Mark Latham Commodity Equity Intelligence Service

Tuesday 22nd March 2016
Background Stories on www.commodityintelligence.com

News and Views:

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    Macro

    Helicopter Money.

    Increasingly, central bankers, economists and market watchers are discussing the pros and cons of what's called helicopter money, a 47-year old idea that posits a way to kickstart an economy through dropping money on its citizens. Peter Praet of the European Central Bank, for example, said in an interview published last week that "all central banks can do it" if needed; his ECB colleague Jens

    Weidmann warned that such a move "would rip huge holes in central bank balance sheets." Helicopter money feels very much
    like an idea whose time may be coming.

    Quantitative Easing

    Given all the interest, it's worth asking whether Milton Friedman, who came up with the concept, would support or oppose
    such an unorthodox policyif he were writing today. Friedman's 1969 essay on "The Optimum Quantity of Money" runs to 50 pages
    and opens a book that's almost 300 pages long and contains 13 articles.

    Friedman's thought experiment is designed to answer the question hinted at in the title: How much money would a
    perfectly balanced economy have in circulation to guarantee a community's ability to buy goods and services? He includes the important proviso that the money drop is a one-time, never-to- be-repeated event:

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    Russia says to act on its own against Syria truce breaches if no U.S. response


    Russia will act unilaterally against those militants who violate ceasefire in Syria if Moscow does not reach agreement with the United States on a mechanism of detecting and preventing truce breaches, Russia's Foreign Ministry said on Monday.

    The ceasefire agreement, worked out by Russia and the U.S., is largely respected, the ministry said.

    But the two nations, which co-chair the Syria International Support Group, have so far failed to agree on terms of preventing all cases of ceasefire violations, which sends a wrong signal to "those members of the opposition ... who have not dissociated themselves clearly enough from well-known terrorist groups", it said.

    Russia's general staff of the armed forces proposed earlier on Monday to hold an urgent meeting with U.S. representatives to agree on the mechanism of controlling the ceasefire in Syria, saying it would act unilaterally starting from March 22 if it gets no response.

    The United States later rejected the call from Russia's military, saying that its concerns were already being handled in a constructive manner.

    http://www.reuters.com/article/mideast-crisis-syria-russia-ceasefire-idUSR4N16N05D
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    EU trials new way to measure emissions but will it make a difference?


    An ungainly contraption that resembles a bicycle rack with tubing attached will become a common sight on cars around Europe over the coming months as a new way of measuring car pollution gains traction following the Volkswagen scandal.

    The Portable Emission Measurement System (PEMS) aims to supplement laboratory tests -- the flaws of which were laid bare by the VW experience -- with more realistic testing on roads.

    But Europeans shouldn't expect to be breathing much cleaner air in the near future, experts and analysts say, because all the testing regimens in the world won't solve the problem until the European Union introduces much tougher pollution limits and finds a foolproof way to enforce them.

    VW's use of a banned "defeat device" has led to the scrutiny of a system that has allowed nitrogen oxide (NOx) emissions to reach up to seven times their European limits.

    EU officials who spoke to Reuters on condition of anonymity said that industry manipulation of the testing regime had been obvious for years. The European Commission failed to stop it, they said, because of the influence of the auto industry and because protecting a pillar of the economy was for many a higher priority than the environment.

    "I was not in the least surprised when this came to light. I just thought 'finally they have been caught' but I was amazed at their stupidity in trying to cheat in the U.S.," said one of five EU officials interviewed by Reuters.

    The officials, who asked not to be named because they are not authorized to speak to the press, said it was a mistake to leave vehicle regulation primarily in the hands of the industry section of the European Commission, rather than the environment department.

    Although regulators did not know of anything clearly illegal going on, they were aware loopholes were being exploited and chose to tune out the problem, the officials said.

    "There was no push from the hierarchy," said the EU official. "It was failure by neglect."

    A second official said: "Policy officers (on the lower levels) develop a desire to do something meaningful ... higher up, they don't want to rock the boat. The lower down the pecking order you are, the closer you are to the facts."

    Commission spokeswoman Lucia Caudet said the Commission had worked for many years to improve regulation in consultation with all relevant parties, including the car industry.

    "The Commission always acts in the general European interest, not in the interests of any one group or stakeholder," she told Reuters in answer to written questions.

    NEW TESTING REGIMES

    PEMS have been used on trucks for years following a previous defeat device scandal in 1998, which, like the Volkswagen case, was discovered in the United States.

    Early versions of the device, which cost around 150,000 euros ($166,335) each, were too heavy for cars, but they have since become less unwieldy and are going on trial pending their mandatory use as part of EU vehicle authorization from September 2017.

    A VW spokesman said the company was already using the devices to test carbon dioxide (CO2)and NOx emissions in research and development.

    Emissions Analytics CEO Nick Molden bought a PEMS in 2011, seeing a business opportunity serving people who wanted to know why their cars used much more fuel, and therefore produced more CO2, than manufacturers promised.

    An economist by training, Molden specializes in advanced modeling techniques to helpbusinesses extract profit from data.

    His company, based in an industrial unit in Feltham on the western edge of London, attaches the device to cars, drives them around and collects the data, selling it on to interested individuals, businesses and even regulators. So far it has gathered data from 1,000 vehicles, Molden said.

    Business is brisk. Five major car makers subscribe to Emissions Analytics' database and the company set up a Los Angeles branch in 2013.

    Molden said the PEMS is a powerful tool but questioned how effectively its use would be enforced given the long history of industry, together with member states, diluting Commission plans.

    Since he formed his company, Molden has been invited to sit on EU working groups to debate proposed legislation in Brussels, and the experience is instructive.

    "It's clear for all to see the power of the automotive lobby versus the number of specialists from the Commission side. German manufacturers send their top engineers," he said.

    Only a month after the VW scandal was exposed, Germany and the car industry lobbied successfully for leeway to allow them to carry on polluting above official limits up to 2021 and beyond.  

    They argued they needed the flexibility to protect the profitability of an industry that provides around 12 million jobs, directly and indirectly, and accounts for 4 percent of EU GDP, according to European Commission data.

    RESISTANCE IS INEVITABLE

    Isolated EU officials have spoken out for the use of PEMS for years to tackle diesel fumes. In 2011, then-Environment Commissioner Janez Potocnik noted PEMS were already being used for trucks and said the Commission was working to ensure the "necessary technical developments" were completed by 2013 for cars.

