le Bar des Potos

10 FEB, 2011, 02.19PM IST,PTI
Govt will save $2bn if Rajasthan royalty cost-recoverable: ONGC

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Read more on »rajasthan oilfields|oil and natural gas corporation ltd.|cairn india ltd.


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NEW DELHI: Refuting the claims made by Cairn India, state-run Oil and Natural Gas Corp (ONGC) has said the government will save USD 2 billion if royalty paid on the prolific Rajasthan oilfields is allowed to be cost-recovered.

ONGC owns a 30% stake in the Barmer oilfields and pays royalty to the state government not just on its share, but also on the balance 70% owned by Cairn India.

Over the life of the field, ONGC estimates it will pay over Rs 14,200 crore (USD 3.15 billion) in royalty on behalf of Cairn India, which the government -- in numerous commitments since 1997 -- has promised to reimburse the state-run oil exploration firm for in full, sources said.

ONGC has alternatively suggested that the royalty can be added to the project cost and recovered from the sale of up to 240,000 barrels per day of oil projected to be produced from the Rajasthan oilfields.

Sources said the company, in workings submitted to the Oil Ministry this week, stated that the government's profit share will be lower by USD 1.1 billion in such a scenario, much less than the USD 3.15 billion it would otherwise have to reimburse to ONGC.

While the workings have been calculated considering the oil price of USD 70 per barrel, the profit for Cairn India, ONGC and the government is calculated after debiting capital and operating expenses and royalty from the oil price realised.

Sources said Cairn India CEO Rahul Dhir had on February 7 written to the Oil Secretary S Sundareshan saying the government's profit share of USD 14.6 billion at the present approved peak output of 175,000 barrels per day would be reduced by over USD 2 billion if ONGC's proposal is accepted.

The UK-based company estimates that ONGC's cashflow at an USD 80 per barrel oil price will be USD 5.834 billion. ONGC's royalty payout would be USD 5.282 billion and it would have paid another USD 878 million as its share of capital expenditure. Thus, its total deficit would be just USD 564 million.

Cairn says the government will have to reimburse only USD 564 million to ONGC if the PSU is reimbursed for the excess royalty burden, while if royalty is added to project cost, the government's profit share will come down by USD 2 billion.

Sources said ONGC has countered these assumptions, stating that Cairn has not accounted for the cost of money and the operating expenditure involved before calculating the net cashflow.

Also, ONGC is a commercial organisation which functions for earning profits. In Cairn's assumption, ONGC is shown as a no-profit-no-loss company. These also do not account for the time and effort put by ONGC into the Rajasthan joint venture.

ONGC says it is only asking for its contractual right under the Production Sharing Contract (PSC) and it was none of Cairn's business to discuss how much of its royalty liability should be reimbursed by the government.

Pour moi, le deal se fera.
C'est exactement la même technique que quand vous achetez un tapis dans un souk marocain
- faut savoir partir
- dire que cela ne vous convient pas du tout
- sembler être intéressé par autre chose
Et au final on trouve le juste prix pour les deux partis, et on boit un bon thé

Ton regard me semble persan ... ;-)

10 FEB, 2011, 07.29PM IST,PTI
Cairn India posts 7-fold jump in Q3 net to Rs 2,010.12 cr

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Read more on »net profit|earnings announcement|cairn india ltd.


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NEW DELHI: Cairn India Ltd , the operator of the nation's biggest onshore oilfield, today reported an almost seven-fold jump in net profit for the third quarter on back of record increase in output.

Net profit climbed to Rs 2,010.12 crore in October- December from Rs 290.96 crore a year earlier, Cairn said in a press statement here.

Cairn said it produced an average of 124,861 barrels per of oil from its mainstay Rajasthan block in the quarter. The company realised an average of USD 75.9 per barrel price for the oil as compared to USD 70.7 a barrel in Q3 of 2009-10.

