From credible Leadership to invaluable Opposition. The meandering AAP schematics just don’t add up

Off late we been sensing a tectonic shift in the rhetoric emanating from the AAP faithful – till just about a month back all we would receive from Shri Shri Kejriwal and Co is the good that AAP can do for the country if it comes into power (no matter the absolute zilch achieved during their 49 days stint in government). And now, we hear of them wanting to provide a clean opposition, a reliable conscience against the next government in power.

But this blurb isn’t a tirade against AAP and its antics (surprise, surprise), on the country I am advocating that we all do consider voting for them (!!) but not this year, not this time.

The call of the hours is that we have a government which has proved its self, a leader who has shown the way on development, on progress and on improving every single measurable human-development index in his state.

So here’s how I think this nightmarish scenario just might pan out.

If perchance the BJP is not able to win a significant number of seats which doesn't give the NDA a clear majority, it will be heavily reliant on not just its current allies but would also need to seek outside support from the likes of mercurial featherheads including, but not limited to, M/s Amma, Didi & Chichi’s – all of which dot the current Indian political landscape!

And to put this in perspective – spare a thought for our poor current PM; Maun Mohan Singh knows just as well what one can (mostly cannot) achieve when he is hemmed-in by a capricious women… a feeling, I'm sure, most married men will attest to!

So given this rather scary scenario we might have a government which is so reliant on its allies that it is almost held hostage to their whims and fancies. Would such a government be capable of pushing through big ticket economic reforms, of unleashing the bitter medicine that our economy, indeed the country needs to shake of years of socialist lethargy? We have for far too long been driven by policies that aim to please a particular bastille just in the name of garnering votes.

10 years and multiple mega scams later, where is our nation headed? Let us destroy the crooks from this government and their small-time selfish regional satraps who have cultivated their own private vote banks at the cost of this countries growth. At the same time filling their own coffers and banks accounts in Switzerland or Liechtenstein or Dubai.

Every vote that goes against BJP to people like the AAP who have yet to prove their mettle in any forum (adept handling of social media and drama bazi don’t count!) just might bring in one less seat to BJP, make it just a little bit weaker and ever so slightly more reliant on outside support. And is this a happy scenario? Does this in any way make for a strong decisive government?

Every vote for AAP doesn't bring in a stronger opposition; it just brings in a slightly weaker government who might be held beholden to some whimsical ally!

BJP is the best chance we have today, maybe the only chance the nation has! Let us bring in BJP with a strong and clear mandate required to clean up this unholy mess.

And if after 5 years they too turn out to be a bunch of muppets, I will personally wear the AAP topi to work each day thereafter till the 2019 elections!

Love and longing - the Indian political way

Churchill once quoted of Russia as a riddle, wrapped in a mystery, inside an enigma.

But perhaps when it comes to understanding India, he just might have needed some additional puzzle solving skill sets.

Even in its most mundane form the Indian political tamasha can be mind numbing in its spectacle and sumptuousness. Most times the common Indian (less said of the poor foreigner, the better) is left scratching his, or her head, in wonderment as this juggernaut rolls on – sometimes with scant heed to propriety.. or even sanity!

The Indian election is an event of gargantuan proportions with the 2014 general expected to be the biggest democratic exercise in history with more than 800 million people casting their electronic ballots. But what adds a little bit (more) colour to these mammoth and impressive numbers are the honourable men and women who seek to get elected in to India’s hallowed corridors of the power – The Lok Sabha.

For most of us bored with the usual suspects – BJP, Congress, the communists, the regionalists, and of course the latest entrant AAP here are some other parties who, sadly, are much lesser known but pack an entertainment quotient no less than Ragul Gandhis IQ or Arvind Kejriwals perennial U-turns.

For all of us wallowing in the cruel, hateful world of today;  we have the Indian Lovers Party.

This lovely congregation led by B Kumar Sri Sri (not to be mistaken for either Sri Sri Ravi Shankar or Shri Shri Arvind Kejriwal) was launched as a regional party of Tamil Nadu on 14^th Feb (of course!) 2008.

This party’s aim is as bold as their symbol is colourful – to stand steady by star-crossed lovers from Indians myriad different castes, sub-casts and sub-sub casts of each religion … not to mention a plethora of religions too, whose draconian elders don't approve of their relationship.

Keeping in line with this party’s gallant ethos and in order to fulfil its noble and affectionate agenda, the party proudly aims to: “heal the wounds inflicted in the hearts of lovers by society.”

For all this talk about love, Mr. Kumar has a clear political roadmap in place. Although he is keen to make it clear that his heart truly belongs to this cause, he also readily admits that he adopted this platform as a foolproof way of garnering immediate attention for his party. He says that he has attracted over 100,000 supporters to his party so far, many of them youngsters.

He has helped organize and fund 15 weddings personally and in other cases has mediated with the parents on both sides to convince them to allow their children to marry. Mr. Kumar takes great care to ensure that he helps only “genuine lovers,” or couples who are both of legal age and want to get married to each other.

