KG-D6 dispute timeline

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• April 12, 2000 – RIL signs the PSC with government to develop the KG-D6 basin. (Link)
• Nov 1, 2006 – RIL files amended development plan for KG-D6 with DGH. Production rate to be enhanced to 80 mmcmd from 40 mmcmd. (Link)
• Sept 21, 2008 – RIL has commenced production of hydrocarbons in its KG D6 block of KG basin with crude oil production on Sept 17, 2008. (Link)
• April 1, 2009 – RIL starts natural gas production from KG-D6 fields. (Link)
• Oct 29, 2009 – Production ramped up to about 40 mmscmd. (Link)
• Jan 22, 2010 – Production ramped up to about 60 mmscmd. (Link)
• Feb 21, 2011 – RIL-BP deal announced. (Link)
• June 2011 – CAG report leaked in the media. (Link)
• October 2011 – RIL asks for explanation from ministry preventing cost recovery. (Link)
• November 2011 – RIL seeks arbitration on the matter. (Link)
• April 17, 2012 – RIL and Niko petitioned the Supreme Court asking that the Govt. should nominate an arbitrator. (Link)
• May 3, 2012 – Govt. asked RIL to refund $1.25 bn in production costs. (Link)
• May 30, 2012 – Govt constitutes Rangarajan Committee to resolve gas pricing, profit sharing issues. Committee to submit report by Aug 30, 2012. (Link)
• June 21, 2012 – Niko announced Indian govt. is considering increase in KG-D6 gas prices. (Link)
• Jan 2, 2013 – Rangarajan committee recommends average global prices for domestic gas. (Link)
• Jan 7, 2013 – CAG to begin its audit on Jan 9. (Link)
• Jan 14, 2013 - Gas output from RIL's KG-D6 fields drops to 22 mmscmd. (Link)
• Jan 21, 2013 - Government wants to resolve RIL row over KG-D6 block via talks: Veerappa Moily (Link)
• Jan 22, 2013 - Gas output from RIL's KG-D6 fields drops to all time low of 20 mmscmd. (Link)
• Jan 23, 2013 - Expected gas price revision is unlikely to benefit Reliance Industries. The clauses in the Cabinet note will not make RIL eligible for any price hike before April 2014. (Link)
• Feb 4, 2013 - DGH refused to issue approval letters for the block's work plans and budget since 2010-11. (Link)
• Mar 5, 2013 - Natural gas supplies to power plants has completely stopped after output from the eastern offshore fields dropped to an all-time low of 17.3 mmscmd. (Link)
• Apr 11, 2013 - RIL has shut its ninth well at the main gas fields in the KG-D6 block, leading to output plummeting to an all-time low of 15.5 mmscmd. (Link)
• May 11, 2013 - RIL announced a major gas find more than 4 kms below the sea bed and 2 kms directly underneath the currently producing D1&D3 field in the KG-D6 block off the east coast. (Link)
• June 16, 2013 - In a relief to RIL, Oil Minister has indicated that he may not fully accept DGH's recommendation for taking away 86% of the company's KG-D6 gas block area. (Link)
• July 19, 2013 - The government has given the go-ahead for RIL’s $1.5 billion field development programme for the KG-D6 block. (Link)
• July 22, 2013 - RIL plans to invest $6.5 billion in its KG-D6 gas fields to re-attain natural gas production of up to 60 mmscmd by 2019-20 and regain the lost glory of the prolific block. (Link)
• Aug 7, 2013 - DGH has recommended additional penalty of $781 million (taking the total to $1.786 bn) on RIL for producing less than projected natural gas. (Link)
• Aug 15, 2013 - RIL plans to invest $3.18 billion in R-Series gas field to produce 13-15 mmscmd of gas for 13 years from the D-34 (Dhirubhai-34) discovery in the KG-DWN-98/3 or KG-D6 block. (Link)
• Aug 22, 2013 - 12 power plants solely dependent on KG-D6 gas lying idle. (Link)
• Aug 22, 2013 - ONGC may share KG-D6 infrastructure. (Link)
• Sept 03, 2013 - Government not honouring contracts on KG-D6 gas block, says Reliance. (Link)
• Sept 15, 2013 - Reliance Industries slams oil regulator's move to snatch KG-D6 area.(Link)
• Sept 25, 2013 - If you find more gas in KG-D6, keep it: Angry RIL to govt.(Link)
• Sept 25, 2013 - Govt may hire consultant to end KG-D6 gas row with RIL.(Link)
• Oct 13, 2013 - RIL trashes expert report on KG-D6 output fall.(Link)
• Oct 18, 2013 - RIL, BP to invest up to $10 bn in KG-D6 block: Moily.(Link)
• Oct 22, 2013 - Govt says no to fresh evaluation of whether RIL hoarded KG-D6 gas.(Link)
• Oct 29, 2013 - Oil ministry to ask RIL to surrender 5 KG-D6 gas finds.(Link)
• Nov 12, 2013 - Reliance Industries to furnish bank guarantee (Link)
• Nov 17, 2013 - Non-adherance to KG-D6 plan be taken as default: Panel (Link)
• Nov 18, 2013 - RIL plans to increase KG-D6 gas output (Link)
• Nov 21, 2013 - Govt disallows another $792 mn RIL investment in KG-D6 block (Link)
• Nov 26, 2013 - Reliance Industries' new gas discovery likely biggest ever (Link)
• Nov 26, 2013 - No going back on gas price hikes; notification soon: Moily (Link)
• Nov 27, 2013 - KG output drops to record low (Link)
• Dec 5, 2013 - Reliance Industries's KG-D6 output slips to 10 mmscmd (Link)