    But resistance to the system is inevitable, analysts say, as carmakers are wedded to testing in laboratories using dynamometers, which they say they provide a predictable, repeatable result.

    By contrast PEMS are affected by many variables, such as different altitudes and temperatures, known as "boundary conditions", a spokesman for the European Automobile Manufacturers' Association (ACEA) said.

    Ongoing debate to define these boundary conditions legally could amount to another watering down of standards, Molden said.

    It is not clear how using PEMS would affect a system that has grown up in Europe whereby the government agencies that put their seal of approval on the cars -- so-called national type approvers -- work with manufacturers to put the cars through tests.

    That system has tolerated practices such as the use of specially prepared cars, known as golden vehicles, which are primed to be as fuel efficient as possible. Air conditioning is turned off, for instance, and special fuel and tires are used.

    The European Commission says PEMS will make it much harder to cheat. But although the Commission is redoubling efforts to tighten the regulations, it has stopped short of proposing a powerful independent regulator along the lines of the U.S. Environmental Protection Agency, the body that forced Volkswagen to admit its use of defeat devices.

    http://www.reuters.com/article/us-volkswagen-emissions-device-idUSKCN0WN18E

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    No separate carbon tax, more VAT reform in China, finance minister


    There will be no separate carbon tax in China, and instead, a carbon tax is likely to be incorporated into either the environmental protection tax or resource tax, said the head of China's Ministry of Finance.

    As for individual income tax, the current system is "unreasonable" and an official plan for its reform will be ratified by the State Council, the cabinet, admitted Finance Minister Lou Jiwei at the two-day China Development Forum, ending March 21.

    From May 1, China will expand a value-added tax (VAT) program and replace business tax across the board, he said.

    The country has long imposed VAT on tangible goods, but services are subject to business tax, which is based on the value of a firm's sales.

    Such a crude system results in a tax on tax: It is charged on the taxes already priced in the supplies they buy. VAT avoids this, as it is applied to the value added at each link in the chain of production.

    The program, which began in 2012, has reduced the tax burden of enterprises, most of which are small entities, by 641.2 billion yuan ($100 billion) by the end of 2015.

    http://en.sxcoal.com/0/143070/DataShow.html
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    Oil and Gas

    Airlines stop hedging

    After decades of spending billions of dollars to hedge against rising fuel costs, more airlines, including some of the world’s largest, are backing off after getting burned by low oil prices.

    When oil prices were rising, hedging often paid off for the airlines, helping them reduce their exposure to higher fuel costs. But the speed of the 58% plunge in oil prices since mid-2014 caught the industry by surprise and turned some hedges into big money losers.

    Last year, Delta Air Lines Inc., the nation’s No. 2 airline by traffic, racked up hedging losses of $2.3 billion, while United Continental Holdings Inc., the No. 3 carrier, lost $960 million on its bets.

    Meanwhile, No. 1-ranked American Airlines Group Inc., which abandoned hedging in 2014, enjoyed cheaper fuel costs than many of its rivals as a result. “Hedging is a rigged game that enriches Wall Street,” said Scott Kirby, the airline’s president, said in an interview.

    Now, much of the rest of the industry is rethinking the costly strategy of using complex derivatives to lock in fuel costs, airlines’ second-largest expense after labor.

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    Petrobras posts record loss as oil price slump forces writedowns


    Brazil's state-controlled oil company Petrobras posted its biggest-ever quarterly loss on Monday after booking a large writedown for oil fields and other assets as oil prices slumped and refinery projects faltered.

    Petróleo Brasileiro SA, as the company at the epicenter of Brazil's massive corruption scandal is commonly known, had a consolidated net loss of 36.9 billion reais ($10.2 billion) in the fourth quarter, according to a securities filing.

    The bigger-than-expected shortfall was 48 percent larger than the 26.6 billion-real loss a year earlier, the previous record. It also turned the company's full-year 2015 result, which was positive through September, into a full-year loss.

    For a second year in a row, Chief Executive Officer Almir Bendine said, Petrobras will not pay dividends to either its government or non-government investors and it plans to make no bonus payments to employees.

    The result caught analysts and investors by surprise. The largest fourth-quarter loss expected in a Reuters survey of analysts was 9.7 billion reais. Petrobras common shares PBR.DG fell 5.5 percent in after-hours electronic trading in New York, after the results were released.

    The red ink at Petrobras was driven by a 46 percent decline in the price of benchmark Brent crude oil LCOc1, a drop that has driven up losses and caused writedowns throughout the global oil industry.

    Of the 46.4 billion reais written off in the quarter, 83 percent was for oil fields. A year earlier, writedowns were also the cause of Petrobras losses, although they were largely related to the giant price-fixing, bribery and political kickback scandal that has roiled the company and help fuel calls for the impeachment of Brazilian President Dilma Rousseff.

    Petrobras' poor result also bodes poorly for Brazil's economy. Brazil's biggest company and largest investor has been slashing spending and laying off thousands in the wake of the scandal and oil price drop, helping deepen the country's worst recession in decades.

    Net sales, or sales minus sales taxes, totaled 85.1 billion reais in the quarter and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, were 17.1 billion reais.

    The fourth quarter result pushed the company's full-year 2015 result to a 34.8 billion-real loss.

    The company, though, did manage to increase its cash position at the end of the period to 97.8 billion reais from 44.2 billion reais by cutting investments. That provided it a bigger cushion to pay its 492.8 billion reais, or $126.2 billion dollars, of debt at the end of the quarter.

    Bendine told reporters on Monday, the company can generate enough cash to make all its debt payments through the end of 2017 without needing to raise new capital, even if its plan to sell about $14 billion of assets this year runs into trouble.

    "Even if we hit a road-bump we have sufficient cash through 2017," Bendine said. "This doesn't mean if we have good opportunities to raise cash or lengthen maturities we won't do it."

    Total debt in reais, though, was 40 percent greater at the end of 2015 than a year earlier.

    The biggest non-oil-field write-off was 5.28 billion reais for the company's unfinished Comperj refinery near Rio de Janeiro, whose ballooning costs and repeated delays were one of the key focuses of the Petrobras corruption scandal.

    Start-up of the refinery has been pushed back to at least 2023 because Petrobras has been unable to find a partner to help finance the plant's completion, company officials said on Monday.

    http://www.reuters.com/article/us-petrobras-results-idUSKCN0WN29R

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    BP, Statoil to withdraw staff from Algerian plants after attack


    BP and Norway's Statoil will withdraw staff from two gas plants in Algeria after an attack by militants on one of the sites in the North African country, the companies said on Monday.

