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Hindu Dec 7

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Content
More than $150 billion of oil projects face the axe in 2015

Cheap oil and strategic reserves

Growth prospects brighten

FPI inflow in equities reaches Rs. 1 lakh crore

Saudi Arabia opposes gender equality in climate change policy

India to showcase its commitment to renewable energy in Lima

Most CMs favour restructuring of Planning Commission

China uses water power to deepen Sri Lanka ties

India's GSAT-16 launched

Notes by vineetpunnoose on www.kiwipaper.com

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More than $150 billion of oil projects face the axe in 2015

Sun, Dec 7, 2014

The Hindu, crude oil, economics,

Global oil and gas exploration projects worth more than $150 billion are likely to be
put on hold next year as plunging oil prices render them uneconomic,
As big oil fields that were discovered decades ago begin to deplete, oil companies are
trying to access more complex and hard to reach fields located in some cases deep under
sea level. But at the same time, the cost of production has risen sharply given the rising
cost of raw materials and the need for expensive new technology to reach the oil.
Now the outlook for onshore and offshore developments -- from the Barents Sea to the
Gulf or Mexico -- looks as uncertain as the price of oil, which has plunged by 40 per
cent in the last five months to around $70 a barrel.
Around one third of the projects scheduled for FID in 2015 are so-called unconventional,
where oil and gas are extracted using horizontal drilling, in what is known as fracking,
or mining.
Of those 20 billion barrels, around half are located in Canada's oil sands and Venezuela's
tar sands,
Even with oil at $120 a barrel, the economics of some projects around the world were
in doubt as development costs soared in recent years.
New oil fields typically require four to five years to be developed and billions before
the first drop of oil is produced.
Any cutbacks in oil production bodes ill for international oil companies that are already
struggling to replace depleting reserves as exploration becomes harder and discoveries
smaller

Cheap oil and strategic reserves

Sun, Dec 7, 2014

The Hindu, crude oil, economics,

Sticky economic problems ranging from ballooning subsidies to unbridled inflation

have all been solved by the 40 per cent fall in Brent crude prices between June and
now. The cheaper oil prices now present an opportunity for the government to reform
and revamp the energy sector; it is also an excellent chance to build up our strategic
storage, which is now next to nil.
To provide a bit of background, India had conceived of a strategic petroleum reserve
as far back as in the late 1990s The plan was to build storage capacities in three places
-- Mangaluru and Padur (near Mangaluru) on the west coast and Visakhapatnam on the

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east. With a total capacity of 5 million tonnes, this storage was estimated to cover two
weeks' requirements.
four more strategic storages would be built in Bikaner, Rajkot, Padur and Chandikhole
in Odisha. These will have a combined capacity of 12.5 million tonnes and take the
storage to 90 days' equivalent of consumption by 2020. This is in addition to commercial
storage of crude and petroleum products of about 30 million tonnes (about 70 days'
needs) available with the oil companies at any given point in time.
These storages are built in underground natural rock caverns through excavation.
Funding and building these caverns is a relatively easier challenge than filling them
up. Remember, the oil stored in these reserves will be stocked and not consumed which
means that the cost of financing will be huge. Only the government can conceivably
fund this storage as there is unlikely to be a viable commercial model for private
developers to exploit.
This is where the falling oil prices come in. The cost of filling up these caverns is 40
per cent lower now at $68-70 a barrel compared to just six months ago when Brent
crude averaged $115 a barrel. If the project had not been delayed, the country could
have benefited by filling up the caverns now at the prevailing cheaper prices. But the
opportunity is not lost yet. If analysts and experts are to be believed, the low oil price
regime is projected to continue well into the next calendar year.
With supply running well ahead of demand in the global oil markets and producers,
notably OPEC countries, reluctant to turn off their taps, the capability to store crude
oil will be an important factor in determining the resilience of oil producers in riding
out the current price slump.
There have been instances in the recent past when some producers such as Iran
commissioned very large crude carriers (VLCC) to act as floating storage to ride out
temporary market difficulties.
China, which boasts of 170 million barrels of strategic reserve, has been at the exercise
for a decade now and is expanding it further.

