India Energy Updates

IndianOil Posts Rs. 2,488 Crore Profit for Q3

2012-02-14T09:54:00.000+05:30

IndianOil Posts Rs. 2,488 Crore Profit for Q3

(Gross Turnover up by 26.8% to Rs. 1,04,064 crore in Q3)

Indian Oil Corporation Ltd. (IndianOil) has registered a profit of Rs. 2,488 crore for the third quarter of the current financial year ended December 2011 as compared to a profit of Rs. 1,635 crore for the corresponding quarter of the previous year. The profit for the current quarter could be achieved mainly due to Government compensation of Rs. 8,237 crore for the previous quarters, approved and accounted for in this quarter.

The unaudited financial results of the Corporation were taken on record at the meeting of the Board of Directors here today. The Gross Turnover for the third quarter of the current financial year ended December 2011 rose by 26.8% to Rs. 1,04,064 crore from Rs. 82,097 crore during the same period last year.

Chairman addressing the mediapersons

For the nine-month period, IndianOil’s turnover went up by 26.8% to Rs. 2,97,690 crore. The loss for the period April-December 2011 was Rs. 8,716 crore as compared to the profit of Rs. 3,540 crore during the corresponding period of the previous financial year.

Mr. RS Butola, Chairman, IndianOil, said, "IndianOil sold 19.287 million tonnes of products, including exports, during the third quarter of 2011-12. Our quarterly refining throughput was 14.166 million tonnes and the throughput of the Corporation’s countrywide pipelines network was 18.160 million tonnes. The gross refining margins during the third quarter were US$ 4.31 per bbl."

IndianOil launches New High Performance Polypropylene Grades

2012-02-07T13:05:00.000+05:30

In a significant step aimed at offering superior products to plastic processors, IndianOil has unveiled high performance Polypropylene grades for the Polymer processors in the injection moulding sector. The new Polypropylene grades - 1110MAS and 2120MC - were launched today by Mr. R.S.Butola, Chairman, IndianOil, in the presence of Mr. Sudhir Bhalla, Director (HR), Mr. A.M.K. Sinha, Director (Planning & Business Development), Mr. VS Okhde, Director (Pipelines), IndianOil, as well as major customers and business partners in the petrochemicals industry at a high profile event in the Capital today.

The new high performance grades have been developed using cutting edge technology at IndianOil's state-of-the-art Product Application & Development Centre (PADC) located at Panipat. The novel 1110MAS grade is designed to provide better attributes such as higher productivity, high stiffness, low warpage and superior gloss. The other new grade, 2120MC, provides superior aesthetics, excellent clarity, energy saving and higher productivity to polymer processors.

India is amongst the fastest growing petrochemicals markets in the world. IndianOil has identified Petrochemicals as a prime driver of future growth. The Corporation has established world scale mega petrochemicals plants - LAB, PX/PTA and Naphtha Cracker at its Refineries - as well as a world class Product Application & Development Centre. The PADC renders technical services in the areas of customer support, market development & new application development.

Today, IndianOil is a major supplier to the key players in the detergent industry, both national and international. Similarly, in PTA business, all major domestic customers are catered to by IndianOil. A robust logistics model has been the key to IndianOil's success story and facilities have been put in place for seamless product dispatches to customers by rail, road and sea. The technology and capacities of the Naphtha Cracker and Polymer units are world-class, with products ranging from commodity to niche grades. These initiatives are designed to catapult IndianOil among the top three petrochemicals players in Southeast Asia in the long term.
http://www.4-traders.com/INDIAN-OIL-CORPORATION-LI-9743425/news/INDIAN-OIL-CORPORATION-LIMITED-IndianOil-launches-New-High-Performance-Polypropylene-Grades-14004533/

VS Okhde taken over as the Director (Pipelines) of Indian Oil Corporation

2012-02-02T10:27:00.000+05:30

Mr. VS Okhde has taken over as the Director (Pipelines) of Indian Oil Corporation Ltd., the country's only Fortune 100 company. Prior to his elevation, he was Executive Director (Exploration & Production).

Mr. Okhde brings with him diverse experience of over three decades in various facets of hydrocarbon pipeline systems such as Operations, Maintenance, Engineering Services and Projects. Additionally, he has held senior management positions in the Business Development function. He will head IndianOil's cross-country network of crude oil, product and gas pipelines, spanning almost 11,000 km with a capacity of over 75 MMTPA, the largest in the country.

A Mechanical Engineer from Regional Engineering College, Bhopal, Mr. Okhde also holds a degree in Executive Management from Management Development Institute (MDI), Gurgaon.

Hike in petroleum product prices after polls

2012-01-20T09:53:00.000+05:30

Hike in petroleum product prices to wait till polls

With international crude oil prices hovering around $110 a barrel and the subsidy bill threatening to balloon, touching around Rs. 1,40,000 crore this fiscal, the oil marketing companies (OMCs) have been denied "political go-ahead" to raise the prices of petrol, diesel and domestic LPG due to Assembly polls in Punjab, Uttar Pradesh , Uttarakhand , Goa and Manipur.

