Energy News Monitor I Volume VIII, Issue 35

India, Iran and the Oil Weapon

 

 

 

NEWS BRIEF

OIL & GAS

February 14, 2012. Reliance Industries and global major BP plan to submit a brand new field development plan for the entire D6 block by June to raise output and cut costs, hoping to turn the page on its uneasy relationship with the oil ministry, which wants to penalise the company for the fall in gas production. The new field development plan will cover the entire block, instead of the existing one that covers only a segment, giving the operator flexibility to cut costs by making sure that existing facilities are fully utilised and the need to build new infrastructure for each field in the block is minimised. Higher production would be a relief for gas customers, who are facing a severe shortage, as well as the government which is worried about the decline in output. The block's output has fallen below 40 million metric standard cubic metres a day (mmscmd) from 60 mmscmd. The government blames the company for the decline, while Reliance says output dropped because of geological complexities. Reliance and BP are now much more confident about the block's geology as they have access to accurate data collected during three years of the field's operation. Also, BP has the expertise and global experience in developing deep-sea blocks.

February 13, 2012. Gujarat State Petroleum Corporation (GSPC) said it has spudded its third appraisal well in the Deen Dayal East (DDE) area of the Krishna Godavari (KG) Block, off Andhra Pradesh coast. This latest well will take the total number of wells drilled on the KG Block to 18, with the previous 13 wells, all flowing with gas and condensates. The state PSU's block partner Jubilant Energy stated in a release that the DDE-A-2 appraisal well was spudded in a water depth of 99 metres using Aban Offshore's jack-up Deep Driller-1 rig. The well is being drilled to a total depth of 5,300 metres to appraise the lower Cretaceous Early Rift fill sands which were found to be hydrocarbon bearing in the KG-16 discovery well. GSPC is operator of the KG Block and holds a 80 per cent interest, while Jubilant holds a 10 per cent. In a major boost to GSPC's gas finding potential in the block, the Union Ministry of Petroleum and Natural Gas of the MoPNG, had recenlty approved an extension of 20.5 square kilometres to its existing contract for the KG Block.

February 11, 2012. Reliance Industries' eastern offshore KG-D6 gas fields may see a further decline in output until new wells are brought to production, the company's minority partner Niko Resources has said. Niko, which holds 10 per cent stake in the RIL-operated KG-D6 block off the Andhra coast, said its share of gas production in the October-December quarter from the D6 block "averaged 143 million cubic feet per day compared to 195 mmcfd in the prior year's quarter". The figures put out by Niko in its third quarter earning statement, represent 10 per cent of the total output from KG-D6. KG-D6 output in October-December, according to Niko's statement, should be 40.49 million cubic meters per day as compared to 55.21 mmcmd in the same period a year earlier. D6 gas production in December averaged approximately 137 mmcfd (38.79 mmcmd for the entire block), Niko said. The current output is less than half of the peak 80 mmcmd that RIL had projected as fewer wells were drilled than planned and six wells ceased to produce due to the entry of sand or water. 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 due to water/sand ingress. The company is to do workovers or maintenance of these well, which may raise the output, Niko said. MA oilfield in the same block had seen one out of the five wells cease due to the same reasons. The Canadian firm said plans were approved for the development of the first four satellite discoveries around the currently producing D1&D3. These fields can add up to 30 mmcmd to the output. RIL holds 60 per cent interest in the 7,645-sq-km D6 block after farming-out 30 per cent stake in BP Plc of UK. Production of oil from the MA discovery began in September 2008 and production of gas from the Dhirubhai 1 and 3 (D1&D3) discoveries in April 2009. The Company has been granted petroleum mining licences for the discoveries expiring in 2028 and 2025, respectively.

February 10, 2012. India's Oil and Natural Gas Corp. (ONGC) has made two shallow water gas discoveries offshore India. Exploratory well Alankari No. 1, in NELP Block KG-OSN-2004/1 in the KG shallow offshore Basin, was drilled to a depth of 6,273 feet (1,912 meters). The 6,002 to 6,010 foot (1,829.5 to 1,832 meter) interval in the Godavari clay/Ravva formation of Mio-Pliocene age was formation tested, producing gas at a rate of 144,780 MMcm/d and condensate at 1.6 cu M/d. The gas discovery is located south of Narsapur, Andhra Pradesh state, 4.3 miles (7 kilometers) from the coast in a water depth of around 69 feet (21 meters). This was the second gas discovery in the block following Chandrika South No. 1. The second exploratory well, GSS04NAA No. 1 in NELP Block GS-OSN-2004/1 in Saurastra offshore, Western offshore basin, reached a depth of 16,033 feet (4,877 meters). The 15,733 to 15,697 foot (4,795.5 to 4,784.5 meter) interval of Mesozoic age was also formation tested, and produced gas at a rate of 1.4 MMcf/d through a ¼-inch choke. ONGC claims this discovery provides a significant lead to explore other sub-basalt Mesozoics in the area. Exploratory well GSS04NAA No. 1 is located southwest of Dwarka, Gujarat state, about 56 miles (90 kilometers) offshore in a water depth of around 328 feet (100 meters).

February 13, 2012. Government run Indian Oil Corp Ltd, the country's largest oil refining and marketing firm, has asked the government to compensate for revenue losses incurred on selling gasoline below market prices. India freed pricing of petrol in June 2010 but continues to subsidise prices of gasoil, kerosene and cooking gas to protect the poor from the impact of any inflation pressures.

February 10, 2012. Reliance Industries said it has shut a crude distillation unit at its only-for-export refinery at Jamnagar in Gujarat for about three weeks to do maintenance work. The planned maintenance and inspection shutdown would be used for "replacement of catalyst and implementation of productivity improvement measures in some of the secondary processing units". The shutdown is expected to be completed in the first week of March. Three other crude distillation units at the Jamnagar refining complex are expected to maintain normal operations.

February 9, 2012. HPCL has reduced the size of its annual deal with Iran to 60,000 barrels per day in 2012/13 compared with 70,000 bpd of this fiscal year, said its head of refineries, without elaborating the reason for the cut. Iran has offered terms similar to last year and kept the credit period at 90 days. HPCL's offtake of Iranian crude was less than contracted volumes in the current fiscal year due to payment problems. HPCL operates a 166,000 bpd Vizag refinery in southern India and a 130,000 bpd plant in Mumbai, in western India. Hindustan Mittal Energy Ltd (HMEL), a joint venture between HPCL and billionaire Lakshmi Mittal's Mittal Energy, owns a 180,000 Bathinda refinery in northern Punjab state.

February 13, 2012. The Appellate Tribunal dismissed Gail India's appeal against Petroleum and Natural Gas Regulatory Board (PNGRB) and the state venture Gujarat State Petronet Limited (GSPL) that won bid to commission Mallavaram to Bhilwara gas transmission pipeline. In 2010, the state venture Gujarat State Petronet Corporation (GSPC) led consortium consists of three oil marketing companies IOC, HPCL and BPCL won competitive bid to commission gas transmission line connecting Andhra Pradesh and Rajasthan. To be commissioned in three years at an investment of ` 5,000 crore to transmit 30 mmscmd of natural gas from East Coast, almost 2,000 km long pipeline will pass through the areas of Chhattisgarh, Madhya Pradesh and Rajasthan. The order from Tribunal will enable the consortium to kick off the project commissioning that was witnessing road block since Gail's plea was pending before the Tribunal.

February 8, 2012. Reliance Industries is in talks with India's major airlines to provide jet fuel infrastructure and transport services, the company said, a day after a government panel approved direct fuel imports for carriers. Oil and gas major Reliance is negotiating with airlines including Kingfisher Airlines, Jet Airways and Air India to provide storage facilities at ports, transport services to airports and fuelling infrastructure around the aircraft. A government panel approved allowing India's cash-starved airlines to import their own jet fuel, a move that could help them cut fuel costs -- which account for about half of their operation costs -- by up to 20 percent.

