Cairn has recently approached the government seeking permission to a swap arrangement with Indian Oil Co whose refineries are in a position to use low sulphur crude
After acquiring the Rajasthan block from Shell in 2002, Cairn made the first oil discovery in 2004, when ONGC came in as a partner with 30% stake. Now, Cairn produces about 180,000 barrels a day (bpd) and has plans to reach 200/215,000 bpd after receiving some clearances from the government which are awaited.
Once regulatory approvals are received and additional investments made, 35% of India's crude requirement will be met from Cairn-ONGC fields. This will take the production—it is envisaged—to 300,000 bpd and save a lot in foreign exchange outgo!
It may be recalled that the petroleum ministry announced recently that they are already working on a revised and comprehensive policy on NELP (New Exploration Licensing Policy). This is awaited with great interest, and it is hoped that they would take the necessary precaution to use the rupee as the base pricing factor rather than the dollar. For the sake of drawing a parallel to international prices, they may use this, but they will fix the parity rate to avoid any dispute later.
Cairn has recently approached the government that their current product sharing contract (PSC), which is valid till 2020, be extended indefinitely, meaning that this should really be allowed to last as long as the economic life of the well. Rightly so! This freedom will enable Cairn, and for that matter all others in similar situation, to plan their investment and expansion policy more realistically. So far, Cairn has invested about $3.8 billion in their fields for development.
Earlier, Cairn had made a representation to the government that the areas they had surrendered in Barmer district be reinstated to them, instead of inviting fresh bids to do so, which is the normal practice. Since no formal advice has been received from the government on this score; a favourable decision would facilitate Cairn's future plans in the area.
In support of their request, Cairn has stated that the economic life of the block is entirely dependent upon the volume produced and the price obtained.
When the revised NELP is announced, it is expected to cover all the contracts—both the old and the new—so that everyone is treated equally.
Due to the shortage and the resultant need to import crude, Indian government does not permit export of oil and gas. In case of Cairn, the oil produced from Barmer, Rajasthan has low sulphur and high wax content, which cannot be easily used by most Indian refineries, because of inherent difficulties in the refinery configuration. As a result, Cairn has recently approached the government that they should be permitted to come to a swap arrangement with Indian Oil Company (IOC) whose refineries are in a position to use low sulphur crude. Such a move, when approved, will benefit Cairn which sells the Rajasthan oil at a discount because of sulphur and wax contents.
As long as the oil producer does not violate the law of the land, they should not be subject to such approvals from government for selling their products to another domestic company, which, in this case, happens to be a government entity. This move will also benefit IOC in the long run. It appears that an earlier request to have this processed in Jamnagar refinery (owned by Reliance) was not approved. Such obstacles are handicaps in national development and need to be avoided.
A brief study of their website indicates satisfactory progress made in their operations in Rajasthan, Andhra Pradesh and Gujarat. Cambay basin (in Gujarat) is the smallest unit with a production of 5,204 barrels of crude oil and 18 mmscf (million standard cubic feet) of gas per day. As against this, Rawa (off Andhra Pradesh) has a daily crude output of 27,165 barrels and gas at 55 mmscf per day. Rajasthan's Barmer leads in oil production at 180,000 barrels per day.
Once some of these pending matters are cleared, it would appear that Cairn has its own plans for making future financial commitments and to undertake new projects.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
A noted consumer product researcher, Dr Arvind Shenoy, made a shocking discovery while shopping. He found out that two packets of Saffola Active kept together had different levels of oryzanol, which may be in violation of FSSAI regulations
Dr Arvind Shenoy, a noted consumer product researcher, while shopping, shockingly found two distinct labels for the same packet of Saffola Active oil. One packet of Saffola Active contained 40mg of oryzanol per 10gms of oil while an identical packet showed 85mg of oryzanol per 10 gms of oil. Mr Shenoy, in his complaint, said, “The value of 40mg of oryzanol per 10gms of blended oil containing 80% of rice bran oil (RBO), is in clear violation of Food Safety and Standards Authority of India (FSSAI) regulations.”
