Page 156 - CW E-Magazine (14-5-2024)

Hydrocarbons Hydrocarbons

DISCOUNTED PRICING imports of petroleum crude and products in FY2022, while that from West Asian by 15-22 basis points in FY2023-24.
Share of Russian crude in India’s imports rises declined by 15.2 percent YoY during countries (Saudi Arabia, the UAE and However, the extent of monthly dis-
counts relative to price narrowed
April-February of last fi scal, even as Kuwait) fell to 23 percent from 34 per-
to nearly 40% in April volumes rose slightly in this period. cent, respectively. sharply over the fi scal, to 8 percent
This was supported by the fall in average
on an average in September-
global crude oil prices as well as savings ICRA estimates that the lower February FY2024 from 23 per cent
Russia increased its share in Indian India’s overall crude imports, Ms. Serena Huang, analyst at Vortexa. from stepped up purchases of discounted imputed unit value of imports of in April-August FY2024. Con-
crude oil imports to nearly 40% in April however, dropped 8% month-on-month Brent, the international crude benchmark, Russian crude. Russian oil, compared to imports sequently, the savings related to
from 30% in March this year, closing in to 4.5-mbpd in April. Imports from is around $85 per barrel, refl ecting the from West Asia, has led to savings purchase of Russian crude are likely
on its all-time peak of 42% last July, as Iraq, the second-largest supplier, current physical demand-supply situa- In volume terms, the share of in India’s oil import bill amounting to to have dipped to $2-bn in September-
higher global oil prices pushed Indian dropped 31% to 776,000-bpd while the tion and the geopolitical premium due crude petroleum imported from $5.1-billion in 2022-23 and $7.9-billion February FY2024 from $5.8 bil-
refi ners to increase intake of discounted supply from Saudi Arabia fell 6% to to the Middle East confl ict. Urals, the Russia jumped to 36 percent in in 11 months of 2023-24, thereby lion in April-August FY2024, ICRA
Russian barrels to reduce their average 681,000-bpd. The UAE’s exports to fl agship Russian crude, is available at April-February FY2024 from 2 percent compressing India’s CAD/GDP ratio said.
crude purchase cost. India fell by 40% while those from the a discount of $7-8 per barrel to Brent
US reduced by 15%. on a free-on-board basis. Discount nar- INDUSTRY TRENDS
Indian refi ners imported 1.78-million rows to about $2-3 per barrel on a deli- India to lead liquids storage project count in Asia
barrels per day (bpd) of crude oil from Iraq’s share in Indian imports fell to vered-at-port basis, the preferred mode
Russia in April, up 19% from March, 17% in April from 23% in March while of Russian crude purchase by Indian through 2028: Report
according to energy cargo tracker, that of the UAE declined to 6% from refi ners. Urals made up 89% of India’s
Vortexa. This exceeded China’s 9%. Russia’s share in April was higher Russian oil purchases in both April and India is poised to take the lead in the Analyst at GlobalData, commented, nation to adjust oil supplies in response
import of 1.27-million bpd and Europe’s than the average of 35% in 2023-24. March. number of liquid storage projects in Asia “India is also set to witness the to emergencies, such as disruptions in
396,000-bpd of seaborne Russian crude that are expected to start operations second-largest increase in liquids global oil supply chains. The Chandikhol
in April. “India’s imports of Russian crude in Indian private sector refi ners – during 2024-2028, contributing about storage capacity in Asia by 2028, with project is the largest planned SPR in the
April rose to a nine-month high. Higher Reliance Industries and Nayara Energy – 42% of the region’s total project count an expected addition of 160-million country, with a proposed capacity of
Russia supplied more oil to India Russian crude exports in Feb/Mar accounted for 45% of all Russian crude by 2028, according to a report by data barrels (mmbbl) of storage capacity. 29.3-mmbbl by 2028. Indian Strategic
than its next three top suppliers – Iraq, as well as lower imports by Chinese imports in April. Nayara Energy is and analytics company, GlobalData. These capacity expansions are mainly Petroleum Reserves Ltd (ISPRL) is the
Saudi Arabia, the UAE – put together refi ners have made available more partly owned by Russian energy giant, being planned to accommodate the operator of this project, with operations
in April. volumes for Indian refi ners,” said Rosneft. The report reveals that out of 45 nation’s ever-growing demand for crude anticipated to commence by 2025.
projects to commence operations in oil, petroleum products, and chemicals.”
RISING TREND India by 2028, new build projects are Bikaner is another major SPR
In India, Strategic Petroleum Reserves project with a total capacity of 27-mmbbl.
India’s oil import bill could cross $100-bn in FY2024-25: likely to account for 62% and the rest (SPRs) are projected to constitute 47% ISPRL is the operator of this project
are expansions of existing projects.
of the total additions to liquid storage as well, which is expected to start ope-
ICRA Ms. Bhargavi Gandham, Oil & Gas capacity by 2028. SPRs enable the rations by 2025.