February 14, 2012. A cabinet panel will discuss whether to sell a stake in the flagship Oil and Natural Gas Corp that could fetch the cash-strapped government over $2 billion. The government has said earlier it is mulling whether to sell a five per cent stake in the state-run exploration company through an auction but has given no other details. It owns 74.1 per cent of ONGC and would sell another 427.7 million shares, reducing its holding in the company to 69 per cent. The move could fetch the federal government around ` 118 billion ($2.4 billion) at the current stock price.

February 14, 2012. Petrol prices are expected to rise by about ` 3 per litre early next month after the crucial assembly election in Uttar Pradesh. Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum said petrol rates had not been revised for two months despite high international prices due to an informal government directive to hold the price line till elections. On paper, petrol prices are decontrolled, denying state firms any compensation from the government for below-market sales, but this time, companies will seek compensation as they fear heavy losses because the government informally told them to freeze prices, executives said requesting anonymity. Quarterly profit rose disproportionately because the government disbursed subsidy payments for two quarters simultaneously. In the nine months ended December 31, IOC posted a net loss of ` 8,716 crore against a net profit of ` 3,540 crore in the same period previous year. The company will post a net profit for the fiscal year only if it is fully compensated by the government for the January-March quarter. The international price of petrol has risen to about $128 a barrel from $109 a barrel two months ago, when its prices were last revised. The price of Brent crude oil has risen above $118 a barrel, close to a six-month high. Petrol prices currently were about ` 3 less than market rates. The company was likely to renew its term contract with Iran to import 1.5 million tones a year of crude oil. The company is a relatively small importer of Iranian crude compared to MRPL, HPCL and Essar Oil, which buy large quantities.

February 13, 2012. The Oil Ministry wants Finance Ministry to waive withholding tax on rupee payments Indian oil refiners plan to make for crude oil they buy from Iran, as the high tax rate makes the newly agreed payment mechanism unviable. Iran had agreed to receive 45 per cent of the payments for about 370,000 barrels per day of oil it sells to India, in rupee. But the mechanism that was devised on fears of its existing payment conduit through Turkey being blocked by the US and European sanctions, hasn't started because of taxation issues. Payments received by National Iranian Oil Co (NIOC) in India in Indian rupee are liable to be taxed as tax authorities would view it as income generated by the Iranian national oil companies in the country. The income tax levied on such income is called withholding tax, which is as high as 40 per cent. Neither NIOC nor Indian refiners want to pay this tax. For Iran, the tax will reduce its revenues and it thus wants the Indian refiners to bear the tax. Indian refiners do not want to pay the tax as it would make oil imports significantly costlier and they would prefer buying oil from somewhere else. The oil ministry is writing to the Finance Ministry requesting waiver of withholding tax on payments made to Iran. Indian refiners are keen to make payments in rupee as they suspect the current payment route through Turkey may close due to the US and European sanctions.

February 12, 2012. While the Oil Ministry gears up to reject Reliance Industries' demand for a higher gas price, its order fixing $ 4.20 per mmBtu as price of KG-D6 gas may be ambiguous offering room for revision in rates before the set five-year term. The Oil Ministry had on October 10, 2007, written to RIL fixing $ 4.20 per million British thermal unit as the price of gas from KG-D6 fields for first five years of production. The letter however did not stop at this and went on to state that if RIL was to realise a price higher than $ 4.20 per mmBtu, that rate would be used for determining government's take from KG-D6 block. It is perplexing why this clause was inserted if the gas price was to be $ 4.2 per mmBtu for five years as the Oil Ministry is insisting now. The ministry's has prepared a draft reply rejecting RIL's demand for revision in KG-D6 price citing a letter the company wrote on October 24, 2007 accepting the terms set out in the government's October 10, 2007 letter. But the ministry's October 10, 2007 letter alluding to RIL realising a price higher than the one fixed by the EGoM headed by the then External Affairs Minister Pranab Mukherjee, is equivocal.

February 11, 2012. FIEO has demanded that the National Calamity Contingent Duty (NCCD) on crude oil imported - NCCD on crude oil imported imposed in 2001 for oil imports under advance authorization/DFIA due to Gujarat earthquake @ Rs 51 per MT be discontinued. The Planning Commission, in its Integrated Energy Policy says that energy prices in the country should be internationally aligned. Private investments in oil and gas sector have significant contributions and stressed on the need to treat production of gas at par with crude oil.

February 10, 2012. Refiners have sought at least 2.6 million barrels extra supplies from Saudi Aramco for March. India's Mangalore Refinery and Petrochemicals Ltd has sought an extra 600,000 barrel cargo. MRPL has doubled its annual crude oil import deal for 2012 with Saudi Aramco to 42,000 barrels per day (bpd) to feed a 25 per cent expansion of its capacity to 300,000 bpd by end-March. Hindustan Mittal Energy Ltd (HMEL), a joint venture between state-run Hindustan Petroleum Corp and billionaire Lakshmi Mittal's Mittal Energy, has asked for 2 million barrel crude for lifting in March. The supply of extra barrels is yet to be confirmed by Saudi Aramco. Previously Saudi Aramco supplied one million barrels crude to HMEL for lifting in end-January. HMEL owns a 180,000 Bathinda refinery in northern Punjab state and does not have a term deal with Saudi Aramco. The refinery is yet to stabilise and operate at full capacity.

February 9, 2012. Finance ministry has agreed to pay ` 150 billion as cash subsidy to state-run oil refiners for the October-December quarter. HPCL's share of subsidy would be ` 33 billion, as compensation for selling oil products at state-set cheaper prices.

February 8, 2012. Planning Commission deputy chairman Montek Singh Ahluwalia said domestic gas prices should be aligned with international rates and criticised distorted gas-pricing formula where producers discovered market prices of gas through customers identified by the government.Ahluwalia said the energy pricing in the country would be a major challenge during the 12th Five-Year Plan. Every kind of energy prices; including coal, oil and gas in India, are below global prices and this issue would be addressed in the next plan, he said. He, however, cautioned that the transition from artificially low pricing regime to market rates should be gradual and it could not be done in one go. The Planning Commission, in its Integrated Energy Policy says that energy prices in the country should be internationally aligned. Ahluwalia said private investments in oil and gas sector have significant contributions and stressed on the need to treat production of gas at par with crude oil.

February 8, 2012. The oil ministry is making a fresh attempt to financially penalise Reliance Industries for the fall in natural gas output from the D6 block even as it wants to avoid arbitration over the same issue. The oil ministry wants to prevent Reliance from recovering all its development costs from gas sales and officials say the government can put pressure on the company using its power to approve accounts of the block. The block's accounts are provisional, and need the approval of the block's Management Committee that is headed by the director general for hydrocarbons (DGH), who reports to the oil ministry. Reliance has recovered $5.26 billion of its cost in the block, but the oil ministry wants to deduct $1.24 billion from the contractor's share of future revenue because of fall in gas production.

POWER

February 14, 2012. Integrated power generator JSW Energy, looking for suitable acquisitions inside India, is planning to set up a 450-600-MW coal-fired plant in South Africa where the power sector is opening up for investment. The decision on target companies would depend on the total package, whether land acquisition has been done and the like. Many of the domestic power projects have hit the roadblock and only long-term players can continue in this space. Meanwhile, JSW Energy, with a domestic generation capacity of 2,600 MW, is planning to put up a pit head power plant in South Africa where it has a 0.5 million tonne coal mine.

February 14, 2012. Reliance Power (RPower), which posted a 42 per cent jump in consolidated net profit at `204 crore for quarter to December, said its 1,200-MW coal-based Rosa project will be fully operational by next month. The company had posted a consolidated net profit of ` 144 crore in the year-ago period. The consolidated operating revenue for the December quarter stood at ` 457 crore, an 82 percent jump from the year-ago period at ` 251 crore. Construction activities at the 3,960 MW Sasan ultra mega power project (UMPP) in Madhya Pradesh is progressing as per schedule and the first unit is expected to be commissioned ahead of schedule by December-end. Further, the pre-commissioning activities have commenced for the first 300 MW unit of the 600 MW Butibori project in Maharashtra and the unit is expected to be commissioned by March.

