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India plans Sovereign Fund to seek energy assets abroad
In an indication of India turning aggressive in its hunt for energy assets abroad, the government is drawing up ambitious plans to set up a Sovereign Fund that would help its state-run companies pursue acquisition of oil, gas, coal, LNG and other raw material in other countries in order to compete with China. Oil and Natural Gas Corporation Videsh Limited (OVL) had been told to pursue at least one major oil and gas asset every year. China, with $2.4 trillion of reserves and a $300-billion sovereign fund, has outpaced India in the global quest for resources to feed the worlds fastest-growing major economies. Chinese companies spent a record $32 billion last year buying oil, coal and metal assets abroad, while a $2.1-billion investment by OVL was Indias sole energy acquisition. OVL last year bought Imperial Energy Plc for 1.4 billion ($2.1 billion) in Indias biggest energy acquisition. ONGC has taken another stride towards earning green revenue with issuance of first set of certified emission reduction (CER) from its first registered CDM (clean development mechanism) project, waste heat recovery project at Mumbai High. According to a release, the UN Agency UNFC & CC (UNFCCC) issued the CERs on March 18. With this, the deck is clear for ONGC to earn revenue from CDM projects. Nuclear Power Corporation of India Limited (NPCIL) and NTPC joint venture is likely to build two 700 MWe nuclear power plants at a site identified by the Department of Atomic Energy (DAE). Under the agreement, the joint venture will have 51:49 shareholding between NPCIL and NTPC. NPCIL plans to build indigenously developed pressurised heavy water reactors (PHWRS) of 700 MW capacity each at four locations across the country. While two plants each are expected to come up at Rawat Bhata in Rajasthan and Kakrapar in Gujarat, plans are afoot to finalise sites in Haryana and Madhya Pradesh for atomic power plants. (Locate In Atlas)

Indian, Russian cos to jointly bid for SakhalinIII oil fields

India has decided to join hands with major Russian oil and gas companies to jointly bid for the prosperous Sakhalin-III oil fields. India had already demanded Russia that it should be given a stake in Sakhalin-III project in Far East Russia and gas fields in East Siberia and Yamal Peninsula during talks with Mr. Putin. Gazprom owns licences for at least eight of the 11 gas fields discovered on the Yamal Peninsula. OVL already has 20 per cent stake in Sakhalin-I project and is keen on an agreement with Russias Rosneft to jointly bid for Sakhalin-III. OVL is also looking at Trebs and Titov exploration blocks for which an alliance with Rosneft is being looked at. ONGC Chairman and Managing Director R. S. Sharma had stated that his company was in talks with Rosneft, Gazprom and Sistema for exploration and production possibilities. (Locate In Atlas)

ONGC gets CER from UN Agency

Emami plans power plant in Ethiopia

The Emami Group, which has already marked its footprint in Ethiopia with a biofuel project, is now planning to invest between Rs. 1,000 crore and Rs. 1,500 crore for setting up a 300 MW power plant, Director Aditya Agarwal said.

BGR, Orissa Govt sign pact

BGR Energy Systems has signed a memorandum of understanding (MoU) with the Orissa Government for setting up a 1,320 MW (2 x 660) power plant at Bhapur in Nayagarh district, Orissa, at an investment of about Rs. 6,287 crore. The Orissa Government is entitled to purchase 12-14 per cent of power generated from the plant at variable cost as determined by the Orissa Electricity Regulatory Commission. BGR Energy Special Purpose Company would be free to sell the remaining power.

NPCIL-NTPC to build two nuclear plants

NTPC plans plant in Bangladesh

NTPC will examine the feasibility of setting up a coal based power plant in Bangladesh as part of the enhanced bilateral cooperation between the two countries.


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Energy The possibility of setting up the plant which could be in the region of 500-1,000 MW. Under the initial plan, power generated from the plant will be evacuated to India through a transmission network to be developed by the Power Grid Corporation of India Ltd. (PGCIL). NTPC and the Bangladesh Power Development Board will jointly develop the project. At present, Bangladesh has a power generation capacity of 5,000 MW, of which 83 per cent is gasbased. It has also appointed merchant bankers and legal consultants for the due diligence of a mine in Mozambique. NTPCs total coal requirement for the current financial year (2010-11) is about 145-150 million tonnes, of which the company is planning to import 14 million tonnes. (Locate In Atlas)

NTPC-NPCIL sign JV agreement

Nuclear Power Corporation of India Limited (NPCIL) and NTPC entered into a joint venture agreement (JVA) to set up nuclear power projects. The agreement was signed by S. K. Jain, Chairman and Managing Director, NPCIL, and R. S. Sharma, Chairman and Managing Director, NTPC. NPCIL has comprehensive capability in all facets of nuclear power generation technology, namely, site selection, design, construction, commissioning, operation, maintenance and life extension and has plans for significant capacity addition. NTPC, the largest power generation company, with an installed capacity of 31,704 MW has established itself in the field of development of thermal power projects and has proven track r ec or d i n e n g i n ee r i n g , c on t r a c t s , pr oj ec t management and power generation and intends to enlarge the area of its operation by making a foray into nuclear power development.

