gggasoasoasolll ttttt - motilal · pdf filejanuary 2013 3 1. dgh - pace of e&p approvals...
TRANSCRIPT
January 2013
KEY TRENDS
IEA/EIA up 2013 oil demand forecasts
1-M Relative Stock Performance
the oil & gas monthly
Reuters Singapore GRM (USD/bbl)
GGGGGASOASOASOASOASOLLLLLINEINEINEINEINE TTTTTANKANKANKANKANKSpecial Report .................................... 2
Oil Market Trends ............................ 16
GRM and Product Spreads .............. 18
Petchem Margin Trend .................... 19
Key India Statistics .......................... 23
News Updates .................................. 25
Stock Price Performances ................ 29
Global Peer Valuations .................. 30
Data sources: Bloomberg, Reuters, Ministry of
Petroleum, PPAC, various companies
Investors are advised to refer through disclosures made at the end of the Research Report.
1
M Cap P/E (x) P/B (x) EV/EBITDA (x)
USD b FY12 FY13E FY14E FY12 FY13E FY14E FY12 FY13E FY14E
Integrated/UpstreamRel iance Inds* 50.4 12.7 12.4 12.2 1.5 1.4 1.3 8.3 9.9 9.2 ONGC 44.2 9.4 10.0 8.8 1.8 1.6 1.4 3.8 4.2 3.5 Ca irn Indi a 11.7 6.9 5.3 6.2 1.3 1.1 1.0 5.4 3.8 3.6 Oi l Indi a 5.3 8.6 8.4 8.0 1.6 1.5 1.3 3.8 4.5 3.5
OMCsIOC 12.4 5.7 12.1 10.2 1.1 1.1 1.0 8.5 10.9 8.1 BPCL 4.9 34.5 15.2 14.9 1.7 1.6 1.5 11.9 10.3 8.3 HPCL 1.9 11.7 13.4 12.4 0.8 0.8 0.7 10.2 11.5 8.1
Independent RefinersMRPL 2.1 12.7 22.9 7.7 1.6 1.5 1.3 6.9 8.7 4.8 CPCL 0.4 33.8 (8.2) 5.4 0.6 0.6 0.6 43.8 25.8 5.0
Gas CompaniesGAIL** 8.5 9.7 9.1 8.9 1.6 1.5 1.3 6.4 6.6 6.8 GSPL 0.8 8.7 9.2 9.0 1.8 1.6 1.4 5.3 5.2 4.8 Petronet LNG 2.2 11.6 11.6 11.2 3.5 2.8 2.3 8.3 8.1 6.9 IGL 0.6 11.5 9.5 8.3 2.9 2.4 2.0 6.2 5.0 4.2
*No. of shares adj. for treasury s hares ; **P/E adj. for investments
SUMMARY - December 2012
Special Report: (a) Key takeaways from our Delhi meetings; (b)
Update on GRM's; (c) Cairn India - receives exploration approvals
and (d) Rangarajan Committee - imply USD8/mmbtu gas price.
Weak global economics' lead to flat crude prices - marginal uptick in
2013 demand estimates: Brent prices continued to hover around USD
110/bbl during Dec-12 (averaged flat at USD 110/bbl in the last 3
quarters). IEA/EIA has marginally increased 2013 oil demand growth
estimates led by positive demand sentiments.
Reuters Singapore GRM up 4% MoM; but down 29% QoQ: MoM
increase is led by increase across product cracks except LPG. 3QFY13
GRM averaged USD6.5/bbl, -29% QoQ led by lower FO cracks. Outlook
remains subdued led by demand issues and addition in world refining
capacity, amidst delays in closures of uneconomical refiners.
Polymer/Polyester margins up MoM: Headline margin trend was
weak on QoQ basis in 3QFY13 led by weak demand. In chemicals,
Benzene prices increased to an all-time high led by tight supplies.
Valuation and view - 2013 - A Year of Reforms? As we entered 2013,
talks of strong reforms (diesel de-regulation/cutting LPG & Kero
subsidy) are gathering pace. If followed by action; oil PSU's will be
the key beneficiaries. We remain positive on ONGC (expect ~5%
production CAGR thr' FY15 incl. OVL acquisitions), Oil India in upstream
and while OMC's are trading at attractive valuations, BPCL is our top
pick for its E&P upside. RIL's new projects are likely to add to earnings
from FY15/FY16, however medium-term outlook on core business
remain weak with RoE reaching sub-15%, Neutral. Maintain Neutral
on GAIL and GSPL due to headwinds on incremental gas in medium
term. However, domestic gas scarcity augurs well for Petronet LNG.
Harshad Borawake ([email protected]); +91 22 3982 5432
Kunal Gupta ([email protected]); +91 22 3982 5445
Valuations: Coverage Universe
1
6
6
2
12
6
5
2
(4)
12
(10) (5) 0 5 10 15
RIL
ONGC
OIL
GAIL
HPCL
BPCL
IOC
Cairn
IGL
PLNG
GSPL
0
4
8
12
Dec-09 Dec-10 Dec-11 Dec-12
0.89
0.800.800.70 0.800.80
0.870.90 0.90 0.92
1.00
0.80
0.80
Jul-
12
Aug
-12
Sep
-12
Oct
-12
Nov
-12
Dec
-12
IEA EIA OPEC
2013E world oil demand estimate
January 2013 2
Increased positivity; 2013 to be a year of reforms?Key takeaways from our meetings in Delhi
SPECIAL REPORT
We met various companies, government officials and industry experts in New Delhi. Some of
the key issues discussed include subsidy sharing, E&P approvals, long-term company specific
strategies, M&A opportunities and gas prices, among others.
Increased positivity in the environment: Government officials sounded more
positive and indicated that the pace of decision making has improved (v/s few
quarters back). Sector regulators, DGH and PNGRB are working towards improving
the Indian E&P attractiveness and trying to bring in more transparency.
Upstream sharing unlikely to be >40% in FY13E: On the under recoveries front,
while we will have to wait till 4QFY13 for clarity on FY13 sharing, upstream
companies do not expect >40% sharing as their cash outlflow will be higher in
FY13 led by higher absolute under recoveries and higher cess rate.
Hopes from Rangarajan committee report and its implementation: Sector participants
are, in general, looking forward to likely recommendations/implementation of the
Rangarajan committee report on production sharing contracts and guidelines for
fixing domestic gas prices. Historically, though, government has never implemented
any expert committee recommendations in totality.
Company-specific takeaways:
1. Acquisition focus of ONGC and Oil India seems to be more on acquiring developed/
producing assets (v/s exploration) so as to add to the production growth.
2. IGL is awaiting SC decision on its case against PNGRB, while Petronet LNG is on
track to commission Kochi terminal in 4QFY13.
3. Gail India expects the near term transmission business utilization to be low and
expects earnings growth post commissioning of petchem expansion.
4. Cairn India management expects the exploration approval to come through soon.
5. Downstream oil marketing companies will not be surprised if the cap on cylinders
is increased for 6 to 9.
Oil & Gas Sector: Key pending issues for the upstream and gas companies
January 2013 3
1. DGH - Pace of E&P approvals to gather pace post Rangarajan committeereport
More positivity at DGH: As against the earlier (a year back) environment of
unavoidable delays in decision making due to enquiries by various government
agencies, the current working environment is much more positive.
Long-pending issues getting sorted out: DGH has recently been able to resolve
the long pending issues like defense clearances (Ministry of Defense) for NELP
blocks. It has secured conditional approval for exploration in the blocks falling
under defense area, with conditions like limited / nil surface facilities. This
permission, in our view, at least paves the way for seismic surveys. For all the
future bidding rounds, DGH has decided that it will not put blocks for bidding,
unless it gets all the clearances and further added that they will have a single-
window clearance cell for all the necessary approvals required by an E&P company.
Expect some positives in Rangarajan Committee report: DGH expects the pace of
E&P approvals and policy decisions to increase post the report by Rangarajan
Committee (expected in Dec-12). Post the criticism by CAG of the PSC's, government
had appointed Rangarajan committee to study the existing PSC's and suggest the
best possible alternatives. Further, the terms of reference also asked committee to
suggest "guidelines for determining the basis of price of domestic gas".
Various initiative undertaken by DGH: DGH is working on various policy as well as
procedural initiatives like:
a) Working to set-up National Data Repository (NDR): DGH is in process to award
the work of NDR, which will consolidate all the E&P data of the country under
single database and which can be accessed online globally. The online
availability of the quality data will help promote India's E&P sector and also
streamline the associated procedures.
b) Shale gas policy by end-2013: DGH is currently working the framework of shale gas
policy and expects to call for bidding by end-2013. Many of the identified shale gas
acreages are common to the currently allocated nomination/NELP acreage and
DGH is also working towards framing the exploration policy for the same.
c) Simultaneous exploration in CBM blocks: Along with coal ministry, DGH is
trying to facilitate the simultaneous exploration of coal and CBM and is
currently working towards the same.
DGH has awarded 0.8m exploration acreage in nine …however, Indian basins still continue to remain underNELP rounds.. explored (% of sedimentary basin)
Company-wise share ofallotted NELP acreage (%share)
Company-wise discoveries till-date in NELP acreage(number)
January 2013 4
2. GAIL India - Expect subdued operational performance in medium-term Expect gas volumes to remain flat in medium-term: GAIL India's current
transmission volumes of ~107mmscmd (transmission business contributes ~50%
to EBITDA) are unlikely to see any increase in the medium-term despite
contribution from Kochi and Dabhol terminal due to fall in the KG-D6 volumes.
KG-D6 currently contributes ~16mmscmd.