February 13, 2012. IDBI Bank is arranging loan syndication for the proposed ` 12,000-crore thermal-power plant at Nayachar off the Haldia coast in West Bengal. The power plant would be funded by 70:30 debt-equity ratio.

February 10, 2012. Alstom-Bharat Forge, the JV between French equipment maker Alstom and Bharat Forge that has bagged NTPC's mega order for steam turbines, is awaiting the state-owned power company's nod to start production. Alstom-Bharat Forge emerged as the lowest bidder in a tender floated by NTPC for sourcing super-critical or energy efficient steam turbines for its upcoming projects. The NTPC contract for sourcing boilers has been delayed due to legal issues. Alstom invests around 500 million euros as capital expenditure globally. Alstom, which is currently supplying gas turbines to a power plant in Bangladesh, is also looking at other such projects in the gas and thermal space. Alstom has formed the joint venture company with Bharat Forge for manufacturing steam turbines and auxiliary equipment with an annual capacity of 5,000 MW. It has also entered into an agreement with state-owned BHEL for manufacture, supply and technology transfer for supercritical boilers.

February 8, 2012. Faced with multiple domestic sectoral woes, the country's largest private power producer, Tata Power, is actively exploring overseas opportunities for generation and distribution projects in SAARC nations, Africa, Turkey and the Middle East. The company cannot "keep waiting" for issues to get resolved in the Indian power sector. Tata Power has an installed capacity of over 3,790 MW and expects to have a capacity of 25,000 MW by 2017. Tata Power is becoming very active internationally, both for projects as well as resources.

February 11, 2012. Chennai-based Numeric Power Systems sold its Indian uninterrupted power supply (UPS) systems business to France's Legrand Group for ` 837 crore. The purchase by the French major is one more sign of global interest in India's UPS market. Last year, Luminous was bought by another French conglomerate Schneider Electric. UPS contributed almost all of Numeric's revenues in 2010-11 - ` 525 crore out of the revenues of ` 530 crore.

February 9, 2012. State-owned power utility PowerGrid Corp said its Board of Directors has approved an investment of ` 7,209.65 crore in different projects. The Board of Directors of the company approved an investment of ` 1,310.85 crore for system strengthening in Wardha in Aurangabad corridor for independent power producers (IPP) projects in Chhatisgarh. An investment of ` 3,201.44 crore has been approved for transmission system for phase - I generation projects in Jharkhand and West Bengal.

February 9, 2012. Power transmission firms are gearing up to bid for two much-delayed transmission projects worth ` 2,800 crore, which are likely to be awarded by March. After a lull of almost one year, activity in private-sector participation in power transmission has picked up and developers are keen to grab these projects as the ones awarded earlier have been concentrated mostly between Reliance Infrastructure and Sterlite Grid, which bagged four projects worth ` 7,000 crore and three projects worth ` 4,500 crore, respectively. The projects on offer are challenging as they involve difficult terrains, cyclone-prone regions, limited precedence of setting up transmission lines in the region and forests along the route. But companies are fiercely competitive and are expected to bid aggressively to bag the projects. The power transmission sector is likely to see total investment of ` 2 lakh crore in the next five years, and companies are keen to participate in these projects. Companies, such as Sterlite Grid, Larsen & Toubro, Lanco Infratech, GMR Group and KEC International, are believed to be in the race for two of these transmission projects that were announced almost a year ago. The projects would be executed under the public-private partnership model where the private sector developers with the lowest tariff would get the licence to build and operate the transmission lines.

February 13, 2012. The government directed NTPC to commence production from five mines re-allocated to the state-run firm by the Coal Ministry expeditiously as these assets were earlier taken away over the PSU's failure to develop them. The Coal Ministry cancelled allocation of five blocks, namely Chatti Bariatu, Chatti Bariatu (S), Kerandari, Brahmani and Chichiro Patsimal, to NTPC as the power producer could not develop the mines within the stipulated timeframe. However, the ministry reversed its decision following a request by the Power Ministry to review the order.

February 13, 2012. The country’s nuclear research programme could get a major fillip with the Bhabha Atomic Research Centre (BARC) proposing to build two new research reactors under the 12th Five Year Plan. The reactors will be used for testing materials for new power plants, radioisotope production and manpower training, among others. The first new reactor, High Flux Research Reactor (HFRR), is a compact 30 MW thermal reactor with very high neutron flux needed for material irradiation. The reactors will help in production of radioisotopes that have application in agriculture, food processing, medicine, industrial uses and protection of environment through processing of municipal wastes.

February 12, 2012. The West Bengal Power Development Corporation (WBPDCL), state-owned power generating company, was planning to foray into hydel power with an investment of ` 2,000 crore. State power minister Manish Gupta said there was plan for two hydel projects with combined generation capacity of 300 MW and the sites have already been finalised. While one hydel project of 200-220 MW capacity will come up at the confluence of Rangit and Teesta rivers, the other 80-100 MW project will be set up close to Coronation or Sevoke bridge near Siliguri on Teesta, the minister said. The combined investment in both the hydel projects would be ` 2,000 crore. The project will have twin benefits, to help improve better thermal/hydel mix of the state which is heavily tilted toward thermal power. Secondly, the project will go a long way in development of north Bengal with Chief Minister Mamata Banerjee laying emphasis for investment for job creation in backward regions of north Bengal districts like Darjeeling. Moreover, after the Katwa thermal project was transferred to NTPC due to land acquisition problem, hydel power projects seem to be more viable as land would not act as any hurdle. In the past WBPDCL had attempted to foray into hydel power projects in Bhutan but those never took off beyond the planning stage. The total installed capacity of Bengal is 7501 MW, of which, 4170 MW is generated by WBPDCL which caters to bulk of the state’s power supply.

February 12, 2012. The Coal Ministry has asked the inter-ministerial panel to introduce an online mechanism for granting green clearance to projects. In a meeting held a few days ago under the chairmanship of Finance Minister Pranab Mukherjee, who is also heading an inter-ministerial panel on issues hurting coal production, Coal Minister Sriprakash Jaiswal had requested for introduction of a new system for granting clearances (both forestry and environment) which aimed at expediting the process of clearances to projects awaiting forestry and environment go-ahead.At present, around 168 projects of Coal India, which account for over 80 per cent of the future increase in domestic coal production, are awaiting environment and forest clearances at the Centre and state-levels. Sixty-seven of these projects are greenfield and the remaining are ongoing expansion schemes.

February 10, 2012. Punjab's industry opposed the proposal to increase power tariff by 55 per cent and said the hike would be counter-productive. Industry representatives asked for containing ballooning power subsidy to farm sector and 100 per cent metering of agricultural power connections. These points were raised by the industry while filling objections with Punjab State Electricity Regulatory Commission (PSERC) on Annual Revenue Requirement (ARR) petition filed by Punjab State Power Corporation Limited (PSPCL). PSERC invites objections before fixing tariff. PSPCL in its ARR had said it would require 55 per cent hike in power tariff for containing its revenue gap for year 2012-13. Against the total expenditure of ` 20,415 crore, it had proposed a revenue gap of ` 8,983 crore for 2012-13. The industry is charged ` 4.47 per unit to ` 4.95 a unit. Besides, fuel surcharge of 8 paise per unit, 13 per cent electricity duty and 10 paise as octroi are also charged. However, power to farm sector, SC domestic consumers and non-SC BPL consumers is free with state providing subsidy to the tune of about ` 4,200 crore per annum. Describing free power as burden on resources, the industry representatives asked for the 100 per cent metering of farm connections which would keep a check on misuse of power by "unscrupulous" farmers. They also strongly objected to the proposal of introducing dual tariff for the industrial sector, describing it as move to curtail open access usage by industry. Under dual tariff, users will have to pay fixed charges as per routine usage and when the usage exceeds the allocated demand, then further charges will be levied at separate rates. Industry also sought to lay down a roadmap to eliminate the cross-subsidy with respect to power supply to different consumers as it felt that per unit cross-subsidy on industry was rising every year. Transmission and Distribution losses which are ruling at higher level of 18 per cent needed to be brought down significantly to improve power supply situation in the state.