So all of you out there worried about what your parents, relations, the society or neighbours stand in the way of your true love – fear not! There is help at hand and like the caped crusader this one’s calling symbol is just as distinctive – the Taj Mahal framed in a heart, surrounded by pink with an arrow running across it

Economic Stability in Production Sharing Contracts (PSC)

Economic Stability and Change of Law provisions in a PSC

The use of stabilization clauses is a direct response to material changes in legislation that altered the economic positions of foreign companies under previously concluded long term investment agreements. Investors rely on stabilization clauses to ensure relative stability of the main investment conditions needed for the successful performance of their investment ventures.

For the foreign investors and their bankers, stabilization concerns among other things, the stability of the fiscal regime to ensure investment recovery, security of tenure over property and title, the ability to sell, the ability to retain and repatriate foreign exchange earned and the ability to operate the project under reasonably foreseeable conditions. Foreign Investors would also be concerned about non financial matters like changes in labour and environmental law or changes in the interpretation of the existing law to the extent that it affects their interests adversely.

In the period between the first and second world war, American companies began to include stabilization clauses in the concession contracts to prevent acts of nationalization by Latin American governments.

Stabilization Clause can be primarily of 2 types:

1.       Freezing provision

2.       Economic Balance provision

1.       Freezing Clause :

It stipulates that neither the fiscal, nor the non-fiscal elements (social & environmental  issues)  of  the  contract  may  be  changed  by  the  host government during life of the contract  without the two parties consent (Angola, Tunisia, Mozambique etc) .

Examples:

a.       Cl 30.7(d) Mozambique PSC Model (2001) :

The Government shall not revoke or amend the Autorisation granted to ENH to explore for and produce Petroleum from the contract Area without taking effective measures to ensure that such revocation or amendment does not affect the rights granted to the Contractor hereunder

CL 30.7(e) The Government will not without the agreement of the contractor exercise its legislative authority to amend or modify the provisions of this Agreement and will not take or permit any of its political subdivisions, agencies and instrumentalies to take any administrative or other action to prevent or hinder the contractor from enjoying the rights accorded to it hereunder.

b.      Cl. 18(m) Ivory Coast 1996 Petroleum Code

The petroleum contract in particular must set…. The legal conditions concerning the applicable law, the stability of conditions, the cases of force majeure and the regulation of disagreements

c.       Cl. 24.1 Tunisia 1989 PSC Model

The contractor shall be subject to the provisions of this Contract as well as to all laws and regulations duly enacted by the Granting Authority and which are not incompatible or conflicting with the Convention and/or this Agreement. It is also agreed that no new regulations, modifications or interpretation which could be conflicting or incompatible with the provisions of this Agreement and/or the Convention shall be applicable

2.       Economic Balancing Clause:

Essentially, the provision stipulates that if the host government adopts a measure subsequent to the conclusion of the petroleum contract in which the fiscal terms are stated, that is likely to have damaging consequences to the economic benefits for one or both parties, a re-balancing will take place in order to restore the economic balance of the contract.

Two (2) ways to achieve the economic balance:

         i.            Adjustment may be automatic or achieved in a manner stipulated in the contract.

       ii.            Make express provision for the parties to negotiate how amendments should be handled

Examples of this are Vietnam, India, Indonesia, Egypt etc.

a.       Vietnam PSC Cl 18.1.3

If after the Effective Date, existing law(s) and regulation(s) are amended or annulled or new law(s) and regulation(s) are introduced in Vietnam, or an official interpretation or application of changes of regulations of a law, or licence is cancelled, not renewed, or the conditions therefore are revised adversely affecting the economic interest of the CONTRACTOR under this Contract, then upon notice from the CONTRACTOR the Parties shall consult promptly with each other and make such changes to this Contract as are necessary both to maintain the CONTRACTOR’s rights, benefits and interests hereunder, including CONTRACTOR’s share of Profit Oil or Profit Gas, as at the Effective Date and to ensure that any revenues or incomes or profits, including any one or more of the foregoing, derived or to be derived to the CONTRACTOR under this Contract, shall not in any way be diminished in comparison to that which was originally contemplated as a result of such changes of laws or annulment therefrom or their interpretation or application or as a result of such changes, cancellation or non-renewal of approvals or licences.  

b.      Egypt

Exploration, Development and Production of Petroleum, which take place after the Effective Date, and which significantly affect the economic interest of this Agreement to the detriment of CONTRACTOR or which imposes on CONTRACTOR an obligation to remit to the Arab Republic of Egypt the proceeds from sales of CONTRACTOR’s  Petroleum, CONTRACTOR shall notify EGPC (the NOC) of the subject legislative or regulatory measure. 

c.       Indonesian PSC Cl 15.4.3

It is agreed further in this CONTRACT that in the event that a new prevailing Indonesia Income Tax Law comes into effect, or the Indonesia Income Tax Law is changed, and CONTRACTOR becomes subject to the provisions of such new or changed law, all  the percentages appearing in Section VI of this CONTRACT as applicable to the portions of CONTRACTOR and GOI’s share so affected by such new or changed law shall be revised in order to maintain the same net income after tax for CONTRACTOR or all  Participating Interest Holders in this CONTRACT.  

d.      Indian PSC Cl 17.10.

