Page 6 - AsianOil Week 31

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IOC’s profits slip in April-June quarter
PERFORMANCE
STATE-RUN Indian Oil Corp. (IOC) has seen its net pro t for the rst quarter of nancial year 2019-2020 shrink by almost half year on year on the back of weaker inventory gains.
Pro ts fell to INR35.96bn ($507.9mn) from INR68.31bn ($964.8mn) in the same period of 2018-2019, the re ner said on July 31. Revenue in April-June, meanwhile, inched up by 0.3% to INR1.5tn ($21.19bn).
The company posted a net inventory gain of INR23.62bn ($333.7mn) compared with INR70.65bn ($998.1mn) in the year earlier period.
e company’s gross re ning margin (GRM) slumped from $10.21 per barrel in April-June 2018-19 to $4.69 per barrel.
IOC sold 22.66mn tonnes of oil products, including exports, during the quarter, while its re ning throughput amounted to 17.28mn tonnes.
While the company’s operating profit dropped 23% quarter on quarter to INR83.5bn ($1.18bn), it still beat analysts’ forecasts of INR57.84bn ($816.7mn).
However, IOC’s operating income will remain under pressure for the rest of nancial year, Centrum Broking senior vice president Probal Sen told BloombergQuint, adding that it could improve 2020-2021. “ e possible stake sale by the government will continue to remain an overhang.”
The government aims to raise INR1.05tn ($14.83bn) by March 2021 through stake sales in state-run companies such as IOC and Oil and Natural Gas Corp. (ONGC).
In July, the Economic Times cited an unnamed government official from the Department of Investment and Public Asset Management (DIPAM) as saying the gov- ernment might reduce its direct controlling stakes in large energy companies below
51%. It would retain indirect majority con- trol through the stakes held by state-run companies such as Life Insurance Corpora- tion of India.
IOC has earmarked INR250bn ($3.53bn) for capital expenditure in financial year 2019-20, with INR42bn ($592.8mn) to go towards upgrading its refineries to produce Bharat Stage VI (BS-VI) compliant fuels. The country is set to implement the emis- sion standards, which are equivalent to Euro VI, from April 1, 2020.
e shi to BS VI-compliant fuel is part of the central government’s e orts to tackle ris- ing urban pollution levels. BS VI fuel’s sulphur content is limited to 10 parts per million (ppm), down from 50 ppm in BS IV.™
ONGC, partners to exit Sudanese blocks
PROJECTS & COMPANIES
INDIA’S state-run Oil and Natural Gas Corp. (ONGC) is set to exit two oilfields in Sudan owing to the state’s struggle to pay the company for its share of production.
The Economic Times reported on August 2 that ONGC, as well as its partners China National Petroleum Corp. (CNPC) and Malay- sia’s Petronas, had not been paid for oil extracted from blocks 2A and 4. e paper added that the Indian developer, which has a 25% stake in the blocks, was owed $500mn. CNPC owns 40%, Petronas holds 30% and Sudan’s state-owned Sudapet has the remainder.
e state’s di culty in paying the partners dates back to 2011.
In a financial statement, overseas unit ONGC Videsh Ltd (OVL) said: “ e company has reviewed the geopolitical situation in Sudan and has considered the option for exit from the operations in Block 2A, 4 in terms of article 14.1 of the [joint operating agreement] JOA. The intention in this regard has been conveyed to the government of Sudan on May 10, 2019.”
As such, the company said it had provided INR5.98bn ($84.2mn) against the “associated oil and gas and other assets” in its consolidated nancial statement.
OVL led an arbitration claim against the Sudanese government in the UK in April 2018. Reuters quoted unnamed sources as saying at the
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w w w . N E W S B A S E . c o m Week 31 07•August•2019