February 10, 2012. State-run Power Grid Corp of India plans to borrow `140 billion ($2.83 billion) in the upcoming financial year beginning April 2012. Out of the total amount, 20-25 billion will be via external commercial borrowings.

OIL & GAS

February 14, 2012. Greater Nile Petroleum Operating Co., which produces crude in Sudan and South Sudan, said it accurately provided data on the number of oil wells to South Sudan amid reports of under counting as the fields were closed. GNPOC, as the company is known, has made regular reports about its oil wells to South Sudanese authorities since a dispute over borders and fees began. The company’s crude production dropped to 60,000 barrels a day from 120,000 barrels a day after South Sudan completely halted all oil production on Jan. 28 in a dispute with its northern neighbor. Among the fields GNPOC operates are eight deposits in the Western Upper Nile area and its pipeline links oil from South Sudan with refineries at Khartoum and El Obeid. GNPOC is owned by China National Petroleum Corp., or CNPC, Malaysia’s Petroliam Nasional Bhd., ONGC Videsh Ltd. of India and Sudapet, Sudan’s state oil company. The company has about 320 wells in South Sudan, of which 145 are oil related, 50 are water injections and about 125 are abandoned. South Sudan took control of about three-quarters of Sudan’s oil production of 490,000 barrel a day when it declared independence on July 9.

February 14, 2012. STX OSV Holdings Ltd., the world’s biggest maker of oil-rig support vessels, may attract a takeover premium of more than 30 percent as buyers look to profit from the Western Hemisphere’s largest oil discovery in three decades. South Korea’s STX Group is seeking to sell its 51 percent stake in STX OSV. STX OSV is building a second shipyard in Brazil, where Petroleo Brasileiro SA plans to spend $225 billion to help tap a possible 50 billion barrels of oil under the Atlantic Ocean. That may make STX OSV more attractive to Keppel Corp. and Sembcorp Marine Ltd., the largest oil-rig builders, according to Shinyoung Securities Co. With Singapore’s takeover guidelines requiring a buyer of a 30 percent stake to bid for the rest of the company, STX OSV may get an offer valued at $1.86 billion, 36 percent more than its current level.

February 14, 2012. Armored anti-riot vehicles cluster outside the police station in Awwamiya in Saudi Arabia’s oil- producing eastern region, where unrest is turning violent. Clashes between police and armed Shiite protesters in the two towns have intensified since October, when 11 police were injured in an attack. Since then, seven Shiites have been killed by security forces. It’s in such places that tensions between the Gulf’s Sunni nations and Shiite-led Iran may spark violence inside Saudi Arabia, the world’s biggest oil exporter. Shiites here have cultural and family ties with Iran, and also with Bahrain, where Saudi troops helped crush Shiite-led protests that broke out a year ago. Saudi authorities accuse Iran, which is under growing western pressure to back down over its nuclear program, of stirring up unrest in both cases. After two Shiites were shot dead in gun battles in Awwamiya and al-Qatif, the cost of Saudi Arabia’s credit default swaps jumped 2 percent to 131.8, before retreating to 129.2. They reached a two-and-a-half- year high last month as Iranian threats to block the Strait of Hormuz, in response to a planned western oil embargo, stoked concerns of conflict in a region that supplies a fifth of the world’s crude. Most of that comes from Saudi Arabia, and the biggest Saudi oil fields are in the Eastern Province, home to most of the Saudi Shiite population. It’s the second-largest Shiite community in the Gulf after Iraq’s, comprising between 10 and 15 percent of the total of 19 million Saudi nationals, according to the U.S. State Department. Iran denies charges of interference by Saudi Arabia and other Gulf nations, and accuses their Sunni rulers of discriminating against Shiites.

February 9, 2012. Repsol YPF SA’s Argentine unit said its shale oil resources at the Vaca Muerta formation in the south of the country probably hold about 23 billion barrels, almost half the size of Brazil’s so-called pre-salt reserves. The new estimates come after further drilling in the Connecticut-sized area of Argentina’s Neuquen province and reviews of the area by independent auditor Ryder Scott, YPF said. YPF, the local unit of Madrid- based Repsol, previously discovered about 927 million barrels at the Loma La Lata field, which is located in the formation. YPF, producer of more than half Argentina’s crude, is boosting exploration to arrest output declines amid government criticism that local oil companies are failing to invest in production. The resources at Vaca Muerta compare with the 50 billion barrels of oil Brazil estimates it’s found underneath a thick layer of salt beneath the seabed and which include the largest fields discovered in the Americas in three decades.

February 8, 2012. Brazil's state-run oil giant Petrobras, expects its refineries to produce an average 1.9 million barrels per day (mbpd) in 2012, up from 1.85 million bpd last year. The average in January was above 1.9 million bpd and capacity use at Petrobras refineries is at record levels. Brazil's gasoline imports have averaged 80,000 bpd so far this year, above the 2011 average of 45,000 bpd, but below the peak of 100,000 bpd reached late last year.

February 13, 2012. Oil and gas trader BP Singapore has secured a 16-year deal to supply 8 million tonnes of liquefied natural gas to a Japanese power company and hopes to use the upcoming Singapore LNG terminal - when more tankage becomes available here - to ship some of the LNG cargoes. Buyer Chubu Electric Power Company, which announced the BP Singapore deal over the weekend, said that the LNG cargoes, starting this April, will originate from LNG sources that the oil major owns worldwide. It did not disclose the value of the deal. BP Singapore will reportedly ship about 500,000 tons of LNG a year to Chubu. The oil major - which is a partner in LNG projects in Australia, Indonesia, Abu Dhabi and Trinidad & Tobago - has capacity of 12 million tons annually.

February 13, 2012. Sanctions on Iran are tightening after Overseas Shipholding Group Inc., Frontline Ltd. and owners controlling more than 100 supertankers said they would stop loading cargoes from the Organization of Petroleum Exporting Countries’ second-largest producer. OSG, based in New York, said that the pool of 45 supertankers from seven owners in which its carriers trade will no longer go to Iran. Four OSG-owned ships, managed by Tankers International LLC, called at the country’s biggest crude-export terminal in the past year. Nova Tankers A/S and Frontline, with a combined 93 vessels, said Feb. 9 and 11 they wouldn’t ship Iranian crude.

February 13, 2012. Japan’s 10 regional power utilities increased their imports of liquefied natural gas by 39 percent in January, when most of the country’s nuclear reactors remained idled over safety concerns. Power companies imported 5.19 million metric tons of LNG last month, up from 3.73 million tons a year earlier, according to data from the Federation of Electric Power Cos. Oil imports almost tripled to 1.34 million kiloliters (8.4 million barrels), while fuel-oil purchases increased nearly threefold to 1.51 million kiloliters, according to the data. The average operating rate of nuclear plants in January was 10 percent, down from 66 percent last year, it said. Thermal- power generation rose 29 percent from a year earlier.

February 9, 2012. Soaring demand for natural gas in Spain has led to an increase in imports of piped gas from Algeria, but a small drop in imports via France, according to Spanish gas grid operator Enagás. With a wave of freezing temperatures hitting Spain since the end of January, conventional (residential and industrial) gas demand in Spain has twice broken daily demand records.

February 8, 2012. SOCAR Turkey Enerji (Turkish division of Azerbaijan State Oil Company) plans to participate in the distribution of oil products in Turkey.Upon construction of the oil-refining company, SOCAR Turkey Enerji can cooperate with one of the existing distribution networks in Turkey. For this purpose, SOCAR can create a new company for the distribution of fuel or purchase another company.

February 8, 2012. Unipec, the trading unit of China’s largest refiner, booked a supertanker to ship Iranian crude this month as the Persian Gulf nation continues to supply its biggest customer before Europe bans its oil exports. State-owned China International United Petroleum & Chemical Co. hired the Takamine, a very large crude carrier, to carry 265,000 metric tons from Kharg Island. The provisional booking is subject to change or cancellation. Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries, faces a July 1 oil embargo from the European Union because of its nuclear program. In the first half of 2011, China was the largest importer of Iranian crude, followed by Japan, India, South Korea and Italy, according to data from the U.S. Energy Department. The Japan-flagged Takamine is sailing in the Pacific from Tokyo Bay to Fujairah in the United Arab Emirates. The double- hulled vessel, built in 2004, is owned by Nippon Yusen KK. Unipec took delivery of another VLCC, the Yuan Yang Hu, which loaded from Kharg Island on about Dec. 31. The China-flagged vessel is docked in Bohai Bay.

