Reliance Industries' gas output from D1 and D3 blocks may fall further: DGH
02 May 2011;economictimes.indiatimes.com:Sanjay Dutta:NEW DELHI: Output from Reliance Industries' D1 and D3 showcase gas fields off the Andhra coast-which have seen a sharp fall in recent months-is expected to drop further in 2012-13, the government's regulatory arm for exploration activities has said. "The production profile, as submitted by the Operator (Reliance), is expected to fall further during 2012-13," the Directorate General of Hydrocarbons wrote to the oil ministry on Ap RIL 4 after reviewing the field's performance with RIL executives and plans "resubmitted" by the company. In the revised work programme and budget for 2011-12 and 2012-13, Reliance indicated gas production of 43 mcmd (million cubic metres per day) and 38 mcmd, respectively. This is less than the 62 mcmd indicated for this period in the $9-billion plan approved by the regulator for developing the field, projected to pump over 80 mcmd by 2012. Reliance did not offer any comment. Sources, however, said the company had told DGH during the review meeting in March that certain capital expenditure needed to be incurred to maintain peak production and output would not drop if such capex plan was approved. Some company executives explained that D1 and D3 are frontier fields in terms of depth of the reserves and geological structure of the rocks cradling the gas pool. They said there was no previous experience in India of cracking reserves at such depths and ways to tackle geological surprises that may crop up during operation. They expect things to improve with BP coming in as the UK major is considered one of the best deepwater explorers in the world. But such explanations are unlikely to cut much ice with DGH and oil ministry officials when RIL executives meet them for approving investment made in the field in the last nine months and budgets for the next two years. Reliance cannot recover its money from gas sale revenue unless the investment in the field is approved by the ministry and DGH representatives. Going by the DGH's April 13 letter, RIL executives are expected to face a tough time explaining why the company has drilled 20 wells but is operating only 18 against the approved plan of putting in place 22 wells. Questions would also be raised on why all wells have been drilled in the main reserve area and why these were not spread across the additional channels to maximize output. Broadly, the letter blames Reliance for not doing enough to arrest or ramp up production. Production from the fields has dropped to approximately 41 mcmd, forcing the government to curtail supplies to non-essential industries such as petrochemicals and refineries and ensure earmarked quantities of gas to priority sectors such as power and fertilizer units. Even gas services in the capital are under pressure as suppliers like IGL have to buy costlier gas imported in ships to meet demand and have been forced to raise fuel prices.
02 May 2011;business-standard.com:Sharmistha Mukherjee & Ajay Modi:New Delhi: When Modi Rubber closed an agreement with German tyre manufacturer Continental for outright sale of Modi Tyre Company Ltd (MTCL) last month, the exit led to speculation of the group foregoing interests in the segment. Modi Rubber is, however, looking at regaining possession of the company’s Modinagar factory, to re-enter the market for motorcycle, tractor and light commercial vehicle (LCV) tyres. “This plant (at Modinagar) was leased to us by a company called Modi Export Process. This company defaulted and the Uttar Pradesh liquidator put a seal on the plant. We have approached the Allahabad High Court, seeking possession of the plant,” said Alok Modi, director, Modi Rubber. Adding: “After we get possession, we will make a business plan. While technology has changed for car tyres with the introduction of radials, we can still produce motorcycle, tractor and LCV tyres, since there is huge demand for these. This plant has a capacity to process 30-35 tonnes of rubber per day. While this option is open to us, marketing products for a small plant may not be competitive. Therefore, we may also consider contract manufacturing at this unit.” In 2010-11, as many as nine million motorcycles and 350,000 LCVs were sold in the domestic market. The segments saw growth rates of a little over 22 per cent. With rising sales, big opportunities have opened up for auto component and tyre manufacturers. The Modinagar plant in Ghaziabad district, 45 km from here, used to manufacture tyres for scooters, motorcycles, cars, tractors and light commercial vehicles. It was shut in 2001, when Modi Rubber went to the Board for Industrial and Financial Reconstruction (BIFR), following financial and labour disputes. In 2008, when Modi Rubber came out of BIFR, this plant was, with the ones at Modipuram and Partapur (both in Meerut district), given to the company. But Modinagar was soon taken over by the state liquidator. Along with the plant, there is land that runs into several acres. This can be used for real estate development. Said Modi, “We may go for a service model in housing for the industrial plants around Modinagar.” Last week, Modi Rubber announced an agreement to sell all its stake in subsidiary company MTCL to Continental Corporation. Upon completion of the transaction, MTCL would become a wholly-owned subsidiary of Continental, the world’s fourth largest tyre manufacturer. Continental would roll a million units of truck and bus tyres and tubes annually from MTCL’s plants in Modipuram and Partapur.