Likely tariff revision of KG-basin network to have one-time impact of INR1.5b:
PNGRB is likely to fix the transmission tariff for GAIL's KG-basin network in Andhra
Pradesh in the coming few weeks. Company expects a one-time impact of ~1.5b
due to the downward tariff revision, which is applicable for Dec-08.
Petchem expansion commercial production by 1QFY15: GAIL expects the
mechanical completion at its petchem expansion by Dec-13 and assuming 3 months
for stabilization in 4QFY14, company expects the commercial production to start
in 1QFY15. While, company maintained that the gas for the expansion would be
sourced from domestic sources, we believe, however it would also require some
RLNG to operate at full capacity.
E&P - Myanmar production to start in May 13: GAILexpects the commercial
production from its Myanmar gas block to start from May-13 and annual revenue
contribution would be INR3-5b.
Valuation and view: We expect GAIL's earnings to remain flat in the medium term
as headwinds on incremental gas availability continue. We model transmission
volumes of 107/116mmsmcd in FY13/14. Adjusted for investments, the stock trades
at 8.4x FY14E EPS of INR32. Our SOTP based fair value stands at INR385/sh. We have
a Neutral rating due to: (1) low near-term visibility of transmission volume growth,
(2) lower return ratios in near term due to under-utilization of new capitalized
pipelines, and (3) ad-hoc subsidy sharing risk.
Our FY14E volume assumptions clearly under risk due to lower likely KG-D6 supplies
Source: Company, MOSL
3. Indian Oil - Planned projects on track, Panipat cracker stabilized Expect Paradeep refinery to commission by 3QFY14: IOC expects its new 15mmtpa,
Paradeep refinery to be mechanically complete by April-13 and post the
stabilization period could start commercial production by Nov-13. Of the planed
INR300b capex, IOC has spent INR190b till date on this refinery.
Panipat Petchem plant now stabilized: After continual stabilization issues, IOC
has now stabilized its new Naphtha cracker at Panipat and does not expect to
report any operating loss due to stabilization issues in future.
January 2013 5
LPG cylinder cap could be increased: IOC indicated that it will not be surprised if
government increases the recently announced cap of 6 subsidized cylinders per
household to 9 cylinders.
Capex: Apart from its maintenance capex of INR40b, IOC plans to spend INR 100b
towards capital projects.
Valuation and view: We model Brent oil price of USD110/105/bbl in FY13/FY14. We
expect OMCs to be fully compensated by upstream (40% share) and government
(60% share) for under-recoveries. Key events to watch (apart from subsidy sharing)
are: (a) positive contribution from Panipat petchem division, and (b) GRM
performance. The stock trades at 10.9x FY13E EPS of INR23.8 and 1x FY13E BV.
Valuations are attractive in our view. Maintain Buy.
4. Petronet LNG - Kochi on track, domestic gas deficit augurs well Kochi terminal to commission by March-13: As against the media reports of likely
delay in the Kochi commissioning, management indicated that the BPCL will start
taking the gas from terminal in Feb/March-13, thus maintaining the commissioning
guidance of 'by March-13'. Company expects a minimum off-take of 0.8mmt in
FY14 and some of the key customers for Kochi LNG include BPCL refinery, FACT,
Mangalore Chemicals, BSES etc. The commissioning of Phase-2 of the Kochi-
Mangalore-Bangalore pipeline is critical for the volume ramp-up and PLNG expects
the pipeline to commission by Dec-13. (Separately, our interaction with Gail India
indicated that the scheduled completion is by Mar-13, however 1-2 month delay
is possible). Management maintained its re-gas charge guidance of ~USD1/mmbtu.
HPCL is likely to take minority stake in Gangavaram terminal: PLNG is likely to
reduce its stake to 74% in the new 5mmt terminal at Gangavaram in East Coast of
India. HPCL and Gangavaram port authority are likely to take 7-8% stake each, in
the terminal. In order to capture the market, PLNG is going to commission a floating
LNG terminal till the land-based terminal commissions by FY16/17. RoE/RoCE on
floating terminal is likely to be lower than the land based terminal. PLNG is
currently awaiting the environmental clearance for the project. Its gas evacuation
strategy also includes to lay a pipeline to connect with RGTIL's east-west pipeline,
which can be connected through a 130km pipeline.
Spot LNG prices up; long-term contract price softening: Spot-LNG prices have
strengthened in the recent weeks (could be due to winter demand) by USD2/
mmbtu and are hovering at ~USD14/mmbtu. However, interestingly, the long-
term contract prices have softened a bit, and sellers are now ready to link the gas
prices to a "blend of gas and oil benchmarks" as against earlier stand of linking to
price to "oil only".
Regulations unlikely to have an impact: MoPNG recently notified the regulations
on eligibility conditions for registration of new LNG terminals. PLNG indicated
that as their Dahej and Kochi terminals being already into existence will not be
impacted by these regulations, however any new terminal will have to register
with PNGRB. Further, the condition of providing third-party access for 20% of the
short-term or 0.5mmtpa (whichever is higher), will also not impact PLNG as at
Dahej it already provides such access for ~2mmtpa and also will be providing
more than 0.5mmtpa at Kochi. Further, PLNG continues to believe that the trading
gains (marketing margin) will not be controlled by the government
January 2013 6
Dahej expansion on track - throughput to rise by 60-80% by FY15/16: PLNG is on
track to setup new jetty (USD180m) at Dahej by 4QFY14 and expand capacity
(USD650m) to 15mmt by 4QFY15. However, new jetty would help PLNG to increase
throughput to 12-13mmt and post the capacity expansion, throughput would
increase to 16-18mmt.
Valuation and view: Strong visibi lity in earnings growth; Maintain Buy: PLNG's
next earnings growth cycle would come post FY13 led by (1) volume ramp-up at
Kochi and (2) second jetty commissioning at Dahej. At assumed full utilization of
Kochi terminal in FY17; we expect PLNG to report earnings CAGR of >15% over
FY13-FY17 period. The stock trades at 11.2x FY14E EPS of INR14.8. We value stock at
INR207 - the average of two valuation methodologies (1) P/E (13x FY14E EPS), and
(2) DCF (INR214). Maintain Buy.
PLNG capacity to expand to 28mmtpa by FY16/17
Source: Company, MOSL
5. Indraprastha Gas - Awaiting SC verdict; volume growth steady Expects steady volume growth: Over the next 2-3 years, IGL expects overall volume
growth of 12-13%, with 10-12% in CNG business and 15-20% in PNG business.
Commercial PNG volume growth volatile: Commercial PNG business is witnessing
meaningful volati lity in volumes due to alternative fuel prices. Recently, the fall
in Fuel Oil (FO) prices have resulted in commercial establishments shifting back
to FO, thus impacting IGL's volumes.
LNG prices have strengthened recently: Imported LNG contributes ~30% of IGL
gas purchase and recently the LNG prices have strengthened by ~USD2/mmbtu to
~USD14/mmbtu. IGL's 2QFY13 EBITDA at INR6.1/mscm (v/s average of INR5.3/mscm
in the last 5 quarters) was highest in recent quarters, however with increase LNG
prices and no price increase effected by the company in 3QFY13, we expect 3QFY13
profitability to be lower.
Capex plans: IGL will spend INR4-4.5b each in FY13 and FY14 and would be focusing
more on increasing its PNG network and would be adding ~20 new stations each
year.
Supreme Court Case decision awaited: Given that the case is sub-judice,
management did not offer any comments. The next hearing at Supreme Court is
scheduled on January 4, 2013.
Valuation and view: Our rating for IGL is under review due to lack of clarity in
predicting earnings for IGL and would await the Supreme Court decision. Our
January 2013 7
analysis indicates that the PNGRB order would impact the company's EBITDA by
20-60% and PAT by 30-90%. Our current estimates do not factor in any impact of
PNGRB order.
IGL has reported steady volume growth historically (mmscmd) …however recent quarter growth rate has been subdued
Source: Company, MOSL
6. Cairn India - Awaiting government approvals; next Rajasthan ramp-upin 1QFY14
Production ramp up likely only in 1QFY14: Rajasthan field production to remain at
~175kbpd till March-13. Post pipeline capacity de-bottlenecking, production to
reach 200kbpd by June-Sept 2013 helped by Bhagyam ramp-up and Aishwariya
production start.
Expects exploration approvals soon: Company is eagerly awaiting the exploration
approval at its Rajasthan block and mentioned that the pace of approvals seem to
have increased at MoPNG and expects to get the approvals soon. Cairn expects
exploration approval to be part of existing PSC and does not expect government
to impose new PSC for the new exploration.
Opened office in London: Cairn India has opened a office in London to tap the
M&A opportunities. Company mentioned that the M&A deals, particularly for the
African continent takes place in London.
Update on exploration blocks:
South Africa: The recent offshore block acquisition in South Africa is in the
final stages of regulatory approval. Once the approvals are in place, Cairn will
start with the seismic surveys in the block.
KG-Onland block: Company plans to drill the first of the two planned wells in
1QFY14. Reserve guidance remains at in-place resources of 550mmbbl.
However, given the tight reservoir, recovery rate would be lower at this block.
Sri Lanka: Will commence appraisal drilling in 2013.
Maintain Neutral: For FY13/FY14/FY15/long-term, we model in Brent oil price at
USD110/105/100/90 and INR/USD at 54/53/50. The stock trades at 5.9x FY14E EPS of
54.6. Our SOTP stands at INR350/sh. Neutral.
January 2013 8
Expect Rajasthan field production stable at 172kbpd
Source: Company, MOSL
7. Oil India - Steady production growth; focusing on acquiring producingassets
Does not expect higher upstream subsidy sharing in FY13E: While, the uncertainty
continues on the likely upstream subsidy sharing in FY13, company believes that
the sharing is unlikely to be higher than FY12 i.e. 40%. However, overall revenue
contribution from upstream (ONGC and Oil India) is still going to be higher due to
absolute higher subsidy and also higher cess rate in FY13.