February 8, 2012. Technip SA, Europe’s second-largest oilfield-services provider, won a five-year order from Petroleo Brasileiro SA to supply $2.1 billion of flexible pipes for offshore oil projects. The contract is for 1,400 kilometers (870 miles) of equipment to be made at two sites in Brazil using a “high level” of locally produced content.

February 14, 2012. China’s ambitions to unlock the natural gas trapped in shale rocks are likely to take longer than planned, boosting the nation’s reliance on overseas suppliers from Exxon Mobil Corp. to Royal Dutch Shell Plc. Shale gas output will rise to 23 billion cubic meters in 2020, or 29 percent of the government’s 80 billion target. The shortfall, stemming in part from tougher geology, should boost liquefied natural gas imports from about $5.8 billion in 2011 while curbing speculation that the nation can duplicate the U.S. shale boom that has upended global energy markets. Drillers in China, the world’s biggest holder of shale reserves, have yet to produce shale gas commercially, with Shell helping China National Petroleum Corp. to sink the nation’s first horizontal well. Explorers such as Cnooc Ltd. and China Petrochemical Corp., which have invested more than $5.7 billion in so-called unconventional oil and gas assets overseas, have found their technology lacking at home. Until then, China will need to boost purchases of LNG from providers such as Exxon, Chevron Corp. and Woodside Petroleum Ltd. to meet demand. The nation imported 12.2 million metric tons of LNG in 2011, worth $5.8 billion at last year’s average price. Paris-based GDF Suez SA estimated shipments may almost quadruple to 44 million tons in 2020.

February 14, 2012. Wall Street, after years of poaching the best and brightest from specialized commodity firms, is losing the war to keep the essential traders who know how to arbitrage copper or store crude. After financial reforms sounded the death knell for the excessive use of bank money to trade markets two years ago, banks such as Goldman Sachs and Morgan Stanley had resigned themselves to watching their proprietary trading rainmakers flee to hedge funds with few limits on risk or compensation. Now as banks make deep compensation cuts and stricter oversight forces them to take less risk and bolster balance sheets, the latest wave of talent migration risks cutting deeper -- luring away the physical traders who excel at arbitraging copper markets, importing heating fuel or storing wheat. The dozen or so merchants that buy and sell a trillion dollars worth of commodities every year are finding it easier to skim the cream of the trading crop, promising unfettered bonuses and a future share in their typically private firms.

February 12, 2012. Iraq, seeking to maximize crude oil exports, opened the first of four planned offshore mooring facilities in the Persian Gulf and intends by March to add 200,000 barrels a day to its capacity for loading tankers. The new single-point mooring unit, extending into the sea from the southern oil terminal of Fao, has a potential export capacity of 850,000 barrels a day. Iran probably won’t shut the Strait of Hormuz, a waterway at the mouth of the Gulf and a chokepoint for about a fifth of all traded crude. Iraq holds the world’s fifth-largest crude deposits including Canadian oil sands. The government is trying to attract foreign investment and expertise to help boost energy exports and rebuild an economy shattered by years of conflict, sanctions and sabotage.

February 10, 2012. Nigeria’s parliament is probing whether fraudulent practices by government agencies fueled a fivefold rise in spending on gasoline subsidies in the past three years. The government is probably paying more than 2 trillion naira ($12.6 billion) to fuel importers to cover the difference between market costs and state-regulated prices for last year. That’s up from 384 billion naira in 2009 and represents almost half of last year’s 4.5 trillion budget.

February 10, 2012. Canada's prime minister made his strongest comments yet in support of a proposed pipeline from oil-rich Alberta to the Pacific coast, saying his government was committed to ensuring the controversial project went ahead. Enbridge Inc's Northern Gateway pipeline, which is strongly opposed by green groups and some aboriginal bands, would allow Canada to send tankers of crude to China and reduce reliance on the U.S. market. An independent energy regulator -- which could in theory reject the project -- last month started two years of hearings into the pipeline.

February 10, 2012. BP Plc persuaded a judge to bar the introduction of evidence of previous accidents involving the oil company from this month’s trial over fault for the 2010 Gulf of Mexico blast and oil spill. U.S. District Judge Carl Barbier in New Orleans granted a BP motion blocking the introduction of exhibits pertaining to prior industrial accidents, including the 2005 explosion at BP’s Texas City, Texas, refinery and a 2006 oil spill at its Prudhoe Bay field in Alaska. The April 2010 Macondo well blowout and explosion killed 11 workers and caused the worst offshore oil spill in U.S. history. The accident spurred hundreds of lawsuits against BP and its partners, including Transocean Ltd., the Switzerland-based owner and operator of the Deepwater Horizon drilling rig that exploded, Halliburton Co., which provided cementing services for the project, and Anadarko, the owner of 25 percent of the well.

February 9, 2012. Merchant Commodity Fund is suspending a three-decade of trading after a year in which it lost 30 percent and its assets contracted twice as much. Assets fell to about $550 million last month, from $1.56 billion at the end of 2010. The assets of the hedge fund, started in June 2004 with $10 million, are now traded mostly by a co-founder. Merchant’s 2011 slump, which still left its initial investors with a return of 236 percent, illustrates last year’s swings in raw materials. While the Standard & Poor’s GSCI Index of 24 commodities gained 2.1 percent for all of last year, it rose as much as 21 percent, before falling 25 percent and then rallying 13 percent. The average fund tracked by the Newedge Commodity Trading Index lost 4.2 percent last year, beating Merchant for only the second time in seven years.

February 9, 2012. Oversight of drilling and hydraulic fracturing for oil and gas on federal land is “erratic and inconsistent” and in a decade led to about $300,000 in fines, according to report released by U.S. House Democrats. The Interior Department avoids imposing fines for violations such as deficient casing and cementing, which may lead to tainting of drinking water, and lets some companies break rules while imposing penalties for identical breaches by competitors. The analysis covered cases from 1998 to 2011. Hydraulic fracturing, or fracking, releases gas trapped in shale rock by injecting water, sand and chemicals thousands of feet underground, is used for almost every new natural-gas well drilled on U.S. lands. Fracking helped boost production of the fuel to a record, while pushing prices to 10-year low. President Barack Obama said the U.S. has natural gas supplies that can last almost a century, and urged safe development of the resource in his Jan. 24 State of the Union address.

February 9, 2012. Crude oil output from the Organization of the Petroleum Exporting Countries (OPEC) rose to 30.87 million barrels per day (bpd) in January from 30.83 million bpd in December. This leaves the organization overproducing its brand new production ceiling by 870,000 bpd. A 200,000-bpd increase in Libyan production to 1 million bpd – just 600,000 bpd short of pre-uprising output early last year – more than offset combined reductions totalling 170,000 bpd from Angola, Iran, Nigeria and Venezuela. United Arab Emirates production also saw a small increase of 10,000 bpd to 2.56 million bpd.