The United Progressive Alliance-Il is wary of raising the prices of petroleum products as it feels that not only will this add to inflation, which has been cooling down for the last few weeks, but also upset the voters and work to the disadvantage of the Congress and its allies.

Courtesy: The Hindu, New Delhi, January 19, 2012

World’s first hydrogen-powered three-wheeler ‘HyAlfa’makes debut

2012-01-10T10:12:00.000+05:30

Hydrogen-powered three-wheeler ‘HyAlfa’ makes debut

The world’s first hydrogen-powered three-wheeler, ‘HyAlfa’, was showcased at the 11th Auto Expo here today. Part of a development project dubbed ‘DelHy 3w’, a fleet of 15 HyAlfa three-wheelers will run on an experimental basis at Pragati Maidan, where a hydrogen refuelling station has also been set up. The India Trade Organisation Promotion (ITPO) will use the vehicles on an experimental basis.
HyAlfa has been developed under a joint project by the United Nations Industrial Development Organisation (UNIDO) International Centre for Hydrogen Energy Technologies (ICHET), Mahindra & Mahindra and IIT-Delhi, with support from the Ministry of New and Renewable Energy.
Carbon-free fuel
“The aim of this project is to convert vehicles so that they can carry and use hydrogen — a carbon-free fuel — and thus remove all pollutants,” Mahindra & Mahindra President (Automotive and Farm Equipment Sectors), Mr Pawan Goenka, told reporters here. He said the vehicle is not yet ready for commercial production and further fine-tuning will be required before moving in that direction. “Moreover, we also have to look at the commercial viability of running a hydrogen-powered three-wheeler as the cost of hydrogen will be around Rs 250 per kg, which is not affordable at all,” he said.
CNG three-wheeler
Asked about the possible price of HyAlfa, he said: “When the product is on mass production, it will cost Rs 20,000 to Rs 25,000 more than a CNG three-wheeler.” On an average, a CNG three-wheeler costs close to Rs 2 lakh. Commenting on the development, UNIDO-ICHET Managing Director, Mr Mustafa Hatipoglu, said the DelHy 3W project aims to demonstrate hydrogen technologies developed by Indian partners for the Indian transport sector. Project coordinator, IIT-Delhi Professor L.M. Das, said HyAlfa marks a journey of 20 years from “laboratory to land’’. ITPO Chairperson-cum-Managing Director, Ms Rita Menon, said the hydrogen-powered three-wheeler could play a role in moving towards a newer, sustainable and eco-friendly mode of transportation. “We are happy to be a part of this project and are especially excited about the cargo version,” she said, adding that her organisation plans to submit a report within three months on the vehicle’s performance to the project organisers.

…from the pages of THE HINDU BUSINESS LINE newspaper.

Mahindra Solar commissionned 5-megawatt grid connected solar power plant

2012-01-10T10:10:00.000+05:30

Mahindra Solar commissions 5 MW unit

Mahindra Solar announced the commissioning of a 5-megawatt grid connected solar power plant using crystalline silicon modules in Jodhpur, Rajasthan. The cost per MW is in the range of Rs 9-10 crore.The plant has been set up under the Jawaharlal Nehru National Solar Mission (JNNSM) policy and had the distinction of generating the highest output per MW of any solar plant in India with cutting-edge tracker technology that maximises energy from the sun. The plant site is equipped to evacuate 55 MW and the company intends to scale up the capacity to match the evacuation capacity. Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra, said, “We aim to be one of the top three companies in this industry.”

Essar Energy successfully commissioning of amine regeneration unit

2012-01-10T10:08:00.000+05:30

Essar Oil to hike Vadinar refinery capacity to 18 mtpa by March
Ahmedabad, Jan. 9::::::Essar Oil Ltd, a subsidiary of Essar Energy, on Monday announced the successful commissioning of the amine regeneration unit (ARU), a part of the Phase-I expansion at its Vadinar refinery in Gujarat, whose completion will increase the refinery's capacity from the existing 14 million tonnes per annum (300,000 barrels per day) to 18 mtpa (375,000 bpd).
The completion of expansion will also increase its complexity from 6.1 to 11.8. (The Refinery Complexity Index is a cost-based index. It provides insight into such things as refinery construction costs, replacement value, conversion capability and product slate.) The project is nearing completion and increased throughput of 18 mtpa will commence by March, the company said here.
An optimisation project is also under execution at the refinery to further increase the capacity to 20 mtpa (405,000 bpd) by September. The capacity expansion, complexity enhancement and subsequent optimisation will give the Vadinar Refinery the capability to process nearly 87 per cent ultra-heavy crudes, which are lower cost than light crudes.In terms of product yield, the expanded Vadinar Refinery will have the flexibility to produce higher value products, including pet coke, Mr Lalit Gupta, Managing Director and CEO, Essar Oil, said.
The ARU, with 8 mtpa design capacity, is one of the largest such units in the world. Essar Oil is the first refinery in India that will use in the ARU a specially-formulated amine UCARSOL, from Dow Chemicals, that helps achieve better efficiency in gas treating and reduces energy consumption in the ARU.
http://www.thehindubusinessline.com/companies/article2788328.ece

