15 Feb 2010;economictimes.indiatimes.com:Rajeev Jayaswal & Subhash Narayan: NEW DELHI: Country’s only international fuel retailer Shell India has silently ramped up its petrol pump network to 74, a 50% jump in just one year, even as other private retailers fret about the lack of level playing field in the retailing business between the private players and government-owned companies. After getting a licence to open 2,000 retail outlets in India in 2004, Shell opened only 50-odd pumps in over four years, citing predatory pricing by state-owned competitors — Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL). A Shell official confirmed that the company has increased the number outlets and said Shell India has aggressive expansion plans. “We have 74 (retail outlets) up and running. A few more are in the process of commissioning,” the official, who did not wish to be named, said. Petrol and diesel sold at Shell pumps are costlier by Rs 2-5 a litre (depending on the location), compared with those sold at a public sector fuel station. It could not be ascertained whether Shell India has achieved break-even in its fuel retail business. The privately-held company declined to reveal its accounts and other details. The company, which does not have a refinery in the country, buys petrol and diesel from Mangalore Refinery & Petrochemicals (MRPL) and sells through its pumps. “The company’s retail operation is running on reputation. As fuel retailer, it is the best in the country,” an oil sector expert and CEO of a private-sector refinery said requesting anonymity. Shell India’s growth is in sharp contrast to Reliance Industries’ (RIL) fuel retail business. “Only 600 pumps of RIL are functional today, mainly in Rajasthan, West and South India,” a company official said on condition of anonymity. At present, the company has about 1,400 retail outlets, he added. Interestingly, another private sector company Essar Oil is planning to nearly double its retail network. “We are going to increase (number of petrol pumps) to 2,500 by next fiscal (end),” Essar group chairman Shashi Ruia said in Delhi recently. “It is likely that the private oil companies are expanding their retail business in hope that the government will soon deregulate pricing of auto fuel,” an official in IOC said. All the three private firms declined to comment on this issue. The government is expected to take a decision on freeing prices of petrol and diesel by Sunday or next week, a senior official in the oil ministry said. “I have submitted a memorandum (regarding pricing of petrol, diesel, kerosene and cooking gas) to the Prime Minister and the finance minister,” oil minister Murli Deora said. “We have also requested them (PM and FM) to compensate PSU oil companies the shortfall on account of SKO (kerosene) and LPG (cooking gas) for the current fiscal,” he said. The finance ministry has paid a cash compensation of Rs 12,000 crore to public sector oil retailers for the entire financial year, leaving a gap of around Rs 19,000 crore in their books.
15 Feb 2010;dailypioneer.com:New Delhi: Stating that the auto industry is yet to come out of the woods despite clocking record breaking sales in January, vehicle makers have asked the Government to continue the stimulus package provided during the economic downturn in the upcoming Budget. The country’s largest car maker Maruti Suzuki India (MSI) said policies that helped the auto industry grow at about 21 per cent in the last 12 months should be continued. “It will be too early to exit from stimulus measures as those were the main reasons of growth for the industry. It is too early to say that the auto industry has fully recovered (from the slump due to global economic crisis),” MSI Executive Officer Marketing and Sales Mayank Pareekh said. According to Society of Indian Automobile Manufacturers (SIAM), total vehicle sales of 11,14,157 units, in India in January was at the highest ever sold in a month. Car sales were also at record high of 1,45,905 units. It was the 10th straight month of growth by the segment. The good numbers notwithstanding, Mahindra & Mahindra Vice-Chairman Anand Mahindra said the Government should be very careful on any withdrawal of stimulus packages. “It was not a very overwhelmingly large one like in China or in the US. It is a very very measured package.”The Government had cut CENVAT by 4 per cent in December 2008 that resulted price reduction of automobiles and helped in spurring demand. Besides, States were encouraged to buy more buses for urban transport that gave a fillip to the commercial vehicles segment. General Motors India also felt that the industry is yet to see concrete signs of recovery from the battering it received during 2008-09. Support for continuation of the stimulus package has also come from the auto component manufacturing segment with the industry body, ACMA asking the Government to continue with the status quo. “Stimulus should not be removed in the immediate future. Although total auto sales may have zoomed, the commercial vehicle segment has still not fully recovered and exports are also below earlier high figures,” ACMA Executive Director Vishnu Mathur said.
