MIRA
INFORM REPORT
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Report Date : |
01.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
BG EXPLORATION
AND PRODUCTION INDIA LIMITED |
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Registered
Office : |
1st
Floor, Midas, Sahar Plaza, Kondivita, MV Road Andheri (East), Mumbai – 400 059,
India |
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Country : |
India |
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Date of
Incorporation : |
Around 2003 |
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TAN No.: (Tax Deduction
& Collection Account No.) |
MUMB12758E |
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PAN No.: (Permanent
Account No.) |
AAACE4569K |
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Legal Form : |
A Closely held Public
Limited Liability Company |
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Line of
Business : |
The company is in
Exploration, Production, Development and Supply of existing and emerging gas
markets around the world. |
RATING &
COMMENTS
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MIRA’s Rating
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NR |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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Maximum Credit
Limit : |
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Status : |
Undetermined |
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Comments : |
As the company is
incorporated outside India (in Cayman Islands), it would be difficult to
assess the performance and financial status of the company. |
LOCATIONS
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Registered
Office : |
1st
Floor, Midas, Sahar Plaza, Kondivita, MV Road Andheri (East), Mumbai – 400 059,
India |
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Tel. No.: |
91-22-56435000 /
28395841 |
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Fax No.: |
91-22-28395201 |
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E-Mail : |
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Website : |
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Head Office : |
BG Group plc, Thames Valley Park, Reading, Berkshire, RG6 1PT |
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Tel. No.: |
44-(0) 1189353222 |
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Fax No.: |
44-(0) 1189353484 |
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E-Mail : |
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Aberdeen
Office : |
BG Group plc , 6 Albyn Grove, Aberdeen, SCOTLAND, AB10 6SQ |
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Tel. No.: |
44 (0) 1224202020 |
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Fax No.: |
44 (0) 1224202099 |
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Branch : |
BG House, Lake
Boulvard Hiranandani Business Park, Powai, Mumbai-400076, Maharashtra, India |
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Tel. No.: |
91-22-40325000 |
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Fax No.: |
91-22-40058930 |
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E-Mail : |
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Branches : |
Located at : v
Argentina v
Bolivia v
Brazil v
São Paulo v Canada v Delhi v Israel v Italy v
Kazakhstan v
Malaysia v Middle
East
v Netherlands v Norway v Palestine
v Philippines v Scotland v Singapore v Thailand v Trinidad
& Tobago v Tunisia v United
Kindom v USA |
DIRECTORS
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Name : |
Mr. Nigel Shaw |
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Designation : |
Chief Executive Officers BG India |
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Name : |
Mr.
Bill Adamson |
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Designation : |
Managing
Director |
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Name : |
Mr. Kapil Garg |
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Designation : |
Managing Director BG Exploration & Production India Limited (BGEPIL) |
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Name : |
Mr. B S Shanthraju |
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Designation : |
Managing Director Gujarat Gas Company Limited (GGCL) |
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Name : |
Mr. Gary Morgan |
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Designation : |
Technical Director BG India |
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Name : |
Mr. Harbinder Singh Ahluwalia |
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Designation : |
Finance Director BG India |
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Name : |
Mrs. Nicole Mcmahon |
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Designation : |
Director, Policy and corporate Affairs BG India |
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Name : |
Mr. Philip laing |
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Designation : |
Lrgal Counsel BG India |
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Name : |
Mr. Alasdair Mackenzie |
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Designation : |
Director, Commercial BG India |
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Name: |
Mr. R. Suriyanarayana |
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Designation : |
Director, HR |
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Name: |
Dr.
Anthony Barker |
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Designation : |
Director,
Downstream Business Development |
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Name: |
Mr.
Philip Croft |
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Designation : |
Technical
Director Mahanagar Gas Limited (MGL) |
BUSINESS DETAILS
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Line of
Business : |
The company is in
Exploration, Production, Development and Supply of existing and emerging gas
markets around the world. |
GENERAL
INFORMATION
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Suppliers : |
v
Ankleshwar v
Bharuch v
Surat in
south Gujarat |
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Customers : |
v
Domestic v
Commercial v
Industrial
Customers |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
This is a foreign company
incorporated in Cayman Islands Around 2003.
GENERAL
OBSERVATIONS:
BG Exploration & Production India Limited (BGEPIL)
With the purchase in 2002 of substantial interests in offshore oil and
gas fields in the Gulf of Cambay and north west of Mumbai, BG India established
itself as a major player in the exploration and production sector in India.