Write-offs unlikely to be higher in 2HFY13: As against the unusually high well
write-off of INR9.3b in FY12, it expects FY13 write-off to be subdued with 2HFY13
write-off largely in-line with 1HFY13 write-off of INR1.9b.
Production growth on track: Oil India expects steady production growth and expects
oil production of 3.9mmt in FY14 and 5mmt by FY17. Gas production is expected to
jump post the commissioning of Assam gas cracker (Brahmaputra Cracker and
Polymer Ltd) in Dec-13.
Likely to acquire developed/producing asset: Oil India is currently focusing on
acquiring discovered/producing asset and has already submitted non-binding
offers. Company expects to announce an acquisition by end-FY13.
Update on key blocks:
Overseas: (a) Venezuela - Carabobo: Oil production is expected to commence
by 4QFY13 and would ramp-up from initial production rate of 4kbpd to planned
plateau of 400kbpd. Oil India has 3.5% stake in this block. (b) Gabon: Expects
to commence exploration drilling in Nov-12.
Domestic: (a) Mizoram block MZ-ONN-2004/1: To commence exploration
drilling by 4QFY13; (b) KG on-land block KG-onn-2004/1: To commence
exploration drilling by 4QFY13.
Valuation and view: We model Brent oil price of USD110/105/100/90/bbl for FY13/
FY14/FY15/long term. We remain positive on OIL due to its strong operational
foothold: (1) steady production growth, (2) high share of oil (55% in 1P and 62% in
2P) in its reserves, and (3) attractive valuations - trades at >50% discount to its
global peers on EV/BOE (1P basis). While subsidy rationalization is a long-term
trigger, gas price hike is a medium term trigger. The stock trades at 7.5x FY14E EPS
of INR63.2 and implied dividend yield is ~4%. Maintain Buy.
January 2013 9
Cairn India - Further exploration approved in RajasthanPaves way for 300kbpd production pleateau
SPECIAL REPORT
The Petroleum Minister indicated that the government has given further
exploration approval in the producing blocks of Cairn India (CAIR IN, Mkt Cap
USD11.7b, CMP INR337, Neutral) and Reliance Industries.
The approval has been attached with the ring-fencing provision, whereby cost
recovery will be allowed only from a commercial new discovery, thus protects
government's profit share from the current production.
Exploration approval would likely to result in higher reserves, as well as help to
increase plateau production (vision of 300kbpd v/s current guidance of 240kbpd)
in the medium-term. Of the in-place resources of 7.3bboe, Cairn has fully explored
2.2bboe, partly explored 2bboe and rest of 3.1bboe is yet to be explored. Cairn
India stock price of INR337/sh is currently factoring in long-term Brent price of
USD85/bbl (USD99 without factoring in any exploration upsides). Our SOTP stands
at INR350/share. We would be reviewing our recovery estimates post the clarity
from further exploration in the block. We have a Neutral rating, but believe that
the risk-reward is turning favorable.
Exploration approval to lead to increase in production, however, productionmight reach 300kbpd, but unlikely before FY16 In our interaction with the company management, it had indicated that they are
'drill ready' and will start the exploration in the block immediately.
However, considering the timelines for exploration, filing and approval of the
revised FDP (current approval only for 200 kbpd), de-bottlenecking the pipeline
capacity and dealing with other infrastructure requirements, we believe that the
production can reach 300kbpd not before FY16. We currently model in 250 kbpd of
production from the Rajasthan block in FY16.
If FY16E production average were to increase to 300kbpd (20% upside); then Its
EPS will increase by 18% (refer exhibit below for further sensitivity analysis)
Further exploration drilling will likely add reserves and increase fair value The approval is with the ring-fencing caveat, i.e. exploration cost recovery will be
permitted after commercial discovery. We believe that despite ring-fencing, this
is a significantly positive news for Cairn India as it allows the company to add
reserves from its high prospect Rajasthan block.
As per Cairn India, of the 7.3bboe of in-place resources, it has (a) developed
2.2bboe, (b) partly explored 2bboe (includes Barmer Hill), and (c) not yet explored
3.1bboe. This approval will help to (a) explore the 3.1bboe of unexplored
resources, and (b) further explore the partly explored 2bboe resources.
Currently we have modeled in recoverable reserves of 1.2 bboe from the Rajasthan
block.
If we assume higher recoverable reserves in the range of 1.3-1.7 bboe, the SOTP
of CAIR increases to INR 369-419/share at a long term crude average of USD 90/bbl
(refer the table below for sensitivity to crude prices).
January 2013 10
Earnings to increase by 18% in FY16,if production rises to 300 kbpd Every 100 mmbbl addition in reserves add INR10/share to SOTP
Source: MOSL
Cairn India: Rajasthan resource potential
Source: Company, MOSL
Cairn has historically increased Rajasthanin-place resources (mmbbl) Cairn India: Our base case assumptions
Our current SOTP is based on long-term Brent of USD90/bbl and Fx rate of INR51/USDUSDb INR/sh Remarks
Rajasthan 7.9 227 DCF based, net recovery of 720mmbbl, WACC: 11.5%
Ravva 0.2 6 DCF based
Cambay 0.1 2 DCF based
Less: Net Debt / (Cash) (2.5) (73)
Base Value 10.7 308
Potential Upsides
Rajasthan upside 0.7 20 DCF based, additional 180mmbbl from Barmer Hill
Rajasthan other 0.0 0 530mmbbl prospective resources
prospective resources
Other exploration assets 0.8 22 1bboe resources valued at USD5/boe; 15% of GCoS
Target Price 12.1 350
Source: Company, MOSL
Source: Company, MOSL
Y/E March FY11 FY12 FY13 FY14 FY15 FY16
Exchange Rate (USD/INR) 45.6 47.9 54.5 53.0 53.0 51.0
Brent Crude Price (USD/bbl) 86.7 114.5 110.0 105.0 100.0 90.0
Rajasthan gross production (kbpd) 99 128 170.8 195 221 250
Disc. % for Rajasthan Crude (USD/bbl) 12.0 9.4 10.8 12.0 12.0 12.0
Rajasthan net realization (USD/bbl) 76.3 103.7 98.2 92.4 88.0 79.2
January 2013 11
Energy: Singapore GRM up 4% MoM in Dec-12Improved L-H spreads give some respite to RIL; GRM outlook remain subdued
SPECIAL REPORT
3QFY13 Singapore GRM at USD6.5/bbl v/s USD9.1/bbl in 2QFY13: Regional
benchmark, Reuters Singapore GRM was up marginally MoM in Dec-12 to USD5.7/
bbl v/s USD5.4/bbl in Nov-12 led by improvement in all the product cracks (except
LPG). 3QFY13 average now stands at a 2 year low of USD6.5/bbl (v/s USD9.1/bbl in
2QFY13 and USD8/bbl in 3QYFY12) primarily driven by decline in FO cracks
(averaged USD-5.5/bbl in 3QFY13 v/s USD-0.6/bbl in 2QFY13 and USD4.0/bbl in
3QFY12). While, simple refiners (with higher share of FO in product slate) will be
impacted more, complex refiners will not be majorly impacted (lower/nil share
of FO in product slate).
Higher L-H spreads provides respite to RIL; expect 3Q GRM at USD8.5/bbl: The
extent for GRM decline would be lower for complex refiners like Reliance
Industries' (RIL IN, Mkt Cap USD50b, CMP INR848, Neutral) as the (a) Reuters
Singapore GRM fall is driven by Fuel oil (23% in Reuters v/s 4% in RIL slate) and (b)
Light-heavy crude differentials have improved. We peg RIL's 3QFY13 GRM's at
USD 8.5/bbl and given that the headline GRM fall is driven by FO, we believe our
2HFY13 GRM assumption for RIL of USD8.7/bbl might not see downward revision.
Refining segment contribute ~52% to RIL's EBIT and a USD1/bbl variation in GRM
changes RIL's EPS by ~12%.
GRM outlook subdued; global economic rebound key for growth: We expect GRM's
to remain subdued in medium-term due to (a) weak global oil demand (0.8mmbbl/
d in 2013) led by escalated crude prices (still at ~USD 110/bbl); and (b) additional
refining capacity coming up with almost nil refinery closures in last 8-9 months.
Resistance by European governments to shut down the uneconomical refineries
has contributed to the lower overall utilization impacting margins.
Valuation and View: OMC's are trading at attractive valuations and BPCL is our top
pick for its E&P upside potential. RIL's new projects (petcoke gasification and off-
gases cracker) are likely to add to earnings from FY15/FY16, however medium-
term outlook on core business remain weak with RoE reaching sub-15%, Neutral.
RIL GRM premium on Singapore show high correlation to Expect RIL premium on Singapore to increase in 3QFY13Arab L-H differentials (USD/bbl) (USD/bbl)
Source: Company, MOSL
January 2013 12
MoM GRM movement Analysis: up 4% MoM GRM's MoM were marginally higher at USD 5.7/bbl for Dec-12 against USD 5.4/bbl
in Nov-12. The increase was led improvement in product cracks (except LPG cracks
which declined MoM). LPG cracks declined during the month due to decrease in
prices internationally.
Arab L-H spread improved 16% MoM to USD 4.5/bbl due to increase in premium
charged by Gulf countries on light crude.
Brent oil and USD/INR averages were flat MoM at USD 110/bbl and 54.7 respectively.
QoQ GRM movement Analysis: down 29% QoQ 3QFY13 Singapore GRM stood at USD6.5/bbl v/s USD9.1/bbl in 2QFY13 primarily
due to fall in FO (fuel oil) cracks.
