Reliance Industries is planning to move forward its maintenance at a crude distillation unit (CDU) at its 580,000 barrels-per-day (bpd) Jamnagar refinery by about a week to 6 or 7 February, traders said. When contacted, Reliance's spokesman was unable to comment on the matter. Traders said the CDU at the export-oriented newer complex will shut for a maximum of 25 days. The maintenance was initially planned for January but it was later postponed to around 15 February. Reliance's maintenance is being scheduled just as Indian diesel demand is picking up slightly, which could curb supply and boost margins, traders said. Essar Oil offered only one diesel cargo for January loading, after selling three cargoes for December. The company has yet to offer a cargo for February. This is likely due to a pick-up in diesel demand in India, where it is used in the industrial, agricultural and transport sectors and closely follows the country's economic health. India's economy will gather steam this year after its worst performance in a decade as a slew of reforms take hold and the central bank eases policy to spur growth, a Reuters poll found. Asian gasoil margins have stayed above $19 a barrel since November, last year. They could go higher from the second quarter as maintenance season begins, traders said. Reliance operates another plant in Jamnagar which has a capacity of 660,000 bpd. The site was hit by a fire last month that brought down on the refinery's CDUs for about a week. (Reuters)
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Coal India Ltd, the world's largest coal miner, has finalised a production target of 492 million tonnes for the fiscal year that starts on 1 April, about 6 per cent higher than the current year's expected production. The target was finalised in a meeting last week with officials from India's planning commission, Coal India Chairman S. Narsing Rao told Reuters. The state-controlled miner, which produces about 80 per cent of India's coal, is under pressure from the government and power producers to ease fuel shortages at home but has struggled for years to raise output due to problems in obtaining environmental and regulatory approval. Output levels have remained nearly flat for the past two years and it missed its production target last year. The company is aiming to supply 464 million tonnes of coal this fiscal year ending March, an increase of about 7 per cent. The company is fairly close to achieving this target, but performance in the last two months would hold the key, Rao said. "It is still a tight situation, but the next 66 days can tilt the scales," he said. So far this year, Coal India has produced 20 million tonnes more compared to the same period last year, but now needs to push up production by another 9 million tones in the remaining period. India produced 240.32 million tonnes of coal in the first half of the current fiscal year, up 8.2 per cent from a year earlier, figures provided by a government official showed. (Reuters)
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The government's share sale in state-run power producer NTPC Ltd to raise roughly $2 billion is likely to take place on February 7, three sources with direct knowledge of the situation said on Friday.The government, which owns 84.5 per cent of NTPC, plans to sell a 9.5 per cent stake in the company to institutional investors through an auction of shares.The floor prices for the auction is likely to be announced a day ahead of the sale, said the sources, who declined to be named as they were not authorised to speak to the media.Officials at the Department of Disinvestment, responsible for handling state stake sales, could not immediately be reached for a comment.(REuters)
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The Krishna-Godavari (KG) Basin, operated by Reliance Industries (RIL), is in a shambles. The natural gas production at the D6 block has sunk to an all-time low of 20.88 million metric standard cubic metre per day (mmscmd) after the company shut its eighth well, B6, on 9 January. B6 was in the main producing fields of Dhirubhai-1 and 3 (D1 and D3) and was shut “due to water loading”, according to a report by the Directorate General of Hydrocarbons (DGH). Since D1 and D3 started production in 2009, the production from 18 wells has gone down from 55 mmscmd of gas to 16.98 mmscmd during the week ended 13 January, after the well B6 was shut, the DGH said. Citi analysts say the decline is expected to continue through FY14, but may be arrested in FY15. Maintenance work in D1 and D3 fields has started. New production from satellite fields and R-series in Asia’s largest gas find are likely to come on stream by FY17. The firm has been awaiting approvals since last year from the oil ministry and the DGH to start maintenance work to revive the sick wells. The ministry says the approvals were withheld as RIL had denied access of its books to the Comptroller and Auditor General for a second round of audit. But, sources say, the audit began a week ago. RIL has already budgeted $100-120 million for the maintenance this fiscal, as it did the previous two years, which are still pending approval. 