The transaction gave BG India a 30 per cent interest in the offshore
Tapti gas field and the Panna/Mukta oil and gas fields. The BG interest is
vested in its subsidiary BG Exploration and Production India Limited (BGEPIL).
The other partners in the consortium are the Indian Government’s Oil and
Natural Gas Corporation Limited (ONGC) with a 40 per cent shareholding and
Reliance Industries Limited, which holds the remaining 30 per cent.
The new assets are proving a valuable fit with the company’s growing
onshore transmission and distribution businesses and the company is keen to
unlock their full potential.
The Panna/Mukta fields lie approximately 95 kilometers (km) north west
of Mumbai in water depths of 45 to 70 meters. The two licence areas cover
around 300,000 acres. The Panna Field is estimated to have original oil in
place of one billion barrels and original gas in place of 1.9 trillion cubic
feet (tcf). The Tapti contract area is approximately 160 km north west of
Mumbai and amounts to some 363,500 acres, comprising the South and Mid Tapti
gas fields. Tapti has estimated gas in place of 3.75 tcf.
In 2004, total production from the Panna/Mukta and Tapti fields was
around 29 million barrels of oil equivalent (mmboe).
In November 2004, the Indian Government allowed the JV partners to
directly sell gas to customers rather than to the Government nominee. The move,
which came into effect on 1 April 2005, was seen as good news for the industry
and a shift towards further liberalization in the supply of gas in the country.
BGEPIL and its partners are using advanced drilling techniques and
innovative technology to realise the full potential of the fields. A two-stage expansion
programme is currently under way which will enable output from the Tapti gas
field to be doubled and will enhance and extend production in the other areas.
The first stage of the expansion programme involves infill drilling of
up to 18 wells in Panna/Mukta and a four well recompilation exercise in Tapti.
In February 2004, the Ensco 50 jack up drilling rig came on hire for the South
Tapti workovers and the Panna infill drilling campaign. The rig completed three
workovers on the South Tapti B platform before moving to Panna, where a total
of six multi-branch horizontal wells were drilled in 2004.
Government approval has been received for the installation of two
wellhead platforms in the Panna field and the drilling of 11 firm wells. This
is expected to result in gross incremental reserves of approximately 17 million
barrels of oil and 74 billion cubic feet (bcf) of gas. First production is
expected in mid 2006.The new platforms will be designed to allow future infill
drilling, which could further extend the economic life of the Panna field.
Further expansion in South Tapti will see five new wells drilled in 2006
while plans for Mid Tapti include eight wells and a Mid Tapti wellhead platform
to be installed in 2007. In the fourth quarter of 2004, new compression
facilities in the South Tapti field came on line. This marked the end of five
months of activity involving 15 different contractors and up to 220 personnel
during peak periods.
BGEPIL was involved in bidding for two deepwater exploration blocks as
part of the New Exploration and Licensing Policy (NELP) IV bidding round in
2003 and one deepwater exploration block as part of NELP V, and continues to
evaluate exploration and production opportunities, both onshore and offshore,
with a view to further developing its upstream portfolio in India.
KEY DATES
1995 Formation of Mahanagar Gas Limited –
joint venture with the Gas Authority of India Limited (GAIL)
1997 BG acquires majority interest in Gujarat
Gas Company Limited
2000 GGCL commissions 73 km Hazira-Ankleshwar
transmission pipeline
2002 BG acquires 30% interest in Panna, Mukta
and Tapti fields
BG India’s exploration
and production assets include a 30 per cent interest in the Tapti gas field and
the Panna/Mukta oil and gas fields. Significant investment is planned for
further development in the fields.
Partners (%) Panna/Mukta and Tapti fields
30 BG
30 Reliance Industries Limited
40 ONGC
BG India has a 65.12 per cent controlling stake in Gujarat Gas Company
Limited, which supplies natural gas to the cities of Ankleshwar, Bharuch and
Surat in south Gujarat.
BG India also has a 49.75 per cent stake in Mahanagar Gas Limited, which
is developing a natural gas distribution system in Mumbai. Both companies
deliver piped natural gas to domestic, commercial and industrial customers as
well as compressed natural gas (CNG) for natural gas vehicles.
BG Group
BG Group
is an integrated gas company engaged in the exploration, production,
transmission, distribution and supply of natural gas to industrialised
economies and developing markets in more than 20 countries.