FO cracks averaged USD-5.5/bbl in 3QFY13 v/s USD-0.6/bbl in 2QFY13 led by
weak global demand, especially from Power and Industrial customers Share
of FO is high in simple refiners, while it is lower in the complex refiners
(positive for RIL).
Light-Heavy differentials up meaningfully: US's LLS-Maya Recent drop in Singapore was driven by lower FO cracksand Arab L-H trend (USD/bbl) (USD/bbl)
Source: Company, Reuters, Bloomberg, MOSL
Valero's analysis suggests net capacity additions> demand Our data suggests atleast 1mmbbl/d of capacity additionsin next 2 years
Source: Valero, Industry, MOSL
January 2013 13
Product cracks have also declined for gasoline (-17% QoQ), diesel (-8% QoQ),
jet/kero (-4%), however improved for naphtha (+29% QoQ) and LPG (+24%
QoQ). Gasoline cracks have corrected due to subdued demand (seasonally
weakest quarter of the year) from Europe and US, but cracks are expected to
improve due to planned maintenance shutdowns in 4QFY13.
Light-Heavy differentials up QoQ and YoY: Arab L-H differentials has averaged
USD4.0/bbl in 3QFY13 against USD 3.2/bbl in 3QFY12 and USD 2.5/bbl in 2QFY13.
Also, if we compare differentials as % of Brent prices, then 3QFY13 average is
130bps higher from 2QFY13 average.
Brent-WTI spread widens during 3QFY13: Brent-WTI spread has widened to
average USD22/bbl in 3QFY13 (v/s avg. USD18/bbl in 2QFY13) led by lower Brent
production in North Sea and continued off-take bottleneck at Cushing for WTI.
After reversal of Seaway pipeline, spread has come down from peak of USD29.7/
bbl in Sep-11. As the crude carrying capacity of Seaway increases (from 150 to
400kbpd), and post the likely approval for 700kbpd Keystone XL pipeline, the
differential is likely to come down.
Brent broadly remains flattish; INR remained weak: Brent prices very range bound
at USD ~110/bbl amidst mixed reactions on supply concerns and weakening demand
due to slowdown. INR continued to remain weak and is still hovering at 55 mark.
Historical product crack trend indicates weak FO (new complex refiners have nil FO output) and Naphtha cracks
Brent flat YoY (CY basis) in USD but up 13% YoY in INR terms GRM down YoY (CY basis) in USD but up in INR terms
Source: Company, Reuters, MOSL
* monthly average Source: Company, Reuters, MOSL
January 2013 14
Rangarajan Committee implies gas price at ~USD8/mmbtu
Also refer our detailed report
dated 3 January 2013
SPECIAL REPORTRecommends scrapping cost recovery in PSCs; implementation hinges ongovernment PSC related recommendations suggest moving to revenue sharing (prospectively) from
current cost recovery, thus reducing continuous cost monitoring by the government. Other
recommendations (applicable to current PSCs) suggest setting up of inter-ministerial
committee for fast decision making.
On gas pricing, the committee-suggested formula implies gas price at ~USD8/mmbtu. While
the government would take a final decision on gas pricing, if applicable to all gas producers,
will be most positive for ONGC followed by Oil India and RIL.
The key Rangarajan Committee recommendations are:
(1) To do away with the current cost recovery mechanism and government to share
overall revenues of the contractor without setting off costs, (2) extend income tax
holiday from 7 to 10 years, (3) extend exploration time period for frontier/deep-
water blocks from 8 to 10 years and (4) perform audit by CAG/CAG-empanelled auditors
on the basis of financial materiality of a block.
On domestic natural gas pricing, committee noted that though the PSC provides
for arms-length pricing, it is not possible in India to adopt this route for several
years and hence recommended an unbiased arm's length pricing based on
international prices. Committee suggests to take trailing 12-month average of (a)
volume-weighted net-back pricing at well head for gas producers and (b) volume-
weighted price of US's Henry Hub, UK's NBP and Japan's JCC linked price. The gas
pricing will be uniformly applicable to all sectors and domestic gas allocation will
be based on government's gas utilization policy.
Our view: It is to be noted that historically the government has never implemented
any expert committee's recommendations in totality.
Since the PSC-related key financial recommendations are on prospective basis,
they would not impact current PSCs and hence would not impact the profitability/
NAV of current producing blocks of RIL/Cairn India.
However, the proposed gas pricing formula will have a meaningful impact on
domestic gas producers (RIL, ONGC, Oil India) as RIL's KG-D6 gas price revision is
due in March 2014 and would also influence prices for other gas producers.
Committee's recommendation to determine gas price through arms-length is
positive. However, views/affordabi lity of the key consuming sectors like power
and fertilizer would also weigh heavily on the final gas price decision in March
2014. The higher input price for fertilizer will have implications for the government
through higher subsidy, unless commensurate end-product prices are increased.
Sensitivity of gas price change on domestic producers: While the government would
take a final decision on the recommendations, our sensitivity analysis indicates that
domestic producers shall meaningfully benefit from the proposed gas price formula.
If the gas pricing formula were to be uniformly applied to all domestic gas producers,
ONGC will be the largest beneficiary, and at USD8/mmbtu of gas price, its FY15E EPS
would increase by 30%. While EPS sensitivity for RIL is lower at 6%, it shall benefit
from increased commercial viability of other discoveries, thus increasing its reserves/
production in the future.
January 2013 15
Brent oil price trend (USD/BBL) Brent forward curve (USD/BBL)
n Dec-12 average at USD110/bbl (flat MoM and +2% YoY).
n 3QFY13 average at USD110/bbl (flat QoQ and +1% YoY).
n With continuing worries on the global economic conditions,
OPEC and IEA are reducing their near-term demand
projections, reflected in forward curve.
Crude price differentials (USD/BBL) Henry Hub gas price trend (USD/MMBTU)
YoY oi l production and demand change (%) OPEC crude supply (USD/BBL)
n Dec-12 average at USD3.3/mmbtu (-6% MoM and +6% YoY).
n 3QFY13 average at USD3.4/mmbtu (+18% QoQ and +2% YoY).
n Global product demand: Nov-12 average at 91.6mmbbl/d
was 2.1% higher than 3-yr average of 88.9mmbbl/d.
n Oil demand growth has increased in recent months,
probably due to the winter demand.
n OPEC spare capacity averaged at ~3.0mmbbl/d in the last
3 months (EIA estimate at 2.2 in 2012 and 2.4 in 2013).
n OPEC supply at 30.5mmbbl/d in Nov-12 was down 0.7%
MoM and 1.6% YoY.
Last 3 quarters Brent averaged at USD 110/bblArab Light-Heavy differentials up MoM
OIL MARKET TRENDS
n Arab L-H dif ferential averaged USD4.5/bbl (USD3.9/bbl
during November); while WTI-Maya is negative since Jun-
11 and averaged USD2.9/bbl in Dec-12.
n 3QFY13 Arab L-H at USD4.0/bbl (+61% QoQ and +26% YoY).
0.0
3.0
6.0
9.0
12.0
Dec-04 D ec-06 De c-08 Dec-10 Dec-12
-24
-12
0
12
24Ara b L-H WTI - Maya (RHS)
40
70
100
130
Dec-04 Dec-06 Dec-08 Dec-10 Dec-12
0
4
8
12
16
Dec-04 De c-06 Dec-08 Dec-10 Dec-12
79
84
89
94
Nov-04 No v-06 Nov-08 Nov-10 Nov-12
-4%
0%
4%
8%
Oi l Product Demand ( mmbbl /d) Y oY Change (%) - RHS
25
27
29
31
33
Nov-04 Nov-06 Nov-08 No v-10 Nov-12
2
4
5
7
8
Spare Capacit y (RHS) OPEC SUPPLY
0
40
80
120
160
Dec-01 Apr-05 Aug-08 D ec-11 Ap r-15 Aug- 18
Brent Spot Aug-04 Ma r-06Ma r-10 Ma r-11 Dec-12
January 2013 16
US weekly petroleum data
n US crude inventory declined 11.1mmbbl/d in last week
of December due to holiday season; however it is only
1.4% down as compared to last 1 year average.
n Distillate inventories are ~13% below the last 5-year
average.
n US refinery utilization continues to remain high
(partly assisted by WTI discount to Brent) at ~91%; 6%
above 5 year average.
n Total products supplied showed some recovery and is
now only 1.5% below the last 5-year average.
US distillate inventory (mmbbl) US gasoline inventory (mmbbl)
US total product supplied (mmbbl/d) US refinery utilization (%)
US crude oil inventory (mmbbl)
90
114
138
162
186
1 18 35 52Week
Range ( 2007-11) Average (2007-11) 2012
170
190
210
230
250
1 18 35 52Wee k
Range (2007-11) Average (2007-11) 2012
17
19
20
22
23
1 18 35 52W eek
Range (2007- 11) Aver age (2007- 11) 2012
64
74
84
94
1 18 35 52Week
Range (200 7-11) Average (2007-11) 2012
US Weekly Data Summary (mm bbl)
Week ended Variation (%) from
21-Dec-12 28-Dec-12 WoW WoW (%) 30-Dec-11 YoY (%) 1-Yr Avg 3-Yr Avg 5-Yr Avg
Inventory Data
Crude Oi l 371.1 359.9 -11.1 -3.0 329.7 9.2 -1.4 1.3 4.6
Ga sol ine 223.1 225.7 2.6 1.2 220.2 2.5 6.8 4.4 5.5
Dis ti l l ates 119.4 124.0 4.6 3.8 143.6 -13.7 -2.4 -14.9 -13.2
Products Supplied
Total Produ cts 18.9 18.9 0.0 0.2 18.0 4.8 1.1 -0.5 -1.5
Ga sol ine 8.6 8.5 -0.1 -1.0 8.6 -0.4 -1.4 -4.2 -5.1
Dis ti l l ates 3.7 3.3 -0.5 -12.3 3.5 -7.7 -10.9 -13.2 -14.4
R efinery
Uti l i zation (%) 90.3 90.4 0.1 0.1 85.0 6.4 3.1 5.0 5.9
Imports
Crude Impo rts 8.0 7.1 -0.9 -11.6 9.0 -21.4 -18.1 -20.0 -22.2
Ga sol ine 0.6 0.5 -0.1 -19.1 0.7 -33.7 -25.7 -37.6 -44.1
Yearly variationWeekly variation
250
285
320
355
390
425
1 18 35 52Week
Range (2007-11) A verage (2007-11) 2012
January 2013 17
n Reuters Singapore GRM increased 4% MoM to USD5.7/bbl in Dec-12 and has
averaged USD7.4/bbl in FY13 v/s USD8.3/bbl in FY12.
n We expect GRM's to remain subdued in medium-term due to (a) weak global oil
demand (0.8mmbbl/d in 2013) led by escalated crude prices (still at ~USD 110/
bbl); and (b) additional refining capacity coming up with almost nil refinery closures
in last 8-9 months. Resistance by European governments to shut down the
uneconomical refineries has contributed to the lower overall utilization impacting
margins.
