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Indias natural gas production rises 3.3% in July 2016
Aug 24,2016

Indias natural gas production rose 3.3% to 2.70 billion cubic meters (bcm) in July 2016 over a year ago. Natural gas output of ONGC moved up 8.2% to 1.82 bcm, while that of private and JV companies declined 11.0% to 0.62 bcm. Meanwhile, the natural gas production of Oil India increased 10.1% to 0.26 bcm in July 2016.

Natural gas output declined -3.8% to 10.45 bcm in April-July 2016 over April-July 2015.

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Indias crude oil refinery output rises 7.7% in July 2016
Aug 24,2016

Indias crude oil refinery output increased 7.7% to 20.41 mt in July 2016 over July 2015. The output of public sector refineries surged 15.5% to 10.97 mt, while the output of private refineries also gained 2.0% to 8.11 mt. The refinery output of public-private JV refiners declined 11.8% to 1.33 mt in July 2016.

Among public refineries, the output of Chennai Petroleum Corporation jumped 32.4% to 0.93 mt, while the output of Hindustan Petroleum Corporation moved up 28.5% to 1.34 mt, and Mangalore Refineries 19.7% to 1.23 mt in July 2016 over July 2015. The output of Indian Oil Corporation also inched up 14.4% to 5.19 mt, and Bharat Petroleum Corporation 5.3% to 2.03 mt, but that of Numaligarh Refineries declined 3.6% to 0.24 mt in July 2016.

Among private refiners, the output of Reliance Petroleum increased 3.8% to 6.44 mt, while that of Essar Oil declined 4.4% to 1.67 mt in July 2016 over July 2015.

Among JV refineries, the output of Bharat Oman declined 30.5% to 0.42 mt, while the output of HPCL Mittal rose 0.8% to 0.91 mt in July 2015.

The cumulative refinery output increased 8.5% to 79.42 mt in April-July 2016. The output of public refineries increased 11.9% to 42.73 mt, while that of private refineries rose 4.5% to 31.22 mt. The refinery output of JV refineries moved up 7.4% to 5.46 mt in April-July 2016. Among public refineries, the output of Numaligarh Refineries, Hindustan Petroleum Corporation, Indian Oil Corporation, Bharat Petroleum Corporation, and Chennai Petroleum Corporation rose, while that of Mangalore Refineries was flat.

The overall capacity utilization was higher at 108.6% in July 2016 compared with 102.5% in July 2015, while it was also higher at 106.0% in April-July 2016 compared with 104.5% in April-July 2015.

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Cabinet approves introduction of the Surrogacy (Regulation) Bill, 2016
Aug 24,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of the Surrogacy (Regulation) Bill, 2016.

The Bill will regulate surrogacy in India by establishing National Surrogacy Board at the central level and State Surrogacy Boards and Appropriate Authorities in the State and Union Territories. The legislation will ensure effective regulation of surrogacy, prohibit commercial surrogacy and allow ethical surrogacy to the needy infertile couples.

All infertile Indian married couple who want to avail ethical surrogacy will be benefited. Further the rights of surrogate mother and children born out of surrogacy will be protected. The Bill shall apply to whole of India, except the state of Jammu and Kashmir.

The major benefits of the Act would be that it will regulate the surrogacy services in the country. While commercial surrogacy will be prohibited including sale and purchase of human embryo and gametes, ethical surrogacy to the needy infertile couples will be allowed on fulfilment of certain conditions and for specific purposes. As such, it will control the unethical practices in surrogacy, prevent commercialization of surrogacy and will prohibit potential exploitation of surrogate mothers and children born through surrogacy.

No permanent structure is proposed to be created in the Draft Bill. Neither there are proposals for creating new posts. The proposed legislation, while covering an important area is framed in such a manner that it ensures effective regulation but does not add much vertically to the current regulatory structure already in place at the central as well as states. Accordingly, there will not be any financial implications except for the meetings of the National and State surrogacy Boards and Appropriate Authorities which will be met out of the regular budget of Central and State governments.