February 8, 2012. China, the world’s second-biggest oil consumer, raised domestic fuel prices for the first time in 10 months to spur production by refiners including China Petroleum & Chemical Corp. and PetroChina Co. Retail gasoline and diesel cost 300 yuan ($47.58) a metric ton more starting, the National Development and Reform Commission said. The increase is equivalent to 0.22 yuan a liter on average nationwide for gasoline and 0.26 yuan a liter for diesel, China’s top economic planning agency said. China Petroleum, known as Sinopec, and PetroChina, the country’s biggest refiners, have urged the government to increase prices after international crude costs rose. The government controls fuel prices to curb inflation, which cooled to a 15-month low of 4.1 percent in December. PetroChina’s losses from refining were 41.5 billion yuan in the first nine months of 2011 and Sinopec’s were 23.1 billion yuan. PetroChina said Oct. 21 its refining loss may widen to 50 billion yuan for all of 2011, from 23.4 billion in the first half. Sinopec’s six-month refining loss was 12.2 billion yuan. China introduced a pricing system in December 2008 that allows the NDRC to adjust retail fuel prices when the moving average of a basket of three crude varieties changes more than 4 percent over 22 working days. The moving average of Brent, Dubai and Indonesia’s Cinta, the three crude types in the pricing basket, climbed 4.2 percent over the past 22 working days as of Feb. 6, according to Shanghai-based commodity researcher C1 Energy. C1 reported the price increase, before the government announcement. China must introduce changes to the current pricing method to “rationalize” fuel prices, the NDRC said. The government is studying possible alterations to the pricing system and will seek public opinion after ironing out details. Changes will involve shortening the pricing cycle, improving the execution of changes and changing the crude grades assessed. The government reduced fuel price increments and delayed some adjustments last year to cushion the impact of rising costs, the NDRC said. Gasoline and diesel tariffs increased by as much as 550 yuan a ton in 2011, when they should have risen by 1,500 yuan in accordance to the current pricing method. The NDRC last adjusted fuel prices in October, when rates were cut by 300 yuan a ton. The last increase was in April. China may raise retail gasoline and diesel prices by 15 percent in five separate increases to about $4.10 a gallon this year. The U.S. and allies including the U.K. and the European Union have imposed sanctions on Iran to pressure it to allow inspections of its nuclear program, which Western nations say may be aimed at creating nuclear weapons. Iran, which says it needs nuclear power for civilian purposes, has threatened to block the Strait of Hormuz if its economy is targeted. The risk premium in oil prices should be two to three times higher than it is now, based on the risk of military conflict in Iran and a potential lack of spare output capacity globally.

POWER

February 14, 2012. Sri Lanka's Norochcholai coal power plant is to resume operations following repairs that have cost SLR 168 million. The country's power authority Ceylon Electricity Board (CEB) earlier said the operations will resume. The coal power plant broke down on January 21 for the third time in two months and two fires broke out in the plant, one in October 2010 prior to its opening in January 2011 and the other in August 2011. The last breakdown in January was the fourth breakdown of the plant since its installation. The CEB has to spend SLR 80 million per day to purchase electricity from the private sector to cater to the needs of the country when the coal power plant breaks down.

February 13, 2012. Officials recently approved a motion to get a cost estimate on the salvage value of Escanaba's power plant. It's a way to assist in the negotiation process to keep the plant operating. Richmond based Recast Energy in interested in buying the plant and converting it to a woody biomass plant.

February 13, 2012. Already under watch by the U.S. Environmental Protection Agency, Fairbanks is coming under scrutiny by the environmental agency again after a resident complained of black dust near a power plant downtown. The EPA received a petition by the resident last May, investigated in September and found enough questions to warrant an investigation. Other residents have complained about the issue to the Alaska Department of Environmental Conservation.

February 14, 2012. The Muscat Electricity Distribution Company (MEDC) has clarified the causes of power outages that dipped some parts of the city in dark. Several residential neighbourhoods in the Governorate of Muscat were affected by interruptions in the evening due to tripping of 132kv lines of Madinat Sultan Qaboos and Jahloot owned and operated by Oman Electricity Transmission Company lasting for about half an hour, MEDC said.

February 13, 2012. The General Court of the European Union said it confirmed that a power purchase agreement between privately-owned power plant Budapesti Eromu and the state-owned Hungarian Electricity Works (MVM) constitutes unlawful state aid. The court noted that, although the agreement was signed before Hungary’s EU accession, it must still be examined in the light of EU rules on state aid. In the mid-1990s, the Hungarian state entered into long-term power purchase agreements with power generators as an incentive for foreign investment. The agreements guaranteed a predictable return on investments necessary to modernise the country’s power infrastructure. Three plants of Budapesti Eromu, a unit of Electricite de France Internationale, entered into the long-term purchase agreements with MVM. The last of the agreements is set to expire in 2024.

February 11, 2012. The Asian Development Bank (ADB) and the Government of Vietnam signed the first tranche of a $730 million investment program to upgrade the country’s power transmission network. The program will help improve delivery and meet growing demands from industry and households. Without additional network expansion, the share of urban and rural populations without electricity is expected to increase, particularly among populations with lower income. The multi-tranche loan facility for the Power Transmission Investment Program begins with a first payment of $120.5 million. The program supports the construction of almost 648 kilometers of 500 kilovolt (kV) lines and more than 100 kilometers of 220 kV lines, plus upgrades to associated substations, and training and other support for the National Power Transmission Corporation.

February 9, 2012. Traders can double their money betting Winsway Coking Coal Holdings Ltd.’s $1 billion takeover of a Canadian coal miner won’t be derailed by an allegation the Chinese acquirer’s financial statements aren’t accurate. Chinese companies have faced increased scrutiny in North America after short seller Carson Block’s Muddy Waters LLC alleged Sino-Forest Corp. overstated assets, Longtop Financial Technologies Ltd. was delisted following a probe by U.S. regulators and China MediaExpress Holdings Inc. lost almost all its value as its auditor quit.

February 14, 2012. The Bangladesh Energy Regulatory Commission (BERC) is likely to introduce a regulation on fixing the prices of petroleum products. The commission would circulate the regulatory notification if and after the law ministry approves the draft. Once the regulation is framed, the energy ministry will lose its power to fix fuel prices. According to Section 59 of the Bangladesh Energy Regulatory Commission Act 2003, the commission is supposed to frame regulations on price fixing for power generation, power and energy transmission and distribution and energy storage. The Act also made BERC the authority for fixing the prices for the agencies dealing with power and energy in line with the regulations in the sector, but it is yet to frame regulations on price fixing for the agencies dealing with petroleum products like diesel, kerosene, petrol, liquid petroleum gas, etc. The Energy Division, without any previous notification, has been increasing the prices of petroleum products by using its executive power, saying that the pre-announcement would motivate the hoarders to stock petroleum products and create an artificial shortage. The Energy Division in 2011 increased the price of furnace oil by around 131 per cent in six phases, and of other petroleum products like diesel and kerosene by around 39% in four phases.

February 13, 2012. Iranian President Mahmoud Ahmadinejad’s announcement that he will soon unveil a “major” nuclear development may be part of a strategy he’s employed since 2006 of promising breakthroughs and delivering incremental gains. Ahmadinejad, said that he will unveil “major nuclear accomplishments” in the coming days. In the past six years, Iran has started its first nuclear power plant, making Iran the first country in the Middle East to have a nuclear-power generating facility. The 1,000-megawatt plant will start operating at full capacity during this month. Iran has also gone from enriching uranium from a 3.5 percent purity level to 20 percent, which it says it needs to fuel a Tehran research reactor that produces medical isotopes. Enriched uranium can be used to fuel a nuclear power reactor, or it can be enriched further to a concentration of 90 percent to build nuclear weapons. Iran’s enrichment activities have raised the concerns of the U.S. and its allies about the true intention of the work. Iran’s known enrichment facilities, including the Fordo fortified nuclear site, are under surveillance from the United Nation’s International Atomic Energy Agency, which hasn’t cited evidence that enriched uranium has been diverted to military use.

February 13, 2012. Kenya Power Ltd. will raise electricity tariffs from this month after it increased use of diesel-generated plants amid a decline in water levels at hydropower dams. Prices will rise to 5.60 shillings (7 cents) per kilowatt hour from 5.44 shillings.