Coal India selects merchant bankers to acquire overseas assets

Bank of America-Merill Lynch, Royal Bank of Scotland and Bank of Canada are the three merchant banks selected for helping the public sector Coal India Ltd (CIL) which is currently taking efforts to seal strategic partnership deals with coal companies in three countries Australia, Indonesia and the U.S. for augmenting Indias coal supplies. An investment of about $1.8 billion is expected to be made in these deals which may involve the worlds single largest coal company, CIL, picking up shares in the overseas companies against assured supplies of coal, the official said. While Bank of America-Merill Lynch (and its Indian arm DSP Merill Lynch) will help with the Australian proposals, Bank of Canada will help conduct due diligence and evaluation of the proposals from the U.S. and Royal Bank of Scotland will help with Indonesia. NTPC announced that it was exploring the possibility of setting up two coal-based thermal power plants in Kazakhstan and looking at acquisition of coal assets abroad. Kazakhstan, which is a coal rich country, is seeking Indias support for harnessing its dry fuel reserves. Kazakhstan has huge coal reserves, about 33 billion tonnes. NTPC was looking at various options of sourcing the dry fuel, including global coal block acquisition, and has identified countries like Indonesia, Australia, Mozambique and South Africa for the purpose. The company has appointed Australian firm Macquarie as consultant for the evaluation of Kalimantu coal mines in Indonesia.

NTPC-BHEL joint venture targets Rs. 7,000 crore orders

NTPC-BHEL Power Projects Ltd. (NBPPL) signed an agreement with its equal joint venture partners NTPC and BHEL to meet the target of order bookings worth Rs.7,000-crore in the current financial year. NBPPL has been jointly set up by NTPC and BHEL for capacity building in manufacturing of power plant equipment. This signing of MoU was a major initiative taken to ensure fast track growth of NBPPL by providing greater functional autonomy and empowerment in achieving the laid down objectives of the company. It would also help the joint venture partners in achieving financial objectives set in the MoU for the various parameters, an official statement said. The MoU was signed by NTPC Chairman R. S. Sharma, BHEL Chairman and Managing Director B. P. Rao and NBPPL Chairman and Managing Director C. P. Singh.

NTPC plans two plants in Kazakhstan


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CURRENT AFFAIRS FOR I.A.S. (PRE.) 2011 NBPPL will be setting up manufacturing facilities in Andhra Pradesh. It has already taken up EPC work for Namrup gas-based project of 100 MW in Assam and Palatana gas-based project of 726 MW in Tripura. will also take up execution of 500 MW Singrauli thermal power plant and 600 MW thermal power plant at Rayalseema of Andhra Pradesh Power Generation Corporation Ltd. (Locate In Atlas)

Essar Energy begins formal trading on London Stock Exchange

The shares of Essar Energy Plc, a part of the diversified Essar Group, began formally trading on the London Stock Exchange, after its 1.3-billion pound public offer, the biggest since December 2007. Essar Energy Chairman Ravi Ruia, Vice-Chairman Prashant Ruia and LSE Chairman Chris Gibson-Smith, among others, were present at the opening trading ceremony.

Focus turns to energy efficiency

Stating that rapid economic growth and industrialisation were the major challenges that need to be met head on, Union Power Minister Sushilkumar Shinde said power generation capacity addition during the XI Plan would be about 74,000 MW, almost close to the original target of 78,577 MW. With best efforts, we would add about 12,000-13,000 MW power generation capacity over the likely addition of 62,000 MW in the current Five-Year Plan. This would be at 74,000 MW near to the original target of electricity generation capacity of 78,577 MW, Mr. Shinde said at the National campaign for energy efficiency and conservation organised by Federation of Indian Chambers of Commerce and Industry (FICCI). In its mid-term review, the Planning Commission had reduced power generation capacity addition target by over 20 per cent to 62,374 MW for the current Plan period from the original 78,577 MW. The Plan panel had stated that It is anticipated that additional power generation capacity of 45,234 MW can be commissioned during the remaining period of the XI Plan, noting that 19,207 MW of capacity was added till December 31, 2009, he added. During the X Plan, 21,080 MW was added against the target of 41,000 MW. The Minister said the CDM (clean development mechanism) executive board has approved our Bachat Lamp Yojana under which incandescent bulbs are replaced by energy-efficient CFLs at a cost of Rs. 15 only. The CDM is an international organisation for approval of carbon credit projects under the United Nations Framework Convention on Climate Change. The replacement of all incandescent bulbs in the country is expected to result in a saving of 6,000 MW of power. The Power Minister said the Government had put in place an overarching legal, regulatory and policy framework to promote market-based energy efficiency.