Reuters Singapore GRM (USD/bbl)
0
3
6
9
12
Dec-04 Dec-05 Dec-06 De c-07 Dec-08 Dec-09 Dec-10 De c-11 Dec-12
GRM up 4% MoM led by improvement in cracks (except LPG)
Weak demand, new start-ups, resistance to shut old refineries to lead to lower
margins
GRMS & PRODUCT
SPREADS
Reuters Singapore GRM performance (USD/bbl)Dec-11 Nov-12 Dec-12 MoM YoY 3QFY12 2QFY13 3QFY13 QoQ YoY FY12 FY13 YoY
(USD/bbl) (%) (%) (%) (%) (%) 1 Yr Avg 3 Yr Avg 5 Yr Avg
Singap ore GRM 7.0 5.4 5.7 4.2 -19.4 8.0 9.1 6.5 -29.1 23.1 8.3 7.4 -10.3 7.4 6.8 6.0
Oil, Product Prices and Cracks (USD/bbl)
(USD/bbl) Dec-11 Nov-12 Dec-12 M-o-M
(%)
Y-o-Y
(%)
3QFY12 2QFY13 3QFY13 Q-o-Q
(%)
Y-o-Y
(%)
FY12 FY13 Y-o-Y
(%)
Oil Prices
W TI 98.6 86.7 88.2 1.7 -10.5 94.0 92.2 88.1 -4.4 -6.3 97.3 91.2 -6.2
B rent 107.9 109.7 109.6 -0.1 1.6 109.3 110.0 110.4 0.4 1.0 114.5 109.8 -4.1
Du bai 106.2 107.1 105.7 -1.3 -0.5 106.2 106.2 107.2 0.9 1.0 110.0 106.5 -3.1
In dian Bas ket 107.2 106.5 107.1 0.6 -0.1 107.6 107.6 107.8 0.2 0.3 111.8 107.6 -3.7
Product Prices
LPG 71.2 84.1 79.2 -5.9 11.2 67.6 74.3 83.2 12.0 23.0 75.3 74.1 -1.6
Ga sol in e 111.6 116.5 116.0 -0.4 4.0 114.3 118.8 117.7 -1.0 2.9 121.7 117.8 -3.1
Die sel 123.6 124.0 123.6 -0.3 0.0 124.4 125.7 125.1 -0.4 0.6 128.0 124.2 -3.0
Je t/Kero 122.8 125.4 124.6 -0.6 1.5 124.7 126.7 126.8 0.1 1.7 128.4 125.3 -2.4
Na phtha 98.3 101.7 102.4 0.7 4.2 96.8 99.8 102.7 2.9 6.1 105.3 100.0 -5.1
Fuel Oi l 108.5 100.3 99.5 -0.8 -8.3 110.2 105.6 101.6 -3.7 -7.7 111.2 104.7 -5.8
Product Cracks (v/s Dubai)
LPG -35.0 -23.0 -26.5 -15.3 24.3 -38.5 -31.9 -24.0 24.7 37.6 -34.7 -32.5 6.4
Ga sol in e 5.4 9.3 10.3 10.5 92.8 8.2 12.6 10.5 -17.2 27.9 11.7 11.3 -3.4
Die sel 17.4 16.9 17.9 6.1 3.0 18.2 19.5 17.9 -8.0 -1.6 18.0 17.7 -1.9
Je t/Kero 16.5 18.2 19.0 4.0 14.6 18.5 20.5 19.6 -4.3 5.7 18.4 18.7 1.7
Na phtha -7.9 -5.4 -3.3 40.1 58.8 -9.4 -6.4 -4.5 29.2 51.9 -4.7 -6.6 -40.8
Fuel Oi l 2.3 -6.8 -6.2 9.4 nm 4.0 -0.6 -5.5 -834.5 n m 1.3 -1.8 n m
January 2013 18
Petroleum product-wise spreads
Gasoline spreads (USD/bbl)
Jet/Kero spreads (USD/bbl)
Diesel spreads (USD/bbl)
Naphtha spreads (USD/bbl)
Fuel oil spreads (USD/bbl)
LPG spreads (USD/bbl)
-25
-15
-5
5
15
Dec-04 Dec-06 Dec-08 De c-10 Dec-12
-56
-40
-24
-8
8
De c-04 Dec-06 Dec-08 Dec-10 Dec-12
0
10
20
30
40
Dec-04 Dec-06 Dec-08 Dec-10 Dec-12
-25
-15
-5
5
15
Dec-04 Dec-06 De c-08 Dec-10 Dec-12
n Dec-12 average at USD10.3/bbl v/s USD9.3/bbl in Nov-12
and USD5.4/bbl in Dec-11;
n 3QFY13 at USD10.5/bbl v/s USD12.6/bbl in 2QFY13 and
USD8.2/bbl in 3QFY12.
n Dec-12 average at USD17.9/bbl v/s USD16.9/bbl in Nov-12
and USD17.4/bbl in Dec-11;
n 3QFY13 at USD17.9/bbl v/s USD19.5/bbl in 2QFY13 and
USD18.2/bbl in 3QFY12.
n Dec-12 average at USD-26.5/bbl v/s USD-23.0/bbl in Nov-
12 and USD-35.0/bbl in Dec-11;
n 3QFY13 at USD-24.0/bbl v/s USD-31.9/bbl in 2QFY13 and
USD-38.5/bbl in 3QFY12.
n Dec-12 average at USD-3.3/bbl v/s USD-5.4/bbl in Nov-12
and USD-7.9/bbl in Dec-11;
n 3QFY13 at USD-4.5/bbl v/s USD-6.4/bbl in 2QFY13 and USD-
9.4/bbl in 3QFY12.
n Dec-12 average at USD19.0/bbl v/s USD18.2/bbl in Nov-12
and USD16.5/bbl in Dec-11;
n 3QFY13 at USD19.6/bbl v/s USD20.5/bbl in 2QFY13 and
USD18.5/bbl in 3QFY12.
n Dec-12 average at USD-6.2/bbl v/s USD-6.8/bbl in Nov-12
and USD2.3/bbl in Dec-11;
n 3QFY13 at USD-5.5/bbl v/s USD-0.6/bbl in 2QFY13 and USD4/
bbl in 3QFY12.
-4
4
1 2
2 0
2 8
D e c -04 D e c -06 D e c -08 D e c -10 D e c -12
0
1 0
2 0
3 0
4 0
D e c - 04 D e c- 0 6 D e c - 0 8 D e c - 1 0 D e c - 12
January 2013 19
Key polymer price trends (INR/kg) Premium/discount to international prices (INR/kg)
Polymer Prices and Spreads
Dec-11 Nov-12 Dec-12 MoM
(%)
YoY
(%)
3QFY12 2QFY13 3QFY13 QoQ
(%)
YoY
(%)
FY12 FY13 YoY
(%)
Exch. Rate (INR/USD) 52.6 54.8 54.7 (0.2) 3.9 50.9 55.2 54.2 (1.8) 6.4 47.9 54.5 13.6
Naphtha (USD/MT) 865 895 901 0.7 4.2 852 878 903 2.9 6.1 927 877 (5.4)
Naphtha (INR/kg) 48 52 52 0.5 8.3 46 51 51 1.0 12.8 47 50 7.5
International Prices (US$/MT)
PE 1,267 1,342 1,381 2.9 9.0 1,308 1,308 1,357 3.7 3.7 1,382 1,332 (3.6)
PP 1,308 1,405 1,431 1.9 9.4 1,375 1,397 1,413 1.1 2.8 1,481 1,401 (5.4)
PVC 945 937 966 3.1 2.2 909 971 969 (0.2) 6.6 1,050 982 (6.5)
Simple Spreads over Naphtha (USD/mt)
PE 402 447 480 7.3 19.4 456 430 454 5.5 (0.6) 456 455 (0.1)
PP 443 510 530 3.9 19.7 523 519 509 (1.8) (2.6) 555 524 (5.5)
PVC 80 42 65 54.3 (18.7) 58 93 66 (29.4) 13.7 124 105 (14.9)
Domestic Prices (INR/kg)
PE 82.4 87.9 90.4 2.8 9.7 80.3 91.2 89.4 (2.0) 11.2 79.1 90.9 14.8
PP 86.9 90.4 94.2 4.2 8.4 84.0 91.9 92.2 0.3 9.7 84.5 91.8 8.6
PVC 55.5 59.0 61.0 3.4 9.9 53.5 63.5 62.0 (2.4) 15.9 56.9 62.6 10.0
Simple Spreads over Naphtha (INR/kg)
PE 34.5 36.3 38.6 6.2 11.7 34.7 40.3 37.9 (5.9) 9.2 32.5 40.8 25.4
PP 39.1 38.9 42.4 9.1 8.6 38.5 41.0 40.7 (0.6) 5.9 37.9 41.7 10.1
PVC 7.7 7.5 9.2 23.3 20.2 7.9 12.6 10.6 (16.1) 33.5 10.3 12.5 21.6
Prem/(Disc) to International Prices (%)
PE 17.5 13.7 13.9 1.3 (21.0) 14.9 20.3 15.7 (22.5) 5.8 14.0 19.3 38.6
PP 20.2 11.7 14.6 23.9 (27.9) 14.4 13.5 14.6 8.6 1.5 13.8 14.5 5.6
PVC 6.2 9.4 9.9 5.5 58.5 10.1 13.0 12.4 (4.3) 23.2 8.3 11.7 40.6
Petchem margin trendPolymer and Polyester prices improve MoM
Polymers
n International polymer prices recovered during Dec-12 and were up 3%. Naphtha
prices also improved marginally 1% MoM while it was up 4.2% YoY.
n Similarly, even the Domestic polymer prices were up by 3%; with demand showing
signs of improvment. PVC spread over Naphtha recovered strongly from their
bottom and was up 54% MoM.