February 12, 2012. Electricity tariffs in Nigeria will increase up to 88 per cent under reforms designed to revive the power sector and attract outside investors. The proposed new rates will be announced before the privatisation of 18 state-run power generation, distribution and transmission companies this year. But the move is likely to cause controversy, coming just a month after the removal of fuel subsidies, which caused petrol prices to more than double. The price increase prompted street protests and a weeklong nationwide strike, forcing Goodluck Jonathan’s administration partly to backtrack. Nigeria’s government said the higher “cost-reflective tariffs” for residential and commercial electricity customers were necessary to ensure that investors could make a profit. Under the new pricing regime, due to become effective in April, tariffs will rise 25-88 per cent, though most customer classes will see a 50 per cent increase in their bills. The government hopes that cushioning the blow for the poorest consumers – a policy absent during the fuel subsidy removal – will ensure that there is no repeat of the public outcry. Nigeria sells power below cost at an average of about 10 naira, or six US cents, per kilowatt hour, one of the cheapest rates in Africa. But despite having large reserves of natural gas that can fire thermal plants, the country’s electricity supply and service is among the world’s worst, with half of the 160m population lacking access to the grid. Peak output is little over 4,000MW, with per capita consumption just 3 per cent that of South Africa, Nigeria’s rival for the continent’s biggest economy. Frequent blackouts mean that most of Nigeria’s power comes from privately owned petrol and diesel generators, greatly increasing business costs and deterring potential investors. It is hoped that privatisation will greatly improve service and output, with the government targeting 18,000MW output by 2016.

February 14, 2012. State government is all geared up to instal solar power plants with total capacity of 450 MW over the next three years in the state. The project involves investment of ` 4,500 crore and will be undertaken in the western parts of the state, which receives maximum solar radiations in the country. As per the solar power policy, the tender process to instal various solar plants of different capacities has already started. In a bid to promote solar power, a large number of solar power plants are being installed in the state. Under the project around 100 MW-capacity plant will be installed for small solar photovoltaic projects of 5 to 10 MW capacity. Besides this, two 50 MW capacity plants will also be installed. Under the project, 50 MW solar TV will be installed along with conventional power projects of the same capacity.

February 13, 2012. Underlining the principle of "equity" in climate talks, Prime Minister Manmohan Singh said growth should take place in a way which does not harm the environment. During his meeting with Environment Ministers of BASIC countries- Brazil, South Africa, India and China- Singh said the principle of equity -- equal per capita rights to the atmospheric space--should be the goal of future negotiations on climate change. India had successfully brought the principle of equity back to the table as one of the country's key non-negotiable principle during Durban Climate talks which were attended by Environment Minister Jayanthi Natarajan. Environment ministers of China, South Africa and Brazil informed the Prime Minister that the BASIC nations played a "constructive role" in Durban and also commended the role played by India in bringing equity back on global climate negotiation platform.

February 12. 2012. India's biggest wind-turbine maker Suzlon Energy slashed consolidated sales guidance for 2011-12 to ` 21,000-22,000 crore from ` 24,000-26,000 crore after reporting a decline in sales in the quarter to December 2011.

February 10, 2012. Wind power company Suzlon has proposed to set up a manufacturing unit for rotor blades used in wind power production machinery in Jodhpur district in Rajasthan. The company's CMD Tulsi R Tanti told the state's Chief Minister Ashok Gehlot that the proposed unit can generate employment opportunities for over 1,500 people. In a meeting with Gehlot, Tanti also presented other proposals regarding investment in non- conventional energy sector in the Jaisalmer, Jodhpur and Bikaner districts.

February 9, 2012. Delhi's solar mission is in trouble. The Delhi government had formulated a roof-top solar policy under which consumers would set up solar panels on their roof-tops and feed extra power generated into the main grid. Government, however, felt the scheme could be exploited on several grounds, a major violation being production of power through cheaper means and selling it to discoms at higher rates. The 465 kilowatt of solar power generation under a ministry of new and renewable energy scheme that had been offered to BSES is not finding any taker. The discom is asking for subsidies, which the government has refused. The environment department is now searching for other parties to take on this work. The change in policy has also landed discom BSES in a soup. The power distribution company had planned solar power generation through roof-top panels and is now waiting for the government to come out with another policy. The government is miffed with the discom for not having taken up generation of 465 kW, which is part of Delhi's 1 MW solar project under the MNRE.

February 9, 2012. After testing the waters, the Satluj Jal Vidyut Nigam Ltd (SJVNL) which owns and operates India's largest hydropower project in Himachal Pradesh has now decided to venture into wind energy. The company would commission the project in either Maharashtra, Rajasthan, Madhya Pradesh or Gujarat. It is also planning to launch a 1 MW solar energy project near its maiden 1,500 MW Nathpa Jhakri hydropower project in Shimla district which started generation in 2004-05. Its second mega hydropower project, the 412 MW Rampur hydroelectric project in upper Shimla, is likely to be commissioned by early 2013. The company is also executing one hydro project in Nepal and two in Bhutan. It is also investing ` 750 crore for laying electricity transmission lines from Nepal to India.

February 9, 2012. Private power firm Welspun Energy said it has bagged a contract worth ` 950 crore from the Andhra Pradesh government to set up a 100 MW solar power plant in Anantpur. The company had entered into the agreement with the state government in January, this year, and will complete the project by 2013. The company will construct, operate and maintain the power plant, it said, adding that the firm is acquiring land for the project. The total installed solar power generation capacity of the firm is around 30 MW in Gujarat, Andhra Pradesh and Rajasthan. It plans to commission additional 250 MW solar power projects in the 2012-13. Welspun Energy is part of the $3 billion Welspun group with business in power generation, infrastructure, exploration and production of oil and natural gas, steel pipes and textiles.

February 14, 2012. Yingli Green Energy Holding Co., a Chinese manufacturer of solar panels, agreed to buy $100 million of solar materials from DuPont Co. The most valuable U.S. chemical company will supply Baoding, China-based Yingli with photovoltaic metalization pastes and protective backsheet films, Wilmington, Delaware- based Dupont said. The companies didn’t give a price. DuPont expects its solar photovoltaic market sales to reach $2 billion by 2014 from about $1.4 billion in 2011. Dupont and China-based Suntech Power Holdings Co., the world’s largest solar panel maker, signed a similar agreement on Feb. 1.

February 14, 2012. President Barack Obama, who pledged an “all of the above” energy strategy that included fossil fuels, renewed his proposal to cut more than $40 billion in tax breaks for oil, gas and coal producers in the next decade to spend more for conservation and alternate energy. Republicans sided last year with companies including Exxon Mobil Corp. of Irving, Texas, and ConocoPhillips of Houston, to push back Obama’s repeal of the fossil-fuel breaks, saying U.S. jobs would be lost as producers denied the credit would move operations overseas. The budget, which boosts spending to add jobs in the short term while reducing the deficit over a decade, will trigger election-year sparring. The proposal borrows heavily from a package of tax increases and spending cuts Obama offered in September. Spending for energy efficiency and alternate energy would rise 25 percent. The U.S. Energy Department’s 2013 budget, for the year starting Oct. 1, provides $27.2 billion in overall spending authority, a 3.2 increase over the current year, according to a summary. A loss for fossil fuels will boost U.S. aid for renewable energy and conservation programs, reflecting Obama’s commitment to alternative sources of energy amid Republican criticism about the collapse of Solyndra LLC, which had won a $535 million U.S. loan guarantee then filed for bankruptcy protection two years later. The program that backed Solyndra ended in September and isn’t renewed in the 2013 budget. Obama said in his State of the Union address in January the U.S. needed an “all-out, all-of-the-above” strategy on energy. The plan calls for a $4.75 billion cut in tax credits for oil companies in 2013, including repeal of $3.49 billion in so- called intangible drilling costs, for a savings of $38.6 billion by 2022. The budget shows cuts equal about 1 percent of domestic oil and gas revenue in the next 10 years. Scott Slesinger, legislative director of the Natural Resources Defense Council, said the “forward-thinking” budget proposal would create jobs and protect the environment. The Energy Department budget includes $12 million for research that would reduce risks associated with hydraulic fracturing for natural gas in shale formations. The process, called fracking, uses a mixture of water, chemicals and sand injected underground to free trapped gas. The Interior Department budget includes a $13 million increase for the U.S. Geological Survey to work with agencies on fracking studies.

