Companies & Sectors
Reliance makes headway in Myanmar exploration

Piped gas from Myanmar is far more realistic and practical than expecting the Iranian gas to travel through Pakistan to reach India

Although the question of upward revision of gas prices has been going on for more than a year, and is in line with the contractual obligation, and duly announced by the Oil Minister, it now appears that the revised price cannot be brought into effect from 1st April due to the ensuing elections, as per a ruling made by the Election Commission.


As law abiding citizens, we maintain status quo and await the new government to be formally announced, who will take the appropriate steps in this direction.


The exact price revision is still not certain and, of course, there is no guarantee that, upon the increase, the production and supply of gas will automatically increase to meet our national needs. Far from it. An upward revision would, according to the producers, make it economical and viable for them to explore and extract the gas from depths of the ocean to serve the country.


All the main producers, apart from expanding their exploration and expansion activities in the country, are also keenly investing outside so as to obtain the best results that their investments can buy. Even ONGC, which is a government owned enterprise, has clearly stated that the upward revision would make it worthwhile for them to continue their exploration; at a lower rate, it would be uneconomical to invest such huge sums.


Myanmar, originally and popularly known in the past as Burma, has been the home for oil production for long. Most of the gas it produces goes to China, whom we may recall, laid a pipeline to carry this gas. China is well entrenched in Myanmar, not only in the oil industry but in many other areas as well.


An auction launched by Myanmar in April 2013, according to the Energy Minister, initially received interest from some 68 firms, though, in the end, 30 firm bids were received, covering 30 offshore blocks; and ten blocks each were in shallow and deep waters, which have now been awarded. It would be some more time before the final 10 blocks would be awarded, and no time limit has been set for this purpose, presumably to see the progress that is being made by the awardees.


Myanmar government will receive from these successful bidders a signature bonus of $226.10 million, once the exploration of the blocks begins.


Among the conditions, the winners of the shallow water blocks need to take a local partner but those in the deep water blocks are waived of this ruling, in as much as high costs are involved besides technical competency needed in such work. In any case, bidders will have to enter into a production sharing agreement with the state-owned Myanmar Oil and Gas Enterprise (MOGE).


Reliance won the M17 and M 18 shallow water blocks in Moattama basin in water depths upto 3,000 ft and these two blocks together encompass an area of 27,600 sq km.


Oil India Ltd, Mercator Petroleum Ltd and Oilmax Energy Private Ltd have jointly been awarded three blocks; Italy's ENI Myanmar BV got two blocks while BG Asia Pacific Pte Ltd and Woodside Energy Pte Ltd jointly won four blocks.


International giants like Chevron, Shell and Total also were awarded blocks for exploration. All these successful awardees will have to invest, at least $3 billion in the exploration programme, apart from signing the production sharing contract. This investment will entitle them to a 30 year license to explore and produce oil and gas off the Myanmar shore. The other details of pricing etc. will be known only at a later date when full details are made public.


This is a giant step for India in its march for reviving our age-old relations with Myanmar. It is essential that greater and regular contacts are established with those in authority in that country and we must explore the avenues for persuading them to lay a gas pipeline to ensure supply into India in the eastern states, as a start.


If anything, immediate steps should be taken for the Commerce Minister and Ministry of Oil to lead a joint team to investigate the possibilities for such a pipe line. Piped gas from Myanmar is far more realistic and practical than expecting the Iranian gas to travel through Pakistan to reach India. IPI is a pipe dream, while MPI - Myanmar Pipeline to India would be a distinct and workable possibility.


(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.)


Airports: Massive investment planned but actual realisation difficult

According to CARE Research, procedural hassles, requirement of large land and capital coupled with high leverage position, remain key challenges for airport development in India

Various agencies like the Airports Authority of India (AAI), state governments and private players have been actively involved in creation of airport infrastructure in the country. At present, about 64 airport projects worth investment of about Rs1.51 lakh crore are under implementation or announcement stage. However, out of this only 35% investment is likely to materialise up to FY2017, says CARE Research.


"Inordinate delays experienced by airport projects in the past, procedural hassles, requirement of large land and capital coupled with high leverage position of airport infrastructure companies, remain key challenges for the capacity expansion in the airport sector," the ratings agency said in a research note.


In the Eleventh Five Year Plan, investment in the airport infrastructure stood at about Rs42,500 crore with private sector contributing almost Rs30,000 crore. The Planning Commission has envisaged an investment of about Rs87,700 crore during the Twelfth Five Year Plan.