Polyesters
n Integrated polyester margins were up 3-4% MoM, led by increase in polyester
prices (up ~2% on MoM basis).
-20
0
20
40
60
D ec-04 De c-06 De c-08 De c-10 Dec-12
PE PP PVC
20
40
60
80
100
Dec-04 Dec-06 De c-08 De c-10 De c-12
PE PP PVC
January 2013 20
PP spread over naphtha (INR/kg)
PVC spread over naphtha (INR/kg)
PE spread over naphtha (INR/kg)
Polymer product-wise margins
PE spread overn naphtha (USD/mt)
PP spread over naphtha (USD/mt)
PVC spread over naphtha (USD/mt)
January 2013 21
Polyester price and margin trends
Polyester Prices and Spreads (INR/kg)
Dec‐11 Nov‐12 Dec‐12 MoM
(%)
YoY
(%)
3QFY12 2QFY13 3QFY13 QoQ
(%)
YoY
(%)
FY12 FY13 YoY
(%)
Polyester Intermediates Prices
PTA 60.0 64.0 66.5 3.9 10.8 63.1 60.1 64.6 7.4 2.3 63.1 62.9 (0.4)MEG 60.4 64.0 64.3 0.5 6.5 63.3 57.7 64.3 11.4 1.7 60.2 59.2 (1.6)
Polyester PricesPOY 89.7 91.5 93.5 2.2 4.2 91.2 93.8 94.0 0.2 3.1 91.8 93.4 1.7
PSF 93.8 96.3 98.3 2.1 4.8 97.1 96.2 98.3 2.2 1.2 97.8 96.5 (1.3)
Integrated Polyester SpreadsPOY 51.7 50.6 52.4 3.7 1.3 55.2 53.3 53.2 (0.3) (3.6) 55.0 53.6 (2.4)
PSF 55.8 55.4 57.2 3.3 2.5 61.1 55.7 57.5 3.2 (5.9) 61.0 56.8 (6.8)
POY spread over naphtha (INR/kg) PSF spread over naphtha (INR/kg)
POY and PSF price trend (INR/kg)PTA and MEG price trend (INR/kg)
MEG spread over naphtha (INR/kg)PTA spread over naphtha (INR/kg)
20
35
50
65
80
Dec‐04 Dec‐06 Dec‐08 De c‐10 De c‐12
PTA MEG
50
70
90
110
130
Dec‐04 Dec‐06 Dec‐08 De c‐10 Dec‐12
POY PSF
6
16
26
36
46
Apr
Ma
y
Jun
July
Aug
Sep
t
Oct
No
v
Dec Jan
Feb
Mar
Min 2008‐12 5 yr range Last 5 yr avg. FY13
0
15
30
45
60
Ap
r
Ma
y
Jun
July
Aug
Sep
t
Oct
No
v
Dec Jan
Fe
b
Ma
r
Min 2008‐12 5 yr range La st 5 yr avg. FY13
28
38
48
58
68
Apr
Ma
y
Jun
July
Aug
Sep
t
Oct
No
v
Dec Jan
Feb
Mar
Min 2008‐12 5 yr range Last 5 yr avg. FY13
22
38
54
70
86
Ap
r
Ma
y
Jun
July
Au
g
Sep
t
Oct
No
v
De
c
Jan
Fe
b
Ma
r
Min 2008‐12 5 yr range La st 5 yr avg. FY13
January 2013 22
Refinery throughput trend
Monthly Comparison
KBPDNov-11 Oct-12 Nov-12
MoM
(%)YoY (%) 3QFY12 2QFY13 3QFY13 QoQ (%) YoY (%) FY12 FY13 YoY (%)
Total 3,462 3,578 3,572 (0.2) 3.2 3,330 3,381 3,575 5.7 7.4 3,354 3,446 2.8
PSUs
HPCL 332 339 311 (8.3) (6.4) 326 292 325 11.1 (0.3) 326 302 (7.4)
BPCL 480 480 431 (10.2) (10.2) 476 469 456 (2.9) (4.3) 452 466 3.0
IOC 1,150 1,107 1,170 5.7 1.7 1,135 1,050 1,138 8.4 0.3 1,120 1,096 (2.1)
MRPL 260 309 321 3.8 23.5 245 288 315 9.5 28.4 258 279 8.4
CPCL 213 193 196 1.1 (8.1) 213 151 194 28.6 (8.5) 213 183 (13.8)
Private
RIL 658 678 673 (0.6) 2.4 651 662 676 2.0 3.8 654 665 1.6
ESSAR 311 411 412 0.2 32.2 226 406 411 1.3 81.9 272 394 44.7
Annual ComparisonQuarterly Comparison
Domestic refining processing trend (kbpd)
1,30
4
1,3
71
1,48
1
1,5
48
1,5
52
1,6
41
1,7
83
1,8
56
1,93
0
2,1
61
2,2
50
2,2
43
2,2
43
2,30
2
2,4
52
2,6
02233 5
14 579
571 591 630 60
9 669 76
6
898 1
,489
1,6
28
1,62
4
1,69
7
- -
1,304 1,3711,714
2,062 2,131 2,2122,374 2,486 2,540
2,8293,016 3,141
3,7313,930 4,075 4,299
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13E
Public Total
High Crude oi l price and exchange rate keep under
recoveries high
KEY INDIA
STATISTICS
*RIL SEZ refinery volumes not included Source: MoPNG, MOSL
*RIL SEZ refinery volumes included from FY10
We model upstream sharing at 40% in FY13 and FY14
FY08 FY09 FY10 FY11 FY12 FY13E FY14E FY15E
Fx Rate (INR/USD) 40.3 46.0 47.5 45.6 47.9 54.5 53.0 53.0
Brent (USD/bbl) 82.3 84.8 69.6 86.3 114.5 110.0 105.0 100.0
Gross Under recoveries (INR b)
Auto Fuels 426 575 144 375 812 949 728 679
Domestic Fuels 347 458 316 405 573 712 518 532
Total 773 1,033 461 780 1,385 1,660 1,246 1,211
Under recoveries Sharing (INR b)
Government 353 713 260 410 835 996 648 642
Upstream 257 329 145 303 550 664 499 448
OMC's 163 (9) 56 67 0 0 100 121
Total 773 1,033 461 780 1,385 1,660 1,246 1,211
Under recoveries Sharing (%)
Government 46 69 56 53 60 60 52 53
Upstream 33 32 31 39 40 40 40 37
OMC's 21 (1) 12 9 0 0 8 10
Total 100 100 100 100 100 100 100 100
January 2013 23
Petrol consumption (KBPD) Diesel consumption (KBPD)
Total consumption (KBPD)
Domestic fuel consumption statistics
Overall petroleum consumption growth (in kbpd
terms) was flat YoY led by major fall in demand for
fuel oil. The growth is expected to be better in
2HFY13, due to seasonal factors like festivals and
weather conditions.
Diesel growth, as expected, was lower at 1.7% YoY
- lowest YoY growth since Apr-11. Growth seems to
be impacted by INR5/ltr in Sept-13; higher monsoon
and lower industrial use.
Petrol sales for Nov-12 grew by 13.9% YoY.
Cap on subsidized cylinders impacted LPG sales and
resulted in a negative 4.4% YoY growth.