The
Group aims to achieve strong growth and competitive returns through a strategy
focused on securing competitively priced gas and bringing that gas to high
value markets. Its principal business sectors are Exploration and Production
(E&P), Liquefied Natural Gas (LNG), Transmission and Distribution (T&D),
and Power.
BG India
Since
1995, when it became one of the founder partners in Mahanagar Gas Limited (MGL)
in Mumbai, BG India has developed a series of successful upstream and
downstream businesses which have made it a major private sector investor in the
country’s energy infrastructure.
The
sustained growth of India’s economy and the accompanying increased demand for
energy in the intervening years have helped create a dynamic synergy between
the country’s need for reliable and, increasingly, environmentally acceptable
sources of energy and the
unique
set of skills which BG India brings to the market.
In
2005, for the second year running, BG India’s upstream business, BG Exploration
and Production India Limited (BGEPIL), won the BG Group Chairman’s Award for
Safety Performance – a clear recognition of the company’s commitment to strong
Health, Safety, Security and Environment performance
BG Exploration and Production
India Limited (BGEPIL)
BG
Exploration and Production India Limited (BGEPIL) is a major private sector
player in India’s upstream oil and gas industry, with established production
fields in Panna/Mukta and Tapti and a growing portfolio of exploration
prospects.
Exploration
and production activity during 2005 concentrated on two main strands: bringing
onstream increased production through continued investment in new facilities
and drilling new wells in the existing fields; and the pursuit of additional
exploration prospects, particularly on the east coast of the country.
Production
output in the South Tapti gas field benefited from new offshore compression
facilities. Commissioned in late 2004, this has increased production capacity
from 180 million standard cubic feet per day (mmscfd) to 250 mmscfd.
The
ongoing expansion in South Tapti will see a new wellhead platform and four new
wells in 2006.
In
April 2005, BG India and its joint venture partners announced a further US$500
million investment in the Mid Tapti field. This will involve installation of a
new processing and compression platform, a wellhead platform and up to eight
new wells to raise gas production
capacity
from the current capacity of 250 mmscfd to 450 mmscfd by 2007.
Simultaneously,
an extensive drilling programme, using advanced techniques and innovative
technology, continued as part of the expansion programme for the Panna field.
This involved an 18-well infill programme which has significantly increased
production from the Panna wellhead platforms. Successfully completed in January
2006, the additional wells will help increase
recovery
by 35 mmbbls and 130 billion cubic feet (bcf) of gas.
In
addition, the Indian government has approved the installation of two wellhead
platforms and the drilling of 11 wells in the Panna field. This is expected to
result in gross incremental reserves of approximately 18 million barrels of oil
and 74 bcf of gas. First production from this expansion is scheduled for mid
2006. The new platforms will be designed to allow future infill drilling.
Following
government’s approval in 2004,the PMT joint venture partners were able to begin
direct selling of gas into the domestic market. The move was welcomed as good
news for the industry, a boost for investment and a further shift towards
liberalisation of India’s gas supply.
Another
significant step was achieved at the end of 2005 with an agreement on tariffs,
transportation and processing of PMT gas and condensate with ONGC, which owns
the transportation pipeline and onshore facilities. The agreement means the
partners can now expect to be able to achieve market prices for the condensate
produced from the Tapti field.
During
2005, BGEPIL continued to grow its upstream presence in India beyond the
Panna/Mukta and Tapti areas. A milestone was achieved in December when,
following a competitive tender process, ONGC accepted BGEPIL’s bid for 50 per
cent participation in three deepwater exploration blocks in the Krishna
Godavari basin on the east coat under a joint-operatorship model. These blocks
– GD, KD and KD Extn – cover a total area of 3,090 square kilometres and are in
the vicinity of blocks in which there have been recent discoveries.
Despite
an unsuccessful bid in the New Exploration and Licensing Policy (NELP) V in May,
BGEPIL remains committed to the Indian licensing effort and plans to
participate
in NELP VI during 2006.
Corporate Responsibility
BG
India has developed strong ongoing partnerships with a number of Non Governmental
Organisations (NGOs) to deliver a wide range of social initiatives. The company
partners in developmental initiatives, offers employee skills to community
groups and provides equipment to local organisations as part of its voluntary
social contributions.
