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RBS hosted an oil & gas conference on 18-19 August 2011 where senior management from
seven Delhi-based companies made presentations. The meetings were structured as
interactive sessions, with the bulk of the time devoted to Q&A. We present extracts of these
Q&A sessions.
Key takeaways from the Q&A sessions
Cairn India: Its vision is to produce 240kbpd from the Rajasthan block and the company
expects production approvals to come through, though no specific timelines were provided.
The production sharing contract (PSC) contains provisions allowing further exploration in
Rajasthan, plus it is in line with international best practices in the industry.
GAIL: Gas transmission volume guidance for FY12/FY13 is 120/125mmscmd excluding its
LNG spot volumes. This is sharply lower than the earlier guidance (in June 2011) of
transmission volumes rising to 135mmscmd by end-FY12. The company expects new
pipeline capitalisation in FY12 at Rs66bn. Commissioning of the Dabhol LNG terminal is now
delayed to August 2012 and it would operate at a capacity of 2mt, reaching full capacity of
5mt only in August 2014, once the breakwater facility is operational.
Indian Oil: The naphtha cracker has faced some teething troubles with heat exchangers and
heaters. With their replacement, cracker utilisation would increase from the current 65-70%
to 80-85% in November and 100% in March 2012. The Paradip refinery is due to be
commissioned by July 2012.
ONGC: The dry well costs have gone up due to an accounting policy anomaly, whereby
wells drilled in offshore blocks that cannot be reused have to be written off, even if they are
successful. The company says that the gas price for KG-DWN-98/2 has not been decided
yet, but it could be higher than US$5.5/mmbtu. Production from the block could start in FY16.
Oil India: The company is guiding for 12th Five-Year Plan capex of Rs230bn-300bn, which is
substantially higher than the Rs110bn during the 11th Plan. There is potential to raise domestic
oil production above 4mmt.
Petronet LNG: Outlook for LNG imports remains strong. The equity contribution for the Dahej
brownfield expansion of 5tmpa would be financed by LNG offtakers through upfront deposits. The
company expects re-gas charges for this capacity to be in line with the current tariffs.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RBS hosted an oil & gas conference on 18-19 August 2011 where senior management from
seven Delhi-based companies made presentations. The meetings were structured as
interactive sessions, with the bulk of the time devoted to Q&A. We present extracts of these
Q&A sessions.
Key takeaways from the Q&A sessions
Cairn India: Its vision is to produce 240kbpd from the Rajasthan block and the company
expects production approvals to come through, though no specific timelines were provided.
The production sharing contract (PSC) contains provisions allowing further exploration in
Rajasthan, plus it is in line with international best practices in the industry.
GAIL: Gas transmission volume guidance for FY12/FY13 is 120/125mmscmd excluding its
LNG spot volumes. This is sharply lower than the earlier guidance (in June 2011) of
transmission volumes rising to 135mmscmd by end-FY12. The company expects new
pipeline capitalisation in FY12 at Rs66bn. Commissioning of the Dabhol LNG terminal is now
delayed to August 2012 and it would operate at a capacity of 2mt, reaching full capacity of
5mt only in August 2014, once the breakwater facility is operational.
Indian Oil: The naphtha cracker has faced some teething troubles with heat exchangers and
heaters. With their replacement, cracker utilisation would increase from the current 65-70%
to 80-85% in November and 100% in March 2012. The Paradip refinery is due to be
commissioned by July 2012.
ONGC: The dry well costs have gone up due to an accounting policy anomaly, whereby
wells drilled in offshore blocks that cannot be reused have to be written off, even if they are
successful. The company says that the gas price for KG-DWN-98/2 has not been decided
yet, but it could be higher than US$5.5/mmbtu. Production from the block could start in FY16.
Oil India: The company is guiding for 12th Five-Year Plan capex of Rs230bn-300bn, which is
substantially higher than the Rs110bn during the 11th Plan. There is potential to raise domestic
oil production above 4mmt.
Petronet LNG: Outlook for LNG imports remains strong. The equity contribution for the Dahej
brownfield expansion of 5tmpa would be financed by LNG offtakers through upfront deposits. The
company expects re-gas charges for this capacity to be in line with the current tariffs.
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