It was also found that Saffola Active packet (containing 40mg of oryzanol per 10gms of oil) shows the same quantity of oryzanol as the one as Saffola Gold, and both are differently priced. Saffola Gold is priced higher than Saffola Active.
Most shockingly, the prices of the two packets of Saffola Active were found to be different as well. The one containing less amount of oryzanol (i.e. 40mg per 10gms of oil) was found to be costlier (Rs112.50 per liter; than the one containing higher amount of oryzanol (i.e 85gms per 10gms of oil) and cost Rs99 only !
Unless the consumer is well informed of Saffola’s nutrients or knows the differences between different packaged versions and different batches manufactured at different dates, there is no way of finding out the differences or for that matter the its pricing, says Dr Shenoy.
However, Marico Ltd, the producer of Saffola brand oil, says the difference in oryzanol quantity is because both the packets are produced in different batches. “The two Saffola Active packets you have received are from two different batches of production. We have updated our declaration on the packs of Saffola Active. The updated declaration of 85mg of oryzanol per 10gms is with effect from the last week of July 2013,” the company said.
According to Dr Shenoy, the explanation given by the company representative is not tenable with respect to FSSAI Rules 2011 and is a punishable offence. "Irrespective of whether the batches are older or not; the oryzanol content, as per FSSAI Rules 2011, has to be minimum 80mg per 10ml of oil, since the rice bran oil content is 80% in both the variants of blended oils," he said.
Oryzanol is a rice bran extract known to have health benefits. According to Marico’s website, “The heart healthy nutrients in rice bran oil such as oryzanol are known for their cholesterol lowering ability.”
Marico further said Saffola Gold is a different variant under the Saffola oils portfolio and has a different composition. “Like in Saffola Active, even in Saffola Gold, we have updated our oryzanol declaration with effect from last week of June 2013. From what we gather from the picture attached, you seem to have received a pack from the earlier production. The declarations on our packets are correct as of the date on the production of the pack,” the company said.
Talking about difference in pricing, Marico said, the company prints maximum retail price (MRP), however, there are retailers who could be discounting it.
The following snapshots taken by Mr Shenoy shows the differences between two identical packets of Saffola Active and Saffola Gold.
Saffola Active (40mg)
Saffola Active (85mg)
Different prices of Saffola
Here is transcript of the complaint filed by Dr Shenoy:
Office of the Commissioner,
Food and Drug Administration, M.S.,
Survey No. 341, Bandra-Kurla Complex,
2nd floor, Bandra (East),
I wish to bring to your notice that the pouches of one litre packs of Saffola Gold (blended oil containing RBO 80%) and Saffola Active (blended oil containing RBO 80%). On the label under nutrition information printed on the pouch there is mentioned that oryzanol content is 40mg per 10 gms of blended oil in case of Saffola Gold.
Surprisingly, the two pouches of Saffola Active of one litre each from the same mall at the same time displayed on their nutrition information labels two different values of oryzanol content , namely 40 mg per 10gms and 85mg per 10 gms of blended oil!!! Surprising that the same brand should have 2 pouches with two different values for oryzanol content, that too available at the same time!!
The value of 40 mg of oryzanol per 10 gms of blended containing 80% RBO is in clear violation of FSSAI regulations. The ordinary consumer doesn't bother to read such label information as a result of which companies take consumers for a ride. In my opinion, as I understand, the manufacturers of Saffola brand have been selling Saffola Gold containing 40mgs per 10 gms of blended oil containing 80% RBO for almost about a year, causing great economic loss to millions of consumers.
In the light of this, why strict action should not be taken against the manufacturers of Saffola M/s Marico Ltd?
I have enclosed the images of the pouches and purchase receipts for the same.
I wish the outcome of the action taken by you on my complaint will be made known to me.