The
cornerstones of this community development programme remain in environment,
education and energy. 2005 saw continued progress on a full spectrum of
initiatives linked to these themes as well as prompt and effective involvement
in flood relief efforts in Gujarat and Mumbai.
ENVIRONMENTAL INITIATIVES
Nature Information Centre
In partnership with
the Maharashtra Government’s Forest Department and the Bombay Natural History
Society, a leading environmental NGO, BG India supports the Nature Information
Centre at Borivali National Park, Mumbai. In 2005 the Centre organised several
programmes for school children and faculty members. In addition, the Centre saw
an increase in student volunteering and attendance at family programmes
offering education about nature. The centre educates visitors in environmental
awareness and conservation activities and has been isited by more than 75,000
people since its launch in 2004.
BG
Exploration & Production India Limited (BGEPIL)
With
the purchase in 2002 of substantial interests in offshore oil and gas fields in
the Gulf of Cambay and north west of Mumbai, BG India established itself as a
major player in the exploration and production sector in India.
The
transaction gave BG India a 30 per cent interest in the offshore Tapti gas
field and the Panna/Mukta oil and gas fields. The BG interest is vested in its
subsidiary BG Exploration and Production India Limited (BGEPIL). The other
partners in the consortium are the Indian Government’s Oil and Natural Gas Corporation
Limited (ONGC) with a 40 per cent shareholding and Reliance Industries Limited
which holds the remaining 30 per cent.
The new
assets are proving a valuable fit with the company’s growing onshore
transmission and distribution businesses and the company is keen to unlock
their full potential.
The
Panna/Mukta fields lie approximately 95 kilometres (km) north west of Mumbai in
water depths of 45 to 70 metres. The two licence areas cover around 300,000
acres. The Panna Field is estimated to have original oil in place of one
billion barrels and original gas in place of 1.9 trillion cubic feet (tcf). The
Tapti contract area is approximately 160 km north west of Mumbai and amounts to
some 363,500 acres, comprising the South and Mid Tapti gas fields. Tapti has
estimated gas in place of 3.75 tcf.
In
2004, total production from the Panna/Mukta and Tapti fields was around 29
million barrels of oil equivalent (mmboe).
In
November 2004, the Indian Government allowed the JV partners to directly sell
gas to customers rather than to the Government nominee. The move, which came
into effect on 1 April 2005, was seen as good news for the industry and a shift
towards further liberalisation in the supply of gas in the country.
BGEPIL
and its partners are using advanced drilling techniques and innovative
technology to realise the full potential of the fields. A two-stage expansion
programme is currently under way which will enable output from the Tapti gas
field to be doubled and will enhance and extend production in the other areas.
The
first stage of the expansion programme involves infill-drilling of up to 18
wells in Panna/Mukta and a four well recompletion exercise in Tapti. In
February 2004, the Ensco 50 jack up drilling rig came on hire for the South
Tapti workovers and the Panna infill drilling campaign. The rig completed three
workovers on the South Tapti B platform before moving to Panna, where a total
of six multi-branch horizontal wells were drilled in 2004.
Government
approval has been received for the installation of two wellhead platforms in
the Panna field and the drilling of 11 firm wells. This is expected to result
in gross incremental reserves of approximately 17 million barrels of oil and 74
billion cubic feet (bcf) of gas. First production is expected in mid 2006.The
new platforms will be designed to allow future infill drilling, which could
further extend the economic life of the Panna field.
Further
expansion in South Tapti will see five new wells drilled in 2006 while plans
for Mid Tapti include eight wells and a Mid Tapti wellhead platform to be
installed in 2007. In the fourth quarter of 2004, new compression facilities in
the South Tapti field came on line. This marked the end of five months of
activity involving 15 different contractors and up to 220 personnel during peak
periods.
BGEPIL
was involved in bidding for two deepwater exploration blocks as part of the New
Exploration and Licensing Policy (NELP) IV bidding round in 2003 and one
deepwater exploration block as part of NELP V, and continues to evaluate
exploration and production opportunities, both onshore and offshore, with a
view to further developing its upstream portfolio in India.
BG India and ONGC Strengthen
Relationship
BG
Exploration and Production India Limited (BGEPIL) and Oil and Natural Gas
Corporation Limited (ONGC) announced today that they have reached agreement to
jointly operate three offshore deepwater exploration blocks on the east coast
of India.
