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Report From Oil Industry

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Oil India Ltd: On the right track

July 14: Oil India Ltd (OIL) is set to garner a gross additional revenue of Rs 520 crore on an annualized basis on account of the increase in the price of APM gas to $4.2/mmbtu. The consequent net additional revenue generation is going to be a significant Rs 347 crore. The gas price increase itself will impact EPS by Rs 14.40 per share on an annualized basis.

8Clearly, driven by chairman N.M. Bora, the company is doing well. OIL's share, which was listed in September 2010, has outperformed all stock indices since. Bora has been able to keep output up and profits on the upswing.

8Higher crude oil production is buttressed by the fact the company has low finding and development (F&D) cost (at around $4.22/bbl in 2009-10). Costs continue to remain low even after taking into account the lifting cost of $7.24/bbl during the year.

8These facts were highlighted recently in a finely put together Investors Presentation by TK Ananth Kumar, who was responsible, as OIL's highly capable finance director, for the success of the company's public issue.

8Kumar says that the company is rich in cash and an investment plan worth $1.90 billion has been lined up for the next two years.

8"The main focus of the company will continue to remain in the E&P arena but we are not averse to acquiring a medium sized E&P company," he says.

8Selective diversifications are on cards too, including downstream ventures in refining and petrochemicals as well as into alternative energy, city gas distribution and shale oil in nominated acreages.

Assam gas cracker: Still gasping for air

July 14: The Assam gas cracker is being set up under the blessings of Prime Minister Manmohan Singh.

8Singh had been sent unopposed to the Lok Sabha for the last few terms and this is his way of saying "thank you" to the people of Assam.



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