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Rally in crude oil fuels oil exploration counters

Capital Market / 09:55 , Nov 26, 2009

Shares of two oil explorer firms rose 0.12% to 0.36% at 9:55 IST on BSE, after crude oil prices surged nearly 3% on the New York Mercantile Exchange on Wednesday, 25 November 2009.

Meanwhile, the BSE Sensex was down 24.22 points, or 0.14%, to 17,174.73.

India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 0.12% to Rs 1181. Cairn India gained 0.36% to Rs 280. But, India's second biggest oil and gas exploration firm by revenue, Oil India, declined 0.31% to Rs 1240.

On BSE, Oil India clocked volumes of 200 shares, ONGC reported volumes of 200 shares and Cairn India clocked volumes of 6,286 shares.

ONGC underperformed the market over the past one month till 25 November 2009, rising 0.38% as compared to the Sensex's 2.31% rise. It had also underperformed the market in the past one quarter, declining 0.33% as compared to the Sensex's return of 9.63%.

Cairn India underperformed the market over the past one month till 25 November 2009, falling 2.09% as compared to the Sensex's 2.31% rise. It had also underperformed the market in the past one quarter, rising 7.91% as compared to the Sensex's return of 9.63%.

Oil India outperformed the market over the past one month till 25 November 2009, rising 6.86% as compared to the Sensex's 2.31% rise.

Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Light, sweet crude rose $1.94 or 2.55% to $77.96 a barrel on the New York Mercantile Exchange on Wednesday, 25 November 2009 after a US government inventory report showed a lower than expected rise in inventories last week.

But, oil slipped 50 cents or 0.64% to $77.46 a barrel in the Asian trading on Thursday, 26 November 2009.

Last month, ONGC bagged over a third of the 70 blocks offered under India's eighth New Exploration Licensing Policy (NELP 8), amid luke-warm response towards the bidding round. ONGC bid for 25 blocks and was awarded 11 offshore and two onshore concessions.

ONGC had on 28 August 2009, said it had discovered gas at a block in the northeastern state of Tripura. The gas contains up to 96.3% methane.

ONGC's net profit rose 5.8% to Rs 5089.64 crore on 13.4% fall in net sales to Rs 15080.59 crore in Q2 September 2009 over Q2 September 2008

ONGC specializes in the exploration and production of crude oil and gas. The company has joint ventures in oil fields in Vietnam, Norway, Egypt, Tunisia, Iran and Australia. The groups' other activities include deep-sea explorations on the east and west coasts of India, and the exploration of coal bed methane.

Cairn India, a unit of Cairn Energy, won 2 offshore blocks in the latest auction.

Cairn India had on 5 November 2009 signed a pact with Reliance Industries (RIL) for supply of crude oil. Cairn India will supply crude oil from Mangala field to RIL in Jamnagar, Gujarat. The crude oil will be delivered to RIL's Jamnagar refinery through heated crude oil tankers. The implied price realization on sale of crude to RIL represents an average 10-15% discount to Brent on the basis of prices prevailing for the six months to September 2009, Cairn said.

Cairn India had on 14 October 2009 said it secured $1.6 billion from domestic and overseas lenders for funding its Rajasthan oil field project. The company will also use the funds to repay its existing debt of around $850 million, it said. The borrowings, with tenure of six years, have been arranged through a combination of dollars and Indian rupees.

Cairn India had on 29 August 2009 began pumping crude from its Mangala oil field in the Rajasthan block.

Cairn India's net profit declined 61.8% to Rs 31.09 crore on 64.7% fall in total income to Rs 38.02 crore in Q2 September 2009 over Q2 September 2008.

Cairn India is into exploration and production of crude oil and natural gas in India.

Oil India won 5 offshore blocks in the latest auction. Oil India's net profit rose 0.8% to Rs 722.56 crore on 2% fall in net sales to Rs 2100.25 crore in Q2 September 2009 over Q2 September 2008.

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