    Militants attacked the In Salah gas plant, operated with state-owned Sonatrach, with rockets on Friday, causing no casualties or damage. Al Qaeda's North Africa branch claimed responsibility for the attack.

    Algeria's energy infrastructure has been heavily protected by the army, especially since a 2013 attack on the In Amenas gas plant, also operated by BP and Statoil, during which 40 oil workers were killed.

    "BP has decided to undertake a phased temporary relocation of all its staff from the In Salah Gas and In Amenas JVs in Algeria over the next two weeks. This decision has been taken as a precautionary measure," the British firm said in a statement.

    Statoil said it would also withdraw staff from the In Salah and In Amenas plants, together with staff from its operations center at Hassi Messaoud.

    "It will happen over the next few weeks. Those who are on rotation now will not be replaced when they finish their shifts," a Statoil spokesman said, declining to say for security reasons how many employees would be affected.

    "It's only been four days since shots were fired at In Salah. The production started again, but in the current situation we believe that this is the right decision to make," the spokesman added.

    According to BP's website, In Salah started production in 2004 from the Krechba, Teguentour and Reg fields. In February, it announced the start up of development of the Gour Mahmoud, In Salah, Garet el Befinat and Hassi Moumene fields, to bring output to 9 billion cubic meters a year.

    Statoil, BP and Sonatrach were due to restart the third and final processing train at the In Amenas gas plant, damaged during the 2013 attack, later this year.

    Statoil repeated on Monday the restart of that train would still happen "in the coming months".

    http://www.reuters.com/article/algeria-security-statoil-bp-idUSL5N16T29Q
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    Schlumberger expects first quarter revenue to fall 15 percent from fourth quarter


    Schlumberger Ltd, the world's largest oilfield services provider, said revenue in the current quarter is expected to fall 15 percent from the fourth, as spending cuts by oil producers take a toll.

    The company forecast revenue of $6.5 billion for the first quarter ending March, lower than the average analyst estimate of $6.94 billion, according to Thomson Reuters I/B/E/S.

    "The third phase of E&P spending reductions that we are currently experiencing will have a significant impact on our earnings per share in the current and coming quarters," Chief Executive Paal Kibsgaard said at an energy conference on Monday.

    Kibsgaard, whose comments are closely watched, also called for a change in the way the oil and gas industry operates.

    There is an urgent need for a change in the way the energy industry works given that oil prices are expected to be "medium-for-longer", Kibsgaard said in his keynote address at the Scotia Howard Weil Energy Conference.

    The cost reductions by oil and natural gas producers over the past 18 months were not linked to efficiency improvements, Kibsgaard said, adding they were the result of pricing concessions from oilfield services providers.

    Under the current model, oil producers split drilling and production work into smaller parts, and then seek bids from service providers.

    But this model has led to inefficiencies due to a lack of collaboration between operators and suppliers, Kibsgaard said.

    Schlumberger — which is buying equipment maker Cameron International Corp (CAM.N) for $14.8 billion deal — is developing total drilling and production systems to move away from single components, Kibsgaard said.

    Kibsgaard also hinted at more job cuts, saying the company will continue to match costs and resources to activity.

    Schlumberger has cut 34,000 jobs, or 26 percent of its workforce, since November 2014.

    http://www.reuters.com/article/schlumberger-outlook-idUSL3N16T3OH
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    Halliburton-Baker Hughes Stalled a Third Time by EU


    Halliburton Co.’s bid to buy oil-services rival Baker Hughes Inc. was stalled for a third time by the European Union as the companies continue to face regulatory hurdles on both sides of the Atlantic.

    In a re-run of a similar delay last month, the European Commission said Monday it stopped the clock on the review because it wasn’t provided with key data about the deal. Halliburton already faced months of delays after last July’s EU rejection of an initial merger filing because crucial details were missing.

    “To comply with merger deadlines, parties must supply the necessary information for the investigation in a timely fashion,” Ricardo Cardoso, an EU spokesman, said in an e-mailed statement. “Failure to do so will lead the commission to stop the clock. ”

    Halliburton agreed to buy Baker Hughes in November 2014 in a cash-and-stock deal that at the time was valued at about $35 billion. The transaction was scheduled to close last year, but has been delayed as the companies grapple with antitrust concerns in the U.S. and Europe.

    Self-Imposed Deadline

    The companies previously set a self-imposed deadline of April 30 to close the deal. Halliburton would have to pay Baker Hughes a breakup fee of $3.5 billion if the bid is dropped.

    "Halliburton is working to provide the additional information as expeditiously as possible," said Emily Mir, a spokesperson for Halliburton, in an e-mail.

    “If the review extends beyond April 30, 2016, the merger agreement does not terminate automatically,” she said. “The parties may continue to seek the commission’s approval or one of the parties may terminate the merger agreement after April 30, 2016.”

    The EU probe is seen as one of the most complex in recent years, with regulators identifying more than 30 product lines with potential competition problems.

    ‘Very Complicated’

    The EU move may be just because it’s a “very complicated, data-heavy investigation,” said Anne MacGregor, a competition lawyer at Cadwalader, Wickersham & Taft LLP in Brussels. In the past, there have been cases "in which arguably the stop-the-clock mechanism was used to buy time in the procedure when there were no other options."

    Regulators already extended the review last month to add an extra 20 working days to the deadline.

    Margrethe Vestager, the EU’s antitrust chief, earlier this month pleaded with merging companies to be up-front with officials reviewing deals. The EU process is "based on the trust that everyone plays by the rules. If that gets broken down, things get much more burdensome" and regulators are forced to "check and check again" the information they get from companies, she said.

    While she said she wasn’t specifically referring to Halliburton, she has described the deal as "complicated" to examine.

    Halliburton has been adding assets to the list of businesses it plans to sell to gain antitrust approval. The company plans to divest Baker’s offshore drilling-and-completions fluids division and the bulk of Baker’s completion systems, people familiar with the matter said last month. This comes on top of two other batches of overlapping business lines Halliburton pledged to sell to assuage the U.S. Department of Justice’s concerns.