69% is the decline in production in D1 and D3 RIL’s exploration and production (E&P) segment reported earnings before interest and taxes (Ebit) at Rs 590 crore (down 54 per cent year on year) in the third quarter — below the estimate by research firm Nomura. “Higher depletion charges and charges on relinquishment of E&P blocks were key reasons for the lower numbers…The firm indicated that the declines would likely be arrested only when compression capacity is commissioned by FY15,” say Nomura analysts. RIL said that the C. Rangarajan Committee report addressed the key issue on the production-sharing contract, audit and gas price mechanism, and would help in creating an enabling environment, even if it didn’t seem to agree with the suggested pricing formula. It said the report could pave the way for finalising pricing in line with production-sharing contracts. Oil minister Veerappa Moily has said that the ministry had accepted the committee’s recommendations, including a new formula to link gas prices with international benchmarks. Deutsche Bank analysts say that after a long period, the management was optimistic on its upstream portfolio in India. “The firm is awaiting approval for the revised development plan for MA oilfield in KG-D6, gearing up to submit the development for R-series fields within a month and restart its exploration campaign,” they added. Meanwhile, the Centre wants to withdraw from arbitration proceedings and favours direct negotiations with RIL in its long-running dispute over the cost of developing the KG-D6 block, Moily said. Now after a positive Q3 result and with shares hitting a 19-month high, RIL has started studying ways to arrest the production decline.(This story was published in Businessworld Issue Dated 04-02-2013)
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Homes in India are now getting younger owners. What was earlier tagged as a luxury for the middle-aged, the demographics of the real estate buyer has been changing in favour of the youth. “The average age of buyers has now dropped to 27, and about 40 per cent of our buyers are in this category,” says Nikhil Jain, CEO of real estate company Ramprastha Group. This is a significant drop from the average age of 41 years a decade ago, says Vineet Singh, executive vice-president and business head of the realty website 99acres.com. Today’s 20-30 year-olds have better access to financial resources such as home loans and mortgages, with banks falling over each other trying to sell loans with various incentives. “More and more young people in the 22-30 age group are investing in residential properties via home loans,” says Santhosh Kumar, CEO, operations, at Jones Lang LaSalle India. Industry experts say that youngsters have become more independent in their outlook, and with enough savings they can afford to buy their own house. There is a growing trend of women homeowners in the same age group as well. 27 Is the average age of new real estate buyers in India — down from 41 a decade ago “We attribute this to the availability of more realistic saving instruments, a reorientation towards the nuclear family format, an increased orientation towards future stability and higher aspiration levels. It is clear that Indian youth today has become financially savvier,” says Kumar. The nuclear family format has resulted in lesser expense and more income in the current Indian households. There is also an increase in double-income households, with both husband and wife working — also known as the DINK (Double Income No Kids) group. These people have been earning for five to seven years, and their corporate jobs allow them easy access to long-tenure home loans, thus reducing their EMI payout. The main reasons for this trend could be that not only have Indians begun earning at a younger age, they are also earning a lot more money at a younger age. “If you open the bank loan books today, you will notice that the average home loan size falls in the category of Rs 18-20 lakh,” says 99acres’ Singh. “These youngsters who are investing in real estate prefer taking small loans and buying small houses for themselves. This has been the trend observed in metros and tier-1 cities across the country,” he says. “About 80 per cent of this market chooses to go in for apartments. There is a latent demand for apartments in the Rs 25-75 lakh price range among these younger buyers,” says Singh. Young couples prefer investing in condominiums, rather than independent housing due to factors such as pricing and ease of living. Ramprastha’s Jain says