Oil secretary GC Chaturvedi was quoted by Russia’s Interfax saying that RIL had “over-sold its position without being absolutely sure about it” and that “it is unfair for shareholders and the country at large”
Reliance Industries (RIL) today refuted suggestions that it may have inflated KG-D6 gas reserves, saying they were certified by leading independent international certifiers and KG fields are facing problems similar to those confronting ONGC's Imperial Energy.
The D1&D3 fields in KG-D6 block were originally certified to hold 10.03 trillion cubic feet (tcf) of proved plus probable (2P) reserves, of which about 2 tcf have already been produced in last three years.
"The exploration business is fraught with uncertainty and geological surprises are not unknown in the industry. Both DGH and the oil ministry have enough professionals with sufficient technical knowledge and experience of oil and gas industry to appreciate this," a RIL official said.
With reservoir complexities hitting output, the firm's junior partner, Canadian Niko Resources, which had a few years back given a prognosis of KG-D6 holding over 50 tcf of reserves, last week said the remaining 2P reserves may be only 1.93 tcf. These do not include the reserves 16 satellite fields may hold.
Meanwhile, Niko late on Wednesday posted a fourth quarter net loss of $183.3 million, or $3.55 per share, compared with net profit of $6.2 million, or 12 cents per share, a year earlier. The Canadian company attributed the decline in performance to the fall in output from the KG-D6 blocks on India's eastern coast.
Though oil secretary GC Chaturvedi has steadfastly refused to comment on KG-D6 reserves downgrade, Russia's Interfax quoted him saying that RIL had "over-sold its position without being absolutely sure about it" and that "it is unfair for shareholders and the country at large".
While Mr Chaturvedi couldn't be reached for comments despite repeated attempts, a ministry official said the secretary had not made any comments on KG-D6 reserves to anyone and the Interfax report was "imaginary and wrong".
The company has been criticized by the oil ministry for drilling fewer wells than planned. RIL has so far drilled 22 wells on Dhirubhai-1 and 3, two of the 18 gas finds in the KG-D6 block that have been brought to production, but only 18 were put on production. Of these 18, five have ceased because of water and sand ingress.
When contacted, a RIL official said KG-D6 gas reserves were independently certified by leading global consultants as well as by ministry's own technical arm, DGH.
"The ministry is well aware that KG-D6 reserves had been certified by the best international experts and had been verified by the Directorate General of Hydrocarbons," he said.
He said Mr Chaturvedi had used reserves being certified by international experts as a defence of output lagging targets at state-run Oil and Natural Gas Corporation's (ONGC) most expensive asset, Imperial Energy in Russia.
Imperial's Russian assets produced 15,400 barrels per day (bpd) of oil at end of last year, significantly less than projected 80,000 bpd output when ONGC Videsh acquired the firm for $2.1 billion.
The Comptroller and Auditor General of India (CAG) criticised ONGC in a report last year, and said the falling output resulted in a loss of Rs1,182.14 crore.
Gas output at KG-D6 fields almost halved to 31.33 million metric standard cubic meters per day (mmscmd) after reservoir pressure dropped unexpectedly and water and sand ingress was reported in wells.
RIL had in 2006 stated that output would rise to 80 mmscmd by 2012-13.
In a rare streak of sideways move, the market is moving in a tight range. The Nifty should break out of the range of 5,080 and 5,160, to set a trend
Most of the Asian indices opened in the positive except Hang Seng and so did the Sensex and Nifty. The Sensex opened at 16,986 while the Nifty started off at 5,149. The positive openings were on the stronger-than-expected economic data in the US. Durable goods orders and pending home sales in May increased more than forecast and adding to this was the speculation that China will pursue growth-boosting measures. Yesterday we had mentioned that the Nifty may move sideways with a negative bias in the range of 5,060 to 5,155. The benchmark almost hit a high of around 5,159 a few times, but then started its downward journey. However, the decline got arrested too, keeping the market in a tight range. The Nifty should now break out of the range of 5,080 and 5,160 decisively, to set a trend. On account of the expiry of June 2012 derivatives contracts, the National Stock Exchange (NSE) saw a huge volume of 70.34 crore shares.
All eyes are now on outcome of the two-day summit of the European Union leaders to discuss the ongoing debt crisis in the continent which begins today.
The advance-decline ratio on the NSE was 850:779.
Among the broader indices, the BSE Mid-cap index gained 0.07% and the BSE Small-cap index rose 0.22%.
The top gainers in the sectoral space were BSE FMCG (up 0.82%); BSE Power (up 0.38%); BSE PSU (up 0.31%); BSE IT (up 0.22%); BSE Metal (up 0.17%). While among the top losers were BSE Oil & Gas (down 0.37%); BSE Bankex (down 0.32%); BSE Consumer Durables (down 0.30%); BSE Capital Goods (down 0.17%); BSE Realty (down 0.11%).