February 14, 2012. Japan's Kokusai Kogyo Holdings and Orix Corp will each build a solar power plant with capacity of about 2 megawatts in western Japan, the local Kagawa government hosting the facilities, said. Kokusai Kogyo, a major aerial surveying contractor that has built many solar plants, and Orix, Japan's top general leasing company, are taking advantage of a feed-in tariff scheme, which will requires the utilities to buy all kinds of renewable energy from July. Electricity output generated by the plants, which will start operations in July and September respectively, will be sold to regional power provider, Shikoku Electric Power. Japan is keen to increase renewable power in the wake of the radiation crisis at the Fukushima nuclear plant.

February 14, 2012. Spain’s Solaer group will build the largest solar energy plant in Israel, a project in which it will invest some 80 million euros ($106.55 million). The company announced that authorities in the Israeli municipality of Ramat Hovav approved the proposal made by Solaer subsidiary Sol Proyecto 7 Ltd. to lease 48.5 hectares of land. The parcel will be transformed into the largest solar power array in Israel, with the capacity to generate 35 megawatts of electricity. It will be connected to the national electrical grid. The future solar power park will not only be a clean energy installation but its construction will also serve to rehabilitate a very degraded area that has been used as an evaporation pond for wastewater.

February 14, 2012. Energy Conversion Devices Inc., a U.S. solar manufacturer that suspended production last year, filed for bankruptcy with plans to sell its solar panel unit. Its United Solar Ovonic unit will continue to operate during the sales process, Auburn Hills, Michigan-based Energy Conversion said. The company listed debt of $249.1 million and assets of $986.3 million as of Dec. 31 in Chapter 11 documents filed in U.S. Bankruptcy Court in Detroit. The company joins LSP Energy LP, the owner of a natural- gas-fired power plant in Mississippi; Ener1 Inc., maker of lithium-ion batteries for plug-in electric cars; solar panel maker Solyndra LLC and energy storage company Beacon Power Corp. in bankruptcy.

February 13, 2012. Osmosis Investment Management LLP said investors are more prepared to buy into riskier climate- related businesses that seek resource efficiency amid population growth and higher oil prices. Osmosis tracks companies active in low-carbon services and technologies through the Osmosis Climate Solutions Index. The index is showing early signs of growth after underperforming in the past few years. Investor appetite for companies that use resources efficiently is being driven by rising middle-class consumption and higher fossil-fuel costs. This comes as renewable energy investments rose to a record $260 billion last year, boosted by a surge in solar developments. As some European governments cut clean energy subsidies to tackle austerity measures, businesses have restructured, emerging as well-managed companies. The Osmosis index follows 100 companies including Renewable Energy Corp ASA, EDP Renovaveis SA and LDK Solar Co. in the renewables and low-carbon energy production, energy efficiency and water and waste management sectors. Member companies generate more than 50 percent of revenue from products and solutions that help fight climate change or use natural resources efficiently.

February 13, 2012. The European Union will press ahead with emissions levies for international airlines, putting the bloc on course for a trade spat with countries including China, India and the U.S. At least 27 countries are due to meet next week in Moscow to discuss laying new charges on European airlines as they protest the EU’s addition of aviation to a carbon-emissions trading system last month. The governments say the move extends EU regulations beyond the bloc’s border. China and India have already asked airlines to rebuff mandatory requests from the EU for data needed to fix emissions payments. Carriers will have to hand over permits for 2012 carbon production by April 30, 2013. They will receive about 85 percent for free and will need to buy the rest in the market.

February 13, 2012. Renewable-energy companies are losing their allure with top executives after profits and stock prices collapsed across the industry, making it more difficult for boards to replace underperforming managers. First Solar Inc., the biggest U.S. solar company, ousted its chief executive officer in October and is still seeking a replacement. At Vestas Wind Systems A/S, the largest turbine maker, the chairman and finance director are leaving after the company cut sales forecasts twice in three months and CEO Ditlev Engel said his own job is safe.

February 11, 2012. A123 Systems Inc., a Waltham, Massachusetts-based maker of batteries for electric cars and utilities, rose after announcing a contract to supply power- storage systems to a U.K. grid operator. The storage systems will manage fluctuations on the grid and will be in operation by the end of this year.

February 10, 2012. The argument that renewable energy should be favoured because it will create "green jobs" - a view held by environmental groups, policymakers and companies in the renewables sector - is trumping economic logic and leaving consumers out of pocket. Developed countries are overhauling their ageing fossil fuel energy and at the same time responding to new challenges including energy security and climate change.

February 10, 2012. Tesla Motors Inc., the electric carmaker run by entrepreneur Elon Musk, unveiled a battery- powered sport-utility vehicle with “gull-wing” doors that will go on sale next year after the Model S sedan’s debut. The Model X, touted by Tesla as faster than Porsche AG’s 911 sports car and roomier than Audi AG’s Q7 SUV, will be built in 2013 at the company’s Fremont, California, plant that starts making the Model S this year. Deliveries will start late next year and ramp up throughout 2014. Tesla, which seeks to become a dominant seller of premium electric vehicles, expects Model S sales to help it become profitable for the first time by as early as next year. The Model X may sell as well as the Model S. The company began taking reservations for the seven-passenger crossover, which shares a platform and battery system with Model S, when it showed a prototype at Tesla’s design studio in Hawthorne, California.

February 10, 2012. First Solar Inc., the world’s biggest maker of thin-film solar panels, plans to reduce production at its factory in Germany as declining subsidies reduce European demand. First Solar applied for government assistance to help offset the loss of income for the 1,200 employees in Germany who will be placed on a part-time work schedule. First Solar last year doubled capacity at the factory to 500 megawatts of panels annually, and plans to cut output in half for six months starting in March, once the government assistance is approved.

February 9, 2012. Germany’s biggest program of solar- and wind-power production has driven European coal prices below South Africa’s for the first time in 10 months. Coal in northwest Europe cost $3.55 a metric ton less than supplies from South Africa’s Richards Bay, the widest discount for next-month prices since May 5, 2010. The difference is likely to keep increasing as European demand weakens and Asia boosts imports from South Africa.

February 9, 2012. The U.K. will open the world’s biggest offshore wind farm, marking the start of a 33 billion-pound ($52 billion) push to expand sea-based generation more than 10-fold by the end of the decade. Energy Secretary Edward Davey will inaugurate Dong Energy A/S’s Walney farm, located in the Irish Sea about 9 miles off the coast. The 367-megawatt project will produce enough power for 320,000 homes. Britain, which has more than 1,500 megawatts of offshore wind, plans to increase capacity to 18,000 megawatts by 2020 in a bid to meet rising energy demand without adding emissions. The government says more than 110 billion pounds is needed by then to replace aging power plants, upgrade the grid and build renewable-energy projects. The Walney farm, which Dong co-owns with SSE Plc, PGGM NV and Triodos Investment Management BV, cost about 1 billion pounds and employed more than 5,000 people. Dong installed 51 3.6- megawatt turbines in 5 1/2 months in Walney’s second phase. Together with the first 51-turbine phase, which was linked to the grid a year ago, the offshore farm is the world’s biggest.

February 9, 2012. Chinese solar companies climbed, driving an index of the nation’s stocks traded in New York to gain the most in a month, as Renewable Energy Corp. ASA said demand for the technology is shifting to Asia. The Bloomberg China-US 55 Index of the most-traded Chinese equities in the U.S. advanced 1.6 percent to 106.13 in New York.

February 8, 2012. Hydropower, biomass and geothermal energy groups urged Congress to extend a tax credit that will expire next year, joining the solar and wind industries in saying jobs will be lost without renewable-energy subsidies. The National Hydropower Association and the Geothermal Energy Association, both based in Washington, and the Biomass Power Association of Portland, Maine, in a letter said the “looming expiration” of the credit is already causing a decline in construction. Geothermal-energy projects, which use earth’s underground heat to produce power, can take four to eight years to build, according to the letter. Hydropower and biomass facilities also take several years to construct.

February 8, 2012. Industrias Metalurgicas Pescarmona SA (Impsa), an Argentinean wind-turbine maker, plans to build a 200 million-real wind-turbine plant in the Brazilian state of Rio Grande do Sul. The plant will have capacity to produce 140 machines a year and will start operating in 2013. Impsa also plans to build a 50 million-real electronics factory for wind farms.

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