The
blocks, KG-OS-DW III (“GD”), KG-OS-DW (“KD”) and KG-OS-DW (“KD Extn”), are
located in the Krishna Godavari Basin, and in the vicinity of several blocks in
which there have been recent discoveries. These three blocks cover a
total area of 3,090 square kilometres. Subject to agreeing farm-in
arrangements and Government approval, BGEPIL and ONGC will each own a 50 per
cent interest in these blocks.
The
deepwater exploration blocks were assigned to ONGC by the Government of India
on a nomination basis and on New Exploration Licencing Policy (NELP) terms for
exploration and development in partnership with a global major oil and gas
company. ONGC had marketed these blocks during NELP-V with the Ministry
of Petroleum & Natural Gas.
BGEPIL
has agreed to pay a US$5 million up front payment for each block upon receipt
of Government approval of the farm-in, and additional consideration will be
paid towards exploration costs as well as a payment made upon discovery.
ONGC
and BG India have also agreed to explore other mutually beneficial
opportunities in India and overseas.
Announcing
the agreement at the World Oil & Gas Assembly in Jaipur, Mr Subir Raha,
Chairman and Managing Director, Oil and Natural Gas Corporation Limited,
said: “ONGC is happy to welcome BG, after Cairn and Eni, as joint
operator in these exploration blocks. We are happy that the joint
operatorship framework promoted by ONGC in the Panna, Mukta and Tapti producing
fields has generated the confidence for such a partnership in India and
abroad.”
Frank
Chapman, Chief Executive, BG Group plc, said: “This arrangement marks the
beginning of BG India’s diversification of its upstream portfolio from current
interests in producing fields on the west coast of India to a new growing
hydrocarbon region on the east coast. The Krishna Godavari Basin looks
set to become an important gas province for India and we are committed to
playing a part in its development. We also look forward to working in
closer partnership with ONGC and strengthening our existing relationship with
them.”
BGEPIL
and ONGC are partners with Reliance Industries in the offshore Panna/Mukta and
Tapti joint venture on the west coast of Mumbai.
BG
India
BG
India is one of the largest foreign investors in India’s energy sector through
three principal businesses - BG Exploration and Production Limited, Gujarat Gas
Company Limited and Mahanagar Gas Limited.
BG
Exploration & Production Limited is the subsidiary responsible for the
company’s 30 per cent interests in the Panna/Mukta and Tapti joint
venture. Since the company’s acquisition of these assets in February
2002, committed investment by the partners, BG, ONGC (40 per cent) and Reliance
(30 per cent), amounts to over US$900 million.
BG is the
majority shareholder in Gujarat Gas Company Limited (GGCL), India’s largest
private natural gas distribution and transmission company, which distributes
gas in the cities of Ankleshwar, Surat and Bharuch, via its 1,850 kilometre
pipeline network. GGCL has over 172,000 domestic, commercial and
industrial customers and over 20,000 compressed natural gas (CNG) users.
Mahanagar
Gas Limited (MGL), a joint venture with GAIL and the Government of Maharashtra,
distributes gas in Mumbai and to surrounding areas. MGL owns and controls
1,863 kilometres of pipeline and has nearly 400,000 customers including the
users of more than 160,000 CNG vehicles.
ONGC
Oil and
Natural Gas Corporation Limited (ONGC) is India’s Most Valuable Company.
It has the distinction of being Asia’s Best Oil & Gas Company.
In the
last 50 years, ONGC has scripted India’s hydrocarbon saga by discovering five
of the six discovered basins. ONGC meets 84 per cent of India’s domestic
production of oil and gas. It has established its competitive edge, by
bagging 59 out of the 110 blocks, awarded in five rounds of NELP bidding.
ONGC’s
wholly-owned subsidiary ONGC Videsh Limited (OVL) is the biggest Indian
multinational, with 19 oil and gas properties in 13 countries.
ONGC is
ranked 24th among Global Energy Companies by Market Capitalization in PFC
Energy 50. It is the World’s second largest E&P (Exploration &
Production) Company and first in Profits in the third Platts EBT Survey (2004).
ONGC is
placed at the top of all Indian Corporates listed in Forbes Global 2000 (rank
265th) and Financial Times Global 500 (rank 326th). It is ranked 454th in
Fortune-500 by turnover.
ONGC
nurtures a vision of becoming an Indian Integrated Energy Multinational (PSU),
and targets a turnover of US$50 billion US in five years.
