Saudi ready to pump 12.5 mn bpd oil if needed: source
11 April 2011;business-standard.com:Dubai: Top oil exporter Saudi Arabia would have "no problems" producing at its claimed 12.5 million barrels per day (bpd) capacity if the market needed the oil, a senior Gulf source told Reuters on Sunday. The official dismissed doubts raised by some analysts over the kingdom's stated spare capacity as the work of speculators trying to manipulate oil prices as fighting in Libya has disrupted production in the North African OPEC nation. "First traders used the peak oil theory to drive the market up and since that didn't work now they are saying that Saudi can't use its full capacity, which is completely not true," the senior Gulf source said. OPEC's spare capacity, which is mainly held by Saudi Arabia, has returned to the forefront of oil traders' minds with the unrest in Libya. Although the consensus is that the remaining idle OPEC oil fields can pump more than 3 million bpd, another significant output disruption would leave a razor-thin margin between world oil demand and production capacity. Oil posted its biggest rise in three weeks on Friday, gaining $3.98 to settle on Friday at $126.88 a barrel, its highest since July 2008. Oil consumers warned last week that their economies were being harmed by soaring energy costs. "The market is reacting to misinformation, there is no reason for the price to be at this level," said the source. "We have no problems in reaching our full capacity, we are completely capable of it if its required," said the source. OPEC ministers have blamed speculators for the price rise and said there is little the producers' group can do to rein in prices as the market is currently well supplied. State oil monopoly Saudi Aramco's reported plans to boost the number of rigs drilling wells in the kingdom to 118 from around 92 at present has further stoked speculation about Saudi Arabia's oil output capacity. Aramco discussed increasing the number rigs during meetings with leading oil services companies including Halliburton Co, Simmons & Co analyst Bill Herbert said in a research note released last month last month. "The rigs are for maintaining capacity and other activities like gas exploration, but its not at all a sign that we can't produce 12.5 million barrels a day," the Gulf source said. Saudi Arabia has claimed a sustainable production capacity of 12.5 million bpd since Aramco completed several expansion projects in 2009. Riyadh has traditionally maintained the bulk of OPEC's spare capacity as part of its oil policy.
RIL may stop supply to non-priority sect to meet govt order
10 April 2011;deccanherald.com:New Delhi: Reliance Industries may have to stop natural gas supplies to steel plants, petrochemical units and refineries if it is to implement a government order asking it to first supply fuel from its eastern offshore KG-D6 fields to priority sectors like fertiliser and power. With output from KG-D6 fields dropping by over 20 per cent, a worried government has asked Reliance to first meet all the contracted demand of fertiliser units, plants extracting LPG from natural gas, power firms and city gas distributing companies selling CNG to automobiles, official sources said. Reliance produced 47.5 million standard cubic meters of gas per day from KG-D6 fields in the week ended March 26, down from 61.5 mmscmd output achieved a year ago. Sources said the company has since July last year imposed a pro-rata cut in supplies on all its customers, including fertiliser and power firms. A petroleum ministry order has now instructed Reliance to supply gas to priority sectors in full and if there is any gas left over it should be given to other sectors on pro-rata basis. Reliance has so far signed up customers for 60.76 mmscmd of gas while production is less than 48 mmscmd. The government had accorded highest priority to fertiliser plants followed by LPG extraction units, power plants and city gas distribution projects in allocating KG-D6 gas. Sixteen fertiliser plants have been allocated 15.35 mmscmd of KG-D6 gas on firm or permanent basis while 27 power plants in public and private sector have been allocated 29 mmscmd. A sizeable 7.79 mmscmd of gas has been signed up with steel producers while LPG plants have got 2.59 mmscmd. Refineries including that of Reliance have been allocated 3.46 mmscmd, city gas projects 0.65 mmscmd and petrochemical plants the balance 1.92 mmscmd. With fall in production, supplies to all these customers have been cut on a pro-rata basis. But the new directive would mean that the gas first goes to priority sector. The priority sector allocation totals 47.59 mmscmd, leaving almost nothing for steel plants, refineries and petrochemical units, sources said adding Reliance may have to stop supplies to these if the government order is implemented. Reliance has been asked not to cut any of the committed quantities to the priority sector but in case the production falls further, the company may impose pro-rata cuts in the following order for priority: CGD (domestic and transport), power, LPG and fertiliser sector. Sources said the fall in production of gas from KG-D6 fields has meant rise in government subsidy outgo as the shortfall in cheaper feedstock in fertiliser plants is now being replaced by costlier liquid fuels. Also, less gas to power plants has resulted in lower electricity generation. Reliance is currently producing about 39 mmscmd of gas from Dhirubhai-1 and 3 (D1 and D3) fields in the KG-DWN-98/3 or KG-D6 block off the east coast. Besides, another 8 mmscmd is produced from the MA field in the same block. Gas sales as on March 26 were about 47.5 mmscmd, out of which about 12 mmscmd was sold to fertiliser plants and 24 mmscmd to power plants. The remaining 11.5 mmscmd gas is being consumed by other sectors such as sponge iron plants, LPG, city gas distribution and petrochemical/refinery. Reliance has projected that gas output from D1 and D3 gas fields will fall further to 38 mmscmd in 2012-13.