Guwahati refinery celebrates 50 years

2012-01-03T15:40:00.000+05:30

02 Jan 2012
GUWAHATI: Guwahati Refinery, India's first public sector refinery, celebrated its golden jubilee on Sunday. The day was marked by an inaugural function in the early hours of New Year's Day with a tribute at the Sahid Bedi (Martyr's column) of the Refinery Workers' Union office complex, which was attended by refinery employees, senior officials and the public.

With an initial capacity of 0.75 million metric tonne per year, the Guwahati refinery was inaugurated by the first Prime Minister of India, Jawaharlal Nehru on January 1, 1962 and was dedicated to the nation as a New Year's gift. The refining capacity was subsequently enhanced to 1.0 MMTPA and with INDMAX, the pilot plant for first in-house technology of Indian Oil, the ISOSIV and Hydrotreater the Refinery has been able produce eco-friendly fuels.

The Refinery produces various products and supplies them to the entire northeast and beyond. The Refinery has planned a month-long celebration including a mural on the history and growth of refinery, a herbal park, CSR initiatives in the health sector, skill development programmes for youth and women and release of an audio album.

On Sunday, a reunion of the pioneers and retired employees was organized. They were felicitated by the chief guest, Sudhir Bhalla, Director(HR), IndianOil for their efforts and dedication in transforming a dream into reality. Guwahati Refinery general manager said that the refinery came into existence because of the contribution of the pioneers. Courtesy: TOI

LanzaTech to help IOC, JSPL set up bio jet fuel plant

2012-01-03T13:48:00.000+05:30

NZ Co LanzaTech to help IOC, JSPL set up bio jet fuel plant
MUMBAI: The New Zealand-based renewable energy company LanzaTech is in talks with its partners here - IndianOil and Jindal Steel & Power - to help them set up plant to produce commercial bio jet fuel from ethanol, a top company official has said. As a first step, LanzaTech will open an office in the country in the first half of 2012 as part of its plan to expand its operations here, LanzaTech vice-president for business development for Asia Pacific Prabhakar Nair said.

IndianOil and Jindal Steel & Power (JSPL) are already in discussions for collaborating to accelerate deployment of LanzaTech's technology to produce fuel ethanol from industrial off-gases , he said. "We have done our best to bring these partners (Jindal and IOC) together . While Jindal Steel & Power has the off-gases , IndianOil has facilities to make, store and supply aviation fuel. We expect them to take a decision in a year and a half to set up a demonstration scale plant," Nair said.

However, he said, the proposed plan only includes technology sharing and not any investment in the plant and machinery . Nair also noted that British airline Virgin Atlantic has already committed that it will begin trials using renewable bio jet fuel on its Shanghai- New Delhi-London Heathrow route within two to three years. It may be recalled that Virgin Atlantic had announced a partnership with LanzaTech to conduct such trials last October and its chairman Richard Branson had even visited the New Zealand facilities, where the technology was demonstrated to him.

Besides, the European Union will begin allocating carbon emission quotas to airlines operating flights to and from the Union from today and Virgin Atlantic believes this development will take it well beyond its pledge of a 30 percent carbon cut per passenger km by 2020. "Globally , the aviation industry's current daily demand is around 5 million barrels of aviation fuel. Even if 10% of this is substituted with LanzaTech's aviation bio jet fuel, it will be a big market for us," Nair said.

LanzaTech has the technology to convert carbon monoxide, syngas as well as steel mill off-gases into ethanol and is in talks with all major steel producers in India, including JSPL, Posco and SAIL, he said. "China's demo scale plant at Bao Steel Shanghai is scheduled for the first quarter of 2012, which will produce 1 lakh gallons of ethanol annually. We expect JSPL and most likely IOC to begin working on a similar plant here. We hope Virgin's commitment to use bio jet fuel for trials is likely to encourage our partners," he said.

As recently as last December 5, the US awarded $7.7 million in Federal Aviation Administration contracts to eight biofuel-related companies to develop 'dropin' jet fuels that can be used without changing engine systems or airport fueling infrastructure, out of which deals worth $3 million were bagged by Lanza-Tech alone. This amount is over-and-above the funds allotted last June by the US Defence Advanced Research Projects Agency for research on eco-friendly and low cost jet fuel from sources like rich carbon monoxide, Nair said.