Unlike other infrastructure projects, the airport project requires substantial land at one location. Setting up an airport needs approval from about 16-17 agencies at central and state levels. Hence, airport projects are prone to time overruns on account of procedural delays.  Moreover, construction of airports takes at least about three years for completion from the date of commencement of construction work depending on the capacity and design of the airport.


"Going ahead, delay in land acquisition is expected to remain a major challenge for airport projects. Moreover, muted central assistance and non-viability of some projects are likely impact development of airport infrastructure. Also, high leverage of airport infrastructure companies may act as a deterrent for private participation in the near term," the ratings agency said.


According to CARE Research, out of the total planned investment, about 33 projects accounting for about 25% of the total outstanding investment are under advance stage of construction and are expected to get completed till to FY2017. Balance projects involving 75% cent of outstanding investment are at an early stage of construction and are expected to be commissioned beyond FY17. This means the actual realisation of planned investment in airports remains an arduous task, it added.


Air traffic to witness robust growth

CARE Research said it expects the total air passenger traffic in India to grow at a healthy rate during the period FY14-17. "The growth will be led by favourable policy initiatives by the government, competitive air fares offered by Low Cost Carriers, fleet expansion by airlines, growing trend of transit passengers, increasing affordability coupled with rising share of middle class and strong demographics," it added.



The total air passenger handling capacity at all airports in India grew at CAGR of 20% during the period FY06-13, while the total air passenger traffic grew at a CAGR of 12% during the same period. The growth in air passenger handling capacity is expected to lag the overall air passenger traffic growth till FY17, the ratings agency added.




3 years ago

While private airport operators operate airports in major cities which were otherwise operated by AAI, our aviation minister forces AAI to spend CSR in his constituency to build "akharas" and roads.


shadi katyal

In Reply to pravsemilo 3 years ago

Do we need such useless authorities who are nothing but a drain on the budget?
What kind of roads are we talking ,one which washes away with every seasonal rain.
Time has come to change and close some of these Ministries.


In Reply to shadi katyal 3 years ago

The issue is not just with the authorities, it is the private players also who are equally the culprit.

shadi katyal

In Reply to pravsemilo 3 years ago

Unfortunately it is true because they have to kickback or pay in advance to get such contracts. We are a corrupt nation and without any greasing hands of both bureaucracy and Ministers we cannot move ahead and very few honest people wish to touch India for investments and industry.

shadi katyal

3 years ago

I have never understood that instead of let the nation forward, we always have negative thinking on development. Has writer seen the airports of other nations ??
We have still the worst infrastructure all round and yet are busy with religious politics instead of building the nation.
Even Pakistan has built better airports and highways and we still use same old methods left by our former rulers.
When are we going to move ahead to 21sr century.
Why don't we facilitate government on acquisition of land etc.
Sorry to be blunt but do we want airports like Delhi which built on low land and floods during rains. What a showcase to the world.

Supreme Court suggests Gavaskar's name as BCCI president

The Supreme Court has proposed Sunil Gavaskar’s name as replacement for N Srinivasan as BCCI president while expressing its intention to bar CSK and RR from participating in IPL7

The Supreme Court in a big setback to N Srinivasan, proposed name of legendary cricketer Sunil Gavaskar as president of Board of Control for Cricket in India (BCCI).


The court said it is intending to bar Chennai Super Kings (CSK), owned by India Cements, which is promoted by Srinivasan, and Rajasthan Royals (RR), whose players and team officials are allegedly involved in the scandal, from participating in the Indian Premier League (IPL)-7 tournament slated to begin on 16th April.


A bench headed by Justice AK Patnaik proposed the name of veteran cricketer and commentator Sunil Gavaskar to head the Board during the pendency of the case in the apex court.


The bench asked the Board to give its response by Friday on its proposals after which it will pass an interim order.


Reacting to the apex court's proposal, Gavaskar said he will be 'honoured' and 'happy' to adhere to the directives of the highest court of the land. “First and foremost, if the highest court suggests something, you have to do so but that has to be on record. I am currently contracted with BCCI as a commentator. But if Supreme Court wants me to do that, I will do it,” he told reporters.


The bench also proposed to pass an order barring India Cements officials from getting involved with the functioning of BCCI after senior counsel Harish Salve, appearing for Cricket Association of Bihar, pointed out that many such officials are at present part of the BCCI team.


Salve also raised questions on the conduct of captain of Indian Cricket team, MS Dhoni, who is also vice-president of India Cements, saying that he is guilty of corrupt practices.


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