas supply would remain suspended for two to three days in a week for industries. Factory owners have rejected the government plan and have convened emergency meetings to discuss strategy how to force the government to withdraw its decision. Petroleum Minster Dr Asim Hussain said the country is facing gas shortage and has no option but to stop supply to the industries to ensure smooth flow to the consumers. Ejaz Chuadhry told the meeting that government has two options to meet the country's growing energy needs; either to import or explore new hydrocarbon resources to ensure availability of electricity and gas in the country. The $7.6 billion project is crucial for Pakistan to avert a growing energy crisis already causing severe electricity shortages in the country. The project would help generate around 5,000 megawatts of electricity, experts say. Pakistan and Iran had finalized the gas pipeline projects last year, under which Iran will start supplying natural gas to Pakistan from 2014. Under the deal, Pakistan will import 750 million cubic feet of gas from Iran everyday for 25 years, according to officials. The pipeline will facilitate transfer of natural gas from Iran's biggest gas field in South Pars to Pakistan through its Balochistan province. On Wednesday Prime Minister, Syed Yusuf Raza Gilani, was informed that 1100 km of gas pipeline on the Iranian side has been completed. Minister for Petroleum & Natural Resources, Dr Asim Hussain, told the Prime Minister in a meeting that the progress on the IP Gas Pipeline Project on the Pakistani side, which started on May 9, is quite satisfactory. PAKISTAN : Large-scale gas loadshedding plan approved ISLAMABAD: The Economic Coordination Committee of the cabinet approved in principle on Thursday a massive increase in gas prices for different categories of consumers, subject to approval by the prime minister, curtailment of gas for CNG stations for two days in Sindh and three days in Punjab and a negotiated award of $2.2 billion contract to a Chinese company for the 1100MW Kohala hydropower project in Azad Kashmir.

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A meeting of the ECC, presided over by Water and Power Minister Syed Naveed Qamar in the absence of Finance Minister Dr Abdul Hafeez Shaikh, also approved a subsidy of Rs2 billion on essential items to be sold through the Utility Stores Corporation during Ramazan. The committee accepted the economic rationale for the revision of gas sale prices and for the removal of distortion in the (gas) prices, an official statement said, adding that a final decision had been deferred for two or three days so that the matter may be discussed at the cabinet level or with the prime minister. The decision has in fact been put off in view of a Sindh High Court verdict on prescribed gas prices expected on July 1. A senior official told Dawn that Petroleum Minister Dr Asim Hussain would again take the matter to the prime minister who had asked him a day earlier to get an economic decision from the ECC before a political decision. Under a uniform natural gas management policy, gas tariff will be raised by 15 per cent for domestic and commercial consumers, by 18 per cent for industries, by 36 per cent for the power sector and by 96 per cent for fertiliser feed stock. The ECC also decided to raise CNG rates from 45 per cent of petrol to 65 per cent, an increase of Rs12 per kg from Rs58, and curtail gas supply to CNG stations in Punjab for three days and in Sindh for two days to share gas shortage across the country. The gas so saved will be used for power generation in Sindh (KESC) and will be provided to fertiliser, industrial and power sectors in Punjab on an equitable basis to ensure consistent power supplies. The ECC decided to continue gas supply to two independent power producers (IPPs) for another five months and allow two others to use diesel as alternate fuel for which price differential would be picked up through an increase in electricity tariff. Gas supply contracts of four IPPs with a combined capacity of about 800MW expired on June 30. The uniform gas management policy will be presented to the cabinet for a formal consent. In another major decision, the ECC allowed negotiations with CWE of China, a subsidiary of Three Gorges Corporation, for the award of 1100MW Kohala hydropower project in Azad Kashmir at an estimated cost of $2.2 billion, bypassing procurement rules which call for an international competitive bidding. Sources said Wapda strongly opposed the bypassing of competitive bidding and wanted a fair competition to get a lower bid. It said the procurement rules did not allow a public sector entity to have a negotiated contract award. The water and power ministry, which had signed a memorandum of understanding with the CWE on the instruction of President Asif Ali Zardari, however, found a legal lacuna to avoid competitive bidding. It argued that since the Pakistan Public Procurement Authority (PPRA) had no legal jurisdiction in Azad Kashmir, the project should be awarded to the Chinese firm on a single bid basis. The AJK government had also consented. Wapda contested the argument and said that since the project would be funded through the public money and Wapdas resources had been raised through public funds, it had to follow PPRA rules. Under instructions of the ECC, a ministerial committee had, however, suggested seeking a legal opinion from the law ministry. The law ministry is reported to have consented to bypassing the PPRA rules in AJK, enabling the ECC to formally allow a negotiated deal with the Chinese firm. China had offered to finance the project and recover it through tariff over 50 years of projects life. The ECC meeting also issued a no-objection certificate to the petroleum ministry to award a contract to Khan Research Laboratories (KRL) for developing the Uch-II gas project.

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KRL has offered to undertake the project at a price lower than the one offered in a bidding which was cancelled because of inconsistencies in bidding consortium. The ECC allowed furnace oil blending in the country under monitoring by the Oil and Gas Regulatory Authority. It approved modification of power tariff by Nepra, allowing operation of gas-based IPPs on diesel as backup fuel with full cost recovery for whatever period gas is not available to them. Oil rises above $95 per barrel NEW YORK -Oil climbed above $95 per barrel Thursday as lawmakers in Greece approved final details of a plan that will bring sweeping financial reform to its beleaguered economy. The austerity measures passed this week clear the way for Greece to receive crucial bailout funds. This should ease investor concerns, for now, about a spreading financial crisis in Europe. As a result, the euro strengthened against the dollar, giving oil a boost. Oil is priced in U.S. currency, and it tends to rise as the dollar falls and makes crude barrels cheaper for investors holding foreign money. Benchmark West Texas Intermediate for August delivery added 87 cents to $95.65 per barrel on the New York Mercantile Exchange after rising $4.16 per barrel over the previous two days. Even so, oil is on pace to end the second quarter with its first quarterly drop in a year. Meanwhile, retail gasoline prices slipped less than a penny overnight to $3.541 per gallon. They actually dropped about 2 percent for the quarter, but consumers had to endure a run up to near $4 in early May. Natural gas prices rose 1 percent after the government reported that U.S. supplies grew less than expected last week. The Energy Information Administration said that storage levels rose by 78 billion cubic feet. Analysts had been expecting an increase of between 80-84 billion cubic feet. The natural gas contract for August delivery gained 5.7 cents to $4.391 per 1,000 cubic feet on the Nymex. In other Nymex trading for July contracts, heating oil added a penny to $2.935 per gallon and gasoline futures were flat at $3.012 per gallon. Both contracts expire on Thursday. In London, Brent crude rose 58 cents to $112.98 on the ICE Futures Exchange. Oil mixed in Asian trade after Greek cuts The vote in Athens allayed concerns that Greece would default on its massive debt, a situation that could again shake up the global financial system. New York's main contract, West Texas Intermediate for delivery in August, climbed 15 cents to $94.92 a barrel in morning trade after rising by $1.88 yesterday. Brent North Sea crude, also for August, dipped 32 cents to $112.08 after leaping by $3.62 yesterday. Trading "started slightly weaker from profit-taking after the market's impressive gains yesterday," said Serene Lim, a Singapore-based analyst with ANZ Bank. Despite a general strike and street protests, Greek's parliament voted to slash 28.4 billion euros ($40 billion) from government spending by 2015. The plan is a condition for 12 billion euros of emergency loans needed by mid-July from stressed eurozone partners and the International Monetary Fund that could now be unlocked by eurozone finance ministers as early as their next meeting on Sunday. The news cheered investors and caused the euro to rise against the dollar. A weaker greenback makes dollar-priced oil cheaper, perking up demand and boosting prices. Lim said data showing healthy energy demand in the United States, the world's biggest economy, should also bolster oil prices. Figures released by the US Department of Energy yesterday showed American crude inventories fell by 4.4 million barrels last week, exceeding market expectations.

