06 Aug 2010 PETROLEUM BAZAAR
The future looks bleak for oil marketing companies (OMCs), despite decontrol of petrol prices and increase in prices of other petroleum products. But oil producers like ONGC (Oil and Natural Gas Corporation) and OIL (Oil India) are optimistic about their future performance.
The OMCs — Indian Oil Corporation (IOC), Bharat Petroleum Corporation and Hindustan Petroleum Corporation — posted a combined net loss of Rs 6,990 crore for the June quarter, as their underrecoveries of around Rs 13,500 crore remained uncompensated. The gross underrecoveries for the quarter stood at around Rs 20,000 crore. Of this, roughly one-third, or Rs 6,600 crore, was borne by upstream companies like ONGC and OIL. The government, which freed petrol price and increased diesel, kerosene and LPG prices in June, is yet to come out with subsidy sharing mechanism for the underrecoveries. The gross underrecoveries in 2010-11 on petrol, diesel, kerosene and LPG (till June 25) are estimated at Rs 53,000 crore, considering an average crude oil price of $75 a barrel.
“While no provision (for underrecoveries) has been made in the Budget of current fiscal, we have requested the finance ministry to provide Rs 13,500 crore,” said Petroleum Secretary S Sundareshan. S V Narasimhan, director (finance), Indian Oil, which incurred a net loss of Rs 3,388 crore in the first quarter, said their future performance would depend on government compensation.
The upstream oil companies, led by ONGC, have also seen a dip in their net profits for the June quarter. They, however, are buoyant about their performance in the remaining three quarters, on declining subsidy and higher price of gas. Of the estimated Rs 53,000-crore underrecoveries for the year, roughly one-third, or Rs 17,666 crore, has to come from the upstream sector. Considering that they have already paid Rs 6,600 crore in the first quarter, they may have to pay another Rs 11,000 crore over the remaining three quarters.
“We should be able to show better results going forward on account of the increase in price of administered price mechanism (APM) gas which happened from June 1. There will also be a lower subsidy burden going forward,” said ONGC Chairman and Managing Director R S Sharma.
The company saw its net profit declining 24.5 per cent to Rs 3,661 crore, since its subsidy burden jumped from Rs 429 crore to Rs 5,515 crore. The government has more than doubled the price of APM gas to $4.20 per million British thermal units. The increase in gas price is expected to add up to Rs 900 crore annually to the company’s bottom line.
OIL, whose net profit declined by 32 per cent, is also upbeat on its future performance. “We are hopeful that the subsidy burden shall come down in the remaining quarters,” said N M Borah, chairman and managing director. Courtesy: BS
Sunday, August 8, 2010
Wednesday, August 4, 2010
LNG terminal near Ennore port
05 Aug 2010 PETROLEUM BAZAAR
CHENNAI: A Rs.10,000-crore liquefied natural gas terminal will come up at Kattupalli near the Ennore port, on the northern outskirts of Chennai.To be implemented by the Indian Oil Corporation (IOC) and the Tamil Nadu Industrial Development Corporation (TIDCO), the terminal project has other components – the establishment of a re-gassified facility and a 1,000 megawatt (MW) power project.On Wednesday, B.M. Bansal, IOC Chairman and Rajeev Ranjan, TIDCO Chairman and Principal Secretary (Industries) of the State government, signed a memorandum of understanding (MoU) at the Secretariat in the presence of Chief Minster M. Karunanidhi, Deputy Chief Minister M.K. Stalin and Chief Secretary K.S. Sripathi.
Mr. Ranjan signed two other MoUs – one for setting up a plant to manufacture electronic products in the State Industries Promotion Corporation of Tamil Nadu (SIPCO) industrial park in Manamadurai and another for an automotive tyre facility project in Sriperumbudur. Both projects would entail an investment of Rs. 1,500 crore each. JK Tyre & Industries would establish the tyre facility and the Videocon group, the electronic goods plant.
Pradeepkumar N. Dhoot, director of Unity Appliances, a constituent of the Videocon group, and Arun K. Bajoria, president and director of the tyre company, were the other signatories of the MoUs.The LNG terminal [in Kattupalli] would handle five million tonnes per year and the re-gassified facility's capacity would be 20 million cubic metre per day of natural (vapourised) gas.The timeframe for implementing the project would be four years from the date of approval by the Board of Directors of the public sector undertaking.
The approval was expected by December 2010 or January 2011. Mr. Bansal said the Kattupalli terminal would be the first along the eastern coast. Already, there were two terminals. The third terminal was coming up in Kochi.The IOC chairman said 250 acres were required for the terminal project. Asked from where the gas would be imported, he replied that discussions were on with the representatives of the Middle East, African countries and Malaysia.
Raghupati Singhania, vice-chairman and managing director of JK Tyre, said the first tyre would roll out from the plant by October 2011. and the entire project would be completed by March 2012.Green technology would be adopted. An official release said the LNG terminal project was expected to generate 7,000 jobs.Coutesy:THE HINDU
CHENNAI: A Rs.10,000-crore liquefied natural gas terminal will come up at Kattupalli near the Ennore port, on the northern outskirts of Chennai.To be implemented by the Indian Oil Corporation (IOC) and the Tamil Nadu Industrial Development Corporation (TIDCO), the terminal project has other components – the establishment of a re-gassified facility and a 1,000 megawatt (MW) power project.On Wednesday, B.M. Bansal, IOC Chairman and Rajeev Ranjan, TIDCO Chairman and Principal Secretary (Industries) of the State government, signed a memorandum of understanding (MoU) at the Secretariat in the presence of Chief Minster M. Karunanidhi, Deputy Chief Minister M.K. Stalin and Chief Secretary K.S. Sripathi.
Mr. Ranjan signed two other MoUs – one for setting up a plant to manufacture electronic products in the State Industries Promotion Corporation of Tamil Nadu (SIPCO) industrial park in Manamadurai and another for an automotive tyre facility project in Sriperumbudur. Both projects would entail an investment of Rs. 1,500 crore each. JK Tyre & Industries would establish the tyre facility and the Videocon group, the electronic goods plant.
Pradeepkumar N. Dhoot, director of Unity Appliances, a constituent of the Videocon group, and Arun K. Bajoria, president and director of the tyre company, were the other signatories of the MoUs.The LNG terminal [in Kattupalli] would handle five million tonnes per year and the re-gassified facility's capacity would be 20 million cubic metre per day of natural (vapourised) gas.The timeframe for implementing the project would be four years from the date of approval by the Board of Directors of the public sector undertaking.
The approval was expected by December 2010 or January 2011. Mr. Bansal said the Kattupalli terminal would be the first along the eastern coast. Already, there were two terminals. The third terminal was coming up in Kochi.The IOC chairman said 250 acres were required for the terminal project. Asked from where the gas would be imported, he replied that discussions were on with the representatives of the Middle East, African countries and Malaysia.
Raghupati Singhania, vice-chairman and managing director of JK Tyre, said the first tyre would roll out from the plant by October 2011. and the entire project would be completed by March 2012.Green technology would be adopted. An official release said the LNG terminal project was expected to generate 7,000 jobs.Coutesy:THE HINDU
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