Essar Oil completes refinery expansion project

The Vadinar Refinery is now India’s second largest single-location refinery, with an annual capacity of 18 million tonnes (375,000 barrels per day) and a complexity of 11.8, which also makes it among the world’s most complex refineries.

Essar Oil Ltd (EOL) has announced the completion of the Rs. 8,300-crore expansion of its Vadinar Refinery with the successful commissioning of the final Delayed Coker Unit (DCU), which is amongst the world’s largest. The Vadinar Refinery is now India’s second largest single-location refinery, with an annual capacity of 18 million tonnes (375,000 barrels per day) and a complexity of 11.8, which also makes it among the world’s most complex refineries. The capacity expansion and complexity enhancement gives the Vadinar Refinery the capability to process much heavier crude diet. The share of ultra heavy crude, which currently constitute 20% of crude basket, will go up to 60%; and as a result the overall share of heavy and ultra heavy crude will go up to 80% of the refinery’s total crude basket. The company has already entered into long-term crude sourcing contract with global suppliers, including several national oil companies from Latin America. In terms of product yield, the Vadinar Refinery now has the flexibility to produce higher value, high-quality products, including Gasoline (petrol) and Gasoil (diesel) conforming to Euro IV and V norms, that have growing acceptance in both domestic and international markets. Close to 80% of its production will now be of valuable light and middle distillates; and 50% of the production of Gasoil (diesel) and Gasoline (petrol) will meet Euro IV and Euro V specifications.  EOL is targeting newer markets like Australia, New Zealand and north-west Europe, in addition to countries in the Indian subcontinent for exporting high quality fuels. However Essar Oil will continue to market a majority of its products in the domestic market. The Vadinar refinery benefits from a fully integrated infrastructure including India’s only captive coal fired power plant (nearing completion) to provide power and process steam, a port, pipelines and tankage with multi modal product despatch facilities through rail, road, and sea, giving it a unique cost advantage. Prashant Ruia said: “We are delighted to announce the completion of the refinery expansion programme. This expansion will greatly improve our product offering, margins and competiveness. Our capital expenditure programme is now nearing an end. We have invested close to $5 billion until date in the refinery complex and our cost per complexity barrel is one of the lowest in the industry.” Naresh Nayyar, CEO of Essar Energy, said: “After starting commercial production just four years ago, we are proud of achieving a size and scale that can match the best in the world. It underlines our commitment to building a world-class, integrated, low-cost energy company that is focused on India’s energy growth story.” LK Gupta, MD & CEO, Essar Oil, said, “The timely completion of our expansion project is a testimony to the untiring commitment of the Essar Oil team as well as teams from other Essar Group companies who worked seamlessly under highly demanding conditions to bring this dream project to life.” The Rs. 8,300-crore refinery expansion project was implemented using the Group’s in-house capabilities—construction and overall project management, for instance, was managed by Essar Projects. The DCU is a key addition to any modern refinery because of its ability to convert bottom-of-the-barrel vacuum residue into valuable products like Gasoline (Petrol), Gasoil (Diesel) and VGO (Vacuum Gasoil). It has capacity of 7.5 MMTPA, and is licensed by CB&I LUMMUS. The DCU at the Vadinar Refinery is not only amongst the world’s largest unit of its kind but also one of the most advanced to be used in any refinery worldwide, giving the company a higher flexibility to process heavy and ultra heavy crude and produce high value products. Alongside the expansion, an optmisation project is also underway at the Vadinar Refinery that will further increase the capacity to 20 MMTPA (405,000 bpd) by September 2012. By RAZI ANWAR (PGDM 2nd sem)

India's infrastructure growth rebounds in February

India's infrastructure sector growth jumped to 6.8% in February 2012 versus 6.4% in the same month a year earlier, the Government said on Thursday.

