In a sudden U-turn, upstream oil regulator Directorate General of Hydrocarbons has rejected the price Reliance Industries [ Get Quote ] had proposed for CBM gas saying the process followed was not in conformity with oil ministry guidelines.
DGH had on April 12 written to the oil ministry saying the bidding process followed by RIL to discover CBM gas price was in "compliance with Article 18.6 of the Production Sharing Contract and subsequent guidelines issued by Ministry of Petroleum and Natural Gas dated June 15, 2011 on `Pricing & Commercial Utilisation of Coal Bed Methane."
*******The formula proposed by RIL is the same at which Petronet LNG Ltd, the nation`s largest liquefied natural gas importer, buys 7.5 million tonnes per annum (30 million standard cubic meters per day) of LNG from RasGas of Qatar.
RasGas charges 12.67 percent of JCC and Petronet, which is headed by Oil Secretary, pays a further USD 0.26 per mmBtu for shipping the gas in its liquid form (LNG) from Qatar.
"The proposed formula was based on the pricing formula under a contract for long-term import of LNG into India and was universally accepted by arm`s length buyers who bid in large numbers in an open price discovery process," Niko, which holds 10 percent interest in KG-D6 block, said in its operational review.
Hi Tondon, Sorry for the delay, but these 2 links may be interesting to you....
Q....But strangely, an unsolicited offer from RasGas pricing LNG in a band of USD 16-24 per barrel oil price (USD 2.01 per mmBtu to USD 3.04 per mmBtu gas price) was accepted by PLL.
Further, in 2003, Petronet renegotiated the price and agreed to having a fixed price at USD 20 per barrel of oil (USD 2.53 per mmBtu) for five years from 2004-2009 and indexation with actual crude prices thereafter, he wrote.
This led to the price going up by USD 1 per year for five years from 2009, and from January, 2014, it would be USD 12.66 per mmBtu at an oil price of USD 100 per barrel.
Had Petronet not changed the contract, the price of LNG from Qatar would have been USD 3.04 per mmBtu for 25 years.
But now, users will have to pay USD 12.66 per mmBtu for 15 years, beginning 2014....UQ http://t.in.com/cs10
Q...Reddy is an intelligent minister who would have already got the answers to these questions. A leading player in the gas industry confided to us that there are just too many powerful people behind the scam. We reported the existence of a hidden shark. Reddy, who is fond of quoting classics and Shakespeare, seems to have found virtue in Falstaff’s dictum: discretion is the better part of valour....UQ
4. If fiscal reforms are slow -
Here too, the rating agency has itself noted - "On the fiscal front, we expect the central government will record a deficit of about 6.0% of GDP for the fiscal year ending March 2013. Weaker-than-expected tax receipts, owing to weaker economic growth, and higher-than-budgeted subsidies are the main reasons behind it. On the other hand, many state governments` fiscal conditions have been adversely affected by the state power companies` weak and worsening financial conditions.
In late September, the government announced plans to restructure debts owed by the State Electricity Boards. Part of their debt will be guaranteed by the state governments.
Inflation remains sticky in India. The raw consumer price index eased below 10% in both June and July. On the other hand, the wholesale price index (WPI) rose by 7.55% in August, a rebound from 6.87% in July, the lowest level since November 2009. However, the WPI is still above Reserve Bank of India`s medium-term target of 4%-5%. And the trade deficit remains relatively large in recent months. We therefore expect the RBI to remain cautious in conducting its monetary policy in the coming months."
Notwithstanding measures like allowing FDI in various sectors including multi-brand retail, the government`s fiscal deficit to be higher than the government`s budgeted estimate, at 6 per cent of GDP. And there is a very limited space available to it for the further fiscal consolidation now... If anything, the fiscal consolidation will only get even more difficult hereon, because of the sharp inflation cycle that is in the process of getting unleashed with the massive liquidity overdose entering our markets.
But the single most important factor - the mother of all other ills - continues to be the structurally flawed political-governance space. This will be the most likely cause of the sovereign downgrade event.
The evolving scenario in my considered view is increasingly pointing to an early election - the new government is likely seen to be taking position one-year ahead of its appointed schedule...
The rating agency has itself noted -"...the government has announced reform measures, such as increasing domestic diesel price by about 12% and allowing up to 51% foreign ownership in multi-brand retail stores. The government also announced plans to increase the foreign ownership limit to 49% in insurance companies.