The key gainers on the Sensex were Tata Steel (up 1.83%); Hero MotoCorp (up 1.58%); NTPC (up 1.48%); ITC (up 1.47%); Coal India (up 1.43%). The top losers on the index were GAIL (down 2.44%); Sterlite Industries (down 1.86%); Hindalco Industries (down 1.24%); Sun Pharma (up 1.08%) and State Bank of India (down 0.85%).
Top two A Group gainers on the BSE were-Bajaj Finserv (up 5.41%) and MMTC (up 3.78%).
Top two A Group losers on the BSE were-Jaiprakash Power Ventures (down 4.41%) and Ruchi Soya (down 3.40%).
Top two B Group gainers on the BSE were- Goldiam International (up 20%) and Intec Capital (up 20%).
Top two B Group losers on the BSE were- Onmobile Global (down 16.98%) and DJS Stock (down 15.85%).
The Nifty was led by Jaiprakash Associates (up 2.74%); ACC (up 1.49%); Tata Steel (up 1.49%); ITC (up 1.31%) and NTPC (up 1.23%). Sesa Goa (down 3.13%); GAIL (down 2.73%); Sterlite Industries (down 2.10%); Axis Bank (down 2.09%) and Hindalco Industries (down 1.88%) settled at the bottom of the index.
Most of the Asian indices closed in the green with the Nikkei 225 was the top gainer, was up 1.65%. Japan's retail sales rose 3.6% in May compared to the year-ago period while sales at large-scale retailers declined 0.9% compared to the same period a year ago according to the ministry of economy, trade and industry data.
Back home prime minister Mamohan Singh on Wednesday met senior officials from the finance ministry after taking over the finance portfolio to chalk out plans for the country's economic revival. He stressed that reviving investor sentiment is on top of his priorities as the country is passing through challenging times economically. Mr Singh said he is also concerned about the way the exchange rate is going. Government officials today said that prime minister Manmohan Singh will, within the next two to three weeks, clear confusion over tax policy that has rattled investor confidence.
German chancellor Angela Merkel brushed aside demands from Italy and Spain for rapid action to lower their soaring borrowing costs. She also brushed aside the proposals backed by France that Eurozone countries should assume joint liability for each other's debts. Ms Merkel accused top EU officials of getting their priorities wrong by proposing common Eurozone debt before EU controls are in place on national budgets and economic policies.
At the time of writing, all the European indices were trading in the red while US stock futures indices were in the negative. German joblessness rose for the third month in a row in June according the government data. The data showed the number of people out of a job rose to 2.882 million in June from an upwardly revised 2.875 million in May.
Back home, foreign institutional investors were net buyers of shares aggregating Rs86.09 crore on Wednesday while domestic institutional investors were net sellers of shares totaling Rs15.07 crore.
The coal ministry has given three de-allocated mines, including two of NTPC, to Coal India (CIL) and asked it to appoint mine developers to begin the production from these blocks at the earliest. The move follows a directive from the Prime Minister's Office (PMO) asking the coal ministry to take back captive blocks from the companies which have not developed them within the stipulated time, and give them to CIL. Coal India was up 1.43% to close at Rs347.90 on the BSE.
The Brigade Group and Government of Singapore Investment Corporation Pte Limited (GIC), through its affiliate, Reco Begonia, have entered into 51:49 private equity (PE) partnership through Special Purpose Vehicle (SPV) for the development of a residential projects in Bangalore. The company plans to invest Rs100 crore in the SPV with GIC as partner. The expected revenues would be Rs700 crore in next 3-4 years. Brigade Enterprises rose 15.01% to close at Rs55.95 on the BSE.
Party members are scared that if they say something against the leader or the decision taken by the chief, they would not get the election ticket next time, said former railway minister Dinesh Trivedi
Washington: Removed unceremoniously as India's Union railway minister at the behest of Trinamool chief Mamata Banerjee, party MP Dinesh Trivedi Thursday said that most of the political parties in India, particularly the regional ones, have become 'feudal' where decisions are taken at the whims and fancies of their leaders, reports PTI.
"Sycophancy or 'chamchagiri' is not serving any leader," Mr Trivedi, who is here as part of a Parliamentary delegation, told PTI.
"... slowly, slowly for the last few years a very dangerous trend has come in where most of the political parties have become feudal. There are no internal democracies at all, issues are not debated, issues are not discussed.
"Whatever the head of the party? I am not talking about one political party, I am speaking in general that it is carried on, there is never a debate about it," he said.
In such a situation, he argued party members are scared that if they say something against the leader or the decision taken by the chief, they would not get the election ticket next time.
"At the end of the day for me, country comes first, then comes the family and then comes the party," he said, making it clear that he was speaking in his personal capacity and not as a spokesperson of Trinamool Congress.