Source http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/nz-co-lanzatech-to-help-ioc-jspl-set-up-bio-jet-fuel-plant/articleshow/11333036.cms

Oil is still indispensable

2012-01-02T15:19:00.000+05:30

Oil is still indispensable

Year 2011 was been a year of records for the oil business. It was a year when despite the sovereign debt tumult in Europe, the consumer “balance sheet”, recession in the US and the general economic slowdown in the BRIC countries, the price, demand, revenues and expenditures related to petroleum have all touched historic highs. The year has reaffirmed the indispensability of oil and the vulnerability of countries that, either for reasons of geology or policy, are stuck in the groove of import dependence. It has provided a touchstone for the Ministry of Petroleum to set its policy priorities for 2012.

Over the past 12 months, the price of the benchmark light Brent crude oil has averaged $110/barrel. This is the highest average price in real and nominal terms since Colonel Drake first struck oil in 1859 in the small timber town of Titusville in North Pennsylvania. Global demand has, during this period, hovered just below 90 million barrels. Here too, the figure has touched a historic high. OPEC has, in consequence, earned over a trillion dollars. Only once before in 2008 has their revenue crossed this mark. On the flip side, oil importing countries and in particular, China and India, have seen a record outflow of foreign exchange on their crude oil account. The general consumer too has spent a record proportion of his income on energy for lighting, heating and transportation. Caught between the pincer of squeezed earnings and high prices, thousands have been pushed into “fuel poverty”, especially in countries that do not subsidise energy.
These records throw into sharp relief the pivotal and enduring significance of petroleum. Sure, the price of oil may slip back into double digits in 2012. For demand is declining and production from countries like Libya and Iraq, which had been convulsed by geopolitics, is now re-entering the market. But such a slip, if it did occur, must not be grounds for complacency — at least not in economies like India that are moving into their next, more energy-intensive, phase of development and where their emergent, urbanising middle class is looking to trade up from a cycle to a two-wheeler to a Nano equivalent. For there are few, if any, immediately available commercial alternatives to oil, especially as a transport fuel. CNG (compressed natural gas) for example which has been mandated by the Supreme Court as the fuel for our buses, taxis and 2-wheelers in major cities has a low energy density and cannot therefore be a substitute for the diesel used by the heavy duty long haul transporters. LNG (liquefied natural gas) on the other hand, which has a higher energy density and could, therefore, be the substitute, cannot be used without the development of expensive infrastructure and the redesign and retrofitting of existing engines. The fundamentals of demand and supply do not in short provide a solid base for assuming a prolonged downward shift in prices.

It is with this backdrop of 2011 that the petroleum ministry should review its policy towards exploration and production (EP) of hydrocarbons. It should do so also because of the worsening imbalance between demand and supply. Today India imports more than 80 per cent of its crude oil requirements. EP has long been a policy priority for the ministry. To reiterate that it should occupy pole position in its agenda is not therefore an original thought. But in recent months the signals emanating from the ministry have suggested that there is a gap between rhetoric and practice.
The rhetoric encourages the involvement of private capital. It accepts that EP is an inherently risky and uncertain activity involving not just the challenge of locating hydrocarbons but also, once located, the challenge of developing and producing the hydrocarbons on a commercially sustainable basis. It also accepts that to harness its hydrocarbon potential, India must bring to bear the optimum combination of capital, technology and operational expertise into EP and create a policy framework that attracts the broadest spectrum of petroleum companies from both the public and private sector.
Unfortunately, in practice, things are different. The industry is concerned at the reinterpretation of the contractual clauses related to tax, marketing and prices. They are questioning the rationale behind the continual debate over operating practices. Their foreheads are creased with worry about what they regard as rigidity and lassitude in decision making. Whether warranted or not, this perception has cast a somewhat ambivalent pallor on the EP environment. It is a situation that the country can ill afford. For with the end of the “era of easy oil” and the reality that new discoveries will most likely be found in harsh terrain and geologically complex structures, the private sector is a necessary factor for EP success. This is not to dilute the role of the public sector. In fact, some of the major EP breakthroughs in recent years have been spearheaded by state-owned companies. The unlocking of billions of barrels by PetroBras — the Brazilian PSU — in the presalt reservoirs of the Santos basin in Brazil is a case in point. It is merely to emphasise that private companies must not be deterred. Their contribution to the production of hydrocarbons in India is already material. In 2010-11, for instance, they produced 10.67 mt and 25.5 bcm of oil and gas respectively up from 5.07 mt and 7.72 bcm in 2006-07.
Those of us who have followed the corruption scandals that have bedevilled governance can appreciate the pressures imposed on officials by the sword of Damocles wielded by the CBI, CVC and CAG. We can understand why, under such circumstances, “acts of omission” are deemed safer than “acts of commission”. But this cannot justify ignoring the underlying message of 2011. EP policy must be reinvigorated and if not done the country will pay a huge and enduring price in terms of energy security and economic growth. The writer is chairman of the Shell Group in India.

http://www.indianexpress.com/news/oil-is-still-indispensable/894602/

Pakistan: petrol and diesel price hike from 1st January

2011-12-26T17:22:00.000+05:30

A change in the price of petroleum products is expected to come into effect from January 1, 2012.

