RIL Asks Govt to Expedite Approvals for $7.2B BP Deal

- RIL Asks Govt to Expedite Approvals for $7.2B BP Deal

Tuesday, July 05, 2011
Knight Ridder/Tribune Business News
by Anupama Airy and Gaurav Choudhury, Hindustan Times

Amidst concerns raised by central intelligence agencies over the $7.2-billion (Rs 32,400-crore) Reliance Industries Ltd (RIL)-BP deal, RIL is pushing for speedy approvals to the deal and has cited BP's entry into India as a "major boost to the energy security of the country." Mukesh-Ambani led RIL had signed a deal to sell a 30% stake in 23 oil and gas fields to BP.

RIL's letter dated June 10, asking the petroleum ministry to "expedite approvals" for its deal with BP, comes within days of a June-1 note of the ministry of home affairs conveying concerns of intelligence agencies. The agencies had voiced concerns over the handling of a "natural resource" such as gas by a new player with BP's financial muscle, which would not only take away a large chunk of the gas marketing and transportation business of India's national gas carrier GAIL India Ltd, but will also raise the cost of oil and gas for user industries.

While conveying its "security no-objection certificate" to the RIL-BP deal, the home ministry has asked the petroleum ministry to "take into account" these observations while "considering the case."

However, RIL said that "BP's entry will add value to India's exploration and production (E&P) sector...BP's entry as an international oil and gas major with proven deep ater experience will be a major boost to the energy security of India."

RIL has rebutted the intelligence agencies' observation that it needs to be ascertained whether the New Exploration and Licensing Policy (NELP) contract has a provision of sale of assets and whether it allows BP to sell or transport gas outside the country.

The gas marketing joint venture "is not part of NELP and is governed by a different policy framework for which we will obtain necessary approvals from the authorities concerned," RIL has told the petroleum ministry.

A RIL spokesperson said the company does not want to comment on any inter-ministerial communication and the June 10 letter to the petroleum ministry was self-explanatory.

The deal marked one of the biggest foreign direct investments in a single year in India. Europe's second-biggest oil company bought a 30% stake in 23 oil and gas blocks owned by RIL by paying $7.2 billion or Rs 32,400 crore. RIL will get another $1.8 billion if it strikes more oil or gas. However, the petroleum ministry approval is a mandatory pre-requisite for the deal to go through.

Copyright (c) 2011, Hindustan Times, New Delhi

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Alaska Governor Asks Govt to Expedite Offshore Drilling Projects

Alaska Governor Asks Govt to Expedite Offshore Drilling Projects

Friday, April 01, 2011
Dow Jones Newswires

by  Cassandra Sweet

Alaska's governor asked federal regulators to move ahead in allowing new oil development in the Arctic Ocean, as the state looks for ways to shore up declining production.

In a letter sent Thursday to U.S. Interior Secretary Ken Salazar, Gov. Sean Parnell wrote that "Alaska is the United States' most important and abundant domestic source of future oil and gas." He cited a 2008 U.S. Geological Survey report that estimated more than 10 billion barrels of oil and more than 100 trillion cubic feet of natural gas lay beneath the surface of Alaska's Beaufort and Chukchi Seas. Parnell seized on current concerns in the U.S. about the stability of foreign sources of oil, amid turmoil in the Middle East and rising oil prices.

"We need to develop and increase our domestic supply of oil and gas," Parnell wrote.
Parnell and other Alaska officials have been working to streamline oil production taxes and take other measures to attract more onshore and offshore oil and natural gas development in Alaska. Parnell has introduced legislation, currently working its way through the state legislature, that would slash oil production taxes put in place by his predecessor, former Alaska Gov. Sarah Palin.

Parnell said Wednesday that he had set a "new goal for Alaska" of 1 million barrels of oil production per day through the Trans Alaska Pipeline System within ten years. Current oil production shipped from Alaska's North Slope 800 miles to the port of Valdez through the pipeline system is about 600,000 barrels per day, down from its peak of about 2 million barrels a day 20 years ago.

While the state has encouraged production on state lands and in state waters, for which the state would earn production royalties, officials are also keen to see new offshore drilling in the Outer Continental Shelf, as Alaska collects fees from oil shipped through the Trans Alaska Pipeline.
Alaska's government has also encouraged development of a natural gas pipeline that would ship gas from the North Slope to Canada and the Continental U.S. An alternative project would entail building a liquefied natural gas terminal that would export Alaska gas to overseas markets.

TransCanada and ExxonMobil are developing a $41 billion gas pipeline that would stretch 1,700 miles (2,700 kilometers) from the North Slope to a network of pipelines that connect Alberta, Canada, to the Midwest. A joint venture owned by BP and ConocoPhillips called Denali, has a rival Alaska pipeline plan, with a similar price-tag. Both sets of developers have held open seasons to determine interest by gas shippers in their projects. The companies have not yet released the results of their open seasons.