    The EU merger authority opened an in-depth probe into the deal on Jan. 12, citing concerns that combining the second- and third-largest suppliers to oil exploration companies may impede competition and increase prices.

    http://www.bloomberg.com/news/articles/2016-03-21/halliburton-baker-hughes-faces-third-eu-delay-over-missing-info
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    BP inviting new bids on Mad Dog 2


    BP IS taking cost-cutting efforts a step further at its Mad Dog 2 development in the deep-water Gulf of Mexico by inviting revised bids this summer from existing contenders and new participants.

    http://www.upstreamonline.com/live/1427465/bp-inviting-new-bids-on-mad-dog-2?utm_source=twitterfeed&utm_medium=twitter
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    Sevan agent arrested in Portugal


    Raul Schmidt Felippe Junior was an agent or broker, for listed Sevan Brazilian subsidiary from 2001 to 2007. It was during this period that Sevan, with its distinctive cylindrical platform solutions, signed contracts in Brazil that made Norwegian Norwegian authorities responded autumn 2015. Sevan -gründerne Arne Smedal and Jan Erik Tveteraas, plus the company known today as Sevan Drilling, were charged with corruption. Apparently they have paid Raul Schmidt Felippe Junior 200 million for Sevan Marine would gain entry by Petrobras with two platforms.

    http://www.fvn.no/okonomi/Sevan-agent-arrestert-i-Portugal-2984690.html
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    Bankers Petroleum enters acquisition agreement with 1958082 Alberta Ltd. and Charter Power I


    Bankers Petroleum Ltd. is pleased to announce that it has entered into a definitive agreement with 1958082 Alberta Ltd. and Charter Power Investment Limited for the purchase of all the issued and outstanding common shares of Bankers at a cash price of C$2.20 per Bankers Share. The Purchaser and Charter Power are affiliates of Geo-Jade Petroleum Corporation, one of the largest independent oil and gas exploration and production companies in China. The transaction will be effected by way of a plan of arrangement under the Business Corporations Act (Alberta). The Arrangement values Bankers at approximately C$575 million before the assumption of the outstanding indebtedness of Bankers.

    Highlights

    Cash price of C$2.20 per Bankers Share
    The Arrangement has received the unanimous approval of the Board of Directors of Bankers (the 'Bankers Board') and carries the full support of Bankers' management team
    The Purchaser brings a considerable new investment focus to the Bankers portfolio of assets
    Bankers' corporate and technical headquarters will remain based in Calgary, Canada, with operational offices in Albania, Hungary and Romania

    The transaction price represents a premium of 98% over Bankers' closing share price on the Toronto Stock Exchange ('TSX') of C$1.11 on March 18, 2016, and 109% over the 30-trading day volume weighted average trading price of Bankers Shares of C$1.05 per share ending on March 18, 2016.

    David French, President and Chief Executive Officer of Bankers commented:

    'The proposed transaction provides Bankers with the opportunity to return value to our shareholders at a significant premium to the current market valuation, while offering Bankers added financial resources to accelerate our activity in Albania and capitalize on the potential created by the current commodity price environment. This transaction will generate substantial economic benefit for Albania and the local communities in which Bankers operates. We look forward to working alongside our new investors to deliver the asset possibilities before us.'Following a successful transaction, the Purchaser will support the Bankers' leadership and employee base to capitalize on the experience and depth of the Bankers team. The Purchaser plans to realize the joint vision of both companies to grow the business with enhanced investment into its Albanian operations, while concurrently focusing on growth opportunities in the global marketplace.

    http://www.oilvoice.com/n/Bankers-Petroleum-enters-acquisition-agreement-with-1958082-Alberta-Ltd-and-Charter-Power-Investment-Limited/82b8e6437cea.aspx
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    Leviathan Partners Said in Talks to Secure Up to $4 Billion


    The partners in Israel’s Leviathan natural gas find are seeking to raise as much as $4 billion to develop the offshore field and are in talks with banks on funding plans, two people with knowledge of the matter said.

    Noble Energy Inc. of the U.S. and Israel’s Delek Group Ltd and Ratio Oil Exploration 1992 are seeking to raise between $3.5 billion and $4 billion, the people said, asking not to be identified as the talks are private. The partners will secure their slices of the funds in proportion to their ownership of the Leviathan field, the people said. Delek owns 45 percent through its units, Delek Drilling LP and Avner Oil Exploration LLP, while Noble owns 40 percent. Ratio holds a 15 percent stake.

    They’re negotiating with lenders including Deutsche Bank AG, Citigroup Inc., HSBC Holdings Plc, BNP Paribas SA, JPMorgan Chase & Co. and Natixis SA to cover about 65 percent of the development costs, the people said. The remainder could come from bond sales or equity, according to the people.

    Gas discoveries off Israel’s Mediterranean coast include the Tamar field and Leviathan, the country’s largest deposit, which have brought the nation closer to energy independence and to becoming an energy exporter. Tamar holds about 10.8 trillion cubic feet of gas and Leviathan about twice that amount.

    The partners are also negotiating to export about 10 billion cubic meter a year of natural gas to Turkey, which would be worth about $2 billion a year, according to the people.

    In November they agreed to enter non-binding negotiations with Dolphinus Holdings Ltd. in Egypt to supply as much as 4 billion cubic meters of natural gas annually for a period of between 10 and 15 years. Dolphinus is a group of large, non-governmental gas consumers and distributors headed by Egyptian businessman Alaa Arafa. In addition, Israel expects a gas pipeline to Jordan to begin in 2017.

    Delek Group rose as much as 2.9 percent before gaining 1 percent to 655.80 shekels at the close of trading in Tel Aviv. Delek Drilling added 1.4 percent and Avner advanced 1.2 percent. The TA-Oil & Gas Index strengthened 1.2 percent to 918.7, the highest level since Jan. 11.

    Delek, Noble, Ratio, Deutsche Bank, HSBC and Citi declined to comment. Natixis, BNP Paribas and JPMorgan didn’t immediately respond to requests for comment.

    http://www.bloomberg.com/news/articles/2016-03-21/leviathan-partners-said-in-talks-to-secure-as-much-as-4-billion
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    Offshore Drilling Rig Suppliers Say Oil Recovery Will Be Slower Than Expected


    Leaders of the world’s largest suppliers of offshore drilling rigs and the services that go with them see the oil market recovery taking even longer than expected last year.

    Transocean Ltd. Chief Executive Officer Jeremy Thigpen expects it will have to wait at least another three years before his company can begin charging higher rates for offshore rigs. Schlumberger Ltd. chief Paal Kibsgaard sees the oil industry, stuck in the deepest financial crisis ever, in no rush to get rigs back online even after prices recover.