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Oil holds at $112 as inflation worries stir-UPDATE 6

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LONDON, Oil prices held near $112 a barrel on Thursday as high inflation and uncertainty about the International Energy Agency's emergency stock release plan balanced against a weaker dollar. Comments from European Central Bank chief JeanClaude Trichet reinforced expectations of an interest rate hike next week, which traders and analysts said could stifle economic activity and energy demand. Concerns lingered that Greece could run into further problems even after Wednesday's initial vote to pass an austerity plan to avert bankruptcy. "It's not finished for Greece yet; there is a last vote," said Thorbjorn Bak Jensen, an oil analyst at Global Risk Management. "If the system tightens up well, Greece doesn't need a rate rise." ICE Brent crude <LCOc1> was 40 cents lower at $112 a barrel at 1400 GMT, paring early losses of more than $1, after jumping more than 3 percent on Wednesday. U.S. crude <CLc1> was at $94.84 a barrel, up 7 cents, after gaining 2 percent in the previous session. A weaker dollar was supportive, although the dollar index pared early losses after the European data was released and was little moved after U.S. jobless data showed a slight drop in claims. "The disappointing jobs data helps to invite more easing by the Federal Reserve, which bodes for a weaker dollar and higher commodity prices. Secondarily, yesterday's uptick in Japanese industrial production may signal the bottom for the current slowdown. So the current claims numbers may be the worst we see," said John Kilduff, a partner at Again Capital Llc In New York. Euro zone data showed that inflation was high but stable at 2.7 percent, compared with expectations of a rise to 2.8 percent. The rate is well above the ECB's target of close to but below 2.0 percent. The International Energy Agency has sent conflicting signals to the market this week, saying on Wednesday it was up to operators to decide whether to release crude oil or oil products as part of the emergency release plan. "The market is still assessing the release of emergency stocks by the IEA," said Ben Westmore, commodities economist at the National Australia Bank. The Netherlands joined Germany in clarifying it would hold a tender to release crude oil as part of the IEA programme. The Dutch stockpiling agency said up to 700,000 barrels of crude oil would be offered on Friday. Other countries including Britain, France and Italy said they were not planning on tenders but would reduce minimum strategic stock reserve requirements instead. "There is a huge misunderstanding on this point," the IEA's head of energy markets and security told Reuters. The table provided by the International Energy Agency on Monday, which showed the breakdown of crude and products on its website, was purely indicative, Didier Houssin said. But the agency could decide whether to repeat the release around the third week of July, Richard Jones, IEA deputy executive director, said late on Wednesday. "The impact has been fairly minimal. I don't believe they can continue releasing emergency stocks as that's what they are there for - emergencies," said Roy Jordan, an analyst at Facts Global Energy, adding that in the absence of further disruption, prices would fall anyway because supply was ample. MIXED SUPPLY OUTLOOK In the United States, oil stocks tightened as crude imports dropped and gasoline inventories fell unexpectedly. Crude supplies fell for a fourth straight week, government data showed, dropping 4.4 million barrels, much more than forecast, to 359.5 million barrels.

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But on the other hand, OPEC oil output is forecast to rise in June mainly due to extra oil from Saudi Arabia, Kuwait and the United Arab Emirates, a Reuters survey found on Thursday. Supply from all 12 members of the Organization of the Petroleum Exporting Countries is expected to average 29.45 million barrels per day (bpd) this month, up by 350,000 bpd in May, the survey of oil companies, OPEC officials and analysts found.
Courtesy: Media Reports: PTI / Reuters / Financial Times / BBC Business News / DAWN (Pakistan) / Iran Times / The Times/ CNN/ BBC News / OPEC Press releases / Africa Intelligence / Australia Daily / Hong Kong Times / Gulf News Economic Times / Times of India / Business Standard / Business Line / Financial Express / Deccan Chronicle / Tribune / Telegraph / Statesman / Hindustan Times / The Hindu / The Assam Tribune / Parliament House Press releases / Company Press releases / Ministry / Petroleum Bazaar staff reporting. Interoceanic Shipping Agency.