Background:

India has emerged as a surrogacy hub for couples from different countries and there have been reported incidents concerning unethical practices, exploitation of surrogate mothers, abandonment of children born out of surrogacy and rackets of intermediaries importing human embryos and gametes. Widespread condemnation of commercial surrogacy prevalent in India has also been regularly published in different print-and electronic media since last few years highlighting the need to prohibit commercial surrogacy and allow ethical altruistic surrogacy. The 228th report of the Law Commission of India has also recommended for prohibiting commercial surrogacy and allowing ethical altruistic surrogacy to the needy Indian citizens by enacting a suitable legislation.

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Indias crude oil production declines 1.8% in July 2016
Aug 24,2016

Indias crude oil production declined 1.8% to 3.08 million tonnes (mt) in July 2016 over July 2015. Crude oil output of ONGC fell 0.7% to 1.87 mt, while that of Oil India also eased 0.9% to 0.27 mt. Further, the crude oil production of private and joint venture (JV) companies dipped 4.2% to 0.94 mt. ONGCs offshore output declined 2.4% to 1.37 mt, while onshore production rose at 4.3% to 0.50 mt.

Crude oil output fell 2.9% to 12.08 mt in April-July period of the fiscal year ending March 2017 (April-July 2016), in addition to 0.7% decline recorded in the corresponding period of last year. Output of ONGC eased 1.3% to 7.36 mt, while that of Oil India declined 3.7% to 1.07 mt and private companies fell 5.9% to 3.65 mt in April-July 2016 over April-July 2015.

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Cabinet approves Leasing out of AAI land to AIDC
Aug 24,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for leasing out of AAI land measuring 4050 sq. Mtrs. to Assam Industrial Development Corporation (AIDC), a Government of Assam Undertaking. This will be utilised for setting up of Centre for Perishable Cargo (CPC) and its future expansion at Lokpriya Gopinath Bordoloi International Airport (LGBI Airport), Guwahati.

The land is to be leased by AAI on a token licence fee of Rs.1/- per annum for a period of seven years subject to signing of Lease Agreement. After expiry of initial period of seven years, the future lease period will be made afresh as per AAI policy in-vogue.

Background:

North Eastern Region (NER) in India is rich in flora and fauna. Revenue from export of agriculture and horticulture items will improve economic conditions of NER. There is a need for promotions of perishable cargo export from this region, which will generate employment opportunities directly or indirectly. Facilities for air upliftment of perishable cargo from Guwahati are required to be more effective. Therefore, it has been decided to lease land measuring 4050 sq. Mtrs. to AIDC, by AAI for setting up of CPC and its future expansion at LGBI Airport, Guwahati.

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Cabinet approves Central Scheme for Assistance to Civilian Victims
Aug 24,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval to enhance the grant of compensation to the civilian victims under the scheme titled n++Central Scheme for Assistance to Civilian Victims of Terrorist/ Communal/Left Wing Extremist (LWE), Cross Border Firing and Mine/IED blasts on Indian Territoryn++ from Rs.3 lakhs to Rs.5 lakhs. The highlights of the scheme are as follows:-

1. For the first time, civilian victims of cross border firing along the Indo-Pak border will be given a compensation of Rs. 5 lakh similar to those who die due to terrorism or LWE violence.

2. The decision to give compensation to the victims of cross border firing and enhancing the amount from Rs.3 lakh to Rs.5 lakh to the victims of terrorism or LWE violence was taken by the Government on Wednesday.

3. Now onwards, any civilian who dies anywhere in the country due to terror attack, LWE violence, firing from across the border, shelling or IED explosion will be given Rs.5 iakh as compensation uniformly. The amount will be given to the next of kin of the victim.

4. Rs.5 lakh will also be given to those who receive 50 per cent or more disability or incapacitation due to the same reasons.