ATF decline was driven by lower passenger and
cargo traffic.
kbpd
Nov‐11 Oct‐12 Nov‐12 MoM
(%)
YoY
(%)
3QFY12 2QFY13 3QFY13 QoQ
(%)
YoY (%) FY12 FY13 YoY
(%)
Total 3,173 3,040 3,177 4.5 0.1 3,033 2,915 3,109 6.7 2.5 2,965 3,070 3.6
Key Products
Pe trol 330 363 375 3.5 13.9 347 356 369 3.7 6.4 348 362 4.1
Na phtha 298 287 320 11.3 7.2 275 309 304 (1.9) 10.5 267 297 11.2
LPG 518 488 495 1.4 (4.4) 498 497 491 (1.2) (1.3) 487 493 1.2
Die sel 1,426 1,380 1,450 5.1 1.7 1,379 1,282 1,415 10.4 2.6 1,327 1,403 5.7
Ke rose ne 177 156 163 4.0 (8.0) 172 161 159 (1.1) (7.5) 175 160 (8.8)
ATF 124 109 118 8.3 (4.9) 122 106 114 7.4 (6.4) 118 111 (6.2)
Fuel Oi l 186 149 138 (7.6) (25.9) 172 156 143 (8.1) (16.6) 169 149 (12.1)
Annual ComparisonQuarterly ComparisonMonthly Comparison
*YoY growth is 3 month average *YoY growth is 3 month average
*YoY growth is 3 month average
2,250
2,500
2,750
3,000
3,250
Nov
-08
May
-09
Nov
-09
May
-10
Nov
-10
May
-11
Nov
-11
May
-12
Nov
-12
-10%
0%
10%
20%
30%
To tal YoY (%)
700
900
1,100
1,300
1,500
1,700
No
v-08
Ma
y-09
No
v-09
Ma
y-10
No
v-10
Ma
y-11
No
v-11
Ma
y-12
No
v-12
-10%
0%
10%
20%
30%
Diesel YoY (%)
200
250
300
350
400
Nov
-08
May
-09
Nov
-09
May
-10
Nov
-10
May
-11
Nov
-11
May
-12
Nov
-12
-10%
0%
10%
20%
30%P etro l Yo Y (%)
January 2013 24
GAIL blocks LNG stake sale deal to Qatar Petroleum
GAIL has blocked the Asian Development Bank's (ADB) bid to sell its stake in Petronet LNG
Ltd to Qatar Petroleum Corporation, provoking Qatari energy minister Mohammed bin
Saleh Al-Sada to seek petroleum minister M Veerappa Moily's intervention.
"QPI (Qatar Petroleum) and ADB, with PLL support, have engaged in preliminary evaluator
discussions. I have personally endorsed QPI to move forward as it will be a milestone for
strengthening mutual cooperation between our countries. In light of GAIL's stance, there
could be a possibility that ADB will not be able to proceed further in selling its shares to
QPI," Al-Sada wrote to Moily.
The bone of contention is ADB's 5.2% stake in India's biggest importer of liquid gas in
ships. Petronet is registered as a private firm but is half owned by four state-run oil firms
of IOC, ONGC, BPCL and GAIL. If any of these promoters raise their holding, Petronet
would turn into a state firm in contravention of the basis for going public in May, 2004, and
would require approval for majority shareholders to change the status
ONGC gets project operator's nod for Kashagan stake buy
ONGC, which trumped a strong bid by arch-rival China National Petroleum Corp to bag
ConocoPhillips' stake in Kazakhstan's giant Kashagan oilfield, has won project operator
Eni's approval for its $5 billion acquisition.
In its biggest acquisition till date, ONGC Videsh Ltd, the overseas arm of Oil & Natural Gas
Corp last month agreed to pay US energy giant ConocoPhillips about $5 billion for the 8.4
percent stake in Kashagan, the biggest oilfield discovery in over four decades. The deal is
subject to the approval of governments of Kazakhstan and India and also to other partners
in the Caspian Sea field waiving their right of first refusal. Industry sources said Italy's Eni,
the operator of the first phase of the Kashagan oilfield that is due to start production in
second quarter of 2013, has publicly stated that it will not pre-empt or block the sale.
Eni, ExxonMobil of US, Royal Dutch Shell, France's Total and Kazakhstan's Kazmunaigas
(KMG) hold 16.81 percent stake each in the field, while Japan's Inpex the remaining 7.56
percent. Sources said the partners have 60 days to decide on exercising their right of first
refusal on ConocoPhillips' stake.
NEWS UPDATESIndustry newsDecember 2012
Oil Demand growth estimates from IEA, OPEC, EIA
Oil demand growth (mmbbl/d) 2012 2013 Remarks
IEA (Oil Market Report) 0.67 0.87 Revised 2013 oil demand upwards. Believes that the Chinese
growth sentiment has turned mildly positive.
OPEC (Monthly Oil Market Report) 0.80 0.80 Maintained oil demand forecasts; US oil demand moved from
deep contraction to minor growth.
EIA (Short-Term Energy Outlook) 0.80 1.00 EIA expects global inventories to build during the first half of 2013,
mostly due to continued growth in U.S. and other non-OPEC supply.
Source: IEA/EIA/OPEC/MOSL
January 2013 25
Once all the other five companies in the project waive their pre-emption rights, the deal
will go before Kazakhstan government, which contractually has 180 days to clear it. Sources
said on the previous two occasions when companies sold out of Kashagan, the other
partners pre-empted.
Kashagan holds 33 billion barrels of inplace oil reserves, of which about 10 billion are
potentially recoverable. Of this, OVL's share will be 842 million barrels. The Kazakhstan
government has approved first of the three phases and production is likely to start in
second quarter of 2013. At approved peak from phase-1, OVL's share will be close to 1.6
million tonnes, sources said adding over 25-year period the company's share comes to an
average of 1 million tonnes per annum. Kashagan, the biggest world oilfield discovery
since 1968, may produce 370,000 barrels of oil per day at peak and in subsequent phases,
the output may rise up to 450,000 bpd (22.5 million tonnes per annum). When Phase 2 and
3 are implemented, the OVL's share will be significantly higher, they added.
China finds 5 billion tonnes of oil in 2008-2011
China has made progress in finding natural resources between 2008 and 2011, including
discovery of 5.01 billion tonnes of oil reserves, according to a latest report. Besides, 2.6
trillion cubic meters of natural gas and 279.8 billion tonnes of coal have been discovered,
said the report on land administration and mining resources. China has formed a geological
exploration system that values both public and commercial interests and encourages
investment from multiple social sources, said Xu Shaoshi, the Chinese Minister of Land
and Resources.
During the four years, some 370.8 billion yuan (USD 60 billion) has been spent on mining
resource exploration, up 110 per cent year-on-year. Among the total, central and local
government funds took up only 15.3 per cent, while the rest came from social investment,
Xu said. Meanwhile, a security deposit system to protect the environment in mining areas
has been implemented in 30 provinces so far, Xu was quoted by official Xinhua news
agency as saying.
According to the system, mine owners have to pay a security fee to land administration
organs before they can begin mining. The fee will be returned to the owners if they
successfully repair environmental damage resulting from the mining. If they fail to do so,
the fee will be seized and used by the government to clean up the area.
Rosneft offers India's ONGC role in two Magadan blocks: Minister
Russia's Rosneft has invited the overseas investment arm of India's state-run Oil and
Natural Gas Corp to jointly explore two blocks in the Sea of Okhotsk, Indian Oil Minister
Veerappa Moily has said.
The firm, ONGC Videsh Ltd, is evaluating data relating to the Magadan-2 and Magadan-3
blocks, Moily told lawmakers in a written reply. India imports about 80 percent of its oil
needs and is on the hunt for supplies to power its nearly $2 trillion economy while Russia
is keen to tap its vast offshore reserves. Reuters in October reported that Russia had
offered a stake to ONGC in Magadan-2.
January 2013 26
GAIL completes first phase of Kochi LNG terminal pipeline
State-owned GAIL India Ltd has completed the first phase of pipeline that will connect the
upcoming LNG import facility at Kochi to consumers in Kerala. "Mechanical completion (of
40-km Phase-1) done and ready for gas intake subject to availability of gas from Petronet
LNG Ltd," Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi said in
written reply to a question in the Rajya Sabha.
Petronet is building 5 million tonne per annum liquefied natural gas (LNG) import terminal
at Kochi in Kerala. The facility is likely to be completed in first quarter of 2013 after dredging
of the navigational port is done. The Phase-I of the piepline will connect the Kochi terminal
to Fertilizer and Chemicals Travancore's (FACT) plant, Lakshmi said. The 879-km Phase-II
pipeline to Mangalore and Bengaluru in Karnataka is under implementation and "the
actual physical progress of the project is 64.1 per cent", she added.
"Phase-II of pipeline is passing through the states of Kerala (501 km), Tamil Nadu (312 km)
and Karnataka (66 km)," she said. "As per (GAIL's) Board approval, schedule date of
completion of the project is December 2012 but the project has got delayed." GAIL, Lakshmi
said, acquired Right of Use (ROU) in land from land owners/farmers to lay the pipeline and
compensation was paid as per Petroleum & Mineral Pipelines (Acquisition of Right of
User in Land) Act, 1962. "GAIL has completed the process of acquiring ROU but is unable to
handover RoU to the contractors due to severe resistance from land owners/farmers,"
she added.
Oil marketing companies to float Rs 3,500 crore global tender for ethanol
Public sector oil marketing firms are readying to jointly float a Rs 3,500-crore global tender
to source ethanol, which will have to be mandatorily blended with petrol sold across the
country following the government's directive.
Officials of Indian Oil, BPCL and HPCL, the three state-run oil marketing firms, and the oil
ministry will be meeting over the next few days to finalise the details of the tender, a
person familiar with the matter told ET, adding that the industry will need about 1,000-
1,100 million litres of ethanol a year. The success of the tender is expected to determine
the feasibility of the pan-India roll-out of the 5% ethanol-blended petrol programme,
which is already functional in 13 states. The government had postponed the deadline for
the nationwide roll-out of the programme to June 1, 2013 from December 1, 2012.
Since the oil marketing companies are not in a position to take care of the infrastructure
needed to import, store and transport the material, the tender will involve delivery at
their depots numbering more than 350 across the country. Hindustan Petroleum had,
through its wholly-owned subsidiary HPCL Biofuels, acquired two sugar mills in Bihar that
it revived in the previous fiscal. These units can supply nearly 32.5 million litres, about 10-
12% of the company's annual ethanol requirement.
The three firms had attempted to source ethanol directly from the world's biggest
producer, Brazil, in 2006, when the blending programme was introduced subject to
commercial viability. Between 2006 and 2009, these companies floated tenders to procure
the necessary quantities of ethanol. "Our experience during those three years was that
January 2013 27
the contracted volumes were always significantly lower than the requirement and the
actual supplies would fall short of the contracted volumes," said an official, who did not
wish to be named. In 2009, the process changed with the government fixing the price at Rs
27 per litre. These companies had to float the EoI for the quantities needed, which led to
an improvement in the contracted volumes and supplies.