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Industrial Sales Performance


All India Monthly Industry Sales Performance Sales for the month (TMT) May11 LPG Naphtha + NGL MS ATF / JP-5 SKO HSD LDO FO/ LSHS BITUMEN LUBES/GREASES Total 10 Products Others Total POL Products CNG LNG Total GAS 1186.2 844.6 1351.5 458.6 734.0 5862.5 31.2 648.3 500.4 93.9 11711.1 652.7 12363.7 126.5 736.9 863.4 May10 1043.7 814.6 1251.1 421.1 751.6 5287.3 34.4 849.0 500.8 90.1 11043.7 1348.2 12391.8 112.5 643.7 756.2 Cumulative Sales (TMT) Apr-May 11 2317.8 1735.8 2553.4 910.3 1482.4 11322.3 65.7 1519.2 974.6 174.0 23055.5 672.6 23728.1 250.4 1515.1 1765.5 Apr-May 10 2090.9 1566.8 2369.0 814.1 1500.6 10657.9 63.8 1716.4 1017.3 183.7 21980.5 1294.8 23275.3 220.4 1283.7 1504.1 % Growth/ (Decline) May11 13.7 3.7 8.0 8.9 (2.3) 10.9 (9.4) (23.6) (0.1) 4.3 6.0 (51.6) (0.2) 12.4 14.5 14.2 Apr-May 11 10.9 10.8 7.8 11.8 (1.2) 6.2 3.0 (11.5) (4.2) (5.3) 4.9 (48.1) 1.9 13.6 18.0 17.4

Products

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Pipeline Transfers
Pipeline transfers through inland product pipelines in the country during the month and cumulative are given below:

Figs. in TMTs

Pipeline HBPL (Haldia-Rajbandh-Barauni) HMRPL (Haldia-Mourigram-Chitragung-Rajbandh) BKPL (Barauni-Patna-Mughalsari-Allahabad-Kanpur) * GSPL (Guwahati-Siliguri) MJPL (Mathura-Brijwasan-Ambala-Partapur-Jalandhar) ** MTPL (Mathura-Tundla) MBPL(Mathura-Bharatpur) PRPL (Panipat-Rewari) PBPL (Panipat-Bhatinda) KAPL (Koyali-Ahemedabad) KDPL(Koyali-Dahej) KSPL (Koyali-Viramgam-Sidhpur-Sanganer) KRPL (Koyali-Rathlam) CTMPL (Chennai-Trichy-Madurai) CBPL (Chennai-Bangalore) MPPL (Mumbai-Pune-Solapur) MUMBAI-MANMAD-BIJWASAN MUNDRA-DELHI MHBPL (Mangalore-Hassan-Bangalore) VVSPL (Vizag-Vijayawada-Secunderabad) CCKPL (Cochin-Coimbatore-Karur) JLPL (Jamnagar-Loni) - LPG VSPL (Vizag-Seconderabad) - LPG

May.'11 127.2 168.2 215.0 109.2 530.6 38.2 37.6 132.9 141.6 42.6 101.3 277.9 26.7 161.3 81.1 301.0 252.2 429.9 250.6 365.4 166.9 208.9 57.9

Apr-May.'11 254.3 350.5 455.9 223.5 1124.8 64.8 79 247.1 291.9 82.9 231.8 559.5 56.9 306.6 189.2 639.4 581.4 892.5 501.2 730.8 290.3 429.4 120.9

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Regionwise Industry Sales Growth


Figs. in TMTs

PRODUCTS LPG

REGION NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA

MAY'11

APRIL MAY'11

2011 2010 %GROWTH 2011-12 2010-11 %GROWTH 376.3 331.7 13.4 736.8 669.7 10.0 159.8 283.8 366.3 1186.2 140.2 56.5 545.2 102.8 844.6 428.9 144.8 384.9 392.9 1351.5 172.0 31.0 130.4 125.2 458.6 194.4 191.9 210.6 137.1 734.0 1966.6 816.2 1449.8 1629.8 5862.5 6.8 11.2 10.3 2.8 139.8 253.2 319.0 1043.7 133.1 40.9 557.6 83.1 814.6 404.7 127.3 355.2 363.8 1251.1 148.1 29.4 128.6 115.0 421.1 195.1 189.1 225.8 141.6 751.6 1800.7 721.5 1274.2 1490.9 5287.3 7.1 11.9 12.3 3.1 14.3 12.1 14.8 13.7 5.3 38.1 (2.2) 23.7 3.7 6.0 13.8 8.3 8.0 8.0 16.2 5.5 1.4 8.8 8.9 (0.3) 1.5 (6.7) (3.2) (2.3) 9.2 13.1 13.8 9.3 10.9 (4.4) (5.3) (16.8) (7.2) 308.6 573.5 698.9 2317.8 329.9 120.0 1034.5 251.3 1735.8 795.9 271.6 727.2 758.6 2553.4 341.3 61.9 256.6 250.5 910.3 385.6 382.9 440.9 273.0 1482.4 3794.4 1599.5 2812.0 3116.5 11322.3 12.5 22.6 26.2 4.5 270.6 521.6 628.9 2090.9 289.0 52.8 1046.1 179.0 1566.8 758.1 245.8 660.9 704.2 2369.0 288.1 56.3 248.3 221.4 814.1 387.7 379.1 455.2 278.6 1500.6 3678.6 1468.3 2516.5 2994.5 10657.9 15.6 18.8 24.0 5.4 14.0 10.0 11.1 10.9 14.2 127.3 (1.1) 40.4 10.8 5.0 10.5 10.0 7.7 7.8 18.5 10.0 3.3 13.2 11.8 (0.5) 1.0 (3.1) (2.0) (1.2) 3.1 8.9 11.7 4.1 6.2 (20.0) 20.0 9.3 (17.3)

NAPHTHA/NGL

NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA

MS

NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA

ATF

NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA

SKO

NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA

HSD

NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA

LDO/MLO

NORTHERN EASTERN WESTERN SOUTHERN

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ALL INDIA FO/LSHS NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA BITUMEN NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA LUBES/GRS. NORTHERN EASTERN WESTERN SOUTHERN ALL INDIA TOTAL 10 PRODUCTS NORTHERN EASTERN WESTERN SOUTHERN

31.2 176.9 86.0 317.0 287.0 648.3 147.1 51.2 178.5 123.5 500.4 15.3 12.6 45.3 20.6 93.9 3600.5 1555.6 3456.3 3098.8

34.4 212.6 92.0 271.3 291.5 849.0 159.7 70.5 170.8 99.7 500.8 16.1 14.4 38.7 20.9 90.1 3408.4 1434.1 3306.0 2895.0

(9.4) (16.8) (6.5) 16.9 (1.5) (23.6) (7.9) (27.4) 4.5 24.0 (0.1) (4.6) (12.2) 17.1 (1.3) 4.3 5.6 8.5 4.5 7.0 6.0

65.7 176.9 86.0 317.0 287.0 1519.2 291.5 104.0 345.9 233.1 974.6 28.9 23.9 83.2 38.0 174.0 7046.7 3061.2 6833.9 6113.6 23055.5

63.8 212.6 92.0 271.3 291.5 1716.4 316.6 131.4 343.7 225.7 1017.3 31.0 28.0 83.3 41.5 183.7 6859.0 2832.4 6460.4 5828.5 21980.5

