Oil and Gas - Crude spikes on Iran concerns; ::Edelweiss, PDF link

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Brent crude prices surged in February averaging USD121.1/bbl (up 8.6% MoM) due to Iran concerns. INR appreciated 4.0% over buoyant FII inflows. Indian complex GRMs and Singapore GRMs dipped USD0.4/bbl and USD1.9/bbl, respectively, due to fall in diesel spreads. Light product cracks improved while heavy product cracks declined MoM. In marketing, LPG under-recoveries spiked ~20% MoM to INR381/cyl due to increase in prices of propane and butane. Petrol, diesel and kerosene under-recoveries averaged INR3.0/ltr, INR10.3/ltr and INR29.3/ltr respectively. Top Picks: ONGC, BPCL and PLNG.

Some major company events during the month

·       On March 1, 2012, GoI conducted an auction to sell 428 mn shares with a floor price of INR 290/share. News sources indicate that the auction got total bids of only 292.2 mn shares.

·       ONGC’s OVL and GAIL plan to outbid Royal Dutch Shell and Thailand's PTTEP with a USD2bn offer for UK's Cove Energy.

·       EGoM meeting on gas allocation made no changes to the current structure (no additional domestic supply for power and fertilizer sectors).

·       RIL-BP got the DOC for D-34, while the same has been denied for D-29, D-30 and D-31. Capex for developing D-34 was estimated at USD2.34bn.

Oil and Gas - Crude spikes on Iran concerns; sector update