Tata Motors April sales up 13%, Nano crosses 10k mark
01 May 2011;business-standard.com:New Delhi: Auto major Tata Motors today reported a 13% jump in total sales in April to 64,383 units from 57,199 units in the same month last year, riding on good numbers from small car Nano, which crossed the 10,000-mark for the first time. In April, the homegrown firm registered a 1.24% increase in passenger vehicle sales in the domestic market to 23,387 units from 23,099 units in the same period last year, the company said in a statement. During the month, small car Nano's sales soared by 184% to 10,012 units during April, it said. The 'Indica' range reported sales of 4,250 units, down 53%. The 'Indigo' family, with sales of 5,282 units, witnessed a dip of 27% vis-a-vis the same month last year. The 'Sumo', 'Safari' and 'Aria' models accounted for sales of 3,843 units, up 15% compared to April last year. In the commercial vehicles segment, Tata Motors recorded a 19% jump in domestic sales in April to 36,738 units. Light commercial vehicles sales during the month stood at 22,802 units, up 28%, while medium and heavy commercial vehicle sales stood at 13,936 units, a jump of 6% compared to April, 2010. Tata Motors' total exports in April jumped by 36% to 4,258 units from 3,137 units in the same month last year.
30 April 2011;business-standard.com:New Delhi: State-owned oil firms companies lose a whopping over Rs 1,80,000 crore on fuel sales this fiscal if domestic retail prices are not hiked in step with the cost of raw material. Indian Oil, Bharat Petroleum and Hindustan Petroleum will "at current international crude oil prices lose Rs 180,208 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in FY12", an industry official said here. The revenue loss, termed as under-recovery by oil firms, will be the highest ever, even more than what they lost in FY09 when crude touched a record high of $147 a barrel. The three oil firms now lose a record Rs 18.19 per litre on diesel, Rs 29.69 a litre on kerosene and Rs 329.73 per 14.2 kg domestic LPG cylinder. In addition, they lose about Rs 7.50 per litre on petrol, whose rates have not moved in tandem with the imported cost despite its pricing being freed from the government control in June last year. "Losses on petrol are not included in the under-recovery figures for FY12 as it is a decontrolled commodity," the official said. The basket of crude oil India buys had averaged $83.57 per barrel in FY09 and calculations for the current fiscal have been done at the prevailing rates of around $110 a barrel. "The average price of Indian basket of crude oil last fiscal was $85.09 per barrel, higher than the FY09 average when the government had cut customs and excise duty on crude oil and products to check the impact of rising international rates on domestic markets," the official said. Finance Minister Pranab Mukherjee has refused to cut customs and excise duty on crude this time to protect his projected fiscal deficit. "The situation in the current fiscal will be worse, the three PSU oil marketing companies are losing Rs 540 crore per day on diesel, domestic LPG and kerosene sales," he said. In FY09, the government had issues oil bonds worth Rs 71,292 crore to the three firms to make up for more than two-thirds of the Rs 103,292 crore revenue loss. Upstream oil firms like ONGC provided another Rs 32,000 crore. In FY11, the three firms lost Rs 78,202 crore, but so far the government has provided only Rs 20,911 crore in compensation. The oil marketing firms lost Rs 2,227 crore on selling petrol below imported cost during April and June before its price was freed from the government control. They lost Rs 34,384 crore on sale of diesel, Rs 19,566 crore on PDS kerosene and Rs 22,025 crore on sale of domestic LPG.
Oil firms hike jet fuel price by Rs 156-237 per kilolit
30 April 2011;hindustantimes.com:New Delhi: State-owned oil firms today hiked jet fuel price by Rs 156-237 per kilolitre, the 14th straight increase in rates since October last year. Aviation Turbine Fuel (ATF) price at the T3 terminal in the national capital was increased by Rs 156 per kl to Rs 60,560 per kl effective midnight tonight, an o fficial of Indian Oil Corp, the nation's largest fuel retailer, said. State-owned fuel retailers have hiked jet fuel price on every fortnight since October in line with firming crude oil rates. Jet fuel in Mumbai was hiked by Rs 230 per kl to Rs 61,429 per kl. Today's hike is the 14th straight increase in jet fuel prices since October, 2010, when international crude oil prices started soaring. The ATF price in Delhi on October 1, 2010 was Rs 40,728.52 per kl. The rates have been increased by Rs 19,831.48 per kl, or 48.7 per cent in 14 tranches since then. No comment could be immediately obtained from airline companies on the impact of the latest price hike on passenger fares. Fuel cost accounts for 40 per cent of the airlines' operating cost and rates vary from airport to airport depending upon the local sales tax. Indian Oil Corp and its sister public sector retailers Bharat Petroleum and Hindustan Petroleum revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.
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