Moody's points out that revenue fell, due to the slide in crude oil prices. Crude prices have fallen by more than 50% since June 2014.
Moody's: RIL's credit metrics to improve over next two years Moody's Investors Service says that Reliance Industries Limited's (RIL, LC: Baa2 positive, FC: Baa2 stable) EBITDA increased by 8% during the quarter ended 31 March 2015 (QE3/2015 or Q4), because of the improved performance of its refining segment, and despite revenues falling by 26%.
Moody's points out that revenue fell, due to the slide in crude oil prices. Crude prices have fallen by more than 50% since June 2014. "As for RIL's debt leverage, its debt levels rose in the quarter ended 31 March 2015, as the company executed projects and invested in its telecommunications businesses," says Vikas Halan, a Moody's Vice President and Senior Credit Officer.
Nonetheless, despite a 15% increase in net debt in F2015 as compared to F2014, RIL's net debt to EBITDA only increased marginally, in line with the improvement in the company's EBITDA. "Looking ahead, low crude prices should continue to support demand growth, which will in turn keep product crack spreads firm. In addition, once RIL completes its petcoke gasification project in the next two years, its refining margins should improve by about $2.0-$2.5/bbl; a result which will support earnings growth," adds Halan.
Moody's analysis is contained in its just-released report titled "Reliance Industries Ltd: High Refining Margins Boost RIL's Q4 Results; Credit Metrics to Improve on Completion of Projects over Next Two Years," and is co-authored by Halan, and Sweta Patodia, an Associate Analyst.
Domestic News
Videocon establishes oil reserves in Brazil Videocon Industries advised that Petrobras, Operator of the block SEAL-M-426 in BM-SEAL-11 Concession, Brasil, has completed the formation test (assessing the potential of a petroleum deposit) of well 3-BRSA-1286-SES (ANP nomenclature) / 3-SES-186 (Petrobras nomenclature), located in the BM-SEAL-11 concession in the SEAL-M-426 block in ultra-deep waters of the Sergipe-Alagoas Basin. The results of the formation test confirmed the presence of light oil (37 ° API) and good productivity of the reservoirs.
This drilling identified two reservoir intervals of light oil and gas - the top with a thickness of 44 meters, and the bottom 11 meters thick, the bottom zone being a new discovery for the area. The well is located 102.7 kilometers from the city of Aracaju (SE) and 10.3 km from the first discovery well “Farfan”, in a water depth of 2467 meters.
The well drilling reached a final depth of 6060 meters.This is the third appraisal well in Farfan area, discovered in October 2012, and the initial results of drilling of this well had been communicated to stock exchange on 03.02.2015.This well is part of the Farfan Appraisal Plan in the Sergipe-Alagoas Basin in deep waters, as provided for in the said Plan by the Consortium for the period 2014-2018.
Fitch rates Bharat Petroleum's Proposed USD Notes 'BBB-(EXP)'
Fitch Ratings has assigned India-based Bharat Petroleum Corporation Limited's (BPCL; BBB-/Stable) proposed notes an expected rating of 'BBB-(EXP)'.
The notes are to be issued out of its USD2bn medium-term note programme, rated 'BBB-'. The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of BPCL. The final rating is contingent upon the receipt of final documents conforming to information already received.
Govt to provide LPG subsidy benefit to state-owned oil & gas companies
Coming as a big relief to the state-owned oil and gas companies, Oil Secretary Saurabh Chandra has announced that firms like ONGC and Oil India will not have to pay for LPG subsidies in the current fiscal. "Government will fully meet subsidy burden of LPG in 2015-16," he said at FICCI roundtable on Hydrocarbons in New Delhi.
"Since upstream national oil companies contribution to under-recoveries is reduced, to that extent their resources are freed to invest in exploration and production," he added. The difference between the cost and the retail selling price, called under-recoveries, is borne by the government by way of cash subsidy and producers like ONGC.
RIL to re-open its diesel pump outlets by FY16
With diesel being deregulated in October last year, Reliance Industries plans to re-open all its 1,400 petrol pumps during this fiscal. RIL's 320 retail outlets are already working. The company aims to restart its entire diesel network of 1,400 outlets in FY16.
Around March 2008, the company had closed all of its 1,432 petrol pumps due to massive losses it faced while competing with public sector firms. As the public sector firms got government subsidies and sold fuels at rates which were less than the cost.
RIL and Essar Oil Ltd were the only private refiner in India, which together brought in about 17 percent of domestic retail market for diesel and 10% of petrol by 2006 before state-run firms stamped a heavy toll on private firms' fuel sales. In 2006, RIL had a market share of 14.3 per cent in diesel and 7.2 per cent in petrol.