Growth prospects brighten

Sun, Dec 7, 2014

The Hindu, economics,

A 5.5 per cent growth in the first half of the current year clearly indicates that the days
of a sub-5 per cent annual growth are finally getting over. Although the RBI did not
cut policy rates, it has indicated that there could be one even ahead of the next (February,
2015) policy statement.
the economy grew by 5.3 per cent during the second quarter. With the first quarter

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growth having been estimated at 5.7 per cent, the half yearly GDP growth rate has come
at 5.5 per cent.
As RBI Governor Raghuram Rajan reiterated, sustained growth is possible only when
policymakers have acquired a firmer grip over inflation. Despite the sharp fall in inflation
-- retail and wholesale -- the time is not ripe for a rate cut.
The big picture, of course, is to be seen in the annual growth rate projection -- whether
the economy is finally coming out of the trough into which it had fallen. Over the past
two years, economic growth was below 5 per cent. It is now almost certain that the
growth rate during this year will be well above 5 per cent, closer perhaps to 5 .5 per
cent than to 6 per cent.
An analysis of the constituents that make up the data will be useful. Agriculture (3.2
per cent) and community, social and administrative services (9.6 per cent) were the
main growth drivers during the second quarter. During the entire first half, agriculture
growth has been of the order of 3.5 per cent, particularly creditable because it has come
on top of a base impact of 4.5 per cent last year.
The biggest negative has been manufacturing, a tiny 0.1 per cent increase, not at all
surprising in the light of the monthly IIP numbers. The fall in manufacturing has been
cited in support of an immediate rate to ease interest rates on loans to industry.

FPI inflow in equities reaches Rs. 1 lakh crore

Sun, Dec 7, 2014

FPI, The Hindu, economics,

Overseas investors have pumped in a staggering amount of over Rs. 1 lakh crore into
the Indian stock market since the beginning of the year, primarily on account of
government's reform agenda.
foreign investors have purchased equities worth Rs. 9.60 lakh crore in 2014 so far,
while they offloaded stocks to the tune of Rs. 8.6 lakh crore during the same period,
resulting into a net inflow of Rs. 1 lakh crore (USD 16.57 billion).
According to market experts, improved fundamentals of the Indian economy, a decisive
mandate to the BJP-led NDA at the Centre, various reform measures announced by the
government have caught the fancy of overseas investors (Foreign Institutional Investors,
sub-accounts and Foreign Portfolio Investors).
However, the inflow is significantly higher in debt compared to equities. Till date, it
has attracted Rs. 1.55 lakh crore (USD 25.6 billion).
Total net investment by foreign investors (debt and equity segments) into India so far
this year have reached Rs. 2.55 lakh crore (USD 42 billion).

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Saudi Arabia opposes gender equality in climate change policy

Sun, Dec 7, 2014

environment, The Hindu, gender equality, climate change,

The Saudi Arabia delegation made a strong pitch to exclude the recognition of gender
equality in the recommendations for the draft agreement for Paris in 2015 it was only
Mexico which fought till the end to retain gender as being paramount in the implementation
of climate change policy.
The delegate said that earlier the gender aspect was woven into the entire text but now
a compromised language has been formulated and gender is only in the preamble.
Saudi Arabia attacked the vital content on gender equality, and the need to promote
urgent and effective gender-responsive climate policy. The EU fell in disgrace along
with Saudi Arabia for supporting, in public, the withdrawal of gender equality language
This would have a negative impact, since climate change has differentiated impacts in
women and men, and therefore there is a need to devise differentiated action in climate
policies.
Without proper methodologies in the finance schemes, the finance will be allocated
without understanding the gendered impacts of climate change and therefore may be
exacerbating inequalities, sources said.
The aim was to give a strong focus on gender to support countries in implementing
climate change policies with gender considerations.

