Page 6 - AsianOil Week 33

AsianOil SOUTH ASIA AsianOil
Shell exits Indian gas distributor MGL
FINANCE & INVESTMENT
ROYAL Dutch Shell has sold its remaining stake in Indian city gas distribution (CGD) company Mahanagar Gas Ltd (MGL) via a block deal on August 20.
Shell sold its 10% stake in the company on the National Stock Exchange (NSE) for INR7.7bn ($107.6mn) as part of a wider $30bn divestment strategy. Buyers include HDFC Mutual Fund, Goldman Sachs India, SBI Life Insurance and Societe Generale. GAIL (India) waived its right of rst refusal.
“We already have a controlling stake. What purpose would it have served to buy the additional stake at market price,” a senior unnamed GAIL o - cialtoldtheEconomicTimes. Headdedthatsale price was “too high”.
The sale comes after the Anglo-Dutch super-major sold an 8.5% stake in MGL in April 2018, and a further 14% stake in August 2018. Both sales were also made on the open market.
Shell said at the time that the divestment was part of its “ongoing portfolio optimisation to trans- form Shell into a simpler company, delivering stronger returns”. At the same time, it pointed to its investment in the Hazira LNG receiving terminal in Gujarat State as well as the creation of gas trader Shell Energy India as demonstrating its commit- ment to the Indian market.
e news of Shell’s exit from MGL helped the latter’s stock jump 12% in morning trading that day. Je eries India said in an August 19 report that MGL’s shares had been underperforming owing to uncertainty surrounding Shell’s intentions. In the run-up to the sale the distributor’s share price had declined by almost 24% in nancial 2019-2020.
e gas distributor saw its revenue climb to INR8.31bn ($116.1mn) in the April-June period from INR6.76bn ($94.5mn) in the same quar- ter of 2018-2019. Pro t for the quarter climbed to INR1.7bn ($23.8mn) from INR1.28bn ($17.9mn) in the year-earlier period. e com- pany attributed the improved performance to a fall in spot LNG prices and reduced operational expenditure.
MGL distributes compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai and its adjoining areas and in Maharashtra’s Rai- gad District. e company sells CNG to more than 600,000 vehicles via a network of over 220 CNG retail outlets. e company supplies gas to more than 1mn households.v
ONGC aims to double output by 2040
PERFORMANCE
INDIA’S state-run Oil and Natural Gas Corp. (ONGC) has unveiled plans to double its oil and gas production by 2040 while also tripling its revenue.
ONGC’s Energy Strategy 2040 envisions diver- sifying the energy company’s business interest, with divisions outside the upstream playing a greater role in its performance, chairman and managing director Shashi Shanker has said.
ONGC produced 24.23mn tonnes (487,000 barrels per day) of crude in nancial year 2018- 2019 and 25.81bn cubic metres of gas from domestic elds, while another 10.1mn tonnes (203,000 bpd) of oil and 4.74 bcm of gas came from its overseas assets.
e company posted a 29% increase in its revenue for the 2018-2019 period to INR1.1tn ($15.35bn).
Shanker noted that the company’s 2040 targets could be achieved by consolidating its upstream business, expanding its downstream presence and diversifying into renewable energy. e company also intends to explore new investment opportunities through a ded- icated venture fund.
News agency PTI quoted unnamed offi- cials as saying the company, which controls around 42mn tonnes per year (820,000 bpd) of refining capacity via subsidiaries Hindu- stan Petroleum Corporation Ltd (HPCL)
P6
w w w . N E W S B A S E . c o m Week 33 21•August•2019