    Before rig owners can charge more, they must first see a boost in activity after the worst crude market crash in a generation. Transocean doesn’t expect an increase in rig leases until late next year or sometime in 2018, Thigpen said Monday in an interview at the Scotia Howard Weil Energy Conference in New Orleans. Daily rates, which have fallen by more than half over the past two years, aren’t expected to climb until 2019 or 2020, he said.

    "I think ’16 and ’17 are going to be tough," said Thigpen, who joined the Vernier, Switzerland-based company 11 months ago. "We’re taking the necessary steps to navigate our way through the downturn, but we’re also preparing for that eventual recovery."

    Fragile State

    The fragile financial state of oil explorers means there will be a noticeable lag from when oil prices climb and when exploration and production companies invest again, Kibsgaard said in a presentation to investors at the conference.

    Profitability and cash flow are "at unsustainable levels for most oil and gas operators which in turn has created an equally dramatic situation for the service industry," he said. "Going forward, the industry is likely facing a ‘medium-for-longer’ oil-price scenario, subject to periods of volatility, as the national oil companies within OPEC can still generate significant returns for their owners in such an environment due to the low cost base of their conventional resources."

    Rig contractors have suffered through the double blow of declining customer demand due to tumbling oil prices and a glut of vessels that continue to be built to meet orders made before the rout.

    Transocean leads the industry in reducing its fleet, with 24 rigs scrapped since the downturn began and another eight to 10 it could retire over the next year to 18 months, Thigpen said. Transocean currently has 61 rigs in its fleet with another 11 under construction.

    Financial Liquidity

    The company reported $2.3 billion in cash at the end of last year. Thigpen said he has "no real concerns" with Transocean’s financial liquidity through the end of 2018, and the company has a number of levers it can pull beyond that if needed.

    Schlumberger said Monday it expects revenue in the first quarter to fall to $6.5 billion, a 16 percent drop from the final three months of last year. That’s a larger drop than the $7 billion average of 25 analyst estimates compiled by Bloomberg. The Houston- and Paris-based company said it’s not expecting a meaningful recovery in its own activity until next year.

    Other U.S. oil-industry executives echoed the cautious sentiment:

    Anadarko Petroleum Corp.’s CEO Al Walker said in a presentation increasing demand will signal that higher prices are likely to be sustained.

    Weatherford International Ltd. plans to reduce headcount by another 6,500 after cutting 14,500 jobs in 2015. CEO Bernard Duroc-Danner said he sees the North American market bottoming in the second quarter of the year.

    Apache Corp. is unlikely to pursue acquisitions until more companies in the industry have gone through restructuring, CEO John Christmann said in an interview.

    http://www.bloomberg.com/news/articles/2016-03-21/transocean-ceo-sees-no-chance-to-push-up-rig-prices-until-2019
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    Oil up on Cushing crude drawdown; eyes on U.S. output


    Oil prices rose about 1 percent on Monday after data showed crude inventories at the Cushing, Oklahoma delivery hub for U.S. futures fell for the first time since January, and ahead of the expiration of the U.S. front-month contract.

    Oil's upside, however, was limited by concerns that U.S. energy companies could ramp up drilling again after a two-month long recovery in crude prices, analysts said.

    Brent crude futures for May delivery LCOK6, the front-month, settled up 34 cents, or 0.8 percent, at $41.54 a barrel. Brent has risen 53 percent from 12-year lows of $27.10 hit on Jan. 20.

    U.S. crude's futures for April CLJ6 gained 47 cents, or 1.2 percent, to settle at $39.91, expiring as the front-month. The more-active May contract CLK6, which would be front-month from Tuesday, finished up 38 cents at $41.52.

    Crude stockpiles in Cushing fell 570,574 barrels to 69.05 million in the week to March 18, traders said, citing data from market intelligence firm Genscape. Cushing inventories had previously risen toward 70 million barrels, causing market participants to fear they could hit capacity.

    "Although, it's not a huge draw by any means, the latest data breaks a string of builds," said Peter Donovan, broker at Liquidity Energy in New York.

    Genscape's Cushing data, however, contrasts with a Reuters poll of analysts showing U.S. crude inventories as a whole likely rose 3 million barrels in the week to March 18, rewriting a previous record high. Government data showed Cushing crude stocks USOICC=ECI rose to a peak of 67.5 million barrels in the week to March 11.[EIA/S]

    Stockpile worries aside, some analysts fear U.S. oil production is creeping higher.

    On Friday, data from energy service firm Baker Hughes, showed U.S. drillers added one oil rig last week after 12 weeks of cuts. [RIG/U]

    Analysts generally agreed it was early to read too much into that rise, since oil rigs had fallen by two-thirds over the past year to their lowest since 2009. Still, there were signs the drop-off in drilling was stabilizing after a 50-percent rally in crude prices since February.

    "The higher prices go in the current recovery rally, the higher the likelihood that U.S. producers are going to build their hedge portfolios, which could then result in U.S. oil production not declining as much as what the current forecasts are showing," said Dominick Chirichella, senior partner at he Energy Management Institute, New York.

    http://www.reuters.com/article/us-global-oil-idUSKCN0WN00I
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    U.S. on track for record summer gasoline demand


    The United States will probably consume a record amount of gasoline in 2016, passing the previous peak set in 2007, and the prospect is helping lift crude oil prices.

    Recent data indicates the country is on track for its biggest-ever driving season this summer, which will keep refineries running flat-out turning crude into the motor fuel.

    A rapid expansion in U.S. gasoline consumption has coupled with strong demand growth in India and China, falling crude output in the United States, and hedge funds turning bullish, to send crude and fuel prices surging.

    U.S. motorists consumed 9.16 million barrels per day (bpd) of gasoline in 2015, just 125,000 bpd short of the record 9.29 million bpd set in 2007.

    The U.S. Energy Information Administration (EIA) is still forecasting consumption in 2016 will remain slightly below the 2007 peak.

    On Feb. 23, the EIA published a commentary titled “Motor gasoline expected to remain below 2007 peak despite increase in travel”.

    But the agency has been revising its estimates higher in response to the extraordinary strength in demand exhibited in recent high-frequency data.

    In December 2015, the EIA predicted gasoline consumption would rise by just 10,000 bpd in 2016. By January, it had upped its forecast increase to 70,000 bpd and in March, the agency raised the number to 90,000 bpd (“Short-Term Energy Outlook”, EIA, December 2015 to March 2016 editions).