India to showcase its commitment to renewable energy in Lima

Sun, Dec 7, 2014

environment, The Hindu, renewable energy, climate change,

India is planning to create a buzz around its renewable energy programme during the
climate talks in Lima
During the past three decades, a significant thrust has been given to the development,
trial and induction of a variety of renewable energy technologies for use in different
sectors, the government said.
India today has one of the most active renewable energy programmes in the world and
renewable energy applications have brought about significant changes in the Indian
energy scenario. Apart from electricity generation, the application of these technologies
has benefited millions of rural folk by meeting their lighting, cooking, productive energy
needs in a decentralized and environmentally benign way, the booklet said.

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India's total renewable power installed capacity as on October 31, 2014, has reached
33 gigawatt (GW). Wind energy accounts for 70 per cent of the installed capacity at
22.1 GW followed by biomass power-4.2 per cent, small hydro power-3.9 GW and
solar power 2.8 GW.
Renewable power is generating around 65 billion units per year corresponding to about
6.5 per cent in the total electricity mix.
There are 1.1 million households using solar energy and over 10,000 remote and
inaccessible hamlets have been provided with basic electricity services through distributed
renewable power systems.
The 12th five year plan has projected 33 per cent installed capacity of power in 2030
from renewable energy sources. India has ambitious plans to scale up renewable energy
to 165 MW, of this solar energy will be 100 GW by 2019-20. It has proposed 25 solar
parks in India and 100,000 solar pumps for irrigation and drinking water

Most CMs favour restructuring of Planning Commission

Sun, Dec 7, 2014

The Hindu, polity, Planning Commission,

Congress Chief Ministers questioned the Government's approval to scrap the Planning
Commission, which was announced by the Prime Minister on August 15. Instead, they
demanded that the Centre reinvent the plan panel rather than scrapping it and replacing
it with a new body.
At the consultation meeting, the Centre and States also couldn't reach any agreement
on whether India should retain or scrap five-year plans and the annual State plans.
there was broad consensus on three points: federalism must be strengthened, States
must get more powers and they must have greater flexibility to implement schemes and
programmes. "All States agreed that the principle of one-size-fits-all as far as the design
and format of schemes and programmes go does not work

China uses water power to deepen Sri Lanka ties

Sun, Dec 7, 2014

The Hindu, international, Sri Lanka, China,

China has started a major water supply project in Sri Lanka, using its "soft power" to
deepen its relationship with Colombo.
The Chinese company had been earlier involved in the construction of the $ 1.2 billion
Lakvijaya coal fired power plant in Sri Lanka. Once completed, the new project will
yield clean drinking water that would benefit 600,000 people,

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The CMEC will build a water treatment plant with a supply capacity of 54,000 cubic
metres a day, and other infrastructure, within a three year time frame. That would
include laying over 1,000 km of pipes to carry the water.
China sees Sri Lanka as one of the important elements of the 21 century Maritime Silk
Road (MSR), which will connect its Fujian Province with Europe. The MSR would
transit through the Indian Ocean via India, Sri Lanka, Maldives, and Nairobi in Kenya.
It would finally terminate in Venice after crossing into the Mediterranean via the Suez
Canal.
China is also engaged in the expansion of Hambantota Port in southern Sri Lanka, with
two loans of $600 million and one billion Yuan,

India's GSAT-16 launched

Sun, Dec 7, 2014

The Hindu, science & tech, ISRO, space, GSAT,

ndia's communications satellite GSAT-16 was on Sunday, put on a Geosynchronous

Transfer Orbit (GTO) by the European launcher Ariane 5 VA221
GSAT-16's 48 transponders - 12 in the C band, 12 in the extended C and 24 in the Ku
band - cover the entire country and the Andaman & Nicobar islands.
GSAT-16 will be used by television, telephone, Internet, public and private operators.
It replaces the INSAT-3E -- which expired in April this year -- at 55 degrees East
longitude.
The satellite now goes around Earth in a temporary elliptical one about 36,000 km at
one end and it must be adjusted gradually into a circular one.

Notes by vineetpunnoose on www.kiwipaper.com

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