Oil & Gas - GRMs pounded on lower spreads; ::Edelweiss

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Brent crude prices were flat in November averaging USD111.3/bbl. INR depreciated further by 1.5 over high trade deficit concerns. Indian complex GRMs and Singapore GRMs dipped significantly by USD3.1/bbl and USD4.8/bbl due to a reduction in gasoline spreads. Light product cracks eased while Heavy product cracks improved MoM. In marketing, diesel/kerosene under-recoveries spiked due to INR depreciation and continued high spreads. LPG under recoveries decreased by 2.3% MoM. Top Picks – ONGC, RIL and PLNG.

Some major company events during the month

ü  Petrol prices were reduced twice during the month, first after the de-regulation, on 16^th and 30^th November after having hiked once on 2^nd of November.

ü  RIL filed arbitration against the Govt for full cost recovery in the KG-D6 basin. It also denied any further investment in the block without resolving the legal issues.

ü  BPCL announced a major gas discovery in its Mozambique block with recoverable reserves of up to 15-30+ tcf from the same.

ü  RIL-BP announced formation of India Gas Solutions Pvt Ltd, a 50:50 JV, for sourcing, marketing, and transportation of natural gas in India