    The upward revisions come amid statistics showing gasoline demand already running at record levels.

    In the four weeks to March 11, implied consumption of gasoline averaged almost 9.4 million bpd, an increase of about 560,000 bpd compared with the same point in 2015 (tmsnrt.rs/1UxwHm6).

    Implied consumption, what the EIA calls “product supplied”, was more than 200,000 bpd higher than the previous record for the time of year, set in 2007, and 400,000 bpd above the 10-year average.

    http://www.reuters.com/article/usa-gasoline-kemp-idUSL5N16T3IE
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    Regulator sets permanent steam restriction at CNRL project

    The Alberta Energy Regulator said on Monday it is implementing additional requirements at Canadian Natural Resources Ltd’s Primrose oil sands project after concluding excessive steaming caused a 6,648 barrel bitumen emulsion leak in 2013.

    The requirements include permanent limits on the steam volumes the company is allowed to use to extract bitumen from underground reservoirs, and a requirement that CNRL seek approval for each steaming cycle at its Primrose East site.

    “The restrictions do amount to a permanent ongoing reduction in the intensity of the company’s operations. The company will not be able to pursue its original operating strategy at Primrose,” Kirk Bailey, executive vice president of operations at the AER said.

    CNRL has been operating under steam restrictions at Primrose since the seepage was discovered and in July 2013 company President Steve Laut said the project was producing about 10,000 barrels per day less than previously expected as a result.

    Bitumen emulsion – a mixture of bitumen, sand and water – was discovered oozing to the surface at two locations at CNRL’s Primrose project in northern Alberta in May 2013. Two more leaks were discovered over the next month, prompting the AER to impose restrictions on the site and launch an investigation.

    Biutmen seepage to the surface as a result of oil sands operations are not permitted under Alberta energy regulations. A number of animals died as a result of the leak, which continued for months, including birds, mammals and amphibians.

    The investigation, described by Bailey as one of the most complicated ever undertaken by the AER, concluded the seeps were caused by excessive steam volumes along open conduits such as well bores, natural fractures and faults and hydraulically induced fractures.

    Cyclic steam simulation involves injecting high-pressure steam into an oil well to liquefy viscous bitumen so it can flow to the surface.

    The AER said it looked at other producers using the same technology for oil sands extraction, such as Imperial Oil , and concluded those projects posed no risk of similar seepages.

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    National Oilwell Considering Billion-Dollar Deals in Oil Slump


    After slowing down its M&A machine considerably over the past two years, National Oilwell Varco Inc. is looking at a couple different acquisitions in the billion-dollar range.

    The largest U.S. maker of oilfield equipment made seven acquisitions last year for a total of $86 million, a sharp drop from 2013, when it spent $2.4 billion in cash to buy Robbins & Myers Inc. Up until Clay Williams took over as chief executive officer in early 2014, National Oilwell Varco had made at least $1 billion in acquisitions for each of the three previous years.

    "We’ve had some larger acquisition opportunities we’ve looked at," Williams said in an interview Monday in New Orleans at the Scotia Howard Weil Energy Conference. "We have a lot of liquidity and a lot of access to capital, so I think we have a broad range of things that we can consider."

    Last month National Oilwell Varco reported its biggest quarterly loss since 2000 as customers cope with the worst crude market downturn in decades by cutting orders for new rigs, pipes and other gear in the oil patch. The company ended the year with $2.1 billion in cash and $3.6 billion in undrawn capacity on its revolving credit facility.

    Williams, who oversaw acquisitions at Varco Inc. before it was bought in 2004 by National Oilwell Inc. for $3 billion, said he’d like to deploy capital opportunistically in the downturn because it’s the kind of environment that can lead to good values. He added, though, that he doesn’t feel like he must pull the trigger.

    "We really need to be patient and make sure we’re getting good value for our shareholders as we move forward on transactions," Williams said "It’s turned out to be a much rougher downturn than most of us thought this time last year."

    http://www.bloomberg.com/news/articles/2016-03-21/national-oilwell-considering-billion-dollar-deals-in-oil-slump
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    Canada's Pacific Exploration delays interest payment


    Canada's Pacific Exploration & Production Corp said on Monday it chose not to make an interest payment due March 28, making it the first Toronto-listed oil and gas company in the last one year to delay a payment.

    The company, due to make a $25.6 million interest payment next Monday, said it was working with debtholders to restructure debt. The company has a 30-day grace period.

    Pacific Exploration warned on Friday that its auditor had raised significant doubt about its ability to continue as a going concern.

    The company suffered a major setback in March last year, when Colombia's state-run Ecopetrol said it would not extend its contract with Pacific Exploration to operate Colombia's highest-producing Rubiales oilfield.

    The decision on interest payment follows a Wall Street Journal report last week that Pacific Exploration was evaluating six buyout offers to avoid bankruptcy.

    The company had a long-term debt of $5.38 billion and cash and cash-equivalents of $342.7 million in the year ended December.

    http://www.reuters.com/article/pacific-explor-debtrenegotiation-idUSL3N16T32E
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    Saudi Arabia will freeze oil output without Iran, says Opec delegate


    Saudi Arabia is prepared to sign up to an oil output freeze next month even without Iran taking part, a senior Opec delegate said, potentially removing one of the major obstacles to a deal among big producers.

    Some of the world’s biggest oil exporters will meet in Doha on April 17 to discuss restraining output. It follows a provisional agreement reached in February by Saudi Arabia, Russia, Qatar and Venezuela to freeze production at January levels.

    “There is agreement from many countries to go along with a freeze, why make it contingent on Iran,” said the delegate.

    The comments contrast with those from Gulf officials last month, which suggested any deal was conditional on Iran, Saudi Arabia’s Opec rival, taking part alongside other big producer countries.

    Iran sought to increase production and exports after the lifting of sanctions against its oil industry in January. Iranian officials have until now shown no willingness to back any deal that would result in restricting its own output.

    Questions have been raised among Gulf delegates about the country’s ability to ramp up output, suggesting this could be one reason for compliance even without Iran.

    “Despite all the bragging, we have yet to see what Iran can do,” said the delegate.

    Abdalla El-Badri, Opec’s secretary-general, said on Monday at a news conference in Vienna: “Maybe in the future they will join the group. They [Iran] have some conditions about their production.”