5. The compensation amount will be given subject to the condition that no employment has been provided to any of the family members of the victims by State or Central Government.

6. Till now the next of kin of persons killed or civilians who suffered permanent incapacitation as a result of such violence were paid Rs.3 lakh as per provisions of the Central Scheme for Assistance to Civilian Victims of Terrorist, Communal, Naxal violence since 2008. Families of the victims would be eligible to get assistance under the scheme even if they have received any other assistance, by way of payment of ex-gratia or any other type of relief from the Government or any other source except when a similar scheme is already being implemented by the Central Government. So far, the Government has disbursed Rs.35.89 crore as compensation to civilian victims since inception of this Scheme in 2008.

Background:

During the Prime Ministers visit to Jammu and Kashmir on 23.10.2014, the issue of financial assistance to the people killed in cross border firing was raised. For the first time in 70 years since independence, realizing the problem of Indian population residing in border areas, the Government analyzed their plight as they suffer due to frequent violations of ceasefire specifically on the North Western border of Jammu and Kashmir with Pakistan. Approximately 770 km of the Line of Control (LC) and approximately 220 km of International Border (IB) have been a witness to frequent ceasefire violation and the influx of terrorists since 1990. 13921 civilians have lost their lives till 2015. In view of the hardships faced by the civilian populations, the Government decided to include the civilian victims of cross border firing under the Scheme.

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Cabinet approves MoU with South Africa to establish cooperation in Grassroots Innovation
Aug 24,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has been apprised of the signing of a Memorandum of Understanding (MoU) between India and South Africa to establish cooperation in Grassroots Innovation. The MoU was signed on July 07, 2016 at Pretoria in pursuance to the Inter-Government Agreement between two countries for cooperation in Science & Technology.

Under this MoU, both countries will jointly organise various programmes such as forums, seminars, workshops, and training on matters related to innovation; share open source technologies with each other and jointly develop projects (and including partnering with relevant industries in the respective countries) to assist innovators in converting their ideas into commercially viable innovations leading to joint technology development and transfer of technology for Societal benefit.

The MoU will provide a mechanism and help in creating an ecosystem that will promote inclusive innovation and entrepreneurship at the grassroot level in both countries with particular focus on Indigenous knowledge systems and Agriculture Biotechnology.

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Cabinet approves Cadre Review of Indian Information Service
Aug 24,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the cadre restructuring of the Indian Information Service (IIS) Group A.

The restructuring will involve addition of two posts at Apex level, five at Higher Administrative Grade and 19 posts at Senior Administrative Grade level with matching reduction at other levels. The restructuring will address the problem of existing stagnation in the IIS Cadre and will improve the career prospects of IIS officers. The Cadre review exercise will result in better functioning of media and communication arms of the government.

The Cadre review comes in the backdrop of ongoing efforts to expand the outreach of pro-people policies of the government and the need to disseminate the information of such measures which have grown manifold in the recent years.

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Cabinet approves signing of Air Services Agreement between India and Fiji
Aug 24,2016

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for signing of new Air Services Agreement (ASA) between India and Fiji.

The Agreement is for updation of the existing Air Services Agreement (ASA) between the two countries which was signed on 28th January, 1974. The updation is as per latest ICAO template keeping in view the latest developments in civil aviation sector and with an objective to improve the air connectivity between the two countries.

A draft text of Air Service Agreement has been finalized in consultation with Ministry of Law & Justice (Department of Legal Affairs), Ministry of Finance (Department of Economic Affairs, Department of Revenue), Ministry of External Affairs, Department of Commerce and Ministry of Tourism.