Dr Arvind R Shenoy
Consumer Product Researcher
Marketmen expected a breakout on Tuesday since Nifty opened above the crucial level of 5,950 but the bulls could not hold that line and the index ended with a minor gain. If Nifty closes below 5,905, we will witness a decline towards 5,700 again
Unlike the past two trading sessions, on Tuesday the market opened with high optimism on the back of the surprise measures taken by the Reserve Bank of India (RBI) last evening to improve liquidity conditions in the banking system. The benchmarks hit their highest levels since 23 September 2013. But soon the positive move started losing its steam. By the end of the day, the indices gave up most of their intra day gains and hit a low and closed almost near that level.
The Sensex opened at 20,094 and hit a high of 20,150. By the end of the session the index hit a low of 19,937 and closed at 19,984 (up 89 points or 0.44%). The Nifty opened at 5,975 and after hitting a high of 5,982, it moved down to the level of 5,913 and closed almost near it at 5,928 (up 69 points or 0.38%). The National Stock Exchange recorded a volume of 57.73 crore shares.
Among the other indices on the NSE, the top five gainers were Infra (1.80%); Realty (1.23%); FMCG (1.09%); Smallcap (1.03%) and Bank Nifty (0.59%). The top five losers were Media (1.58%); Metal (0.77%); PSU Bank (0.66%); MNC (0.36%) and IT (0.31%).
Of the 50 stocks on the Nifty, 23 ended in the green. The top five gainers were
Bharti Airtel (2.51%); LT (2.21%); I T C (2.09%); Jindal Steel (2.04%) and ICICI Bank (2.00%). While the losers were BPCL (3.23%); Hindalco (2.05%); State Bank of India (2.02%); IDFC (1.93%) and BHEL (1.44%).
While the uptrend is still strong, we suspect that the inability of bulls to follow up on today’s move was significant; it could lead to a decline or more sideways action.
One reason could be worries about a rate hike. Although the market welcomed Monday’s step of liquidity infusion by RBI and the analysts foresee the marginal standing facility rate by a further 0.25%, they also fear a repo rate hike by 0.25% to contain inflation expectations.
US indices closed in the negative on Monday. US President Barack Obama repeated that he won't negotiate with Republicans over the debt limit. “We're not going to negotiate under the threat of economic catastrophe,” Obama said during a visit to the Federal Emergency Management Agency in Washington. Republicans are insisting on changing the 2010 Affordable Care Act, while Obama refuses to engage in discussions about policy conditions tied to opening the government or raising the debt ceiling. Treasury Secretary Jacob J Lew has warned the U.S. may be unable to pay its bills after 17 October.
Except for NZSE 50 (down 0.37%) all the other Asian indices closed in the green. Jakarta Composite, top gainer, up 1.32%.
The HSBC China Services Purchasing Managers' Index fell to 52.4 in September from 52.8 in August, HSBC Holdings PLC said on Tuesday. A reading above 50 in the gauge of nationwide service-sector activity indicates on-month expansion and below that means contraction.
European indices were trading in the red while the US Future were trading in the green.
German exports rose in August amid signs the economic recovery is continuing in the euro area, the country's biggest trading partner. Exports, adjusted for working days and seasonal changes, increased 1% from July, when they decreased a revised 0.8%, the Federal Statistics Office in Wiesbaden said today.
UK factories saw domestic and export demands strengthen in the third quarter and expect to accelerate hiring in the next three months, according to the British Chamber of Commerce (BCC). Measures of manufacturers' export sales and orders rose to the highest since the fourth quarter of 2010, the BCC said in a report published in London today. An index of domestic sales in the quarter increased, while companies' employment expectations advanced to a record.
The Bank of France on Tuesday trimmed its growth forecast for the third quarter of this year after business sentiment indicators remained unchanged in September from August. French gross domestic product will rise 0.1% in the third quarter from the second, the Bank of France said, according to its monthly index of business activity. Last month, the central bank had forecast a 0.2% expansion in GDP.