    About 15 Opec and non-Opec countries — accounting for two-thirds of global oil output — have so far supported an oil freeze, Qatar’s energy minister Mohammed Bin Saleh Al-Sada said last week.

    A provisional deal has helped to support prices and reverse negative market sentiment toward oil. Brent crude was at $41.47 on Wednesday, up 53 per cent since hitting a 2016 intraday low of $27.10 a barrel.

    “Look at what it [the move towards the oil freeze] did to change the psyche of the market,” said the delegate. “Now the market can see people are gathering, people are communicating. This collaborative element has helped the price.”

    https://next.ft.com/content/3e0de9d2-f002-11e5-9f20-c3a047354386

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    Alternative Energy

    China Plans 22% Boost for Wind Power Capacity After Record 2015


    China plans to increase total wind power capacity by 22 percent in 2016, underscoring the government’s effort to develop clean energy at about the same pace as last year’s record installations.

    The nation plans to develop 30.83 gigawatts of wind power this year, the National Energy Administration said in a statement on its website on Monday. It added 33 gigawatts in 2015, triple France’s entire capacity of the clean resource, according to data from NEA.

    Developers rushed to deliver projects last year before tariffs paid for clean energy were reduced, and the support levels on offer this year are generous enough to keep drawing in investment.

    "The target is very high" for 2016, said Shi Yan, a Shanghai-based analyst at UOB Kayhian Investment Co. "New projects will be in regions with little idling capacity, offering good profitability for developers."

    The central province of Henan will have the most wind power projects approved this year, with the eastern province of Shandong following, according to NEA.

    Wind installations in China have almost doubled since 2012 to 139 gigawatts, according to data compiled by Bloomberg. The rapid growth of wind power has left the grid struggling to connect all the plants, forcing wind turbines to sit idle.

    China is clamping down on the ability of local authorities to plan new wind projects in some of the windiest provinces because the pace of building to date has outstripped the grid’s ability to absorb new power flows. Those places include the northern provinces of Inner Mongolia, Jilin, Heilongjiang, Gansu, Ningxia and Xinjiang.

    http://www.bloomberg.com/news/articles/2016-03-21/china-plans-22-boost-for-wind-power-capacity-after-record-2015

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    Agriculture

    Bayer shares jump on Monsanto crop science interest


    Shares in German drugs and pesticides maker Bayer rose more than 5 percent on Monday after sources close to the matter told Reuters that Monsanto was interested in a deal with its crop science business.

    The sources said on Friday the two companies had held talks over Bayer's agricultural assets, the world's second-biggest crop chemicals business by sales after Switzerland's Syngenta . Bayer declined to comment.

    Bayer's shares gained as much as 5.4 percent on Monday, and at 1235 GMT were up 3.2 percent at 102.45 euros, a 7-week high.

    Monsanto's move underscores the U.S. seed maker's determination to expand after Syngenta rejected its takeover approaches last year.

    Shares in German chemicals group BASF, the world's third-largest maker of crop chemicals, were also higher, up 1.4 percent, though trailing the European chemical sector's gain of 1.6 percent.

    Bloomberg at the weekend cited sources as saying Monsanto had been in contact with both Bayer and BASF about deals in agricultural chemicals. BASF declined to comment.

    UBS analyst Alexandra Hauber, who rates Bayer "neutral", said Bayer's business could be a better fit for Monsanto.

    "Bayer's crop science business is stronger than BASF in terms of market share, which should put Bayer in more favourable negotiation position vs BASF," she wrote in a note.

    Hauber added that, due to possible objections from competition regulators, a marketing collaboration seemed the most likely result of any discussions.

    UBS values Bayer's crop science business at about 40 billion euros ($45 billion), or 15 times its estimated 2017 earnings before interest, taxes, depreciation and amortisation (EBITDA).

    Bayer as a group is trading at 9.1 times its estimated EBITDA for the next 12 months, according to Thomson Reuters data.

    Syngenta agreed earlier this year to be acquired by ChemChina for $43 billion, or about 17 times its estimated future EBITDA.

    "In theory, (a deal between Monsanto and Bayer) is a logical next step given Monsanto's strength in seeds and Bayer's in crop protection. However, we do not see Bayer to be in any rush to sell its division," Deutsche Bank analysts wrote in a note.

    Bayer's crop science division has businesses in seeds, crop protection and non-agricultural pest control. It had sales of 10.4 billion euros in 2015 and adjusted EBITDA of 2.42 billion.

    Bayer said last year it planned to keep its crop chemicals business, describing it as an "integral part" of the group.

    http://www.reuters.com/article/bayercropscience-ma-monsanto-idUSL5N16T2XS
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    Steel, Iron Ore and Coal

    China miners move to cut, consolidate 1b tons of coal capacity


    Many large domestic coal producers are actively following the nation's plan to cut overcapacity in the sector, the Beijing-based Securities Daily newspaper reported on Monday.

    The country will close 500 million tons of capacity and consolidate another 500 million tons into the hands of fewer but more efficient mine operators in the next three to five years, the State Council, China's cabinet, said in a guideline in February.

    Overcapacity in the industry is serious, with shrinking domestic demand amid the economic slowdown making many mines redundant.

    China's annual coal production capacity may have been as high as 5.7 billion tons in 2015, while demand was about 3.5 billion tons, according to media reports in January. Many coal producers have been reporting losses. Experts said China's energy structure is also changing, aided by low global crude oil prices.

    The Bohai-rim thermal coal price index was about 400 yuan ($61.72) per ton as of this month, down from about 520 yuan approximately one year earlier, according to media reports.

    Large State-owned companies including Shenhua Group and Datong Coal Mine Group have announced capacity-cutting plans, according to the Securities Daily.

    Shenhua has focused on eliminating high-cost, low-quality mines or those that don't meet environmental standards. The company has stopped output or construction at 12 of its mines, reducing annual production capacity by 30 million tons so far this year, the Securities Daily reported.

    Zhang Youxi, chairman of Datong Coal Mine Group, said earlier this month that his company plans to close 12 mines, cut capacity by 12.55 million tons and reduce losses by 1.24 billion yuan during the 13th Five-Year Plan (2016-20) period, according to the Securities Daily. In 2016, the company plans to close five mines, making about 10,000 workers redundant.

    So far, eight provincial-level regions, including major coal producers such as North China's Inner Mongolia Autonomous Region and Shanxi Province, have announced action plans to cut overcapacity in the sector, according to the Securities Daily.