Growth in India's eight core sector industries rebounded in February 2012, with all the constituents of the widely tracked gauge showing material improvement over the previous month.  India's infrastructure sector growth jumped to 6.8% in February 2012 versus 6.4% in the same month a year earlier, the Government said on Thursday. Core sector growth stood at a measly 0.7% in January of this year. The Index of Eight core industries has a combined weight of 37.90% in the Index of Industrial Production (IIP) with base 2004-05. India's infrastructure sector output expanded by a healthy 6.7% in November after touching a six-year low in October. Core sector growth turned back up in December (4.6%) before sliding again in January. The Index of Eight core industries stood at 145.6 in February as against 136.4 in February 2011. It was at 149.30 in January and 149.4 in December. Core sector growth during April-February 2011-12 stood at 4.4% versus 5.8% in the corresponding period last year. Coal production registered a growth of 17.8% in February compared to 7.5% in January. Petroleum Refinery production surged by 6.2% in February as against a drop of 4.6% in January. Electricity Generation expanded by 8% in February versus 3.2% in January. Steel production rose by 4.3% in February as against a contraction of 2.9% in January. Cement production registered a growth of 10.8% in February compared to 10.6% in January. Crude Oil production inched higher by 0.4% in February versus a fall of 2% in January. Fertilizer production rose by 4.1% in February as against 4% in January. Natural Gas production dropped by 7.6% in February compared to a decline of 10.4% in January. By RAZI ANWAR( PGDM 2nd sem)

RBI asks banks to improve NPA management

The Reserve Bank today asked banks to improve their ability to manage stressed assets, but said there was nothing alarming about an unexpected rise in the NPA levels this fiscal.

"Concerns (on NPA) are there. Banks have to improve their ability to manage NPAs. We have told banks what is their lacuna. They have to improve their information system. But we see that the situation is not alarming. Though this is our concern. Hope banks will be able to manage them," deputy governor K C Chakrawarthi  told reporters on the sidelines of a function organised by YES bank here.

It can be noted that following the continued slowdown in economic activities on the back of rising interest rate regime, banks, especially the state-run ones, have been reporting higher NPAs in their books since the second quarter.

The country's largest lender SBI had reported record gross NPAs in Q3 at Rs 40,080 crore and saw an 87.5 per cent spike in its provisioning. But private lenders are better off.

The total NPAs in the system are set to top 3 per cent of the total assets this fiscal, against a 2.3 per cent last fiscal at Rs 98,000 crore. 

Posted By- Nitesh Kumar Singh
PGDM 2nd sem

Gold-FOREX Correlations Shift Back to Anti-Dollar as Traders Await FOMC, Data and Treasury budget leads light calendar

Today's economic calendar is very light, with the Treasury's February budget set to be released at 2 p.m. ET. The consensus forecast is $-229 billion compared with the previous $-27.4 billion. Estimates range from $-229.4 billion to -$25 billion.Tomorrow the calendar includes retail sales figures and the Fed's rate decision for March. Economists expect rates to remain unchanged at 0.25 percent when the decision is released at 2:15 p.m.

LONDON (AP) -- Markets were steady Monday ahead of a meeting of European finance ministers that is expected to pave the way for a second massive bailout for Greece that will prevent the debt-ridden country's imminent bankruptcy. Ministers from the 17 countries that use the euro are meeting later and Greece will again be at the top of the agenda. 

The greenback continue to gain ground on Monday, with the Dow Jones-FXCM U.S. Dollar index climbing to a fresh monthly high of 10,018, and the rally may gather pace over the next 24-hours of trading should the Federal Reserve continue to soften its dovish tone for monetary policy. DJ FXCM Dollar IndexThe Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.17 percent higher on the day as market participants scaled back their appetite for risk, and the bullish sentiment underlining the greenback may gather pace over the near-term as the fundamental outlook for the world(TM)s largest economy improves. Indeed, the more robust recovery limits the Fed(TM)s scope to push through another large-scale asset purchase program, and we may see the central bank talk down speculation for additional monetary support as growth and inflation picks up.

DEEPAK SETH

PGDM 2^ND

^PG/11/12

  

SEBI lifts ban on Tayal entities in Bank of Rajasthan case

According to SEBI, when promoters, the Tayals, had indicated that they were reducing their stake in Bank of Rajasthan from 44.71% to 28.61% to comply with an RBI directive, they had actually increased their stake to 55%.