The essential features of the Air Services Agreement are as follows:

i. Both countries shall be entitled to designate one or more airline.

ii. The designated airlines of either country shall have the right to establish offices in the territory of the other country for the promotion and sale of air services.

iii. The designated airlines of the two countries shall have fair and equal opportunity to operate the agreed services on specified routes. The routes and frequencies shall be decided subsequently.

iv. The designated airline will be free to decide tariffs in respect of the agreed services at reasonable levels based on the commercial considerations.

v. The designated Airline of each party can enter into cooperative marketing arrangements with the designated carriers of same party and other party.

vi. Apart from the above, the ASA also has the provisions relating to Revocation or Suspension of Operating Authorization, Principles governing operations of agreed services, commercial opportunities, safety related clause etc. that were incorporated in the line of Indian model ASA.

vii. The existing Route Schedule annex to the ASA has also been revised and new points of call have been added for enhanced connectivity. Now Indian carriers can operate to any points in Fiji from points in India whereas the carriers of Fiji can establish direct operation to Delhi, Mumbai and Chennai in India and by code share with Indian carriers to Bangalore, Kolkata, Hyderabad apart from points given for direct operation. Besides this, Kochi, Varanasi, Ahmedabad and Amritsar may be served through domestic code share operations.

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Murshidabad Gets Jangipur Mega Food Park Running
Aug 24,2016

After a long gap, people of Murshidabad saw the promise made by the Centre during the UPA government in 2008 being kept by the NDA government in 2016. Murshidabad, West Bengal was allotted Jangipur Mega Food Park in year 2008 to benefit poor farmers and people of North 24 Paragans, Birbhum, Malda, and Bardwan but the project could not see the light of the day till 2016.

It was a result of the genuine efforts made by the Minister of Food Processing Industries Smt. Harsimrat Kaur Badal to ensure that revival of Jangipur Mega Food Park takes place so that gigantic critical food processing infrastructure is made available to the poor farmers of this backward belt of West Bengal that Jangipur Mega Food Park could see the light of the day. The Honble President of India, Shri Pranab Mukherjee has inaugurated Jangipur Mega Food Park today in the august presence of Honble Governor of West Bengal Shri Keshari Nath Tripathi. n++The Mega Food Park to leverage an additional investment of about Rs. 250 crore in food processing units in the Park, generate a turnover of about Rs. 500 Crore annually and is expected to provide direct and indirect employment to 6000 people at CPC & PPCs and benefit about 25000-30000 farmers in the catchment areas.n++ Said Smt. Harsimrat Kaur Badal.

Speaking on the occasion, Smt. Badal said that n++Connecting farmers with food processing infrastructure and creating markets are her primary goals so that farmers get remunerative price of their produce. Modern infrastructure at Jangipur, Murshidabad will benefit farmers and growers of North 24 Paragans, Birbhum, Malda, and Bardwan and would benefit processors and consumers and will give big boost to the growth of the food processing sector in West Bengal. Mega Food Park at Jangipur has been set up with the project cost of Rs. 132.71 Crore approximately and in an area of 82.11 acre with a grant of Rs. 50.00 crore provided by my ministry.n++

The food park is having the facilities of fully operational industrial sheds for SMEs, developed industrial plots for lease to food processing units and facilities of 8000 MT Warehouse, 5000 MT Multi Crop Cold Storage, 10000 MT Potato Cold Storage, IQF & Pulping line of 1.5 ton per hour each, 3000 MT Deep Freeze and Quality control lab. The Park also has a common administrative building for office and other uses by the entrepreneurs, Dormitory and Row Houses. 6 Primary Processing Centres (PPCs) at Kandi, Sheikhpara, Barasat, Siuri, Gour Road and Katwawill provide facilities for primary processing and storage near the farms.

Under the visionary guidance of Honble Prime Minister Shri Narendra Modi, Ministry of Food Processing Industries is focusing on boosting the food processing industry so that agriculture sector grows exponentially and becomes a major contributor towards doubling the farmers income and therefore food processing is the major thrust area of Make in India initiative.