3.0 (10.2) (2.2) 16.9 (1.5) (11.5) (7.9) (20.8) 0.7 3.3 (4.2) (6.7) (14.7) (0.1) (8.5) (5.3) 2.7 8.1 5.8 4.9 4.9

ALL INDIA 11711.1 11043.7

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All India Sectorwise HSD-D Sales


Figs. in MTs

SECTOR Defense Railways STUs Power Auto manufacture Steel Cement Sugar Mining Textiles Fisheries Coal Marine Other-Private Other-Govt. Agriculture TOTAL

MAY 2011 20989 198270 176790 7900 3859 15026 17657 5091 27182 8253 22066 36033 82457 312642 45132 9625 979347

APRIL-MAY

2010 %GROWTH 2011-12 2010-11 %GROWTH 21227 (1.1) 36855 41658 (11.5) 197036 170996 7969 5215 11437 18213 5259 25404 10641 19642 37274 56421 329346 53568 13811 969648 0.6 3.4 (0.9) (26.0) 31.4 (3.1) (3.2) 7.0 (22.4) 12.3 (3.3) 46.1 (5.1) (15.7) (30.3) (1.0) 387737 349285 16002 7509 29223 34269 11010 56145 18325 45479 74974 159815 622032 88494 9625 1937154 381362 349920 16083 9032 23592 35421 10072 50940 21944 41523 74590 120482 670891 110559 13811 1958069 1.7 (0.2) (0.5) (16.9) 23.9 (3.3) 9.3 10.2 (16.5) 9.5 0.5 32.6 (7.3) (20.0) (30.3) (1.1)

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Category wise FO/LSHS Upliftments


[000MT] SECTOR Power FO LSHS TOTAL Fertiliser FO LSHS TOTAL Petrochemicals FO LSHS Steel TOTAL FO LSHS TOTAL Other FO LSHS TOTAL General Trade FO LSHS TOTAL TOTAL FO LSHS TOTAL PRODUCT MAY 2011 11.7 35.7 47.4 36.5 83.4 119.8 13.9 0.0 13.9 24.4 6.2 30.7 93.9 2.9 96.8 332.8 6.8 339.6 513.2 135.0 648.3 2010 29.4 58.4 87.7 38.0 68.6 106.6 30.9 17.5 48.4 17.3 4.4 21.7 153.4 4.1 157.6 416.3 10.8 427.0 685.3 163.7 849.0 Variation APRIL-MAY 2009-10 81.6 145.8 227.4 68.8 118.3 187.1 66.8 36.5 103.2 40.8 8.7 49.5 298.1 8.1 306.2 819.6 23.4 843.0 1375.6 340.8 1716.4 Variation % Share +/CY/CUM -45.7 -31.5 -77.1 22.6 45.9 68.5 16.8% -29.7 -36.5 -66.2 -1.8 2.0 0.2 -47.3 -1.9 -49.2 16.9% -73.0 -0.5 -73.5 50.7% -174.8 -22.4 -197.3 100.0% 3.3% 2.4% 9.9% +/2011-12 -17.7 35.9 -22.7 -40.3 -1.5 14.8 13.2 -17.0 -17.5 -34.5 7.2 1.8 9.0 -59.6 -1.2 -60.8 -83.5 -4.0 -87.4 -172.1 -28.7 -200.8 114.3 150.2 91.4 164.3 255.6 37.1 0.0 37.1 39.0 10.7 49.7 250.8 6.2 257.0 746.6 22.9 769.5 1200.7 318.4 1519.2

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Category-wise Naphtha Upliftments


QTY IN TMT

CATEGORY

MAY 2011 42 81 719 2 1 845 2010 53 52 705 3 1 815 Variation -11 28 14 -1 0 30 % SHARE 4.9% 9.6% 85.1% 0.2% 0.1% 100.0%

APRIL-MAY 2011-12 2010-11 Variation %SHARE 123 150 1455 5 2 1736 114 109 1334 6 4 1567 9 42 121 -1 -2 169 7.1% 8.7% 83.8% 0.3% 0.1% 100.0%

POWER FERTILISER PETROCHEM STEEL OTHER GRAND TOTAL

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Crude Oil Production


Crude Oil Production (Figs in TMT) during the month of May, 2011

Production During the Name of the Undertaking / Unit Month under review* May 2011 Production of Crude Oil 1. ONGC On shore Gujarat Andhra Pradesh Tamil Nadu Assam Mumbai Offshore Oil Condensates 2.Oil IndiaLtd(OIL) Assam Arunachal Pradesh 3.DGH (Private/JVC) Onshore Arunachal Pradesh Assam Gujarat Rajasthan Offshore GRANDTOTAL (1+2+3) Onshore Offshore 1989.0 6J4.0 484.0 27.0 21.0 102.0 1355.0 1208.0 147.0 323.8 321.3 2.5 916.5 560.2 7.4 0.2 11.8 540.9 356.3 3229.3 1518.0 1711.3 Preceding Corresponding month of month last current year year May 2010 2024.0 62J.0 494.0 26.0 19.0 84.0 1401.0 1235.0 166.0 229.7 227.6 2.1 691.2 246.7 8.5 1.8 13.8 222.7 444.5 2944.9 1099.4 1845.5 April 2011 1968.0 622.0 473.0 27.0 20.0 102.0 1346.0 1186.0 160.0 316.7 314.3 2.3 901.1 543.0 7.5 0.1 11.5 523.8 358.1 3185.8 1481.7 1704.1

Cumulative Production Actual Prodn. Actual Prodn. During Corresponding current year period last year Apr-Mar 2011-12 3859.0 1169.0 902 0 IK t) 34.0 185.0 2690.0 2379.0 ' 311.0 621.7 617.8 3.9 1778.6 10783 15.0 0.0 22.9 1040.4 700.3 6259.3 2869.0 3390.3 Apr-May 2010-11 4054.0 1244.0 977.0 52.0 37.0 178.0 2810.0 2476.0 334.0 528.7 524.6 4.1 1231.8 398.9 16.7 3.2 27.4 351.6 832.9 5814.5 2171.7 3642.9

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Natural Gas Production


Natural Gas Production (Figs in TMT) during the month of May, 2011 Cumulative Production