Under the change, petrol and high speed diesel prices will increase by 50 paisas, while the price of kerosene oil is expected to decrease.

According to petroleum ministry sources the change will take place under the monthly fuel price adjustment.

Sources add that the price hike is being considered due to an increase in the exchange rate of the dollar.

http://www.thenews.com.pk/NewsDetail.aspx?ID=29400&title=Change-in-petroleum-prices-expected-

Another hike in Petrol Price?

2011-12-26T17:20:00.000+05:30

The state-owned oil companies will meet on December 31 to decide on a petrol price hike. Petrol rates are expected to go up by Rs 1, if the companies manage to get a nod from the government. Oil companies review the prices every fortnight and necessary corrections are made to match international rates. Following this policy, rates were slashed in mid November and again at the start of December.

Though the crude oil rates in the international market have been stable for some time, Rupee has depreciated against Dollar affecting imports. And even though petrol prices are deregulated, the companies still require a informal nod from the government, which was not granted last week for a proposed hike of 70 paise.
http://www.oncars.in/Car-News-Detail/Petrol-prices-may-go-up-from-Jan/1586

Workers unions demand increase of PF interest rate

2011-12-20T11:56:00.000+05:30

Unions seek better returns on PF loans to govt.
NEW DELHI: Workers unions have demanded higher return from the government on the special deposit scheme where nearly a third of provident fund money of the organised sector workers is parked. Faced with the prospects of a sharp drop in returns on PF from 9.5% last year to 8.25%-8.5% this year, unions have stepped up pressure on the government to increase the rate of return to 9.5% from 8%.

The SDS, money borrowed by the central government, at present yields 8% return for the Employees' Provident Fund Oraganisation (EPFO). The EPFO has suggested a lower 8.25% return for 2011-12 on contributions to adjust for payments outstripping available funds in the previous year when a 9.5% interest rate was declared. Its suggestions will be discussed at the EPFO's finance and investment committee (FIC) meeting on Thursday, which will give its recommendations to the EPFO's highest decision making body, the Central Board of Trustees, that meets the following day.

"We will press for higher returns on SDS which has been at 8% since 2003-04, when it was slashed from 12%. We do not want to accept a lower interest rate on EPF this year, when all other funds are earning higher returns," said BN Rai, secretary general, Bhartiya Mazdoor Sangh.

The government has benchmarked returns on small savings to those on government securities, which in the current high interest rate regime means higher yields for borrowers. Rai said workers will also insist on acceptance of fresh deposits under the scheme, which was discontinued in 2007.
Share of EPF funds channelised into SDS has fallen from 63% in 2003-04 to about 30% now. According to All Indian Trade Union Congress secretary DL Sachdev, there was no logic for keeping the returns on SDS at 8% when the government had increased rate of returns for small saving instruments like the public provident fund to 8.6%.
20 Dec, 2011, 03.21AM IST, Amiti Sen,ET Bureau …ECONOMI TIMES

Raiding PSU reserves unsustainable way of plugging budget deficits

2011-12-20T11:13:00.002+05:30

20 Dec, 2011, 04.51AM IST, ET Bureau…editorial in the ECONOMIC TIMES
Raiding PSU reserves unsustainable way of plugging budget deficits

The fiscal deficit looks like widening by at least one percentage point above the budgeted 4.6% of GDP. Economic growth could slow down next year. Meanwhile the government has ambitious but expensive new schemes in mind, for food security and universal health. So, many analysts want the government to take advantage of tens of thousands of crores lying in the reserves of public sector undertakings (PSUs).

When a private sector owner is in trouble, without a second thought he transfers sums from profitable companies to meet his current spending. Many analysts think the government should do the same. However, such transfers are one-off affairs and cannot be sustained over time. They can be justified in difficult times, but should not become a habit. Spectrum sales have in the past been taken to be current revenue, whereas they should actually be shown in the capital account as a reduction of assets. In the case of manufacturing PSUs, their cash surpluses are not large in relation to their investment plans, and these should not be commandeered by the government.

But many PSUs in mineral extraction have large, rising surpluses well in excess of investment needs. It makes sense to save part of this for future generations by investing abroad (as ONGC, Coal India and OIL have been doing) and spending part of it for current social purposes via the budget. We need a policy on how to apportion that bonanza. There are three ways in which PSU reserves can be transferred to the government. One is the declaration of huge special dividends. The second is a buy-back of shares by the PSU. The third is for PSU to use their surpluses to buy out minor stakes of the government in other PSUs.