Though sourcing process is back to the pre-2009 period in some respects, the government
has now allowed import of the commodity. However, blending will prove costly unless
the price of ethanol is lower than the petrol price paid by the oil marketing companies to
the refineries - also known as the refinery transfer price (RTP). According to Indian Oil's
website, the RTP for BS IV petrol was Rs 42.11 per litre in Delhi on December 1, 2012 based
on the global gasoline prices and the exchange rate. "However, this can't be taken as the
maximum acceptable ethanol price straight away, since the ethanol price will have to be
committed for the whole year whereas the petrol price can fall depending on international
prices and rupee movement," said a senior official with an oil marketing company on the
condition of anonymity.
DOE macroeconomic study on LNG exports: key findings
LNG an economic winner for the entire U.S. Economy
"[F]or every one of the market scenarios examined, net economic benefits increased
as the level of LNG exports increased. In particular, scenarios with unlimited exports
always had higher net economic benefits than corresponding cases with limited
exports."
"In all of these cases, benefits that come from export expansion more than outweigh
the losses…"
"In all of the scenarios analyzed in this study, NERA found that the U.S. would
experience net economic benefits from increased LNG exports." "Even with the
highest prices estimated by EIA for these hypothetical cases, NERA found that there
would be net economic benefits to the U.S., and the benefits became larger, the
higher the level of exports."
"In conclusion, the range of aggregate macroeconomic results from this study suggests
that LNG export has net benefits to the U.S. economy."
Exports benefit consumers
"The net result is an increase in U.S. households' real income and welfare."
"All export scenarios are welfare-improving for U.S. consumers…"
"[The] additional sources of income for U.S. consumers outweigh the loss associated
with higher energy prices. Consequently, consumers, in aggregate, are better off as a
result of opening up LNG exports."
Minimal price impacts, no linkage to oil prices
"Natural gas price changes attributable to LNG exports remain in a relatively narrow
range across the entire range of scenarios."
"In particular, the U.S. natural gas price does not become linked to oi l prices in any of
the cases examined."
"However, the effects of higher price do not offset the positive impacts from wealth
transfers and result in higher GDP over the model horizon in all scenarios."
Source: http://lnginitiative.org
January 2013 28
Absolute stock performance (%)
Relative stock performance (%)
STOCK PRICE
PERFORMANCE
Broader markets outperforms O&G index in Dec-12
Value in E&P shoots up BPCL's 1 year absolute returns (our top pick)
6 MONTH ABSOLU TE
17
3
(1)
3
( 4)
1
4
9
5
14
9
(10) 0 10 20
RIL
ONGC
OIL
G AIL
HPCL
BPCL
IOC
Cai rn
IGL
PLNG
GSPL
1 YEAR ABSOLUTE
20
12
8
( 4)
36
62
10
1
(33)
4
7
(50) 0 50 100
R IL
ONGC
OIL
GAIL
H PCL
B PCL
IOC
Cai rn
IGL
PLN G
G SPL
6 MONTH RELATIVE
4
(13)
(8)
(4)
(7)
1
(3)
(9)
(10)
(17)
(11)
(20) (10) 0 10
RIL
ONGC
OIL
GAIL
HPCL
BPCL
IOC
Cairn
IGL
PLNG
GSPL
1 MONTH ABSOLUTE
3
8
8
4
13
8
3
(3)
2
3
6
(20) 0 20
RIL
ONGC
OIL
GAIL
HPCL
BPCL
IOC
Ca irn
IGL
PLNG
GSPL
1 MONTH R ELATIVE
1
6
6
2
12
6
5
2
(4)
1
2
(10) (5) 0 5 10 15
RIL
ONGC
OIL
GAIL
HPCL
BPCL
IOC
Cairn
IGL
PLNG
GSPL
1 YEAR RELATIVE
(16)
(23)
(58)
(21)
(17)
(4)
(12)
(29)
12
38
(14)
(100) (50) 0 50
RIL
ONGC
OIL
GAIL
HPCL
BPCL
IOC
Cairn
IGL
PLNG
GSPL
80
90
100
110
120
Jan
-12
Fe
b-1
2
Ma
r-1
2
Ap
r-1
2
Ma
y-1
2
Jun
-12
Jul-
12
Au
g-1
2
Se
p-1
2
Oc
t-1
2
No
v-1
2
De
c-1
2
O&G In dex Sen sex
January 2013 29
GLOBAL PEER
VALUATIONS
RIL at premium and ONGC at discount compared to global
peers
*All averages are weighted averages
MoPNG: Ministry of Petroleum and Natural Gas; OMC: Oil Marketing Company; GRM: Gross Refining Margin; GoI: Government of India;
IOC: Indian Oil Corporation; HPCL: Hindustan Petroleum Corporation; BPCL: Bharat Petroleum Corporation; ONGC: Oil and Natural Gas
Corporation; GAIL: GAIL (India); EGoM: Empowered Group of Ministers; PSU: Public Sector Unit; PDS: Public Distribution System
M. Cap PE (x ) P/B V (x ) EV/EBIDTA (x )
(USDb)
CY11/F
Y12
CY12/F
Y13
CY13/F
Y14
CY11/F
Y12
CY12/F
Y13
CY13/F
Y14
CY11/F
Y12
CY12/F
Y13
CY13/F
Y14
Integrated Oil Companies
R el i ance Indus tri es 49.1 12.2 12.0 11.8 8.0 9.5 8.8 1.5 1.3 1.2
B i g 5 avera ge 8.6 9.1 9.1 1.9 1.7 1.5 4.0 4.1 4.3
No rth Am eri ca a vera ge 8.6 10.6 10.2 1.3 1.3 1.2 4.0 4.3 4.2
Europ e avera ge 9.3 15.3 9.2 1.0 0.9 0.9 3.7 4.1 3.8
Asi a & Others average 9.3 10.8 9.4 1.5 1.4 1.3 5.6 5.7 5.1
Global Average 9.1 11.4 9.6 1.4 1.3 1.2 4.9 5.1 4.7
Upstream Companies
ONGC 41.8 8.8 8.9 8.0 1.8 1.6 1.4 3.7 3.7 3.1
Oi l Indi a 5.0 8.0 7.8 7.1 3.4 3.6 2.9 4.1 3.9 3.7
Cai rn Indi a 11.4 6.7 5.3 6.0 5.2 3.7 3.4 1.3 1.1 1.0
No rth Am eri ca a vera ge 16.7 16.7 14.3 1.7 1.6 1.5 5.2 5.6 4.6
Europ e avera ge 11.0 10.0 9.9 1.8 1.5 1.4 4.0 3.7 3.6
Asi a & Others average 11.2 11.4 11.4 1.9 1.6 1.5 6.1 5.8 5.5
Global Average 13.6 13.4 12.4 1.8 1.6 1.5 5.3 5.3 4.7
No rth Am eri ca a vera ge 7.9 6.1 7.0 1.4 1.2 1.1 4.0 3.3 3.7
Europ e avera ge 8.8 18.8 9.8 1.3 1.2 1.1 5.6 5.4 5.2
Ja pan average 4.1 4.4 16.9 0.9 1.0 1.0 5.4 12.7 10.3
Asi a & Others average 21.3 47.4 19.3 2.7 2.7 2.5 12.5 17.3 12.3
Global Average 14.4 28.9 14.3 2.0 1.9 1.8 8.6 11.2 8.7
Gas Utili ties
GAIL 8.2 9.7 9.1 8.9 1.6 1.5 1.3 6.4 6.6 6.8
GSPL 0.8 8.1 9.7 9.8 1.7 1.5 1.3 5.1 5.6 5.4
IGL 0.7 11.9 10.3 9.3 3.0 2.5 2.1 6.3 5.4 4.7
Petron et LNG 2.2 12.1 12.5 11.5 3.6 3.0 2.4 8.6 8.5 7.0
No rth Am eri ca a vera ge 22.2 21.3 19.6 2.6 2.7 2.6 11.0 10.7 9.5
Asi a & Others average 22.2 21.3 19.3 4.6 4.2 3.7 12.6 11.9 10.8
Global Average 22.2 21.3 19.6 3.0 3.0 2.8 11.3 10.9 9.7
Petrochemical Companies
No rth Am eri ca a vera ge 12.6 14.8 12.1 2.2 2.0 1.8 7.8 7.7 6.9
Europ e avera ge 13.0 14.1 12.7 2.5 2.3 2.1 7.8 7.3 6.7
Ja pan average 15.9 61.6 24.1 1.2 1.2 1.1 6.8 7.3 7.6
Asi a & Others average 11.2 26.3 20.0 1.6 1.2 1.2 16.7 24.3 18.4
Timely analysis and insights on
all economic data releases and
developments
Our findings and conclusions
based on primary research, so as
to uncover perception and
discover reality
Highlights of interactions with
corporate CEOs. The focus here is
not so much numbers, but what's
behind them
Takeaways and insights from
visits to plant sites, construction
sites, new retail outlets, etc,
with the relevant pictures
What various subject matter
experts have to say on wide-
ranging topics e.g. telecom
policy to terrorism, rural
economy to black economy
Highlights of interactions with
politicians and bureaucrats for
insights into policy matters for
the economy and various sectors
This will highlight the bright
spots in an otherwise bleak
scenario in the economy or any
sector or company Our whistleblower series to
highlight concerns which are
likely to have significant
implications for growth Notes from analysts' diary during
their extended travels, meeting
managements, visiting sites,
conducting channel checks
Sector Periodicals
Product Gallery
January 2013 31
N O T E S
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Nihar Oza Kadambari Balachandran
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