Production During the Name of the Undertaking / Unit Month under review* May 2011 Production of Natural Gas 1. ONGC ONSHORE Gujarat Rajasthan Andhra Pradesh Tamil Nadu Assam Tripura Offshore Mumbai High Offshore 2. OIL Assam Arunachal Pradesh Rajasthan 3. DGH PRIVATE / JVC ONSHORE Arunachal Pradesh Assam Gujarat Rajasthan West Bengal $ (CBM) Madhya Pradesh Jharkhand OFFSHORE GRAND TOTAL (1+2+3) ONSHORE OFFSHORE 1895.5 471J 157.0 1.5 111.5 104.3 42.4 54.6 1424.2 1*24.2 216.3 194.9 11 20.0 2031.9 60.6 2.0 1.5 21.1 29.5 6.0 0.1 0.3 197U 4143.694 748.2 3395.5 1922.4 464.3 161.0 1.7 120.1 93.5 38.2 49.7 1458.2 1458.2 188.8 169,1 1.5 18.2 2474.1 59.5 2.7 5.3 35.0 13.7 2.7 0.0 0.0 2414.6 4585.4 712.6 3872.8 1870.3 441.6 147.9 1.0 105.5 93.7 v 41.1 52.3 1428.7 1428.7 215.4 199.1 1.3 14.9 2010.6 53.6 1.9 1.4 17.9 26.1 5.8 0.1 0.3 1957.0 4096.3 710.6 3385.7

Preceding Actual Prodn. Corresponding Actual Prodn. month of Corresponding month last During current period last year current year year year May April Apr-Mar Apr-Mar 2010 2011 2011-12 2010-11

3765.8 912.9 304.9 2.6 217.0 198.1 83.5 106.9 2852.9 2852.9 431.7 394.0 T.I 34.9 4042.5 114.2 4.0 3.0 39.0 55.6 11.9 0.2 0.6 3928.3 8240.006 1458.8 6781.2

3816.5 919.1 315.2 3.0 238.1 188.5 76.8 97.5 2897.4 2897.4 367.7 328.5 i0 J6.2 4918.2 112.9 5.2 10.6 69.2 22.1 5.8 0.0 0.0 4805.3 9102.5 1399.7 7702.7

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Refinery Production (Crude Throughput)


Figs. in TMTs

Refinery Production (Crude Throughput) during the month of May 2011 Name of the Production During the Month under review* May 2011 10188.5 80.3 552.3 1271.4 735.7 749.7 " 59.7 1194.4 179.7 4823.139 1151.2 600.1 1751.3 668.9 655.6 1324.5 837.6 14.7 852.3 240.000 1190.5 6.8 4189.8 2946.0 1243.8 14378.250 Cumulative Production

PSU /Private CO Undertaking / Unit Refinery Production (In terms of crude) Public Sector 1. IOC, Guwahati 2. IOC, Barauni 3. IOC, Koyali 4. IOC, Haldia 5. IOC, Mathura 6. IOC, Digboi 7. IOC, Panipat 8.IOC Bongaigaon Total IOC 8. BPCL, Mumbai 9. BPCL, Kochi Total BPCL 10. HPCL, Mumbai 11. HPCL, Visakh Total HPCL 12. CPCL, Manali 13. CPCL, Narimanam Total CPCL 14. NRL, Numaligarh 15. MRPL, Mangalore 16. ONGC, Tatipaka Private Sector $ 1. RPL, Jamnagar 2.Essar Oil (EOL), Vadinar TOTAL

Preceding Actual Prodn. Corresponding Actual Prodn. month of Corresponding month last During current period last year current year year year May April Apr-Mar Apr-Mar 2010 2011 2011-12 2010-11 9369.9 100.8 526.8 986.5 601.9 785.0 59.3 1205.7 207.2 4473.2 1155.8 797.6 1953.4 415.2 725.4 1140.6 785.5 43.1 828.6 40.7 928.3 5.1 4383.3 3125.0 1258.3 13753.2 9947.5 97.7 524.9 1225.1 704.5 744.7 15.8 1292.7 170.6 4776.0 1088.7 653.7 1742.4 531.6 722.7 1254J 900.1 59.4 959.5 212.5 995.4 7.4 4058.3 2861.0 1197.3 14005.7 20135.9 178.1 1077.2 2496.6 1440.2 IIW 1 75.5 2487.1 350.2 9599.2 2239.9 1253.7 3493.6 1200.5 1378.3 2578.8 1737.7 74.0 1811.8 452.5 2185.9 14.1 8248.0 5807.0 2441.0 28384.0 18377.5 198.9 1041.1 2043.6 1137.1 H50.7 113.6 2441.3 374.4 8900.6 2181.2 1511.1 3692.4 914.1 1505.1 2419.3 1315.0 80.0 1395.0 40.7 1919.3 10.3 8512.0 6054.0 2458.0 26889.4

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Import / Export Crude & Petroleum Products


IMPORT/EXPORT IMPORT TOTAL CRUDE OIL PRODUCTS LPG MS/ PETROL NAPHTHA/ NGL SKO/ KEROSENE HSD/ DIESEL LOBS/ LUBE OIL FUEL OIL/LSHS BITUMEN OTHERS TOTAL PRODUCT IMPORT TOTAL IMPORT EXPORT LPG MS/ PETROL NAPHTHA/ NGL ATF HSD/ DIESEL SKO/ KEROSENE LDO LOBS/ LUBE OIL FUEL OIL/LSHS BITUMEN OTHERS TOTAL PRODUCT EXPORT NET IMPORT 0 981 859 343 1559 0 7 0 618 0 236 4603 10030 0 1043 842 547 1781 0 8 0 549 0 386 5156 10755 0 1205 634 272 1525 0 9 5 335 0 470 4455 12340 0 3589 3330 1379 5153 0 21 2 1666 0 792 15932 31111 0 3930 3481 2405 6203 0 30 4 1561 0 1151 18765 36163 0 4911 1987 1216 4833 0 32 19 987 0 1306 15291 41652 431 24 118 123 65 108 56 7 267 1199 14633 405 45 152 100 428 108 72 7 266 1583 15911 303 20 33 96 461 0 18 0 26 957 16795 1649 107 556 531 271 367 139 17 690 4327 47043 1569 217 709 479 1944 367 199 17 689 6190 54928 1079 104 104 253 2248 0 64 0 134 3986 56943 13434 14328 15838 42716 48738 52957 April'2011-Mar'2012 ('000MT) April'2011-Mar'2012('Rs. Crore) Feb 11 (P)* Mar 11(P)* April 11(P)* FEB'11 (P)* MAR 11 (P)* April 11 (P)*

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Position of Petroleum Tankers