A special dividend will benefit all shareholders. A buy-back could in theory be restricted to buying back government stakes and not publicly-held stakes, but that would be unethical and Sebi should say no. The third route also cuts out private shareholders and should be avoided altogether. Better than all these will be quick enactment of a goods and services tax, which can bring in additional revenue and plug the fiscal deficit sustainably.

Subsidised diesel dams furnace oil demand

2011-12-20T10:32:00.001+05:30

Subsidised diesel dams furnace oil demand
(Courtesy: Business Standard, New Delhi, December 19, 2011)

The perils of subsidy take different shapes. It is not only subsidised domestic LPG or kerosene oil being diverted for commercial use. With the price of diesel being stable under government control, industrial users of furnace oil in several states are increasingly turning to diesel instead.

This is one reason why the consumption of diesel is now growing at a sharper rate than petrol after several years. It is not just diesel passenger vehicle sales driving this trend. Furnace oil is largely an industrial fuel. It is a key ingredient in generation of electricity and heat in a number of production units.

Being market-linked, the price of furnace oil has been moving up. R S Butola, chairman of IndianOil, the country’s biggest oil marketer and refiner, said furnace oil is selling at $103-104 per barrel in India, compared to diesel’s price of $97 per barrel. This is due to a price cap on diesel, as a result of which the domestic oil companies are retailing it at a loss of a little over Rs 12 per litre.

IndianOil raised over Rs. 1,400 crore from the Indian Bond Markets

2011-12-19T10:36:00.000+05:30

IndianOil mobilises bonds of over Rs. 1,400 Crore at 9.28%

Indian Oil Corporation Limited (IndianOil) has raised over Rs. 1,400 crore from the Indian Bond Markets after a gap of nearly two and half years.

IndianOil’s issue of Secured Redeemable Non-Convertible Bonds opened for subscription on private placement basis on December 15, 2011. The ‘AAA’ rated bonds have a maturity of 5 years with put and call option at the end of the 18th month. The issue has been placed through book-building route in a coupon range of 9.20% to 9.45% p.a., payable annually. The issue was well received by institutional investors particularly FIIs and banks. The issue, which was launched with an original size of Rs. 500 crore, was oversubscribed by over three times with subscription aggregating to approx. Rs. 1,600 crore. IndianOil has decided a cut-off coupon rate of 9.28%, i.e. the lower of the book-building range. As per market sources, this is one of the finest pricing achieved by any corporate in recent times. The proceeds of bond issue shall be utilised for meeting capex of ongoing domestic projects.

The success of the issue once again acknowledges the strong confidence of investors in IndianOil.

Trembling Rupee, rising crude price and oil companies

2011-12-15T14:02:00.000+05:30

Crude, rupee double whammy hits oil companies

The fear within oil industry circles is that if the status quo persists over the next six months, there will be serious liquidity issues which could affect daily operations.
Mumbai, Dec. 14: Oil companies are wilting under the double whammy of the weakening rupee and high crude prices. It is just not the losses on sale of subsidised fuels which are an area of concern. Combined borrowings of IndianOil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are rapidly inching towards Rs 140,000 crore. At this rate, they could even touch Rs 160,000 crore by the end of this fiscal.
“What is especially worrying is the complete sense of inaction by the Government. With Parliament in a permanent state of disarray, we are expected to fend for ourselves in these difficult times,” an oil sector official told Business Line. Things have come to such a head that the companies are believed to be in no mood to comply with advance tax payments or the mandatory interim dividend to the Government, their owner and majority shareholder. “How can we possibly be expected to cough up money when there are no profits to show?” the official asked.
The fear within oil industry circles is that if the status quo persists over the next six months, there will be serious liquidity issues which could affect daily operations. In the process, bigger and more critical investments relating to infrastructure will be put on hold. This is happening at a time when the estimated spend of IOC, BPCL and HPCL over the next four years is nearly Rs 200,000 crore.
The other concern for the refining trio relates to policymaking, which has literally screeched to a complete halt. Nobody within the Government has a clue on what to do at a time when the oil companies are facing their worst-ever crisis in recent times. “All we can do is to borrow more and more because we have no idea if we will get any compensation for losses incurred. The interest burden is gradually killing us in the process,” an executive said. In contrast, 2008-09 almost seems sedate though this period is better remembered as the worst year for the oil industry when crude touched $147 a barrel. The rupee was not in the best of health either except that this state of affairs did not last too long. During the latter part of the year, crude prices started falling and the rupee settled to a more comfortable mid-40s (to the dollar) level.
Crude prices
However, this time around, crude prices have been constantly over the $100/bbl-mark and there is nothing to suggest that they will fall in the coming months. “Unless the Government comes with a cohesive pricing policy for diesel and cooking gas, our goose is cooked,” the executive said. And while it is the refiners who are taking the heat, observers believe it will not be too long before this malaise spreads to the upstream oil companies too. “If the Government does not do its bit in making good the losses of the refiners, ONGC will be soaked dry instead. It happened last year and will be repeated this time too,” they say. Should this happen, ONGC's Rs 12,000 crore FPO (follow-on public offer) will end up being in cold storage.