Under the stewardship of Smt. Harsimrat Kaur Badal, Ministry of Food Processing Industries has been able to successfully create an environment that is smooth, transparent and conducive for the growth of food processing sector in the country. For the first time government has allowed 100% Foreign Direct Investment in Retail of Swadeshi Food that is produced and manufactured in India which is going to spur growth of food processing in India. n++India is a most resilient food economy as a result of which India is going to become the Food Factory of the World by 2022 and our government has put food processing infrastructure on an automatic seamless growth mode. Development of Mega Food Parks in remote areas in India are our first priority. She further added that Time is not far when India shall witness its 6 lakh villages connected with Mega Food Park Processing Unitsn++ Said Smt. Badal.

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BEE announces new star rating methodology for Air conditioners
Aug 24,2016

The Bureau of Energy Efficiency (BEE) has introduced a new star rating methodology called Indian Seasonal Energy Efficiency Ratio (ISEER) for air conditioners. This evolved rating methodology factors in variance in higher temperature in India and rates air conditioners accordingly. Consumers can now purchase air conditioners with higher efficiency leading to lower electricity bills.

Keeping the performance of air conditioners during higher temperature in mind, ISEER will address the different climatic zones in India and higher temperature. ISEER measures energy efficiency of air conditioners based on a weighted average of the performance at outside temperatures between 24 and 43 degree C based on Indian weather data.

As per Indian Weather Data Handbook, 2014, weather profile of 54 major cities shows that 65% of the total number of hours in a year have a temperature above 24 deg C (5778 hours out of 8760). Air conditioners in India have hitherto been tested under the IS 1391 at a standard operating conditions of outside temperature of 35 degree C. Star rating is given to manufacturers based on the test results provided by them as tested on the above standard.

Talking about ISEER, Shri Sanjay Seth, Secretary, Bureau of Energy Efficiency said that the new methodology for rating system will bring in higher energy efficiency of appliances and reduce energy consumption. He further said that the standards have been developed while keeping changing Indian temperature in mind. Such innovations will help us achieve the objective sooner.n++

Ratings based on ISEER have been introduced on a voluntary basis for Variable Speed (Inverter) Air Conditioners since June 2015 and proposed to be merged with fixed speed air conditioners in the mandatory regime from January 2018. Some of the leading manufacturers have already adopted the rating for inverter air conditioners.

BACKGROUND

BEE has from the beginning worked out a plan of progressively improving the efficiency of Room AC from 2008 and to transform market towards better energy efficiency standards, BEE continuously tightens the standards such that, the Star-5 in 2010 became Star-3 in 2015 and will become Star-1 in 2018 as per new ISEER methodology. The weighted average Energy Efficiency Ratio (EER) of AC has increased from 2.6 in 2006 to 3.26 in 2015, which is an increase of 25% in efficiency due to tightening of standards.

Since 2010 Bureau of Energy Efficiency has mandated air conditioners as a mandatory-labelled appliance under Energy Conservation Act and since then air conditioners cannot be sold without star label. Now as per latest notification, from January 2016, Star-2 is the least efficiency level to be sold in the market, hence variation in power consumption is compared between Star-5 (most efficient) and Star-2 (least efficient) air conditioners.

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Fitch Affirms Bharat Petroleum at BBB-; Outlook Stable
Aug 24,2016

Fitch Ratings has affirmed India-based Bharat Petroleum Corporations (BPCL) Long-Term Foreign-Currency Issuer Default Rating (IDR), its senior unsecured rating, and ratings on its outstanding senior unsecured debt at BBB-. The Outlook is Stable.

KEY RATING DRIVERS

Strong Linkages with State: Fitch equalises BPCLs rating with that of its largest shareholder, the state of India (BBB-/Stable) (54.9% shareholding), due to their strong operational and strategic linkages. Fitch believes the linkages remain strong despite the deregulation of diesel prices in 2014 and introduction of the direct benefit transfer scheme - which transfers subsidies directly to the consumers - for household liquefied petroleum gas (LPG). BPCL continues to retail kerosene at government-prescribed prices that are lower than market prices. Government covers the under-recoveries (the difference between market prices and state-controlled selling prices) from the sale of kerosene through subsidies and discounts from upstream companies, whereas downstream companies had borne part of the under-recoveries in the past.