Figs. in MT

PORT VADINAR

VESSEL TAJIMORE NIL

SPLR/BYR

ARRIVED 24JUN11 27JUN11 24JUN11

CARGO CRUDE HSD FO

APROX. QTY 260000 40000LDG

COMMENT ETC 01/07 ETC 30/06

VAD (ESSAR) EAGLE MEERUT SWARNA GODAVARI NIL NIL JAMNAGAR URAL UNIVERSAL BRAVE MEGACORE PHILIPINA HESS JAG PRERNA ARAL SEA MERKUR O NS ASIA E ELEPHANT SWARNA KAVERI CONSTATINOS NIL NIL NIL MUNDRA MUNDRA HMEL JAG AANCHAL LA ESPERANZA JAG PARWAR LAPTEV SEA DALIAN GLORY CHALLENGE PHOENIX BP KANDLA CHALENGE PREMIER GEM OF DAHEZ NIL NIL DAHEJ HAZIRA MUMBAI ENERGY PATRIOT FORMOSA SIXTEEN PRIME EXPRESS NIL NEW YORK STAR SIDRA RAS LAFAN SWARNA KRISHNA CHALLENGE PEGASUS BP PRATIBHA KOYNA SWARNA SINDHU NIL VITOL VITOL VITOL CARGILL TOTAL BP

68000LDG ANCHORAGE

30JUN11 28JUN11 28JUN11 29JUN11 22JUN11 24JUN11 PETROBRAS 28JUN11 30JUN11 30JUN11 30JUN11

CRUDE CRUDE MOGAS HSD CBFS MOGAS/ALKYL ATE HSD CRUDE MOGAS ATF

265000 ETC PM01/07 273000 ETC PM01/07 60000LDG ETC PM30/06 38000LDG 60000 LDG 40000 LDG ETC 30/06 ETC 02/07 ETC 01/07

100000LDG ANCHORAGE 260000 ANCHORAGE 55000LDG ANCHORAGE 60000LDG ANCHORAGE

28JUN11 23JUN11 28JUN11 29JUN11 29JUN11 29JUN11 28JUN11 28JUN11

HSD CRUDE MOGAS FO CRUDE SKO NAPHTHA NAPHTHA

59996 268744LDG

ETC 01/07 ETC 02/07

5751 ANCHORAGE 35000 ANCHORAGE 282125 ANCHORAGE 10242 ANCHORAGE 33000 LDG ANCHORAGE 3000 LDG ANCHORAGE

19JUN11 27JUN11 28JUN11 26JUN11 30JUN11 28JUN11 29JUN11 21JUN11 29JUN11

NAPHTHA NAPHTHA NAPHTHA NAPHTHA FO CRUDE MOGAS IN BALLAST IN BALLAST

36750 LDG

ETC 01/07

36750 LDG ANCHORAGE 35000 LDG ANCHORAGE 45000LDG 30000 LDG 45000 10000 ETC 01/07 ET 02/07 ETC 01/07 ETC 30/07

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NIL JNPT ORCHID NIL NIL GOA KARWAR NIL NIL NIL 28JUN11 FO 5000 ANCHORAGE NIL MANGALORE JAG PRACHI NIL NIL NIL KOCHI SWARNA BRAHAPUTRA UMLMA OCEAN PLUTO MITSUI TAVRICHESKY BRIDGE PETROCHINA JAG PARI TUTICORIN NIL NIL CHENNAI OCEAN GURNARD VITOL OMERA QUEEN HARSHA PREM NIL NIL NIL NIL NIL KAKINADA VIZAG SUVARNA SWARAJYA BERTHEA SWARNA KALASH PRATIBHA CHANDRA BHAGA DESH SHANTI PRATIBHA WARNA PRATIBHA INDRAYANI TRAFIGURA NIL NIL NIL PARADEEP SAMPURNA SWARAJYA NIL NIL NIL HALDIA TWINKLE PREM MALA NIL NIL NIL BJJ NIL NIL 21JUN11 27JUN11 FO NAPHTHA 10000 LDG ANCHORAGE 16500LDG ANCHORAGE 28JUN11 HSD/MOGAS 11000/2500 ANCHORAGE 28JUN11 29JUN11 24JUN11 28JUN11 28JUN11 28JUN11 29JUN11 HSD MOGAS MOGAS LSHS/FO CRUDE HSD MOGAS 8000 32000 ETC 01/07 ETC 02/07 2300 ANCHORAGE 9000/8000LDGETC 30/06 136400 ETC 30/06 29JUN11HSD 21000 ETC PM30/07

20JUN11 22JUN11 24JUN11 26JUN11 28JUN11

CRUDE CRUDE HSD NAPHTHA NAPHTHA

53000 ETC 01/07 75000 ANCHORAGE 42100 ETC 01/07 27000LDG ETC 30/06 12000 ETC 02/07

26JUN11 27JUN11 29JUN11

MOGAS CRUDE HSD

10800 ETC 01/07 90000 ANCHORAGE 15000 ANCHORAGE

18000 ANCHORAGE 13000 ANCHORAGE

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\ Position of LPG Tankers at Major Indian Ports


Figs. in MT

PORT KANDLA DAHEJ SIKKA MUMBAI

VESSEL NIL NIL NIL NIL ANTWERPEN

ARRIVAL QTY(mts)

LOAD PORT

SUPPLIER

RCVRS

REMARKS

01/07

8000 RASTANURA

SHV

AEGIS

EXPECTED

MANGALORE M. BHAVATREYA GENT M. DEVATREYA KOCHI NIL NIL NIL NIL TUTICORIN FLANDRES LOYALITY

28/06 28/06 01/07

20000 RUWAIS 8000 RUWAIS 19000 RASTANURA

ADNOC ADNOC ARAMCO

IOCL IOCL IOCL

ANCHORAGE ANCHORAGE EXPECTED

21/06

6000 RASTANURA

SHV

BPCL

ANCHORA GE

NIL
KAKINADA VIZAG NIL NIL M. VISHWAMITRA M. BHARDVAJ NIL NIL NIL DEVON GRACE RIVER CRYSTEL MARINE M. VISHWAMITRA 10/06 26/06 19000 RASTANURA 43584 RASTANURA ARMACO ARMACO IOCL HPCL ETC 30/06 ACHORAGE

HALDIA

09/06 17/06 23/06 01/07

14000 RASTANURA 13000 TJ SULONG 12079 RUWAIS 15000 RASTANURA

ARAMCO PETRONAS ADNOC ARAMCO

IOPL IOPL IOPL IOPL

ANCHORAGE ANCHORAGE ANCHORAGE EXPECTED

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Daily Price Of Petroleum Products