...Murali Gopalan ...from the pages of HINUD BUSINESS LINE newspaper.

Framing policies on different forms of natural gas.

2011-12-15T11:51:00.002+05:30

Natural gas lost in policy smog
(Courtesy: The Economic Times, December 08, 2011, Delhi Edition)

"Whats in a name? That at which we call a rose by any other name would smell as sweet," Juliet Capulet asked Romeo Montague in William Shakespeare's lyrical tale, Romeo and Juliet. A similar question is relevant in India's natural gas industry where the government has designed distinct policies based on names given to natural gas.

The policies framed for various forms of natural gas coal-bed methane (CBM),shale gas, domestic natural gas, liquefied natural gas (LNG) or associated gas- contradict each other, often requiring the same operator to wear a different hat for a different form of natural gas. But herein lies the irony: the learning from one area is not applied to another. Instead, the government, it would appear, is ready to commit the same mistakes all over again as it goes about framing policies on different forms of natural gas.

UTI Capital bought 4% stake in Indian Oiltanking

2011-12-15T11:50:00.000+05:30

UTI Capital buys 4% in Indian Oiltanking for Rs 100 Cr
(Courtesy: The Economic Times, New Delhi, December 14, 2011)

UTI’s private equity arm, UTI Capital, has bought 4% stake in Indian Oiltanking, a joint venture between state-run IndianOil and Germany’s Oiltanking GMBH, for Rs 100 crore.

Indian Oiltanking, which builds operating terminals and storage facilities for petroleum products, will use the proceeds to fund its upcoming storage terminal in Paradip and for its overseas EPC projects, said Jayanta Bhuyan, managing director, Indian Oiltanking. “We have been looking at raising funds from private equity players primarily to fund our expansion plans.”

IndianOil lost Rs 227 crore per day

2011-12-15T11:48:00.000+05:30

IOC borrowings touch Rs 79,000 cr
(Courtesy: Financial Chronicle, New Delhi, December 14, 2011)

State-owned IndianOil (IOC) said its borrowings have risen to over Rs 79,000 crore, as it lost a record Rs 227 crore per day on selling diesel, domestic LPG and kerosene at controlled rates. “It (borrowings) is more than Rs 79,000 crore at present,” IOC chairman R S Butola said.

The company is hoping to get about Rs 16,000 crore in compensation from the government by early next month to make up for part of the losses it incurred on selling the three fuel in the first half of current financial year. Parliament on Tuesday approved additional spending by the government, including payment of Rs 30,000 crore to state fuel retailers as subsidy. IOC, the market leader, would get about Rs 16,000 crore out of that.

Another Petrol price hike soon

2011-12-15T11:23:00.000+05:30

Petrol price set to go up again

Here is what Hindu writes:

With crude prices firming up in international markets, the oil marketing companies are gearing up to revise upwards petrol price by 65 paise a litre, after a review meeting on Thursday. However, this is subject to the government giving the green signal as Parliament is in session.
While the drastic fall of the rupee to an all-time low of Rs. 53.75 against the U.S. dollar has pushed up the cost of oil imports, the international rates of gasoline — against which domestic petrol prices are benchmarked — have also gone up, a senior OMC official said.
Under-recoveries on petrol stand at Re. 0.55-0.56 a litre. After adding the local sales tax, the desired increase in Delhi comes to Re. 0.65-0.66.
The Hindu newspaper

Indian Oil Corp tops Fortune India 500 list

2011-12-13T13:04:00.002+05:30

Indian Oil Corp tops Fortune India 500 list; RIL at second spotPress Trust of India, 13 Dec 2011 | 12:04 AM (from NDTV Profit news)

This year's list of the country's 500 largest corporations, compiled by the global business magazine Fortune's Indian edition, features as many as 57 new entities. State-run Indian Oil Corp has emerged as the country's biggest company in terms of annual revenue, followed by Mukesh Ambani-led private sector giant Reliance Industries at the second place, as per an annual list of Fortune 500 companies in India.
This year's list of the country's 500 largest corporations, compiled by the global business magazine Fortune's Indian edition, features as many as 57 new entities. All the 500 firms together recorded a collective turnover of Rs 45,79,911.38 crore in the latest financial year. Indian Oil Corp (IOC) was the biggest with annual revenue of Rs 3,23,113.12 crore, followed by Reliance Industries (RIL) with a full-year revenue of Rs 2,72,923.36 crore. Both IOC and RIL have retained their top-two ranks from the previous year, Fortune India said.
In this year's list, the two are followed by Bharat Petroleum (Rs 1,56,580.12 crore) at the third and State Bank of India (Rs 1,47,843.92 crore) at the fourth place. Other entities in the list are Hindustan Petroleum (5th rank), Tata Motors (6th), Oil & Natural Gas Corp (7th), Tata Steel (8th), Hindalco Industries (9th) and Coal India (10th).There are as many as six state-run companies in the top-ten positions, as against four from the private sector. The magazine said that the total sales of the country's 500 top corporations have grown by 21.5 per cent from the last year, while their median growth has been even higher at about 25 per cent.
"The good news, however, is that many of the Fortune India 500 companies are now beginning to shape the world's opinion of India for the better. And they may just be doing a better job than their Chinese counterparts," it added.