There are matters discussed in this media information that
are forward looking statements. Such statements are only predictions and actual
events or results may differ materially. For a discussion of important factors
which could cause actual results to differ from the forward looking statements,
refer to the Company’s annual report and accounts for the year ended 31
December 2004.
Media
Enquiries
Nicole
McMahon 91-124-256 0240
ONGC and BG India Strengthen Relationship
December 02, 2005
Oil and Natural Gas Corporation Limited (ONGC) and BG Exploration and
Production India Limited (BGEPIL) announced today that they have reached
agreement to jointly operate three offshore deepwater exploration blocks on the
east coast of India.
The blocks, KG-OS-DW III (“GD”), KG-OS-DW (“KD”) and KG-OS-DW (“KD
Extn”), are located in the Krishna Godavari Basin, and in the vicinity of
several blocks in which there have been recent discoveries. These three blocks
cover a total area of 3,090 square kilometres. Subject to agreeing farm-in
arrangements and Government approval, BGEPIL and ONGC will each own a 50 per
cent interest in these blocks.
The deepwater exploration blocks were assigned to ONGC by the Government
of India on a nomination basis and on New Exploration Licencing Policy (NELP)
terms for exploration and development in partnership with a global major oil
and gas company. ONGC had marketed these blocks during NELP-V with the Ministry
of Petroleum & Natural Gas.
BGEPIL has agreed to pay a US$5 million up front payment for each block
upon receipt of Government approval of the farm-in, and additional
consideration will be paid towards exploration costs as well as a payment made
upon discovery.
ONGC and BG India have also agreed to explore other mutually beneficial
opportunities in India and overseas.
Announcing the agreement at the World Oil & Gas Assembly in Jaipur,
Mr Subir Raha, Chairman and Managing Director, Oil and Natural Gas Corporation
Limited, said: “ONGC is happy to welcome BG, after Cairn and Eni, as joint
operator in these exploration blocks. We are happy that the joint operatorship
framework promoted by ONGC in the Panna, Mukta and Tapti producing fields has
generated the confidence for such a partnership in India and abroad.”
Frank Chapman, Chief Executive, BG Group plc, said: “This arrangement
marks the beginning of BG India’s diversification of its upstream portfolio
from current interests in producing fields on the west coast of India to a new
growing hydrocarbon region on the east coast. The Krishna Godavari Basin looks
set to become an important gas province for India and we are committed to
playing a part in its development. We also look forward to working in closer
partnership with ONGC and strengthening our existing relationship with them.”
BGEPIL and ONGC are partners with Reliance Industries in the offshore
Panna/Mukta and Tapti joint venture on the west coast of Mumbai.
BG
Group
BG
Group is a rapidly growing company in the global energy market with operations
in more than 20 countries on five continents. The Group’s principal activities
lie in exploration and production and the development and supply of existing
and emerging gas markets around the world.
BG
Group combines a deep understanding of gas markets with industry leading skills
in finding and commercialising gas and in project delivery. This enables the
company to access competitively priced resources and bring them to market
quickly and cost effectively.
Gas
discoveries often require complex chains of physical infrastructure to deliver
the gas to markets. BG Group has proven skills and experience in creating value
from these chains. The company operates in four main business segments:
exploration and production (E&P); Liquefied Natural Gas (LNG); transmission
and distribution (T&D); and power generation.
The
benefits of natural gas over other fossil fuels are well known. Natural gas is
a relatively clean fossil fuel and can replace less environmentally friendly
energy sources. It is competitively priced, plentiful and offers geographical
diversity of supply.
BG
Group has identified four key drivers which will underpin its future long-term
growth. These are:
•
strong asset base with built-in growth;
•
incremental investments around existing asset base;
•
connecting assets to enhance value; and
• new
opportunities that give extra impetus to the existing asset base.
As a
leader in the gas supply industry, BG Group seeks to maintain a deep understanding
of current gas demand and market trends. The company also aims to balance its
activities between major developed markets and selected developing markets, and
is building a portfolio of assets which are increasingly connected and
complementary to one another. This integrated approach enables it to move
swiftly to take advantage of new opportunities as they arise. Among developing
economies, the Group has focused on India and Brazil, in particular, as markets
with significant potential for growth in gas usage.