Indian oil firms on Chavez list

Venezuelan President Hugo Chavez said his government will sign agreements with foreign oil companies, including from India, that will lead to $40 billion in investments in oil projects. The companies involved recently won bidding to exploit the areas Carabobo 1 and 3 in the crude-rich Orinoco River basin in eastern Venezuela. The government granted operating licences in February to Spains Repsol; Malaysias Petronas; Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and Indian Petroleum Corp (IPCL); U.S.-based Chevron Corp; Venezuelan company Suelopetrol, and Japans Mitsubishi, Inpex Corp and Japan Oil, Gas and Metals National Corp JOGMEC. The companies will be involved in joint companies controlled by the state oil company, Petroleos de Venezuela SA.

India, Venezuela ink pact to develop $20-billion oil project

In a big-ticket investment aimed at giving a boost to its holding of oil and gas assets abroad, the Oil and Natural Gas Corporation Videsh Limited (OVL), along with its partners, entered into an agreement with the Venezuelan government to develop a $20-billion oil project in that country. The project is expected to give India 3.6 million tonnes of crude a year. OVL and its partners signed the agreement with Petroleos de Venezuela SA (PdV) for development and production of hydrocarbons from the Carabobo project in the Orinoco region. Spains Repsol-YPF SA, Petroliam Nasional Bhd (Petronas) of Malaysia and OVL each hold a 11 per cent stake in the consortium that will produce 400,000 barrels of oil a day. IOC and Oil India Limited will each have 3.5 per cent interest in the joint venture to


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Energy develop the Carabobo 1 Norte and Carabobo 1 Centro blocks, located in the Orino Heavy Oil Belt. Corporacion Venezolana del Petroleo, a unit of PdV, will hold the remaining equity. About half of the production from the joint venture, called PetroCarabobo SA, will be upgraded light crude oil for export. The project cost has been pegged at $1520 billion. North Americas largest solar energy services provider SunEdison announced its entry into the Indian market with the joint development of a 15-MW photovoltaic solar power plant in Gujarat in collaboration with domestic independent solar power producer Azure Power. Power generation will begin by January 2011, says a release. As part of the arrangement, SunEdison will participate in financing of the project and knowledge transfer of global technology expertise to Azure Power. It will also supply state-of-the-art monitoring technologies to Azure for projects up to 25 MW. The Gujarat project is the latest example of SunEdisons focus on enabling the growth of global solar markets through strong capabilities in project financing, system design and engineering, low-cost procurement, operations, and maintenance services, SunEdison Energy India Pvt. Ltd. CEO Pashupathy Gopalan said.

IT, energy sectors can propel exports to $1 trillion by 2020

The Federation of Indian Export Organisations (FIEO) said that IT and energy sectors had the potential to take Indian exports to $1,000 billion or 5 per cent of the global trade by 2020. However, the federation said a concerted strategy needs to be devised by the Government to meet the challenge. The Union Commerce and Industry Ministry aims to take exports to $1,000 billion in the next 10 years from the present $177 billion, FIEO President A. Sakthivel said. Indias exports in 2009-10 were estimated at $177 billion. IT and IT-enabled exports could increase to $250 billion by 2020. The growth will come from new verticals such as healthcare, media and utilities, he said. By 2020, the pharmaceutical market is anticipated to more than double to $1.3 trillion, with the E7 Brazil, China, India, Indonesia, Mexico, Russia and Turkey accounting for one-fifth of the global pharmaceutical sales.

Sun Edison, Azure to develop solar project

Alstom makes foray into solar energy

Global leader in equipment and services for power generation, Asltom, announced joining hands with BrightSource Energy Inc. with an investment of $55 million to enter the high-growth solar energy market. The company announced investing up to $55 million in BrightSource Energy with an equity stake that positions Alstom as one of the main shareholders in the company. This operation takes place as part of a capital increase of $150 million organised by BrightSource. This privately-owned company is a specialist in designing, building and operating tower based solar thermal power plants with operations in the U.S., Israel and Australia. BrightSources technology employs thousands of mirrors to reflect sunlight onto a central receiver atop a tower to produce high temperature steam at the highest levels of solar efficiency. The steam is then piped to a steam turbine and generator which produce electricity. BrightSource has contracts for a total of 2,600 MW with PG&E and Southern California Edison Californias two largest utilities. To meet this demand, the company intends to build 14 solar power plants in the U.S. southwest by 2016.