Fitch may reassess BPCLs linkages with the state if the state-owned oil marketing companies policy role weakens due to further deregulation of prices for petroleum products. Fitch will also take into consideration governments commitment to maintaining market-based prices for already-deregulated products when oil prices rise. The lower oil prices and deregulation of diesel have improved BPCLs finances significantly. Fitch assesses the standalone credit profile at BB+.

Falling Subsidies: The oil sector reforms by way of deregulation of diesel prices in 2014, along with low crude oil prices, has resulted in a zero subsidy for BPCL during the financial year ending 31 March 2016 (FY16) (FY15: INR4.9bn). We expect no subsidy burden for BPCL over the next two years, given Fitchs assumptions of oil prices at USD42 per barrel (bbl) in 2016 and USD45 per bbl in 2017. Furthermore, government hiked the subsidised LPG prices by INR1.98 in July 2016 and by INR1.93 in August 2016. Similarly, government increased kerosene prices by INR0.25 per litre in July 2016.

Fitch believes that under-recoveries could be reduced significantly if the price hikes continue on a regular basis. Nevertheless, it remains uncertain as to how government will approach subsidies at higher crude prices, especially prices above USD60 per bbl.

Significant Operator: BPCL is the third-largest refiner in the country, with a capacity of 30.5 million tonnes per annum (mtpa) - representing 13% share of Indias refining capacity - and the second-largest marketer of petroleum products, with around a one-quarter market share. BPCL marketed 36.8 mtpa of petroleum products in FY16 (FY15: 35 mtpa) and refined 29.8 mtpa (FY15: 29.3mtpa). We expect BPCL to maintain its leading position over the medium to long term, given its capex plans for enhancing capacity.

Comfortable Financial Profile: We expect BPCLs net leverage (net adjusted debt/operating EBITDAR) to remain below 3x and EBITDA interest cover above 4.5x over the next three years. This is despite the large capex and investment. Credit metrics improved during FY16, with net leverage of 1.3x (FY15: 1.7x) supported by strong gross refining margins (GRM) of USD6.59 per barrel (bbl) (FY15:USD3.62 per bbl).

We expect the GRMs to moderate over the next two years in line with the industry. This, together with the large investment plans, is likely to result in a marginal weakening of credit metrics during FY17 and FY18. However, we expect the benefits from the expanded Kochi refinery and continuing strong performance of the Bina refinery (GRM FY16 USD11.7/ bbl; FY15 USD6.1/bbl) to support improvement in operational cash flows from FY18.

Large Capex: We expect BPCLs capex to remain high at over INR600bn over the next five years (FY16: INR113.6bn). In addition, the company (through its subsidiary) is acquiring a stake in Rosnefts Taas-Yuriah and Vankor fields in Russia for a consideration of around USD1.1bn (around INR75bn). The large investments are likely to result in BPCLs FCF remaining negative over the medium term. The largest portion of the capex is for the expansion of the Kochi refinery to 15.5mtpa from the current 9.5mtpa, at a cost of around INR165bn. The company expects to complete expansion of the Kochi refinery by end-2016, and to start operations in early 2017.

Upstream Discoveries: BPCL has 17 upstream blocks (seven in India and 10 abroad), from which some successful discoveries have been made, and is in the process of acquiring a stake in two blocks owned by Rosneft. Other than the current acquisitions which are producing fields, the most notable is BPCLs 10% participating interest in the Rovuma Basin in Mozambique (discovery of 75 trillion cubic feet of natural gas resources). The other noteworthy discoveries are in its Brazilian assets (20% participating interest), and West Australian onshore assets in Perth (27.8% stake). We expect BPCL to start benefiting from its upstream investments in the medium to long term.