Weekly Market Commentary - Nov 25 - Nov 29, 2013

All eyes on Delhi election results on December 8th. These results may act as a precursor to what is in store for Indian investors. As DII turned buyers during the end of November, it seems that street is expecting a rally in December, which may only happen if BJP wins.

Sensex gained 2.8%; Nifty gained 3.0% while CNX Midcap was up by 3.1% this week.

Monday – Sensex up by 1.9%, Nifty up by 2.0%, Midcap up by 1.5%
Indian markets went up in tandem with global markets as Iran nuclear deal led to easing of crude prices. The deal is good for India in more than one way. It helps in removing the hindrances from importing crude from Iran, and lower prices benefits in reduced inflation expectations and deficits.

Tuesday - Sensex down by 0.9%, Nifty down by 0.9%, Midcap down by 0.5%
Markets gave back some of gains it made yesterday as crude prices rebounded and investors booked profits ahead of GDP data release.

Wednesday – Sensex, Nifty and Midcap flat
Markets ended flat as November derivative expiry arrives and investors stay cautious ahead of GDP and fiscal data release expected on Friday.

Thursday – Sensex up by 0.6%, Nifty up by 0.6%, Midcap up by 0.9%
Markets went up on the day of derivative expiry as traders cover their shorts and domestic institutional investors (DIIs) turned net buyers for first time in November, in addition to FIIs who continued stake building in Indian markets.

Friday – Sensex up by 1.3%, Nifty up by 1.4%, Midcap up by 1.1%
Markets showed optimism ahead of 2Q GDP data release expected during after-market hours. Consensus on the street is 4.6% of GDP growth. Anything below that will be indicator of adverse impact of recent repo rate hikes initiated by Governor Raghuram Rajan.

Weekly Market Commentary - Nov 18 - Nov 22, 2013

Fed’s tapering stayed the talk of the town as markets look exhausted due to lack of any domestic or global cues. The question of will they cut or will not and when continues to linger over the market’s direction.

Sensex lost 0.9%, Nifty lost 1.0% and CNX Midcap was down by 0.9% this week.

Monday – Sensex up by 2.2%, Nifty up by 2.2%, Midcap up by 1.3%
Market continued to rally after Janet Yellen new chair of Fed Reserve allayed fears over QE tapering. Also, RBI governor Rajan’s statement to have an accommodative liquidity stand strengthened the rupee and boosted the investor sentiment.

Tuesday - Sensex up by 0.2%, Nifty up by 0.2%, Midcap flat
Lack of catalysts in the domestic markets makes sure that any rally or euphoria is short lived. Markets were flat as investors stayed cautious and booked profits.

Wednesday – Sensex down by 1.2%, Nifty down by 1.3%, Midcap down by 0.6%
Sensex floundered due to lack of any domestic or global cues. Investors booked profits in banking, IT and capital goods as market sees no new investment and project been announced till the elections are concluded in May.

Thursday – Sensex down by 2.0%, Nifty down by 2.0%, Midcap down by 1.7%
Release of minutes of Federal Open Market Committee (FOMC) meet spooked the investors globally as it indicated tapering might began in next few months, if economy improves. Fed’s doublespeak is confusing the markets as previous week they indicated any tapering is still far away.

Friday – Sensex down by 0.1%, Nifty down by 0.1%, Midcap up by 0.1%
Markets continued to stay cautious as Fed’s comments on tapering confused the investors.

Two charts that says it all

Well, the conclusion of the charts below is crystal clear. The Fed tapering talk in May, which led to sharp depreciation in rupee value, has clearly benefited the firms with significant dollar earnings while domestic environment continues to remain a hurdle. So, the investors should not be overly complacent if Sept quarter results were not as bad as everyone was expecting them out to be. We need to cover a lot of ground on domestic front to substantiate the India fundamental story.

The first chart is from my first weekly commentary in November. It speaks of the divergence in the market performance of different sectors. IT and Pharma with their export earnings have dominated the returns this year.

While the other one from the house of Motilal Oswal speaks of the divergence in the companies with dollar earnings and domestic earnings.