10 April 2011;business-standard.com:Sharmistha Mukherjee:New Delhi: Ratan Tata’s dream of making affordable personal transportation available to millions seems to be finally taking off, with the company reporting increased sales for small car Nano in rural markets, primarily owing to an expansive distribution and financing network for customers. The company expects first-time buyers to account for over 80 per cent of the sales of the small car in the coming months. “During the first round, over 80 per cent of the bookings were registered from buyers who already owned a vehicle, while the remaining 20 per cent were from first-time buyers. The proportion is now shifting. Last month, over 50 per cent of our sales were reported from first-time buyers. We are expecting the numbers to increase by another 30 per cent over the next few months. Sales are also on a rise in rural markets”, said R Ramakrishnan, vice-president, (commercial, passenger car business unit), Tata Motors. Tata Motors sold 8,707 Nano units in March — an increase of 85 per cent, compared to March, 2010. Sales of the small car had hit an all-time low at 509 units in November 2010 following instances of the car catching fire. To boost consumer confidence, Tata Motors had announced various schemes, including offering a free four-year/60,000-km extended warranty and a comprehensive maintenance contract for new buyers at Rs 99 a month. Tata Motors Finance also promised up to 90 per cent finance for the Nano at low rates. Volumes for the compact car have picked up since then. In December 5,784 units were sold, in January 6,703, and February recorded sales of 8,262 units. “We are moving in the direction we had initially targeted. Over one million two-wheelers are sold in the country every month. We expect bike buyers to account for a rise in Nano sales,” Ramakrishnan said. The company, on an average, received over 100,000 enquiries for the car every month across the country. Currently, Tata Motors produces 10,000-12,000 units of the Nano in two shifts at the company’s plant in Sanand, Gujarat. “Nano sales have been very good. Within a few months, we would be running at the full capacity of 20,000 units at Sanand. Beyond that, we would add fresh capacity at Sanand or at Pantnagar”, Ramakrishnan said. The Sanand facility has a capacity to manufacture 25 million units annually, which can subsequently be increased to 50 million units per year.
To look for fresh capacity for Nano, says Tata Motors
09 April 2011;hindustantimes.com:New Delhi: Auto major Tata Motors today said it will look for fresh capacity for its small car Nano as it expects the Sanand plant in Gujarat to run at full capacity "within a few months". "The Nano sales have been very good. Last month, we sold over 8,700 units and within a few months time we will be running the full capacity of 20,000 units per month at the Sanand plant," Tata Motors Vice-President (Commercial), Passenger Car Business Unit, R Ramakrishnan told reporters here. Currently the company is producing about 12,000 units a month in a double shift at the plant. The Sanand facility has a capacity to manufacture 2.5 lakh units annually, which can subsequently be increased to 5 lakh units per annum. Once it hits peak capacity, the company would have to consider adding fresh capacity for the Nano to meet demand, he said. Asked if the fresh capacity could be added at the Sanand plant itself, or whether the company would consider producing at its Pantnagar plant, where it used to produce the Nano in limited quantities, he said options are open for the company. "Where we would add the fresh capacity will be decided in due course of time, but the advantage that we have is the flexible production capability for Nano that we have," Ramakrishnan said. In March, Tata Motors sold 8,707 units of the Nano, 85 per cent more than in the same month last year. He said the company is receiving over 1,10,000 enquiries about the Nano a month from across India and the company expects an increase in the number of first-time car buyers actually purchasing the Nano. "When we started, around 80 per cent of Nano customers were buying it as a second car and 20 per cent were first-time buyers. Now the ratio is about 50:50," he said. "Ultimately, we are looking at 80 per cent first time buyers purchasing the car, which is what we had aimed when we started off," Ramakrishnan added. Asked if the company planned to hike the price of Nano considering rising input costs, he replied in the negative, but said margins were under pressure. Except for the Nano, Tata Motors had hiked prices of its passenger vehicles by up to Rs 36,000 from April 1. Ramakrishnan also said the company expects the sales of its Indica hatchback to pick up after suffering a slump last year due to the non-availability of Bharat Stage-IV compliant version. "Now that we have the Indica eV2, which is BS-IV compliant, we expect to make up for the loss we had last year, as most of the sales are in the cities where the BS-IV norm is followed," he said.
Global oil market oversupplied: Iran OPEC governor
09 April 2011;timesofindia.indiatimes.com:TEHRAN: Iran sees the global oil market as oversupplied, despite prices that have been pushed up by upheaval in the Middle East, its OPEC governor was quoted as saying in a newspaper published on Saturday. "Not only is there not a shortage of supply in the oil market but there is 1 million barrels (per day) of excess supply," Mohammad Ali Khatibi told Sharq daily in an interview. He also warned that prices would continue to increase if the Libyan crisis persists and would "explode" if there were any security problems in Saudi Arabia. "By the beginning of the high travel season gasoline consumption will increase, and considering the shortage of Libyan crude it is natural to expect an oil price hike," Khatibi told the daily. "In the event of any security problems occurring in OPEC's biggest oil producer (Saudi Arabia), there would be no price hike, but rather a price explosion," he added. Khatibi reiterated Iran's stance that there is no need for any emergency OPEC meeting or output increase. Price hawk Iran, holds the rotating OPEC presidency and has responsibility for coordinating any emergency meeting with OPEC's Vienna-based secretariat. The next scheduled meeting is not until June 2.
07 April 2011;deccanherald.com:Toyota has announced that it has sold the one millionth Prius hybrid in the US, as rising fuel prices further stimulated demand for the car. "Since the Prius went on sale 11 years ago, not a year has gone by when it hasn't been the No.1 selling hybrid vehicle in the US," Bob Carter, Toyota vice president and general manager, was quoted as saying by Xinhua. Toyota sold nearly 43,000 units in the first quarter this year, up 52 percent than a year ago. Last year, the company sold over 140,000 units in the US. However, supply shortage has been reported by some Toyota dealers, as last month's earthquake and tsunami in Japan caused problems in production, supply and transportation. According to the Environmental Protection Agency, the Toyota Prius powered by a gasoline engine and an electric motor is ranked as the most fuel-efficient car in the US.
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