14 Feb 2010;business-standard.com:New Delhi: Facing opposition from key allies in the UPA government, Finance Minister Pranab Mukherjee and Oil Minister Murli Deora today discussed an "all-acceptable" hike in fuel prices but it appeared the two failed to reach a consensus and the fuel price hike may not happen immediately. "No decision has been taken," Deora told reporters after an hour-long meeting. PSU retailers are projected to lose Rs 45,571 crore on selling petrol, diesel, domestic LPG and kerosene below cost. To avert bankruptcy, the Kirit Parikh panel has suggested freeing auto fuels from government control along with a steep hike in cooking fuel. Last week, Deora's ministry did not take the proposal to free petrol prices, along with hikes in diesel, cooking gas and kerosene rates, to the Cabinet because of opposition from the Trinamool Congress and the DMK. "The meeting was about under-recoveries (revenue losses) of oil marketing companies and their Kirit Parikh report. No decision has been taken," Oil Secretary S Sundareshan said. Pending a decision, Deora wanted the government to fulfil its promise of meeting the Rs 31,574 crore revenue Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) will lose on selling domestic LPG and kerosene below cost. However, Mukherjee made no promise of giving anything more than the Rs 12,000 crore already promised, sources said adding the meeting could not decide what could be an acceptable price hike to all constituents of the ruling UPA. IOC, BPCL and HPCL currently sell petrol at a loss of Rs 4.72 a litre, diesel at Rs 2.33 per litre, kerosene at Rs 18.06 per litre and domestic LPG at Rs 287.59 per cylinder. Deora, sources said, was of the opinion that any moderate price increase would help curtail revenue losses of the future but the government must urgently decide on the losses that have already been incurred this fiscal. In July last year, it was decided that the government will meet all of the revenues retailers lose on LPG and kerosene and the same on petrol and diesel would be made good by upstream firms like ONGC. The Rs 13,997 crore revenue loss on auto fuels was being made good but issues remained with the losses on LPG and kerosene. Deora had on February 11 submitted a memorandum to the Prime Minister asking the Government to cover the unmet Rs 19,574 crore revenue loss on LPG and kerosene sale. Today's meeting with the Finance Minister took that forward but no decision was reached. Sources said both Mukherjee and Deora were in favour of Rs 2-3 a litre hike in petrol and diesel prices and Rs 25 per cylinder increase in LPG rates, but the allies did not want diesel, LPG and kerosene prices to be touched. Owing to this, the two ministers deferred a decision pending more consultations within the ruling UPA, they said. The proposal of free petrol prices would lead to a price increase of Rs 4.72 a litre. A similar move on diesel, as suggested by the expert group on pricing reforms headed by Kirit Parikh, would have resulted in rates going up by Rs 2.33 a litre. Sources said the Petroleum ministry was willing to settle for Re 1 a litre increase in diesel rates provided, LPG and kerosene prices were also raised. The increase sought will, however, not be in the range of the steep Rs 100 per cylinder and Rs 6 a litre hike, respectively, suggested by the expert group. Sources said the ministry is bargaining for at least half of the price increase suggested by the panel, but may settle at Rs 25 per cylinder hike in LPG rates and Re 1 a litre raise in kerosene prices. Petrol is currently sold at a loss of Rs 4.72 a litre, diesel at Rs 2.33 per litre, kerosene at Rs 18.06 per litre and domestic LPG at a discount of Rs 287.59 per cylinder. In case the government goes for marginal hikes, the Cabinet will also have to decide on how the remaining revenue loss would be met.