It had started production from the Mangala oilfield, the largest in the Rajasthan block, in August-end and is selling the oil to Reliance Industries , Essar Oil and Indian Oil Corp.

"Mangala reservoir performance and surface facilities (are) ready to support immediate production increase of 25,000 barrel per barrel to 150,000 bpd," Cairn said.

Bhagyam, the second biggest field in the Barmer block in Rajasthan, is expected to commence production in the second half of 2011 calendar year and will "achieve approve plateau rate of 40,000 bpd by end of calendar year 2011."

"Mangala production has consistently delivered at the currently approved plateau rate of 125,000 bpd. A further production increase to 150,000 bpd remains subject to joint venture and government of India approval," company Managing Director and CEO Rahul Dhir said.

"All of the processing systems and the pipeline infrastructure have demonstrated safe and efficient operations and we continue to work with the government of India to rebuild the momentum and ensure the national resource in Rajasthan enhances our contribution to our nation's energy security," he added.

Income from operations jumped to Rs 3,096.44 crore in October-December from Rs 495.46 crore in the same period last year.

10 FEB, 2011, 08.54PM IST,PTI
Cairn India says will not accept any term hitting its value

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Read more on »vedanta resources|united kingdom|india|cairn india ltd.



NEW DELHI: Plunging into the $9.6 billion deal between its parent firm and mining group Vedanta Resources , Cairn India today said it will not accept any government condition that will negatively impact its value.

While neither UK's Cairn Energy, which is selling most of its 62.4 per cent stake in the Indian arm, nor Vedanta have publicly commented on government attaching any condition for approving the transaction, Cairn India used the announcement of its third quarter earnings to reject any precondition.

"The Cairn India board of directors has stated that any condition tied to the approval of the transaction, which can negatively impact the value of the company, cannot be accepted," the company said in a press statement here.

Previously, Cairn India had gone ahead and written to the Oil Ministry saying partner ONGC was cash surplus from the Rajasthan fields despite its liability to pay royalty in excess of its 30 per cent share in the output.

This was refuted by the state-owned firm which said Cairn India was misleading the oil ministry by deliberately not including capital expenditure incurred on the block while calculating cash flows. After considering capex incurred, ONGC is net negative in cash flow, something that the oil ministry wants to address before approving the Cairn-Vedanta deal.

The oil ministry has put 11 preconditions for approving the deal, most of which are acceptable to Vedanta.

In particular, Cairn/Vedanta are not agreeable to addressing state-owned Oil and Natural Gas Corp's (ONGC) royalty liability on Cairn India's mainstay Rajasthan block.

ONGC had on July 14, more than a month before the Cairn- Vedanta deal was announced, sought royalty it pays for the block to be included in project costs.

Project cost, both capital and operating expenditure, are recovered from sale proceeds of oil before profits for all stakeholders including the government are calculated.

ONGC, which owns 30 per cent stake in Rajasthan block but pays royalty to the state government on the entire output, says it will pay over Rs 14,200 crore on behalf of Cairn India over the life of the field.

Oil Minister S Jaipal Reddy had earlier this week stated that concerns of ONGC must be addressed before the $9.6 billion deal can be approved.

Cairn/Vedanta are opposed to ONGC's demand as it will lower Cairn India's profitability and valuation. Cairn says only contractor cost - capital and operating expenditure - constitute project cost and can be recovered from sale of oil. ONGC's royalty liability, it says, is a licensee cost which contractually cannot be made cost recoverable.

The state-owned firm on the other hand says its demand is in conformity of the Production Sharing Contract (PSC).

10 FEB, 2011, 09.57PM IST,REUTERS
Cairn opposes change in India royalty payment terms

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Read more on »vedanta resources|india|cairn india ltd.


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NEW DELHI: Cairn India will not accept a change in royalty payment terms of its main producing asset as that could hurt its value, and in turn jeopardise Vedanta Resources' $10 billion acquisition bid.

Asked if Cairn thought its value would be hit if India's government made royalty costs recoverable, Chief Executive Rahul Dhir said it would be unacceptable.