Price in INR

Updated on 25.06.2011 No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Product LIGHT DIESEL OIL PSU (Basic) SUPERIOR KEROSENE OIL (IND) NAPHTHA FOR GENERAL USE FURNACE OIL PSU FURNACE OIL 380 BITUMEN BULK 80/100 BITUMEN BULK 60/70 BITUMEN BULK 30/40 BITUMEN PACKED 80/100 BITUMEN PACKED 60/70 BITUMEN PACKED 30/40 SBP 55/115 HEXANE MTO (LAWS) BENZENE TOLUENE LSHS SCN (REF.NAP) LABFS HSD FDZ 1.4.10 MS (FDZ) 16.01.11 Selling Unit KL KL MT MT MT MT MT MT MT MT MT KL KL KL MT MT MT MT MT KL KL Mumbai 42475.20 41944.00 48892.78 34084.83 33574.83 30660.00 31460.00 33400.00 31820.00 34460.00 36400.00 50000.00 47300.00 49900.00 59250.00 54750.00 35582.94 49142.78 40220.00 31165.12 52509.10

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Retail Selling Prices of MS HSD s


MS/HSD prices applicable w.e.f June 25,2011 Figures in (Rs./Litre)

Location Delhi Kolkata Mumbai Chennai

HSD 41.12 43.57 45.84 43.80

MS 63.37 67.71 68.33 67.22

LPG 14.2 kg. Cyl. (W.E.F.26/06/2010) 395.35 417.10 398.45 404.40

LPG 19.0 kg. Cyl. (W.E.F.01/04/2011) 1270.68 1321.05 1324.55 1432.61

Auto Gas

38.34 40.96 41.34 41.37

Location Agartala Ahmedabad Aizwal Ambala Bangaluru Bhopal Bhubhaneswar Chandigarh Dehradun Gangtok Guwahati Hyderabad Imphal Itanagar Jaipur Jammu Jullunder Kohima Lucknow Panjim Patna Pondicherry Port Blair Raipur Ranchi Shillong Shimla Srinagar Trivandrum

HSD 40.92 42.21 40.42 39.77 46.06 45.38 43.88 41.69 44.20 41.87 38.69 44.93 40.94 40.66 43.44 42.34 40.81 40.74 43.08 43.95 43.28 42.47 39.51 45.48 43.21 40.82 41.99 43.56 45.14

MS 62.32 61.16 63.57 71.10 68.20 63.29 64.17 65.82 62.60 66.78 70.70 62.30 62.46 67.46 66.45 70.45 63.00 67.42 64.32 65.79 61.51 56.26 65.12 63.48 62.78 66.25 68.12 67.13

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Base oil/Bitumen Prices

Bitumen Price (International) Country Bahrain Iran Singapore S. Korea Thailand Grade 60-70 85/100 60-70 85/100 60-70 85/100 60-70 85/100 60-70 85/100 Bulk 575-585 540-560 578-588 575-585 585-592 Drum * 627-635 675-680 *

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MCX Bhav copy


BHAV COPY MULTI COMMODITY EXCHANGE (MCX) Date: 29.06.2011
0

Commodity
CRUDEOIL CRUDEOIL CRUDEOIL CRUDEOIL CRUDEOIL CRUDEOIL NATURALGAS

Contract Month 19DEC2011 17NOV2011 19OCT2011 19SEP2011 19AUG2011 19JUL2011 Contract Month

Open (Rs) 4525.00 4478.00 4419.00 4370.00 4321.00 4272.00 Open (Rs) 199.40 196.10 195.40

Todays High 4531.00 4479.00 4429.00 4385.00

Todays Low 4454.00 4423.00 4365.00 4300.00

Close 4485.00 4444.00 4389.00 4338.00

PCP (Rs) 4534.00 4473.00 4428.00 4374.00

Volume (MT)/bbl 15.800 12.400 19.200 54.200 1393.500

Value (Rs.Lakhs) 712.32 552.60 844.45 2358.78 59883.56 909217.41 Value (Rs.Lakhs) 1132.90 6999.53 118288.83

Open interest 000 61 81 89 411 2566 23405 Open interest 000 314 1083 6285

4334.00 4247.00 4291.00 4328.00

4283.00 4196.00 4241.00 4279.00 21418.900 Todays High 202.60 200.00 198.00 Todays Low 195.10 192.00 189.60 Close 200.70 198.00 196.00 PCP (Rs) 200.60 197.50 Volume (MT)/bbl 566.250 3561.250

