FM is heading towards President Post, he has doen a disastrous job in these few years, but congress will wash their hands off him and say President is Apolitical we dont know Pranab, his problems are his, all good is ours....

Link for the previous quote http://t.in.com/enE9...

Link for the previous quote http://t.in.com/enE9...

Bhusbhac, Thanks for the spirited encouragement. TondonA ...

Right now KG Basin still produces gas below 4.24$ per mmscmd, so it is possible to produce at that price, more relevant question is does it serve business purpose.. ITs a tricky question but since any business is setup mostly for profit motive and there is nothing wrong in that, there should be profit made.. Question is how much profit is too much, because we must understand that any Oil & Gas Company or coal also is earning out of Natural Resources of this country so there would always be some restrictions imposed in the Interest of the Country as such (although at times it is Interest of the Government in Power) RIL not getting the Gas is more about Priority Sectors in Gas getting it First and RIL has to stand in queue despite being the producer itself.. IT is indeed a very weird situation though , at times funny too.. Shale Gas, I think a lot of Shale Gas reserves are over estimated or hyped, but more can only be known about this once more discoveries of bigger magnitude happen as China USA and even India if i read somewhere have put out some numbers which cant e accepted at such an Early Stage of Shale Gas Exploration in he World. KG Basin btw was hyped in my mind.. Some extravagant unrealistic numbers were projected for whatever the reasons be Political or Financial. I found some numbers coming out of E&P after the turn of the millennium way too much to digest.....

Bhusbhac, The answer is to be found in a very simple rationale. The viability of anything depends upon its realisable price. Like, producing wheat at a given price of Rs 1000/ton will NOT be viable. Similarly, at the given price of $ 4.2 alongwith the other associated policies (with their distortions) a large part of the discovered reserves would be economically-unviable. But at the free market discovered price of ngas, which may be closer to $ 10/mmbtu, many of these fields would become economically viable. Same is the reason for writing down of the reserves - because the geological conditions encountered in the bassein, at the present price of $ 4.20, some of the reserves would not be economically recoverable. Once the price increase happens, a part of the written down reserves may get written back. But ...

The basic problem with our Oil and Gas Industry or Related Industries of Power or Fertilizer as well is problems of no pricing power to the end user.. Until that basic problem gets resolved all this issues and doubts over fair pricing , price discovery will continue.. There can be no Fair price when end consumer is subsidized at different levels for Political motives (some may even be genuine) The Price Discovery (Removing subsidy availability by GoI) maybe way too low for the E&P Industry to even exist let alone survive at the subsidized rates prevailing.. Until and unless the system as a whole moves slowly (slowly and this should not be abrupt as that will derail the economy) and steadily towards removal of subsidies broadly over a period of 5-10-15 years, we will debate a lifetime about fair prices and another lifetime on why Indias Economy grew for 10 years gave false hopes of a gr8 economy and ended up being a stagflation case....

Im not talking fo price and im not "debating" either, i dont know why u assume that :p anyways what i wanted to ask is, Are these Fields being considered commercially unviable post Capex. IF so that becomes an issue of Price discovery and cost of Production.. IF it is being considered unviable before complete exploration then it may wel be a decision to reduce cost knowing end result of it not being viable given past decisions in similar blocks. This i am hazarding a guess.. IF Price Discovery is a reason for why the GoI considered it unviable then we can debate prices.. The GoI has to think more than just about how much it earns of teh Gas, it has to think about long term price stability as also about teh fact that a Price above a certain point if permitted it maybe looked upon as a First of a kind for a country to approve domestic Gas price close to Imported Price. No other Country does that . Given the current slew of scandals hitting them, I dont think the Media or People will take things lightly over approval of a Gas price which will be a landmark of sorts even by Global Standards.. Hesitancy on that account will obviously force the GoI to think a thousand times before considering it commercially viable .. At a later stage when domestic prices gradually move up, if it does, these blocks may become viable.. That said no oen can rule our vendetta or act of bribery in approval or disapproval in such matters, your point onyl re-affirms what i firmly believe in , that no decision of certain economic value takes place without an act of bribery or corruption commission .. Without which our bureaucrats Politicians will not work.. And also dare i say without such a Corrupt System a lot of Otherwise Inefficient Businesses would not have survived competition unless competition was checked by policy moves of sorts. The last statement i make is generic in nature of the whole system and no stock or sector in particular....

Sometimes these rating agencies behave as if these things are a surprise for them acting in a childish manner of sorts.. When Nico or BP revised their reserve estimates down, what made them wait for RIL announcement, ofcourse BP is no new baby in this Field it knows a whole lot more than RIL does in this field and it would have done its study to put down its estimates.. Also these agencies downgrade after news, rather a rating agency should be the one who should foresee news before it happens and not react after it happens.. Even i can rate RIL negative after it releases news, what gr8 job is Moody`s doing ? Something a layman reading newspaper or watching CNBC can also do, not a whole lot of rocket science going in there.....

Q: Also about the commerical viability when GoI has not to stake one paisa I wonder under what grounds so many discoveries are set aside as being commerically non viable UQ: Dosent the GoI have to bear the cost recovery ? No expert on these issues, just asking .....

Link for the previous quote

http://t.in.com/enE9...

Link for the previous quote

http://t.in.com/enE9...

Q

Petrochem is already a relatively high margin business: while its petrochem revenues are less than a third that of oil refining (and marketing), the quantum of profits in both divisions is almost the same.

Looking ahead, there would be ample scope for innovative growth in petrochem, emergence as a knowledge-intensive company and consequent rise in valuation. If BP`s $7.2-billion investment in India`s hydrocarbon sector pays off, its partner RIL cannot but benefit.