KEY ASSUMPTIONS

Fitchs key assumptions within the rating case for BPCL include:

- Industry refining margins to moderate during FY17 and FY18

- No net under-recoveries for FY17 and FY18

- Oil prices of USD42 per bbl for FY17, USD45 for FY18 and USD55 for FY19 in line with Fitchs base-case price deck, as outlined in Corporate Oil Price Assumption Raised for 2016; Slow Recovery From Here, dated 27 July 2016

- Total consolidated capex of around INR600bn over the next five years

RATING SENSITIVITIES

Positive: Developments that may, individually or collectively, lead to positive rating action include:

-An upgrade of the sovereign rating, provided the rating linkages with the state remain intact.

Negative: Developments that may, individually or collectively, lead to negative rating action include:

- A downgrade of the sovereign rating

- Weakening of linkages between BPCL and the state.

For Indias sovereign rating, the following sensitivities were outlined by Fitch in its Rating Action Commentary of 18 July 2016.

The main factors that, individually or collectively, could lead to positive rating action are:

- Fiscal initiatives that would cause the general government debt burden to fall more rapidly than expected in the medium term

- An improved business environment resulting from implemented reforms and persistently contained inflation, which would support higher private investment and real GDP growth.

The main factors that, individually or collectively, could lead to negative rating action are:

- Further deviation of the already-high public-debt burden from the peer median, which may be caused by stalling fiscal consolidation or greater-than-expected deterioration in the banking sectors asset quality that would prompt large-scale sovereign financial support

- Loose macroeconomic policy settings that cause a return of persistently high inflation levels and a widening current-account deficit, which would increase the risk of external funding stress.

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Crude oil production during July 2016 was 1.81% lower than in July 2015
Aug 24,2016

Crude oil production during July 2016 was 3077.40 TMT which is 0.39% and 1.81% lower than target and production achieved in July 2015 respectively. Cumulative crude oil production during April-July, 2016 was 12078.34 TMT which is 0.69% and 2.95% lower than target and production during corresponding period of last year respectively.

Unit-wise production details with reasons for shortfall are given below:

1.1 Crude oil production by ONGC during July, 2016 was 1867.77 TMT which is 1.66% lower than the monthly target and 0.70% less when compared with July, 2015. Cumulative crude oil production during April-July, 2016 was 7359.84 TMT which is 1.12% lower than target for the period and 1.28% lower than the production during corresponding period of last year. Reasons for shortfall in production in some fields are as under:

n++ Natural decline from matured and marginal cluster fields

n++ Maintenance of Mumbai-Uran Trunkline due to safety reasons

n++ Assam: Less than envisaged production from new wells, producing wells becoming sick, power shutdown & less gas injection pressure.

n++ Rajahmundry: Closure of 24 wells due to repair / replacement of Kadali-Tatipaka & Endamuru-Oduru GAIL pipelines. Decline in flowing pressure of self-flowing wells in Malleshwaram field. Increase in water cut in Gopavaram field.

n++ Cauvery: Less than envisaged production from Kamlapuram.

1.2 Crude oil production by OIL during July, 2016 was 272.69 TMT which is 0.71% higher than monthly target and 0.89% less than production in July 2015. Cumulative crude oil production during April-July, 2016 was 1070.87 TMT which is 0.18% higher than target for the period but 3.71% lower than the production during corresponding period of last year. Reasons for shortfall in production are as under:

n++ Less than planned contribution from old well

n++ Rise in water cut in wells of Greater Hapjan, Bhogpara & Greater Chandmari fields

n++ Loss in production due to bandhs and blockades by various Organisations

1.3 Crude oil production by Pvt. /JVs during July 2016 was 936.94 TMT which is 1.90% higher than the monthly target but 4.21% less when compared with July, 2015. Cumulative crude oil production during April-July, 2016 was 3647.63 TMT which is 0.06% lower than target for the period and 5.93% lower than the production during corresponding period of last year. Reasons for shortfall in production are as under:

n++ Natural Decline in Ravva, CB-OS/2 and Panna-Mukta

n++ Closure of one well in MA and one well in D1D3 field

Natural Gas

2. Natural gas production during July 2016 was 2704.65 MMSCM which is 2.76% lower than the target for the month but 3.27% higher than the production in July 2015. Cumulative natural gas production during April-July, 2016 was 10449.30 MMSCM which is 2.85% lower than target for the period and 3.80% lower than the production during corresponding period of last year.