that “people, in general, are moving away from individual homes. The four-tier security system set up in most condominiums today provides an assurance to the buyer. Also, condominiums ensure basic services like power backup to the resident.” Besides the real estate buyers who actually use the property they’ve bought, there seems to be an influx of young investors in the Indian market as well. Says Brijesh Bhanote, director of sales and marketing at the real estate firm The 3C Company: “Ninety-five per cent of the market of young buyers has been buying for end use. However, over the past 18 months we have noticed a trend of young investors entering the market. These youngsters have picked up on the bullishness of the realty market and chosen to invest for more profits.” Singh expects this trend to remain stable for a while. (This story was published in Businessworld Issue Dated 04-02-2013)
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Oil Minister M Veerappa Moily on Monday, 18 February, ruled out a roll back in the Rs 1.50 a litre hike in petrol and 45 paisa per litre increase in diesel rates saying only a small raise has been passed on to consumers."No, No," was he refrain when asked if the government will consider rolling back last week's increase. "Our country imports 73-75 per cent of oil. We need to pay Rs 7 lakh crore for the imports. Where do we find that kind of money," he said.The first hike in petrol price in over three-and-a-half months and the second rise in diesel rates in one month exclude local sales tax or VAT, making the cost for consumers even higher.Petrol price in Delhi went by Rs 1.80 to Rs 69.06 per litre from February 16. Diesel rates went up by 51 paise to Rs 48.16 a litre."I think everybody would appreciate that we have not put a lot of burden on consumers. It is only small doses," Moily said.The increase in auto fuel prices, which come on back of a similar small hike in diesel price last month, is expected to fuel inflation that stood at three-year low of 6.2 per cent in January. And there has been demands for a rollback."The money (to pay for oil import) can be either found by raising taxes or passing it on to the consumers," he said.Indian Oil Corporation (IOC), the nation's largest fuel retailer, announced an increase of Rs 1.50 per litre in petrol price as international benchmark oil prices climbed 7.5 per cent.The diesel rate was raised in line with last month's government decision to allow oil firms to raise prices in small doses every month till over Rs 10 a litre loss on sale of India's most consumed fuel is totally eliminated. Even after last week's and a similar hike effected on January 18, oil firms will continue to lose Rs 10.27 a litre on diesel as cost of raw material (crude oil) has risen by 4 per cent to $113.24 per barrel."Whenever there is over-recovery (profit on sale of petrol), we have made it clear that it has to be passed on to consumers. So last month you saw a 25 paisa reduction in rates," Moily said.Prior to February 16 hike, petrol price was last revised on January 18 when the rate was cut by 25 paise a litre. After including VAT, this translated into a reduction of 30 paise to Rs 67.26 a litre in Delhi.The reduction in rates on that day coincided with the government decision to give oil firms freedom to raise diesel prices in small monthly doses to eliminate all of the losses on the fuel. Oil firms hiked diesel price on that day by 45 paise, which after including VAT led to a 50-paise increase to Rs 47.65 a litre in Delhi.The price of petrol was last hiked on October 27 when rates went up by 29 paise after government raised commission paid to petrol pump dealers.(PTI)
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Shares in Reliance Industries fell over 1 per cent as the recent recommendation on a revision in local gas prices was seen benefiting state-run upstream companies such as ONGC and Oil India with immediate effect. However, any price revision will not be applicable to gas produced from Reliance Industries-operated D6 block on the east coast, where pricing has been fixed until April 2014.(Reuters)
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State-run power producer NTPC on 21 January' 2013 reported nearly 22 per cent jump in net profit at Rs 2,596.76 crore in the third quarter ended December, 2012. NTPC had a net profit of Rs 2,130.39 crore in the same period a year ago. In a filing to the BSE, the company said its total income in the third quarter of current fiscal rose to Rs 16,529.55 crore from Rs 16,244.41 crore in the three months ended December, 2011. Currently, NTPC has a generation capacity of 39,674 MW and the same is expected to go up to 1,28,000 MW by 2032. Shares of the company were marginally down at Rs 162.80 in late afternoon trading on the BSE.(PTI)
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