Essar Oil commissioned 0.7 mtpa isomerisation unit at Vadinar

2011-12-09T10:20:00.000+05:30

Essar Oil commissions new unit at Vadinar

Essar Oil Ltd, a subsidiary of Essar Energy, on Thursday announced the successful commissioning of a new isomerisation unit at its Vadinar refinery in Jamnagar district of Gujarat. The 0.7-million tonnes per annum (mtpa) unit is a key component of the phase-I expansion of the company's Vadinar refinery that will increase its capacity from the existing 14 mtpa to 18 mtpa (or 300,000 barrels per day to 375,000 bpd), the company said in a release here. Among the largest such units in the world, its commissioning was completed in just 32 days (as against an industry average of 50-55 days), without compromising on safety, said Mr Naresh Nayyar, CEO, Essar Energy.
This unit is the first expansion unit to be fully commissioned. Using naphtha as its primary feed, the Vadinar refinery's isomerisation unit will help produce Euro IV grade gasoline of high octane rating and almost zero sulphur content. The Vadinar refinery's expansion project is nearing completion. Increased refinery throughput of 18 mtpa will commence in the first quarter of 2012.When completed, the phase-I expansion will also increase the Vadinar refinery's complexity from 6.1 to 11.8. An optimisation project is also under execution at the refinery to further increase the capacity to 20 mtpa (405,000 bpd) by September 2012.
The capacity expansion, complexity enhancement and subsequent optimization will give the Vadinar refinery the capability to process nearly 87 per cent ultra-heavy crudes, which are lower cost than light crudes. In terms of product yield, the expanded Vadinar refinery will have the flexibility to produce higher value products, including pet coke.
Ahmedabad, Dec. 8: from the pages of THE HINDU business line

Wood Biofuel could be a competitive Industry by 2020

2011-12-08T10:29:00.000+05:30

Wood Biofuel could be a competitive Industry by 2020

Corn ethanol is currently blended with gasoline to satisfy government-mandated targets to include renewable content in transportation fuel. Compared to corn, wood-based biofuel is considered more sustainable but is not currently produced in large commercial quantities in Canada and the United States because the costs are too great.

The study, published in the most recent issue of the journal Biofuels Bioproducts & Biorefining, identifies several opportunities for reducing these costs. Researchers in UBC's Faculty of Forestry found that large-scale commercial production of wood-based ethanol, also known as cellulosic ethanol, will reduce capital and operation costs and assist in achieving the improvements necessary for wood-based ethanol to compete, without government support.

(Courtesy: http://www.sciencedaily.com)

IndianOil will hire postmen to check fake LPG connections

2011-12-07T13:45:00.000+05:30

IndianOil will employ postmen to spy on fake gas connections

IndianOil will hire postmen to spy on its cooking gas customers to check fake connections. As part of a proposed deal between the company and the Department of Post, the postmen will help the customer care division of IndianOil in verifying the address and identity of registered customers. Elaborating on the deal, a senior IndianOil officer said that the company believes that postmen might prove handy in these verifications.

"As part of IndianOil's deal with the postal department, the company will provide the postmen with soft copies of the customer's documents, which will include identity numbers, address and the number of cylinders issued on a particular connection. It'll be called the physical verification of the customers. Postmen will also note the change of address of the customers. Any anomaly in such verification will render the connection a fake one. The postmen will then finally submit their findings to the company," said the official.

He added that the new method will help the company unearth fake connection rackets. "The company's survey team has found that many fake connection rackets thrive in the capital. Most of these groups make use of fake address proof and identities. I hope the postmen will be identify such groups," the official said.

Alkesh Tyagi, an official in the publicity department of the Department of Post, admitted that a deal was being struck with IndianOil, but it was at the stage of proposal. "It'll be given a final shape once the payment for postmen is fixed," she said. She also said that the postal department has already successfully provided the services of its postmen to verify customer details for some telecom companies. "Given the decrease in actual postal services, such tie-ups with corporate groups will keep post offices relevant and profit-generating," she added.
Sunday Guardian, New Delhi, Dec 2011