Cabinet note on subsidy share cap of upstream oil cos soon

Ministry of Petroleum and Natural Gas will go to the Cabinet soon seeking a minimum USD 65 per barrel price for state oil and gas explorers like ONGC . The move is expected to help in bringing 70 million tonnes of oil to production.

"We will soon approach Cabinet on the issue of capping the subsidy share of upstream companies," Oil Minister M Veerappa Moily told reporters here today.

Also read: How India can meet its challenges in oil & gas space?

Upstream companies (like ONGC and OIL ) bear disproportionately high subsidy burden. USD 65 is the minimum price that is needed to help bring marginal and deeper fields into production.

Upstream firms pay for a portion of fuel subsidies by giving discounts on crude oil sales to refiners selling diesel and cooking fuel at rates lower than cost of production.

Discoveries in Mumbai High and KG basin on the east coast can produce nearly 70 million tonnes over a period of time if the price is right.

The Kirit Parikh Committee, last year, advocated reducing upstream subsidy burden and Oil Ministry.

The ministry will also circulate a Cabinet note on allowing Reliance Industries extra time to conduct various tests to prove five natural gas discoveries.

"We are going to the Cabinet Committee on Economic Affairs to allow the contractor to conduct DST (drill stem test) after the time period has expired," Moily said here.

The tests should be done to confirm three gas discoveries in the Krishna Godavari basin KG-D6 block and two finds in the NEC-25 block off the West Bengal coast.

Directorate General of Hydrocarbons (DGH) has made DST mandatory and in its absence does not recognise the five finds.

ONGC stock price

On January 24, 2014, Oil and Natural Gas Corporation closed at Rs 283.25, down Rs 2.5, or 0.87 percent. The 52-week high of the share was Rs 353.55 and the 52-week low was Rs 234.40.

The company's trailing 12-month (TTM) EPS was at Rs 22.24 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 12.74. The latest book value of the company is Rs 145.47 per share. At current value, the price-to-book value of the company is 1.95.

Anda sedang membaca artikel tentang

Cabinet note on subsidy share cap of upstream oil cos soon

Dengan url

http://kebugaranhidup.blogspot.com/2014/01/cabinet-note-on-subsidy-share-cap-of.html

Kebugaran Hidup