NATURALGAS 27SEP2011 NATURALGAS 26AUG2011 NATURALGAS 26JUL2011

195.40 60980.000

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Tenders

Tenders for the Month June 2011

Tender Authority

Nature Of Work

Tender Number

Due Date

Ministry of Defence, New Delhi, Delhi Supply of Imported Lubricants/Special MD-New Delhi01-Jul-2011 Lubricants and Hygiene & Chemical 01/06/2011 Indian Oil Corporation Ltd., Chennai, Design, Detailed Engineering, Tamil Nadu Manufacture, Testing at manufacturer's works, inspection by third party, supply, erection, testing and TNSO/LPG/ENG/TRYB 04-Jul-2011 commissioning to detailed P/PT-05/11-12 specifications for chain conveyor system and online equipments for proposed 2nd carousal installation. Indian Oil Corporation Ltd., Chennai, Augmentation of Existing Fire TNSO/LPG/ENG/MAN 07-Jul-2011 Tamil Nadu Protection System along with MV Spray BP/PT-06/11-12 System. Oil & Natural Gas Corporation Ltd., Revamping of ESD-FSD Pull stations at Revamping of ESDMumbai, Maharashtra different off shore platforms. FSD Pull stations at 08-Jul-2011 different off shore platforms. North Central Railway, Allahabad, Utta Supply of LPG. 08-Jul-2011 80101071-B Pradesh Indian Oil Corporation Ltd., Guwahati, Transportation of Bulk LPG. LPG/BULK/Small/11/ 08-Jul-2011 Assam 01-Bishalgarh Indian Oil Corporation Ltd., Guwahati, Transportation of Bulk LPG. LPG/BULK/Small/11/ 08-Jul-2011 Assam 05-Sekmai Indian Oil Corporation Ltd., Guwahati, Transportation of Bulk LPG. LPG/BULK/Small/11/ 08-Jul-2011 Assam 02-Silchar Indian Oil Corporation Ltd., New Delhi, Supply of Soap Solution for Lubrication DSO/LPG/OPS/PT/SO 08-Jul-2011 Delhi of Chain Conveyors. AP/11-12/02 Indian Oil Corporation Ltd., Guwahati, Transportation of Bulk LPG. LPG/BULK/Small/11/ 08-Jul-2011 Assam 004 Mualkhang Indian Oil Corporation Ltd., Guwahati, Transportation of Bulk LPG. LPG/BULK/Small/11/ 08-Jul-2011 Assam 03-Mohanpur Indian Oil Corporation Ltd., Digboi, Tender for Cylinder Handling and IBP/NGHY/4/28-77 12-Jul-2011 Assam Haulage Contract at LPG Bottling Plant. Ministry of Defence, Bengdubi, West Supply of LPG Appliances. MD-Bengdubi-01/06 12-Jul-2011 Bengal Indian Oil Corporation Ltd., Guwahati, Carrying Out Job of Statutory Testing ST&P/NE-IOC/2011 13-Jul-2011 Assam and Painting of LPG Cylinders. Hindustan Petroleum Corporation Ltd., Tenders are invited for Bottling Mumbai, Maharashtra Assistance of approx. quantity of 1500 WZ/LPG/PVT.BOT/VR 14-Jul-2011 MT per month from private bottlers for S/189 LPG Cylinders. Bharat Petroleum Corporation Ltd., Sale of Scrap of LPG Items- Brass BPCL-Mumbai14-Jul-2011 Mumbai, Maharashtra Valves through E-Auction. 10/06/2011/1/I Ministry of Defence, Chandimandir, Supply of LPG Appliances Type A and MD-Chandimandir15-Jul-2011 Haryana B. 25/06 Hindustan Petroleum Corporation Ltd., Supply of 2.50 lakhs 19.0kg. LPG 11000039-HD-12001 15-Jul-2011 Mumbai, Maharashtra cyliners fitted with S.C. Valves. Supply of LPG Appliances. MD-Guwahati-01/06 27-Jul-2011 Ministry of Defence, Guwahati, Assam

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Events
Events Details API Exploration & Production Standards Conference on Oilfield Equipment and Materials, San Francisco, Calif., , United States IOGCC Interstate Oil and Gas Compact Commission, Bismarck, N.D. , United States API Offshore Safe Lifting Conference & Expo, Houston, Texas, , United States Contact Phone: 202 682 8000 Fax: 202 682 8222 Phone: 405 525 3556 Fax: 405 525 3592 Email: iogcc@iogcc.state.ok.us Phone: 202 682 8000 Fax: 202 682 8222 Dated June 27, 2011

June 27, 2011

July 12, 2011

Phone: 312 540 3000, ext. 6649 Annual Chem/Petrochem & Refinery Shutdowns Fax: 312 552 2155 and Turnarounds Conference, San Antonio, Texas , Email: kellyw@marcusevansch.com United States Phone: 918 497 5500 International Congress of the Brazilian Geophysical Fax: 918 497 5557 Society, Rio de Janiero , Brazil Email: eventos@sbgf.org.br Phone: 972 993 9090 NAPE Conference & Expo, Houston, Texas , United Fax: 972 993 9191 States Email: info@nape.com Phone: 307 234 5333 Petroleum Association of Wyoming Annual Meeting Fax: 307 266 2189 & Trade Show, Casper, Wyo. , United States Email: suz@pawyo.org IADC Well Control Conference of the Americas & Exhibition, San Antonio, Texas , United States ACS International Symposium on Hydrotreating/Hydrocracking Technology and National Meeting, Denver, Colo. , United States 3P Arctic Polar Petroleum Potential Conference & Exhibition, Halifax , Canada DEA(e) Technical Oil & Gas Conference on HPHT, Copenhagen , Denmark SPE Offshore Europe Oil and Gas Conference and Exhibition, Aberdeen , Scotland GPA Rocky Mountain Annual Meeting, Denver, Colo. , United States Oil & Gas Indonesia Conference, Jakarta, Indonesia 20th World Congress, Doha, Qatar Phone: 713 292 1945 Fax: 713 292 1946 Email: info@iadc.org Phone: 202 872 4600 Fax: 614 447 3713 Phone: +44 (0)20 7840 2139 Fax: +44 (0)20 7840 2119 Email: 3p@oesallworld.com Phone: +44 (0) 1483 598000 Email: dawn.dukes@otmnet.com Phone: +44 (0)20 8439 8860 Fax: +44 (0)20 8439 8897 Phone: 918 493 3872 Fax: 918 493 3875 Email: pmirkin@gpaglobal.org Phone: +65 6233 6777 Fax: + 65 6233 6768 Email: gerald@iemallworld.com Fax: +974 494 6526 Email: info@20wpc.com

August 02, 2011 August 15, 2011 August 17, 2011 August 23, 2011 August 25, 2011

August 28, 2011 August 30, 2011 September 01, 2011 September 06, 2011 September 08, 2011 September 21, 2011 December 04, 2011

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Director Abhijit Bhattacharya b_abhijit@vsnl.com director@petroleumbazaar.com Content / subscription Dnyaneshwar Pawar Petroleum Bazaar Activities: petroleum.bazaar@gmail.com rajeshwar@petroleumbazaar.com Setting up the Franchisee Network Import / Export of Petroleum Product Marketing of Petroleum Product Circulation / Advertisement Anupama Pawar Publications: pbazaar.advt@gmail.com pawar@petroleumbazaar.com PetroMag e-zine Daily Petroleum Bazaar Monthly Magazine Print Media Petroleum Next Diesel, Alternate Fuels Registered Office: DataMag Data base on oil industry Monthly Petroleum Bazaar 113, Sona Shopping Center, Cinestar Compound, Trikamdas Road, Kandivali (West), Mumbai-400067 Phone-0091-022-28077450, Tele Fax-022-28017099 E-maildirector@petroleumbazaar.com Our Branches Rajkot rajkot@petrleumbazaar.com Iran Mr.Alireza Yousefabad, Tehran, Iran iran@petroleumbazaar.com Activities: Jatropha Plantation Bio-diesel Production from Jatropha, Palm Oil Bio-diesel Marketing Customer tie-ups, trial runs, Petroleum Next An alternate Fuels-weekly Magazine Organizing Seminar / Event on Bio-Diesel Consultancy: Jatropha Plantation / Bio-Diesel Marketing Conservation / Energy Audits / Total Lubes Management Setting up / Operation / Improving Sales of Petrol Pump Setting up CNG Stations Training / Events / Seminar

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