Moody's: RIL's credit metrics to improve over next two years Moody's Investors Service says that Reliance Industries Limited's (RIL, LC: Baa2 positive, FC: Baa2 stable) EBITDA increased by 8% during the quarter ended 31 March 2015 (QE3/2015 or Q4), because of the improved performance of its refining segment, and despite revenues falling by 26%.
Moody's points out that revenue fell, due to the slide in crude oil prices. Crude prices have fallen by more than 50% since June 2014. "As for RIL's debt leverage, its debt levels rose in the quarter ended 31 March 2015, as the company executed projects and invested in its telecommunications businesses," says Vikas Halan, a Moody's Vice President and Senior Credit Officer.
Nonetheless, despite a 15% increase in net debt in F2015 as compared to F2014, RIL's net debt to EBITDA only increased marginally, in line with the improvement in the company's EBITDA. "Looking ahead, low crude prices should continue to support demand growth, which will in turn keep product crack spreads firm. In addition, once RIL completes its petcoke gasification project in the next two years, its refining margins should improve by about $2.0-$2.5/bbl; a result which will support earnings growth," adds Halan.
Moody's analysis is contained in its just-released report titled "Reliance Industries Ltd: High Refining Margins Boost RIL's Q4 Results; Credit Metrics to Improve on Completion of Projects over Next Two Years," and is co-authored by Halan, and Sweta Patodia, an Associate Analyst.
Domestic News
Videocon establishes oil reserves in Brazil Videocon Industries advised that Petrobras, Operator of the block SEAL-M-426 in BM-SEAL-11 Concession, Brasil, has completed the formation test (assessing the potential of a petroleum deposit) of well 3-BRSA-1286-SES (ANP nomenclature) / 3-SES-186 (Petrobras nomenclature), located in the BM-SEAL-11 concession in the SEAL-M-426 block in ultra-deep waters of the Sergipe-Alagoas Basin. The results of the formation test confirmed the presence of light oil (37 ° API) and good productivity of the reservoirs.
This drilling identified two reservoir intervals of light oil and gas - the top with a thickness of 44 meters, and the bottom 11 meters thick, the bottom zone being a new discovery for the area. The well is located 102.7 kilometers from the city of Aracaju (SE) and 10.3 km from the first discovery well “Farfan”, in a water depth of 2467 meters.
The well drilling reached a final depth of 6060 meters.This is the third appraisal well in Farfan area, discovered in October 2012, and the initial results of drilling of this well had been communicated to stock exchange on 03.02.2015.This well is part of the Farfan Appraisal Plan in the Sergipe-Alagoas Basin in deep waters, as provided for in the said Plan by the Consortium for the period 2014-2018.
Fitch rates Bharat Petroleum's Proposed USD Notes 'BBB-(EXP)'
Fitch Ratings has assigned India-based Bharat Petroleum Corporation Limited's (BPCL; BBB-/Stable) proposed notes an expected rating of 'BBB-(EXP)'.
The notes are to be issued out of its USD2bn medium-term note programme, rated 'BBB-'. The notes will constitute direct, unconditional, unsubordinated and unsecured obligations of BPCL. The final rating is contingent upon the receipt of final documents conforming to information already received.
Govt to provide LPG subsidy benefit to state-owned oil & gas companies
Coming as a big relief to the state-owned oil and gas companies, Oil Secretary Saurabh Chandra has announced that firms like ONGC and Oil India will not have to pay for LPG subsidies in the current fiscal. "Government will fully meet subsidy burden of LPG in 2015-16," he said at FICCI roundtable on Hydrocarbons in New Delhi.
"Since upstream national oil companies contribution to under-recoveries is reduced, to that extent their resources are freed to invest in exploration and production," he added. The difference between the cost and the retail selling price, called under-recoveries, is borne by the government by way of cash subsidy and producers like ONGC.
RIL to re-open its diesel pump outlets by FY16
With diesel being deregulated in October last year, Reliance Industries plans to re-open all its 1,400 petrol pumps during this fiscal. RIL's 320 retail outlets are already working. The company aims to restart its entire diesel network of 1,400 outlets in FY16.
Around March 2008, the company had closed all of its 1,432 petrol pumps due to massive losses it faced while competing with public sector firms. As the public sector firms got government subsidies and sold fuels at rates which were less than the cost.
RIL and Essar Oil Ltd were the only private refiner in India, which together brought in about 17 percent of domestic retail market for diesel and 10% of petrol by 2006 before state-run firms stamped a heavy toll on private firms' fuel sales. In 2006, RIL had a market share of 14.3 per cent in diesel and 7.2 per cent in petrol.
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