"Our board's view has been very clear anything that negatively impacts our business is not accepted ... we are all standing firm on any unreasonable conditions, Dhir said on the conference call with analysts.

UK-based explored Cairn Energy agreed in August to sell 40-51 percent in Cairn India to Vedanta but the deal has been delayed over royalty issues with the Indian government and its partner in the big Rajasthan block, Oil and and Natural Gas Corp.

State-owned ONGC, which has a 30 percent stake in Cairn-operated Rajasthan fields and pays royalty on the entire output, said it would not block the planned deal but wanted the royalty issue to be resolved at the earliest.

ONGC says the block is not viable for it on the current royalty terms which amounts to a payment of about 140 billion rupees ($3.08 billion) over the life of the field. It wants Vedanta to pay a share or account for royalty payments in the overall exploration costs.

Oil Minister S. Jaipal Reddy said on Tuesday that ONGC's concerns over the royalties must be addressed for the deal, keenly awaited by shareholders and seen as a barometer of India's investment climate, to go through.

Dhir said he had nothing in writing from the government and added that he expected New Delhi to take "a constructive view" in discussions. "We ... believe we are at the end of this period of uncertainty," he added.

If the deal goes through, it would give Vedanta its first taste of oil exploration and production and expands its portfolio of natural resources in India.

10 février 2011, 21:57 IST, REUTERS
Cairn s'oppose à un changement en ce qui concerne l'Inde paiement de la redevance

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En savoir plus sur »Vedanta Resources | Inde | Inde cairn ltd.


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NEW DELHI: Cairn India n'acceptera pas un changement dans les modalités de paiement de redevances de son actif la production principale qui pourrait nuire à sa valeur, et dans la soumission de son tour mettre en péril Vedanta Resources 'acquisition 10 milliards de dollars.

Interrogé pour savoir si la pensée Cairn sa valeur serait touché si le gouvernement de l'Inde fait les frais de redevances recouvrables, chef de la direction Rahul Dhir dit que ce serait inacceptable.

"Notre conseil d'administration de vue a été quelque chose de très clair que des répercussions négatives sur nos activités ne sont pas acceptés ... nous sommes tous debout sur toute l'entreprise des conditions déraisonnables, Dhir déclaré à la conférence téléphonique avec les analystes.

Royaume-Uni exploré Cairn Energy accepté en août de vendre 40 à 51 pour cent en Inde Cairn à Vedanta, mais l'affaire a été reportée sur les questions de redevance avec le gouvernement indien et de ses partenaires dans le gros bloc du Rajasthan, du pétrole et and Natural Gas Corp

Appartenant à l'Etat ONGC, qui a une participation de 30 pour cent en Cairn-exploite des gisements Rajasthan et paie la redevance sur la production totale, a dit qu'il ne s'opposera pas à l'opération envisagée, mais a voulu la question de la redevance à régler au plus tôt.

ONGC dit que le bloc n'est pas viable à cet effet sur les termes de redevances actuel qui s'élève à un montant d'environ 140 milliards de roupies (3,08 milliards de dollars) au cours de la vie du champ. Il veut Vedanta de payer une part ou d'un compte pour les paiements de redevances dans les coûts d'exploration globale.

Le ministre du Pétrole S. Jaipal Reddy a déclaré mardi que les préoccupations ONGC au cours des redevances doit être adressée en vue de l'accord, très attendu par les actionnaires et considéré comme un baromètre du climat d'investissement en Inde, à passer.

Dhir a dit qu'il n'avait rien écrit du gouvernement et a ajouté qu'il s'attendait à New Delhi pour prendre «une vision constructive» aux discussions. «Nous croyons que nous sommes ... à la fin de cette période d'incertitude», at-il ajouté.

Si la transaction aboutit, elle donnerait Vedanta avant-goût de l'exploration pétrolière et la production et élargit son portefeuille de ressources naturelles en Inde.