Its forays into retail, telecom, hospitality and media are risky but bold bets on the India growth story. RIL`s shift from Sensex proxy to long-term play is evolution, not disaster

UQ

So what is India`s GROWTH story? Today Hon FM says that the whole world is at fault but he is nowhere to blame although everything and balme comes to him and stops there.

He also heads the EGoM on oil and gas and he is not to balme for the delays? He could not even take up anything in case of FDI and on top of it brings out GAAR and he is not to blame?

What is the trade deficit, disinvestment and deregulation of petrol and diesel. He says he is willing to bite the bullet. Just word?

Now the Vodafone case and FEMA enquiry initiated against Bharti Airtel. He says he is not to blame?

REDICULOUS!...

TondonA

Congrats!

Keep it up!...

jai sharemaster

Simply speaking at a higher price GoI gets more profit but is not able to subsidise the fertiliser and power projects. However I feel that if GoI gets a higher price it can directly give a cash subsidy to that extent to the fertilzer and power companies just as it does for crude under recoveries which amount it gets from other sources in the economy.

Now was the private enterprise involvement in NELP and PSCs to supply gas at a LOW price (not defined I am sure) or was it to be a win win situation for both GoI as well as private enterprise.

GUP was defined later but that should have meant only the extent of EXISTING requirments and NOT to make NEW projects based on low priced gas.

At the time of the PSC it is quite clear to me that neither GoI nor RIL thought of crude at prices well abouve US$ 60 at around Rs 40 = US$ 1/-. Also US$ 4.24 per mmscmd appeared to be highly profitable as per International benchmark if you might compare it however the ground reality may be that KG D6 Basin might have been overrated. The first trial well produced as much as 8 mmscmd however at present is around 2 mmscmd.

I think if each well could have produced 18 x 4 = 72 mmscmd even then it was worth it. there are allegations that RIL has deliberately underproduced however when the projected production was 80 mmscmd it was GoI planning even more industries under teh GUP.

Somehow in a two way relationship we must see the right and wrong on BOTH sides! Here even RIL got minimal allocation for its own captive consumption. So many arguments that RIL should not get gas allocation from what it produces does not hold water and in fact if RIL got preference it would only induce the contractor to produce more at higher risk.

Now is it possible tp produce gas at US$ 4.24 per mmscmd and / or less? Maybe if it goes all out for shalegas ...

jai sharemaster

NO GoI does not have to bear anything. If there is no production there is no share to GoI but a loss to RIL. GoI does not pay naything to RIL if there is a loss but if there is a profit over and above the capex then it is entitled to the profit. Even in the case of KG D6 Basin at a higher price GoI is also entitled to a higher profit after the contractor recovers is capex in full.

Now here if there is a discovery the field may not be viable at US$ 4.24 per mmscmd but may be highly viable at US$ 12 per mmscmd which RIL would pay gladly for the purpose of cost sharing. GoI may get as much as US$ 4 per mmscmd even in a very non viable field. It is UPTO RIL to get that price or consume at that price where does GoI lose?

Now if you really wish to argue just elaborate how GoI loses?

For a starter. If GoI wants to have gas at a price for its PSUs as the prime objective and the discovery costs say US$ 8 per mmscmd. If GoI were to pay US$ 8.00 per mmscmd then it indeed pays the contractor towards the capex INDIRECTLY. Now the question some of you need to answer is that whether the yardstick of commercial viability is correct from the point of view of regulatory framework or from the point of view of marketing freedom?...

To me it is quite clear that this GoI babus are corrupt and without corruption the nation can go to hell!!!...

hkre

Banks also do the same. RIL invests in first glass GoI bonds, FDs and Mutual Funds. Through mutual funds I suppose RIL can control the rest of the market when the time comes.

RIL cannot LEND money to anyone since it does not have license for banking as yet although it has interest in a subsidiary which does lend. Hence the other income component might be considered core if the income becomes regular in nature for two years....

TondonaA

Very clear! Motives of our babus seem to be money spinning scams or they are just not interested in our nation`s progress.

Within just ONE year we could turn our fortunes around but that is not what our government wants???????????...

I know the two way trade but at this moment the Indian stock market is not interesting.

Example: On a particular day stocks move in rotation in an unpredictable manner. So yes you can play against the market going up or down but now it is difficult for ME to go with fresh protection and / or short and I simply cannot get myself to go long.

Want to see more destruction? Two more years of this UPA is enough for destruction but not construction so RIL is safe behind arbitration and court cases.

Hence I say that this GoI has NO time to produce 80 mmscmd of gas at US$ 2.00 per mmBtu for this nation in less than two years from now!...

What about those who are not having a portfolio but waiting for it? This market is in danger of selling much more and so those who have nothing but profits working in the market have nothing (only something nootional) to lose.

MMB Members

Different bewteen stagnant and lazy investors who have not even learnt FnO since 30 years of experience.

Now those who know intraday charts and FnO will shine. I will not buy and hold a single more share for the next two years at least. ALL global markets are in RISK and heading for further turmoil.

Elections virtually destroyed EUROZONE and should have the same effect in USA followed all the way by India for the next two years.

Living day to day is fun too! One needs to look at the currency markets and then you will know where this nation could be heading with the typr of GoI we have.

Even with oil crashing and GAAR deferred WE have NO solution!...

TondonA

Interesting!

I hope that you get clarification and let us know about these glitches which could be manipulation and / or some technicality.

Of course the exchange can stop trade to facilate block deals which ought to have been notified earlier however our brokers may have not informed us....