In addition, the cabinet approved foreign investors owning up to 26% (or 49%, depending on the successful enactment of the amended insurance laws) in pension-related businesses. After a long wait, the government seems to have reignited reform efforts, and that bodes well for the future development of the country.
With two state elections, including Gujarat, which will be held December 2012, the government has only a small window to implement reforms.
However, the political cost has become apparent, with one member of the coalition quitting. As a result, the coalition has become the minority in both the upper and lower houses of parliament. Although the ruling coalition expects support from friendly parties, the political condition tends to become more fluid ahead of the general election expected in 2014. The foreign ownership reforms for the insurance and pension business are likely to become more challenging as they need parliamentary approval."
And the political climate is sure to worsen... since the political system is NOT doing anything to forge a minimum consensus which can move things forward... even the party leading the ruling alliance does not seem to have attempted any consensus within its own party either...
Though under-stated by the rating agency, the political climate has indeed been underlined as one of the 4-events that may trigger the downgrade - quote -
"A downgrade is likely if the country`s economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow,"
1. If the country`s growth prospects dim -
On Monday, IMF slashed the GDP forecast for 2012 to 4.9% from 6.2% in July blaming it mainly on domestic structural sluggishness amid a worsening global economy.
It described India`s scenario as "unusually uncertain" even as it took note of the recent burst of reforms, including the liberalisation of foreign direct investment norms and paring of fuel subsidy, while pegging India`s growth in 2013 at 6%.
It referred to the rising concerns over governance in India and called for greater efforts by the government to fast-track projects and curtail subsidy to rein in the fiscal imbalance.
2. If its external position deteriorates -
The rating agency has itself noted - "The current account deficit for this fiscal year ending March 2013 is likely to be 3.5%, below last year`s 4.2% of GDP.
The current account deficits have been counterbalanced by the net inflow of FDI and portfolio investments so far.
However, if the current account deficit shows little improvements going forward, the country`s external position could cease to be a supporting factor for the sovereign ratings."
It is less than 4-weeks since the policy steps were taken by the govt on 13-14Sep. As then pointed out, these were in response to the imminent threat of a sovereign downgrade in Dec. I had also recorded my reservation over the hurried way the FDI-retail policy initiative was taken and notified, without obtaining a parliamentary consensus as promised. My views had then brought the expected proforma negative rejoinders which have become a norm here.
Now within 4-weeks, it has become clear that notwithstanding the steps taken so far under the threat of a sovereign downgrade, these may not be enough to prevent a rating down-grade to sub-investment grade.
The negative outlook signals at least a one-in-three likelihood of a downgrade of the sovereign rating on India within the next 24 months.
A downgrade is likely if the country`s economic growth prospects dim, its external position deteriorates, its political climate worsens, or fiscal reforms slow. On the other hand, we may revise the outlook back to stable if the government implements initiatives to reduce structural fiscal deficits, improve its investment climate, and increase growth prospects. Fiscal measures to lower deficits could include a more efficient use of fuel, fertilizer, and agricultural subsidies, or the implementation of a goods and service tax
There is a serious need to understand the rationale and the reasons why the sovereign downgrade is quite likely to happen.
Reposted about 228 days 18 hrs 7 min 13 sec ago by babboo-q
It is obvious, there are intentional overlooks/bugs left in the electronic trading system at NSE /BSE, which only few of the smart traders could be knowing to exploit. I beleive the order execution works in sequencial from higher to lower on a discrete interval. you may appreaciate the fact that many orders are with a huge volume/quantities with conditions of displayed quantity. So each specific price(sell) order quantity at a given time is only the total of the displayable quantity, the unexecuted quantities of the same price will comeup only in the next cycle, this I beleive can lead to manipulation by buy automated order or algorithmic order at that particular discrete interval to exploit and bring the price down, once this has gone down, the orders pending at higher level will remain hanging in the next cycle, resulting to bring the prices very low and catch up the stop losses which are normally have huge quantities and acquire them unnoticed. Only a programming mind can visualise this. This loop hole I beleive could have been used by the algorithmic order practicing traders with better & faster trading machines under their disposal. Not that this couldnot be fixed, it couldhave been left intentionally or due to chaltha hai cultural attitude of our NSE or their software supporters or or...
So coming back to your point raised unless somebody has the knowledge of the SL under every cycleof trade which is a closed data source not even the system programmer will have access on real time basis this buy order is not possible, it will remain a mistery for ever. even if they find it, I don`t think they will share that information with small guys like us. The entire things will get more complex when we combine the F&O with stocks prices together.