Scrips of RIL, ONGC down

The Finance Minister's announcement for the oil and gas companies did not cheer key players in the industry.

Industry players gave a thumbs down to FM's proposal to review the oil and gas exploration policy and move from profit sharing to revenue sharing contracts. "The proposal to the move from profit sharing model to revenue sharing model marks substantial increase in risk profile for exploration and production companies. From an overall perspective, Budget 2013 has a negative bias for oil and gas industry," said Nabin Ballodia, Partner-Tax, KPMG India.

This would help GSPC create India's largest city gas distribution company

Five months after it acquired 65% stake in Gujarat Gas Company Ltd (GGCL), GSPC or Gujarat State Petroleum Corporation is planning to merge its city gas distribution entity, GSPC Gas Company Ltd with Gujarat Gas Corporation Limited (GGCL). Persons close to the development said this would not only help GSPC create India's largest city gas distribution company but also allow it to transfer the loans it took to acquire GGCL on its books as the company is listed.

With an eye on bigger imports, the oil marketing firm may get its French partner Total to set it up

State-run oil marketing firm Hindustan Petroleum Corp Ltd (HPCL) is planning to invest Rs 600-700 crore to set up its second underground liquefied petroleum gas (LPG) storage facility in Mangalore. The company could rope in its partner, Total SA of France, to build the cavern. "Given the demand for LPG, we think importing in large quantity would make more sense than importing in smaller capacity. We are discussing the feasibility of this project and would decide on the same in the next six months," said a senior HPCL official, requesting anonymity.

The government’s decision to cap the number of subsidised LPG (liquefied natural gas) cylinders seems to have brought cheer to oil companies as their auto gas segment has registered significant growth since last September.

IndianOil Corp Ltd, for instance, saw a growth of around 22 per cent in volumes and nearly two per cent in its market share. It traded nearly 10,517 million tonnes (mt) of auto gas in December against 8,593 mt of auto gas in September.

Their first target could be bulk buyers but state-owned companies are well-entrenched in that market

At 65 million tonnes per annum, diesel accounts for nearly 40 per cent of all petroleum products sold in the country. Not surprisingly, it is a huge opportunity for private oil marketing companies. Now that the government has decided to decontrol diesel prices for bulk users and allowed government-controlled oil marketing companies to raise retail prices in small monthly doses, private oil companies such as Reliance Industries, Essar Oil and Shell India have a real opportunity on their hands.

Looking at ways to stop bulk diesel users from securing fuel from retail outlets

With dual pricing for diesel in place, oil marketing companies (OMCs) are looking at ways to stop bulk diesel users from securing the fuel from retail outlets. The three public sector OMCs — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation Limited — want the government to put in place regulations for this.

Sharp decline in production from flagship Krishna-Godavari basin has changed the business mix for the company

An unimpressive performance on its exploration and production front has brought the refining and marketing and petrochemicals business back in the reckoning for Reliance Industries Ltd (RIL), India’s highest valued company. Over the quarters, a sharp decline in production from its flagship Krishna-Godavari basin, off the Andhra coast, has changed the business mix for the Mukesh Ambani-led company, with refining and marketing now contributing 78.2 per cent of the revenue base and 58 per cent of Ebit (earnings before interest, tax) margins.

Mahan I, in Madhya Pradesh, is Essar Power’s eighth operational power plant, taking its total generation capacity to 3,910 MW

Essar Power has commissioned its 600 mega watt (MW) Mahan I power project. Essar Power, a subsidiary of Essar Energy Plc announced that the 600 megawatt (MW) unit is part of its 1,200 MW Mahan I power project. This 600 MW capacity is the largest size single unit commissioned in Madhya Pradesh.

ONGC's foreign arm had agreed to buy firm's stake in Kashagan field for $5 bn

US-based ConocoPhillips is in talks with state-run Oil and Natural Gas Corporation ( ONGC) to pick stake in more than one of its ultra-deep-water blocks. A senior executive from ONGC said ConocoPhillips, US’s third largest energy giant, had examined 19 of its blocks and would shortly decide the ones it planned to pick a stake in.

Appoints Foster Wheeler as consultant to prepare project report

Even as domestic gas production has fallen 8 per cent, Oil India Ltd (OIL) is planning to set up a liquefied natural gas ( LNG) receiving terminal in India. The company plans to set up a 2.5-million tonne (mt) capacity terminal. According to an industry executive in the know, Geneva-based Foster Wheeler AG has been appointed consultant to prepare a project report for the foray into imported gas. When asked, Ananth Kumar, director (finance), Oil India, confirmed the appointment of a consultant about a fortnight ago, but did not divulge the name, citing a confidentiality clause in the contract.