India’s net oil import bill could widen on purchases of Russian crude persist at price for this fi scal will push up the net oil FINANCIAL PERFORMANCE
to $101-104-billion in current fi scal the prevailing low levels, ICRA expects imports by $12-13-billion during the year, MRPL’s Q4 net profi t down by 40%
from $96.1-bn in FY2023-24 and any India’s net oil import bill to widen thereby enlarging the current account
escalation in the Iran-Israel confl ict could to $101-104-billion in FY2025 from defi cit (CAD) by 0.3 percent of GDP. Mangalore Refi nery and Petrochemi- The company recorded a gross tions stood at Rs. 29,190-crore during
impart an upward pressure on the value $96.1-bn in FY2024, assuming an average cals Ltd. (MRPL) recorded a profi t refi ning margin (GRM) of $11.35 a fourth quarter of 2023-24 against
of imports, according to ratings agency, crude oil price of $85/barrel in the fi scal,” Accordingly, if the average crude oil after tax (PAT) of Rs. 1,137-crore during barrel during the fourth quarter of 2023-24 Rs. 29,401-crore in Q4 of 2022-23.
ICRA. ICRA said. price rises to $95/barrel in FY2025, then the fourth quarter of the fi nancial year against a GRM of $15.12 a barrel in the Revenue from operations was at
the CAD is likely to widen to 1.5-percent 2023-24 against Rs. 1,908-crore in corresponding period of 2022-23. Rs. 1,05,223-crore for the fi scal 2023-24
Based on ICRA’s analysis, lower Additionally, any escalation in the of GDP from ICRA’s current estimate of the corresponding period of 2022-23, against Rs. 1,24,736-crore in 2022-23.
value of Russian oil imports is estimated Iran-Israel confl ict and an associated 1.2-percent of GDP for 2024-25. CAD, registering a decline of 40.41 percent. The company’s GRM was at $10.36 Interest-bearing long-term borrow-
to have led to savings of $7.9-bn in 11 rise in crude oil prices could impart an which is the difference between value of a barrel for the fi scal 2023-24 against ings of the company reduced from
months (April-February) of FY2023-24, upward pressure on the value of net oil India’s imports and exports, is estimated MRPL had recorded a net profi t of $9.88 a barrel for 2022-23. (GRM is the Rs. 14,837-crore as on March 31, 2023
up from $5.1-bn in FY2022-23. imports in the current fi scal year, it added. at 0.8 percent in 2023-24. Rs. 3,596-crore during the fi nancial difference between the price of crude oil to Rs. 9,779-crore as on March 31, 2024.
year 2023-24 against Rs. 2,638-crore in and the end products). MRPL’s debt-equity ratio improved
“With India’s oil import dependency As per ICRA’s calculations, a $10/ Russian imports 2022-23, registering a growth of 36.32 from 1.70 as on March 31, 2023 to 0.94
expected to remain high, if the discounts barrel uptick in the average crude oil ICRA said the value of India’s percent. MRPL’s revenue from opera- as on March 31, 2024.

156 Chemical Weekly May 14, 2024 Chemical Weekly May 14, 2024 157

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