In
2004, BG Group reported another year of strong performance across its operating
segments, with total operating,
BG Group Financial Results:
|
|
Group Turnover |
Total Operating
Profit/(Loss) (a) |
|||
|
|
2004 |
2003 |
2004 |
2003 |
|
|
Exploration And
Production |
2153 |
1794 |
1204 |
959 |
|
|
Liquefied Natural
Gas |
1098 |
945 |
94 |
77 |
|
|
Transmission and
Distribution |
644 |
678 |
134 |
116 |
|
|
Power Generation |
201 |
184 |
121 |
129 |
|
|
Other Activities |
8 |
3 |
|
|
|
|
Less: intra-group
Sales |
(22) |
(17) |
(31) |
(30) |
|
|
TOTAL: |
4082 |
3587 |
1522 |
1251 |
|
(a) Total operating
profit /(loss) includes the group’s share of operating profits less losses in
joint ventures and associated undertakings.
India’s
sustained economic growth continues to drive an appetite for energy which BG
India is well positioned to help meet through its expanding upstream and
downstream assets.
Since
1995, when it helped form Mahanagar Gas Limited (MGL) in Mumbai, BG India has become
a key private sector player in the natural gas industry in India. The company
is committed to playing an expanding role in the market by consolidating and
further developing its businesses both on and offshore.
This
commitment is underwritten by BG India’s parent company, BG Group, which has
identified India as a principal target market due to its anticipated energy
needs – demand for natural gas in India is expected to more than double over
the next two decades to approximately 13,700 million standard cubic feet per
day (mmscfd) in 2025.
In a
major review of its business strategy in February 2004, BG Group made clear its
commitment to substantial further investment to grow BG India’s exploration and
production (E&P) and transmission and distribution (T&D) businesses.
BG
India’s upstream assets lie in a 30 per cent interest in the Panna/Mukta oil
and gas fields and the Tapti gas field (PMT) which were acquired in 2002. Since
acquisition of these assets, committed investment by the joint venture – BG,
Operating
Environment
The
natural gas industry in India is in a state of structural transition and on the
threshold of at least two decades of rapid growth. Current estimates anticipate
that natural gas will grow from eight per cent to 20 per cent of the country’s
fuel mix by 2025.
These
dynamics make it imperative that a level playing field be created for both
public and private sectors and that issues of regulation and governance be
successfully resolved. This will ensure continued investment in the industry so
that the benefits of natural gas can reach more and more consumers.
In
2004, BG India became a founder member of the Gas Industry Group (GIG), an
informal grouping of investors and stakeholders as well as consumers in the
natural gas industry in India. Many of the members have considerable natural
gas experience and expertise and can draw upon international knowledge of
regulatory best practice.
The GIG
seeks to work with the Government of India to secure an optimal natural gas
operating regime to promote industry growth. This is of particular relevance in
the wake of the Supreme Court judgment of 2004, which stated that the Centre
has exclusive jurisdiction over natural gas in the country.
In
order to attract investment to the sector and benefit consumers, the operating
regime should, in the GIG’s view, be consistent with global standards and
practices. This applies particularly to maintaining the independence of the
regulatory regime, adopting clear and transparent operating rules, and promoting
competition.
The GIG
has already commented on the Petroleum and Natural Gas Regulatory Board Bill,
and the Draft Pipeline Policy. On the Bill, the GIG raised concerns on issues
of investment risk, the independence of the Regulator, the potential for conflict
between Central and state government interests, tariff regulation and
conditions of access to pipelines. The GIG has called for separation of natural
gas and petroleum products regulation as each is at a different stage of
development in India.
BG India
endorses the GIG’s view that light-handed gas regulation will promote demand
growth and infrastructure investment. A level playing field approach will also
provide a stable fiscal and legal framework and encourage new market entrants.
Transparent
and principled tariff regulation is also an essential requirement for a
successful pipeline policy. In regard to the Draft Pipeline Policy, the GIG is
of the view that the proposed mandatory 25 per cent excess capacity is
inefficient, will increase tariff rates and has the potential to strand unused
assets. To attract investment, the GIG supports contract carriage for gas
transmission, which allows capacity to be built according to demand.
The GIG
believes that the right of government to take profit gas in kind is erroneous
as it will restrict the marketing rights of contractors and result in them
being unable to commit definite volumes to customers.
Among
positive developments, BG India welcomed comments by Dr. Manmohan Singh, Prime
Minister of the Congress-led
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered
forfeited for violation of money laundering or international anti-terrorism
laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.43.59 |
|
UK Pound |
1 |
Rs.85.53 |
|
Euro |
1 |
Rs.58.14 |
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|