If any change in or to any Indian law, rule or regulation dealing with income tax or other corporate tax, export/import tax, excise, customs duty or any other levies, duties or taxes imposed on Petroleum or dependent upon the value of Petroleum results in a material change to the expected economic benefits accruing to any of the Parties after the date of execution of the Contract, the Parties shall consult promptly in good faith to make necessary revisions and adjustments to the Contract in order to maintain such expected economic benefits to each of the Parties, provided, however, that the expected economic benefits to the Parties shall not be reduced as a result of the operation of this Article.

In the early 1980s, revision of petroleum contracts and nationalisation of petroleum industry assets triggered confrontational  arbitration procedures:  a few cases:

·         Saudi Arabia v. Arabian American Oil company (Aramco)
·         Kuwait v. American Independent Oil Company (Aminoil)
·         Agip Company v. People’s Republic of the Congo
·         Amoco International Finance Corporation v. Islamic Republic of Iran.


It is important to note however that there are many petroleum rich host countries that do not offer clauses designed to provide STABILIZATION and that IOCs have no difficulty living with such a legal regime, as the legal and political risks are low in those host countries (UK, Norway are few examples).

In other countries, while the legal and political risks may be high, the perception of the geological risk is so low that IOCs accept a contract without stabilization provisions (Saudi Arabia, Brazil are some examples).
 

Is India really responsible for this rise in crude prices..??

The one thing that consistently recurs across ions of human existence is the burning need of mankind to find an opportune punching bag.

One, on which, we can conveniently pass on our burden of pain, guilt, fear, hurt or offence. Such visibly “soft targets” have been chosen with remarkable impunity throughout the history of mankind whenever are faced with a crisis- big or small.

Undoubtedly, one of the biggest catastrophes facing us today is the meteoric rise of that one precious barrel of crude. And, true to character, we have found a poor soul on whose Door we can easily lay the blame and, for good measure, also through some brickbats and rotten eggs, at that very Door.

Agreed, that for this particular problem, we have, in our ingenuity, found a number of such Doors but the biggest and by far the most (un) popular belongs to that of India and China, and their mammoth population.

I recently heard a man quote his grandfather and he said “They need to have a course in college called common sense and everyone should take it. Problem is there aren’t too many people that could pass…. or teach it."

Maybe I would'nt need to write a whole lot more if all we could do was just understand and learn from Gramps!


I agree that India has had an increased consumption of Crude but a look at statistics above gives a totally different picture:

I may be wrong, but from what I can see above, the US consumes (and imports) 8 times more crude oil than India, for a human populace that is one third that of India.

In effect, one American consumes 27 times more oil than a single Indian!!

How’s that for finding a Door to lay blame on…??

I do agree that Indian’s have been consuming more oil than their father or grandfathers did, but there are other factors also that need to be discussed. The first is time. These high prices have not been around all that long and development of new supplies takes many years. The second is access to new resources. And the third factor is what is happening to costs. The public focuses on the price at the pump, but the oil industry is preoccupied, and indeed somewhat stymied, by how rapidly their own costs are rising - far exceeding the rate of general inflation. The latest IHS/Cambridge Energy Research Associates (Cera) Upstream Capital Cost Index - the consumer price index for the oil field - shows that costs for developing a new oil or natural gas field have more than doubled in four years. Some costs have risen even more: a deep-water drill ship might have cost $125,000 per day to rent four years ago. Today it goes for more than $600,000 per day - if you can find one.

Everything is in short supply - people, equipment, engineering skills. Be-cause of the contractions that came with the price collapses of 1986 and 1998, there is a missing generation in the oil industry. More than half the petroprofessionals are less than 10 years away from retirement. A petroleum engineer graduating this year is likely to receive a higher starting salary than an Ivy League graduate going to Wall Street. This competition for people and equipment has driven up costs dramatically. These costs and shortages are now causing delays to new projects.

Demand is already responding to the new prices except in those parts of the world where retail fuel prices are controlled or subsidised. What can be done to improve the supply picture? The International Energy Agency's work on future supply is getting attention. But the IEA's message is not that the resources are not there. Rather it is the likely risk that the required investment will be "deferred" - will not take place in a timely way - because of these rising costs and because governments restrict access or postpone decisions.

So maybe we can stop driving big fuel guzzling SUV’s, or maybe stop driving at all and walk a lot more. I guess that will have a much greater impact on the crude oil prices.

Think about it before we go searching for another Door….