    Other areas include Southwest China's Chongqing Municipality, Sichuan and Guizhou provinces and East China's Shandong and Anhui provinces.

    Liu Dongna, a coal industry analyst with Shandong-based industry portal sci99.com, said that although a few companies have been calling for an industry-wide cut in capacity since 2014, the results have been limited.

    "But in this round, with reducing coal and steel overcapacity atop the central government's agenda, we are seeing more serious cuts and we can expect a higher level of implementation," Liu told the Global Times Monday.

    Li Chaolin, an independent coal industry analyst in Beijing, said that many of the localities are choosing to close unprofitable mines because of low prices.

    "For instance, producers in Guizhou were able to make profits when the price was good, but they've lost competitiveness now that the coal price is low. Ensuring local employment has also been a reason for them to keep running, as less advanced mines still employ many hands to extract coal," Li told the Global Times on Monday.

    However, experts said that eliminating capacity will be a lengthy process, although it will help stabilize and support coal prices.

    Low coal prices, which translate into lower costs for products and services in many downstream industries such as electricity, have incidentally helped other sectors struggling with slowing economic growth, Liu noted.

    Compared with privately owned mines, many of which were driven out of business long ago by losses, large coal mines face bigger problems in dealing with laid-off miners, experts said.

    A recent report by investment bank China International Capital Corp forecast that this year and next, 30 percent of the 10 million people employed in China's coal, steel, electrolytic aluminum, cement and glass industries will lose their jobs. The forecast was cited in February in a report by the European Union Chamber of Commerce in China that discussed overcapacity in China.

    A 40-year-old coal miner at a subsidiary of Datong Coal Mine Group based in Datong, Shanxi Province told the Global Times on Monday that he hasn't been paid for more than 10 months.

    "We've been told that the company can't pay right now as it has been struggling with difficulties," he said, preferring not to be identified due to the sensitivity of the issue. He noted that like many of his co-workers, he can only wait to see if the local government will offer "supportive" policies for unpaid coal miners.

    http://en.chinamining.com.cn/News/2016-03-22/1458614334d75757.html

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    US Coal stockpiles grow to highest level in at least 25 years


    Stockpiles of coal are growing to historically high levels at the nation’s power plants.

    The U.S. Energy Information Administration reported Monday 197 million tons of coal were being stored at the end of 2015, the highest year-end level in at least 25 years.

    Government analysts attributed the spike to both a decline in coal demand due to an unseasonably warm winter and a larger economic shift away from coal as a power source.

    Cheap natural gas and steady growth in wind and solar farms have driven down the price of electricity in many U.S. wholesale markets. And with increasing environmental regulation on power plant emissions, many electricity companies have pulled back on coal-fired generation.

    The amount of coal capacity on the U.S. power grid fell 10 percent between 2010 and 2015. according to EIA.

    The shift has caused uncertainty around the future of U.S. coal mining, a critical industry in states including Wyoming, West Virginia and Kentucky. Texas produced roughly 44 million tons of coal in 2014, about 11 percent of Wyoming.

    Peabody Energy, the largest private sector coal producer in the world, has seen its stock price drop to less than $3 a share – from more than $95 a year ago – and is now the subject of speculation whether it will file for bankruptcy.

    The demand problem is evident in the government’s coal supply data. In December, a time when coal stockpiles typically decrease by 3 million tons, the U.S. saw coal reserves grow 8 million tons.

    The decline had a ripple effect on the railroad industry. Over the last four months of 2015, an average of 94,000 railroad cars were loaded with coal each week. That was more than 20 percent below average, according to EIA.

    http://fuelfix.com/blog/2016/03/21/coal-stockpiles-grow-to-highest-level-in-at-least-25-years/?utm_source=twitterfeed&utm_medium=twitter
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    CIL coal production target at 598 mln T for FY17


    Government has set the 2016-17 coal production target for Coal India at 598 million tonnes, Coal secretary, Anil Swarup told NDTV Profit in an exclusive interview.

    ''We are targeting a production of 598 million tonnes for FY17, and should be able to hit 535 million tonnes this year''.

    He acknowledged that the target for 2015-16 was very high at 550 million tonnes and with just a few days left for the current financial year to get over, the total production in the current year should be 535 million tonnes, 15 million tonnes short of the original target.

    The government has a vision to produce a billion tonnes by 2020. While the production has been increasing continuously there has not been many takers of coal. Coal demand has remained subdued; it did not increase as per the increase in the production.

    Coal India has achieved 9.2% increase in production this year, compared with an average of 1-3% production growth between 2009-10 & 2013-14. Coal production grew by 6.7% in 2014-15.

    At a time when the demand for coal remains weak, the government believes that there is still scope for more supply. The government now wants to reduce the imports of coal even further.

    The coal secretary said that ''Coal production should go up further, there is a lot of space occupied by the imported coal''. Till now this year the coal imports have come down by almost 15%.

    Going forward, in 2016-17 improving the quality of coal will be high on government's agenda.

    http://en.sxcoal.com/0/143069/DataShow.html
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    Only 4 million tonnes of iron ore extracted this season in Goa


    Herald Goa reported that only 4 million tonnes of fresh iron ore was extracted till date in the Goa during the ongoing mining season, ending on May 31. By March end, the extraction may touch five million tonnes.

    Directorate of Mines and Geology on Monday met mine owners expressing concern over low iron ore production and to work out measures to increase revenue through the balance seven million tonnes of ore awaiting e-auction.

    During the meeting it was informed that with 17 mining leases commencing operations, only four million tonnes of fresh ore extractions have been reported, with royalty collection of INR 30 crore.

    Mine owner Mr Harish Melvani said the meeting discussed measures to attract more value to the ore proposed for e-auction. He said “The meeting resolved that the government should lower the earnest money for mineral based industries that after purchase of ore would process it and improve its grade. It was also decided to exempt small time industries from payment of earnest amount.”

    Mr Melvani was of the opinion that the government should undertake an exercise to segregate balanced ore into lumps and fines, so that interested buyers can go in for ore of their choice. He said “This move will help us fix different base price and get good value.”

    The date of the final phase of e-auction, where nearly 7.76 million tonnes of stacked iron ore is to be e-auctioned, is yet to be announced. In the last two years, DMG managed to e-auction 7.24 million tonnes of ore, of which more than 60 per cent remains at the sites.

    http://steelguru.com/mining/only-4-million-tonnes-of-iron-ore-extracted-this-season-in-goa/448908#tag
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