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Moodys: North American and EMEA refining and marketing sector outlook to negative on high fuel inventories, weakening margins
Aug 24,2016

Moodys Investors Service says the outlook for the North American and EMEA refining and marketing sector is shifting to negative from stable. This change in outlook reflects Moodys expectations for the fundamental business conditions in the sector over the next 12 to 18 months.

Moodys expects EBITDA for the North American and EMEA independent R&M sector EBITDA to decline by more than 15% through late 2017/early 2018, owing to continued anemic crack spreads. Even summer gasoline demand has not provided a much-needed lift to refining margins, as demand has proven lower than downstream operators had expected, pushing inventories higher.

Adding to the challenge of weak refining margins, we are seeing global and regional product inventories increase, worsening the glut of fuel products in North America and Europe, noted Arvinder Saluja, a Moodys Vice President -- Senior Analyst. Slow demand in Europe and rising Chinese stockpiles, along with the onset of the shoulder season for North American gasoline demand, prevent a drawdown of inventories in the near term, keeping a lid on refining margins globally.

And despite tight refinery margins and high fuel inventories, most refiners have reduced utilization only marginally in 2016. Refiners closer to crude production or to export facilities, with access to cheaper imported oil, or with tighter product supply/demand balances in their regions, will enjoy better crack spreads. As a result, most refineries along the Gulf and West Coasts are likely to maintain high utilization, along with some Midwest and Rockies refineries. East Coast refineries will have to cut production amid historically high inventories, few opportunities to export, and continuous imports from Europe.

The negative outlook could be revised to stable if global inventories -- especially for US gasoline -- decrease significantly, bringing fuel stockpiles back to historical average levels, and with better capacity rationalization for weaker and higher-cost refiners in Europe. A positive outlook could be considered if the US and Asian diesel and distillates markets surged along with gasoline demand, leading to much stronger crack spreads.

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World crude steel production rises 1.4% in July 2016
Aug 24,2016

World crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was 133.7 million tonnes (mt) in July 2016, 1.4% up on July 2015.

Chinas crude steel production for July 2016 was 66.8 mt, an increase of 2.6% compared to July 2015. Elsewhere in Asia, Japan produced 8.9 mt of crude steel in July 2016, an increase of 0.5% compared to July 2015. India produced 8.1 mt of crude steel in July 2016, up 8.1% compared to the same month last year. South Koreas crude steel production was 6.0 mt in July 2016, up by 1.5% on July 2015.

In the EU, Germany produced 3.4 mt of crude steel in July 2016, a decrease of -6.1% compared to July 2015. The United Kingdom produced 0.7 mt of crude steel, down by -27.3% on July 2015.

Turkeys crude steel production for July 2016 was 2.7 mt, up by 6.5% on July 2015.

In July 2016, Russia produced 6.1 mt of crude steel, up by 0.9% over July 2015. Ukraine produced 2.1 mt of crude steel, up by 10.5% compared to the same month in 2015.

The United States produced 6.9 mt of crude steel in July 2016, a decrease of -2.2% compared to July 2015.

Brazils crude steel production for July 2016 was 2.7 mt, down by -6.0% on July 2015.

The crude steel capacity utilisation ratio of the 66 countries in July 2016 was 68.3%. This is the same figure as in July 2015. Compared to June 2016, it is 3.7 percentage points lower.

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