Market regulator, Securities and Exchange Board of India, has lifted the ban on 100 entities associated with the promoters of Bank of Rajasthan, reports said. In March 2010, SEBI had banned these entities from dealing in the securities market for allegedly violating several rules, which included takeover norms, and indulging in fraudulent trade practices. According to SEBI, when promoters, the Tayals, had indicated that they were reducing their stake in Bank of Rajasthan from 44.71% to 28.61% to comply with an RBI directive, they had actually increased their stake to 55%. Prashant Saran, Whole-time Member, SEBI, in his order said, “I am of the opinion that such an offence would have been considered as very serious or fatal if the wrongful disclosures would have led genuine investors into trades that would eventually expose them to much greater risk.” “I have noted that there is no allegation as to any price or volume manipulation by the promoters. Therefore, I am of the opinion that purely from a securities market point of view, the severity of the offence could be considered not very grave,” he added. Further he said in his order: “There is no allegation that the entities indulged in any other kind of manipulation in the securities market. Therefore, it would be reasonable to assume that on the basis of the material available on record, there is no indication of a likelihood that the entities shall indulge again in wrongful disclosures of their holdings of which they have been charged with in the first place.”  By  ANAND PRAKASH (PGDM 2nd SEM)

UK's economy shrinks more than expected in Q4

The UK's GDP in the October-December period rose by 0.5% over the year-ago period compared to an earlier estimate of 0.7%.

The UK economy contracted at a faster-than-expected pace in the fourth quarter of 2011 as output of the dominant service sector declined.  The British economy shrank by 0.3% in the final three months of 2011 compared to the previous quarter, the UK Office for National Statistics (ONS) reported on Wednesday. The ONS had previously estimated a 0.2% quarterly contraction.  The UK's GDP in the October-December period rose by 0.5% over the year-ago period compared to an earlier estimate of 0.7%.  Chancellor of the Exchequer George Osborne yesterday said that Britain was now in the recovery phase.  The UK economy received a boost from net trade in the fourth quarter. Business investment fell 3.3%, less than the 5.6% fall previously estimated. Consumer spending rose 0.4% in the fourth quarter, though this was less than the 0.5% previously forecast.  Real household disposable income fell 0.2% in the fourth quarter, the second successive quarterly decline. The savings ratio - the share of post tax income put aside - fell to 7.7% from 7.9%. The UK economy grew by 0.7% in 2011, with output in the fourth quarter 0.5% higher than the same period a year earlier, revised down from a previous estimate of 0.7%. A separate report showed today that the UK's current-account deficit narrowed to 8.5 billion pounds in the period from a downwardly revised 10.5 billion pounds, as the trade gap fell. By RAZI ANWAR(PGDM 2nd sem)

GAAR proposal disappointing, says Jim Rogers

NEW DELHI: Stating that bureacracy in India is the worst in the world, Jim Rogers, Chairman, Rogers Holdings told ET Now that he was disappointed with the General Anti-Avoidance Rules (GAAR) proposal announced by Finance Minister Pranab Mukherjee in the Union Budget 2012-13.

Rogers is of the opinion that these regulations will discourage global investors. "I would prefer other markets than India if GAAR is implemented," he told ET Now. Rogers believes that India would develop faster if the markets are less regulated. 

Rogers maintains his view on commodities and expects oil to rise in the future. 

Finance Minister Pranab Mukherjee on Tuesday evening said he may modify some provisions of the GAAR prescribed in this year's budget, holding out hope that the government could adopt a lenient position on the issue of taxing short-term capital gains of Mauritius-based foreign institutional investors (FIIs).  



Earlier on Tuesday, finance ministry mandarins said the government had no intention of targeting participatory note (PN) trades, triggering a 205-point rise in the 30-share BSE Sensex. But experts said uncertainty will remain till an amendment is passed to specifically exclude PNs from the ambit of the relevant section of the income-tax law. 

The budget has spooked investors on two fronts. First, GAAR gives the tax authorities, among other things, the power to override the tax avoidance treaty between India and Mauritius to tax FIIs that invest through special purpose vehicles without setting up an office or permanent establishment in the tax haven. 

A finance ministry official said the government did not have participatory notes in mind when it introduced a provision in the budget that makes it clear that deals involving Indian assets, such as Vodafone's acquisition of Hutchison Essar, will be subject to tax even if the transactions are struck overseas between foreign entities. 

A panel has been formed which will formulate procedures and also specify threshold for transactions," said the official.

DEEPAK SETH

PGDM 2^ND 

^PG/11/12