12 Feb 2010;timesofindia.indiatimes.com:NEW DELHI: A group of firms led by flagship explorer Oil and Natural Gas Corporation has won the bid for a 40% stake in Carabobo-1 acreage in the Orinoco heavy crude belt of Venezuela, the first major oil auction during 11 years of Hugo Chavez's presidency and three years after acreages were nationalised in the region. This is the first big-ticket success for ONGC Videsh, ONGC's overseas arm that will represent the parent in the grouping, since its acquisition of then London-listed Imperial Energy for over $2 billion in 2008. Carabobo-1 will also be ONGC Videsh's second project in Venezuela after San Cristobal. The Carabobo-1 acreage is estimated to have 31 billion barrels of recoverable reserves and will take $19 billion to develop, starting with a $9 billion initial investment. The grouping will pay a little over $1 billion as signing amount and also extend a loan of similar amount to Venezuela's state oil firm PdVSA. The group also has Spain's Repsol and Malaysia's Petronas as ONGC's equal partners with 11% each, while northeast explorer Oil India Ltd and refiner-marketer IndianOil Corporation are minority partners and have 3.5% each. Together as a bloc, the Indian holding will, thus, be 18%. As investors, the Indian companies together will get some 5-6 million tonnes of crude as equity oil and will have the first right to buy upto 9 million tonnes of the output. The consortium is expected to bring the project into production by 2012-13. The acreage can produce 400,000 barrels of oil per day, or 20 million tonnes in a year. The grouping will form a separate `mixed company' in which PdVSA will hold 60% through its arm, Corporacion Venezulana del Petroleo. The companies will jointly operate the project, a deviation from other acreages where usually the most experienced company is in charge of operations. Since Carabobo crude is thick and cannot be processed in all refineries, PdVSA will supply dilutants till such time `upgraders' are constructed by 2016-17 at a cost of some $6 billion. By the time production starts, ONGC's refining arm, MRPL, too will be able to process such crude. At present, heavy oils are processed mostly by private refiners such as Reliance Industries and Essar and some quantities in state-run units. Carabobo-1 is among the two projects that Caracas put under the hammer. The other project, Carabobo-3, has been won by Chevron along with Japan's Mitsubishi, Inpex and Venezuela's Suelopetrol after paying a signing amount of $500 million. Carabobo-3 will be assigned at a later date.
12 feb 2010;hindustantimes.com:Sumant Banerji:New Delhi:Tyre major Apollo Tyres wants to be among the top 10 tyre manufacturers in the world within the next five years. The company is currently placed 15th. Its turnover grew more than 100 per cent last year with the acquisition of Dutch tyre company Vredestein BV. “We now have four brands with us — Apollo, Dunlop, Vredestein and Regal — and our intention is that every segment will have a brand catering to it across the world,” said Neeraj Kanwar, managing director, Apollo Tyres Ltd. “We will need to grow both organically (expanding capacities) as well as inorganically (through acquisitions). We are preparing a blueprint that will look into how we can introduce the Apollo brand in Europe and Vredestein into India. By the end of 2010-11, we should have our strategy in place.” Apollo now has a presence in all major markets but it said emerging countries, especially the BRIC nations, will be the growth drivers. “The US is a big market but it is not our focus region. The domestic market will continue to be our mainstay,” Kanwar said. Apollo’s consolidated net sales during April-December 2009 stood at Rs 5,977.4 crore and are expected to cross Rs 8,000 crore by March 31. Its net sales in fiscal 2008-09 stood at Rs 4,070 crore. The company has invested Rs 2,000 crore in building India’s largest truck radial manufacturing factory near Chennai that will be operational by April this year. The factory will produce 6,000 truck radials per day.
No Subsidiary creation for Assam operations of ONGC
11 Feb 2010;dailypioneer.com:New Delhi: Several speculative media reports have appeared in recent past to the effect that ONGC has decided to hive off Assam operations through creation of a separate subsidiary company. Factually such reports have emanated out of certain reviews in ONGC as well as in the Ministry of Petroleum and Natural Gas. Various options for improving productivity in Assam Asset through appropriate changes in the decision making process and a more focused approach with improved professional support to local management, have been contemplated. One of the options examined was creating a wholly owned subsidiary of Assam Asset (like ONGC Videsh Limited). ONGC has, time and again, clarified on the issue reaffirming its commitment towards uninterrupted continuation of its operations in Assam for improvement in the production of oil and gas from its oil fields. ONGC has also clarified that there is no decision to separate Assam Asset from ONGC and the ONGC Management continues to commit its total support in terms of resources including manpower, finance, technical expertise etc. The matter has further been discussed with the Ministry of Petroleum and Natural Gas and after due deliberations it has been decided that there shall be no creation of subsidiary company for ONGC operations in the State of Assam. ONGC shall continue to remain committed to make Tomorrow Brighter for the people of Assam.
