Stocks
Fortnightly Market View: Traders’ Paradise
While day-to-day movements may be sharp, the Nifty will stagnate

 

In the...
Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital+Print Access

Subscribe

Moneylife Magazine Subscriber or MSSN member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
69 small oil, gas blocks to be auctioned under revenue-sharing
For the first time, the Indian government will soon begin the process for auction of 69 small and marginal oil and gas fields on a new revenue sharing model, where bidders will quote the revenue they will share with the government at both low and high ends of the price and production band.
 
An official source told IANS here that the change in model is designed to help keep the government share in cases of windfall from both steep rise in prices as well as quantum jump in production.
 
The new revenue sharing model will replace the controversial production sharing contracts (PSCs) - by which oil and gas blocks are awarded to those firms which show they will do maximum work on a block - that has governed the bidding under the earlier nine New Exploration Licensing Policy (NELP) rounds.
 
The PSC regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India's official auditor, who said it encouraged companies to keep inflating costs - "gold plating" - so as to postpone giving higher share of profits.
 
The source said of the 69 fields of state-run explorers of Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) which are to be auctioned, 27 are in Mumbai offshore while another 15 are in the Krishna Godavari (KG) basin. On offer are also 10 discoveries in the Assam Shelf.
 
However clubbing together of adjacent fields has brought down the number to be auctioned to 48, while the final number on offer may be still lower, the source added.
 
ONGC and Oil India surrendered 63 and six oil and gas fields, respectively, which they found uneconomical to develop in view of small reserve size and high economic cost.
 
Cumulatively the surrendered fields hold about 50.8 million tons of oil and 53.45 billion cubic meters of gas, the source added. The biggest discovery is D-18 in the Mumbai offshore that holds 14.78 million tons of oil reserves.
 
Earlier this month, the union cabinet approved the landmark change in India's hydrocarbons exploration regime.
 
Speaking to reporters after the cabinet meeting, Petroleum Minister Dharmendra Pradhan said that companies offering the maximum revenue share or percentage of oil and gas to the government, and committing to do more work, will win the field.
 
Stressing that with this move, producers will be spared day-to-day government interference, he said the government was unlocking 89 million tonnes of untapped hydrocarbon reserves worth Rs.70,000 crore.
 
Among the gas discoveries, the largest is ONGC's B-9 find in the offshore Kutch basin that has in-place reserves of 14.67 bcm.
 
The government approval of the marginal fields policy proposing a revenue sharing mechanism and market prices for output, would shift the key risks to developers, India Ratings and Research (Ind Ra) said in a report earlier this month.
 
Noting developers will need to consider an overall exploration, development and production cost along with volume and price estimates, as these would be the key variables for ensuring a reasonable internal rate of return on the projects," it said the older methodology "outlined in PSC meant lower risks for developers as it allowed them to first recover the costs incurred, followed by the sharing of profits with the government."

User

Dr. Reddy's signs multimillion dollar deal with Hatchtech
Pharma major Dr. Reddy's Laboratories on Monday announced the signing of a multi-million dollar commercialisation deal with Hatchtech, an Australian pharmaceutical company developing an anti-headlice Xeglyze lotion.
 
The exclusive rights for this product are applicable for the US, Canada, India, Russia and the CIS, Australia, New Zealand and Venezuela.
 
Hatchtech also announced that it will be filing its New Drug Application for Xeglyze with the US Food and Drug Administration (FDA).
 
If approved, the product will be marketed in the US by Promius Pharma, a wholly-owned specialty company of Dr. Reddy's.
 
As part of the agreement, Dr. Reddy's will pay Hatchtech an upfront amount of $10 million, up to $50 million based on pre commercialisation milestones and an undisclosed amount based on post commercialization milestones, linked to achievement of annual net sales targets, said a statement by Hyderabad-based firm.
 
Hatchtech last year announced positive results from its two pivotal Phase 3 clinical studies evaluating Xeglyze lotion as a potential treatment for head lice infestation.
 
The active drug substance was developed in collaboration with Dr. Reddy's Custom Pharmaceutical Services (CPS) business unit.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)