RIL, Russian firm sign MoU on butyl rubber production

Reliance Industries Limited (RIL) and SIBUR, Russias leading petrochemical company, have signed a Memorandum of Understanding (MoU) to set up a joint venture in India to produce butyl rubber. As per the agreement, butyl rubber will be produced at Reliances integrated petrochemical site in Jamnagar. SIBUR operates across the entire petrochemical value chain, from gas processing to production of monomers and plastics, synthetic rubbers, mineral fertilizers, tyres and industrial rubber goods, as well as the processing of plastics. Gazprombank Group is the principle shareholder of SIBUR Holding JSC and owns more than 95 per cent of the company. SIBUR Holding JSC is managed by SIBUR LLC, which acts as the holding companys sole executive body.


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India and Australia to work jointly in energy sector

India expressed its willingness to work jointly with Australia in energy, minerals and power gen erati on sectors including tie-up for gas supply for new plants to be set up by both countries in India. India now h ad t h e fi ft h l ar gest elect r icit y generation capacity in the world and the worlds th ird la rgest tr ansmissi on and di str ibuti on network.

American Capital forms venture with MSM Energy

Seeking to garner a share of the Jawaharlal Nehru Solar Mission 2020 initiative, U.S.-based solar energy giant American Capital Energy announced joining hands with MSM Energy to float a 50:50 joint venture company ICE Solar to provide photovoltaic (PV) solar engineering, procurement and construction to the Indian markets. The company had already bagged a 5 MW solar power project in Gujarat in the private sector and had got solicitations from a number of players wanting to venture into solar energy.

India, Sri Lanka consider energy cooperation

Sri Lanka President Mahinda Rajapaksa has proposed discussions on establishing a joint information mechanism on the possibility of oil and gasfields straddling the India-Sri Lanka maritime boundary. In a joint declaration, Prime Minister Manmohan Singh assured Mr. Rajapaksa that this proposal would receive his governments attention and the matter could be discussed further between the two sides. The two leaders were briefed on the progress in discussions between the National Thermal Power Corporation of India and the Ceylon Electricity Board of Sri Lanka on a joint venture to build a 500-MW coal-fired power plant at Sampur in Trincomalee, incorporating environmentally friendly technologies. Sri Lanka expressed its appreciation of India extending an additional concessionary line of credit of $200 million. Mr. Rajapaksa appreciated the credit facilities for about $800 million for railway projects in Sri Lanka. India agreed to assist in the rehabilitation of the Palaly Airport and the Kankesanthurai Harbour as also help in renovating the Duraiappah Stadium and constructing a cultural centre in Jaffna. India and Sri Lanka agreed to resume ferry services between Colombo and Tuticorin and between Talaimannar and Rameswaram. Both leaders welcomed the proposal for the restoration of the Tiruketheeswaram temple at Mannar and witnessed the signing of the Programme for Cultural Cooperation for the period 2010-2013.

NTPC-BHEL venture plans Rs. 6,000 cr capital investment

NTPC and Bharat Heavy Electrical Ltd. (BHEL) have finalised plans to manufacture nearly 5,000 MW of power equipment annually and hope to secure nearly Rs.7,000-crore worth orders by the end of this year. NTPC BHEL Power Projects (NBPPL), which made a detailed presentation to the Ministry of Heavy Industries and Public Enterprises, has outlined a capital investment of Rs.6,000 crore to become a major player in the field of power generating equipment, it said. NBPPL is a 50:50 joint venture company between NTPC and BHEL for carrying out engineering, procurement and construction (EPC) contracts for power projects as well as for manufacturing and supplying equipment in India and abroad to meet the needs of power equipment in the power sector expansion plans.

Cairn starts crude oil supplies through pipeline

Cairn India announced that it had started crude oil supply from its Mangala oilfield in Rajasthan to private sector Reliance Industries and Essar Oil through the newly built heated and insulated crude oil pipeline. Till now Cairn India shipped crude oil via road to the Gujarat coast for onward journey to Mangalore Refineries and Petrochemicals Ltd (MRPL) and RILs Jamnagar refinery. The company has now completed the 590-km pipeline from Rajasthan to Salaya in Gujarat that has enabled the sale of crude oil to Essars Vadinar refinery in the State.


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IAS PRE 2011 - Current Affairs

Medium: English Price: Rs. 190/Pages: 446 Author: S.A. Majid

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