Investors got the upper hand in 2009, while fund houses struggled to cope with regulatory changes and upheavals in the economy, even as the industry shrugged off recession blues with its assets hitting an all time high of Rs 8 lakh crore (Rs 8 trillion).
The biggest irony is that nearly two-thirds of these funds are estimated to have come from investors in overseas markets, which themselves were in shambles and where companies were in dire need of capital, forcing them to beg their respective governments for money.
The move apparently has been triggered by the drastic fall in international crude oil prices which have dived from $147 a barrel in August 2008 to below $40 now. In the old formula, taking crude price at $60 per barrel, the cost of gas at Iran-Pakistan border translated into $4.93 per mBtu. But according to the new formula, gas price will shoot up to $5.9 per mBtu although crude prices have crashed below $40 a barrel.
International crude prices, which rose to a historic high of over $147 a barrel in July last year, have slumped to four-year low of around $37 per barrel, prompting fears that companies may not invest in new fields. Several oil companies have put on hold investments in small and marginal fields and in difficult and frontier areas following the sharp dip in prices as current rates give a negative rate of return on the huge investments required.
India on Wednesday offered Qatar a 10 per cent stake in Petronet LNG Ltd to get the worlds largest liquefied natural gas exporter to sell 18 more LNG cargoes this year and agree on a long-term supply deal for meeting fuel needs of beleaguered Dabhol power plant.
An oil shock, reminiscent of 1979 crisis, nearly derailed Asia's third fastest growing economy as policy-makers spent more time fire-fighting controversies resulting from the absence of a coherent energy plan than taking decisive steps.
They used to be an avenue of mutual gains for investors in both good and bad times for years, but incurred heavy losses in 2008, when mutual funds became poorer by about Rs 1,50,000 core (Rs 1,500 billion) or about one-third of their total size.
Prime Minister Manmohan Singh on Sunday said he expected India's economy to grow by a healthy 7 to 7.5 per cent in 2009, despite the global financial crisis eroding output across sectors."Due to the current financial crisis, growth rate may come down somewhat next year, but I am still confident that we will be able to achieve a rate of between 7-7.5 per cent," he said while addressing the Indian community in Oman.
Reliance Industries has created history by flowing oil from the nation's first deep-sea oilfield, but gas production from the eastern offshore KG basin will begin in January, four months behind the deadline. Reliance began oil production from its predominantly gas-rich KG-DWN-98/3 or D6 block on September 17 with initial oil flowing at the rate of 5,500 barrels per day, the company Chairman Mukesh Ambani announced on Sunday in Mumbai.
OVL in 2007-08 recorded highest ever oil and gas production from its overseas assets. Crude oil production was up 18 per cent to 6.811 million tons, while gas output was marginally lower at 1.962 billion cubic meters. It earned a net profit of Rs 2,397 crore (Rs 23.97 billion).
India will host the next meeting on the 1,680-km gas pipeline, planned from Turkmenistan through Afghanistan and Pakistan to India, in October even as it has asked Tehran to call a trilateral meeting to finalise the rival Iran-Pakistan-India gas line.
Government will review fuel pricing scenario in October, Petroleum Secretary M S Srinivasan said on Thursday. The petroleum secretary further said, "Situation will be revisited in October when we will take stock of the scenario emerging out of international oil prices." Global crude prices touched a record $145 a barrel, which is expected to push India's oil import bill this year higher by nearly 76 per cent to $110-120 billion.
This year, the import would be higher because Reliance Petroleum's export oriented 29 MT refinery is set for commissioning in August-September. The government had increased petrol and diesel prices on June 5, but oil marketing companies are still selling these fuels below cost price.
Reliance Industries, India's most alued company, and state-run GAIL India will next week mount pitch with Qatar for jointly setting up a $.3 billion mega petrochemical plant in the gas rich nation.
Iran on Tuesday indicated that it may be willing to change the delivery point of gas it wants to sell to India through a pipeline passing through Pakistan, but wanted New Delhi and Islamabad to decide quickly on the $7.4 billion project.
India's Oil and Natural Gas Corp and GAIL (India) Ltd's equity in two gas rich offshore blocks in Myanmar have been cut following Myanmar's national oil company exercising its 'step-in' rights in the fields, gas from where will be sold to China.
Reliance Industries will buy 7.5 mn tons of crude oil from Venezuela for its upcoming export-oriented refinery at Jamnagar. The company has been sourcing crude oil from Venezuela, the only OPEC member country from Latin America, for its existing 660000 barrels per day (33 mn tons) refinery at Jamnagar. Venezuela has agreed to supply 150000 barrels per day of oil from June under a long-term supply contract. Reliance is on a sphere to tie-up crude supplies for its new refinery.
Venezuelan Prez Hugo Chavez promised to give India more oilfields in its heavy-oil belt, as he seeks to tap the world's second fastest growing economy to diversify energy trade beyond US. He intends to supply 1 mn barrels per day of oil to India in the near future. The Junin area is believed to hold some 500 bn barrels of in place oil reserves, of which Junin Norte may have about 7-8 bn barrels. OVL is expected to be given preference in the development and production phase.
ONGC Videsh Ltd, the overseas investment arm of Oil and Natural Gas Corporation (ONGC), has signed a joint venture agreement with Petroleos de Venezuela S.A. (PdVSA) to take 40 per cent stake in the San Cristobal oilfield in Venezuela. Under the agreement, OVL and PdVSA will develop the field from its current production level of 20,000 barrels per day to 40,000 barrels per day, company officials said. OVL will make a total investment of $ 355.738 million comprising signature.
The Third OPEC Summit on its closing day on Sunday is likely to announce a fund, which will have contributions from energy consuming countries and oil producers, to provide technological support for reduction of the environmental impact of fuel use, OPEC officials said.
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