June 8, 2012:

India Reliance Industries Ltd, owner of the world’s largest oil-refining complex, plans to invest 1 trillion rupees ($18 billion) in India in the next five years to double operating profit. The company will invest across all core business and new businesses including retail and digital services, Chairman Mukesh Ambani said today at a shareholder meeting in Mumbai, where the company is based. The aim is to increase revenue from the retail business as much as six times in three to four years and more than double natural gas output to 60 million cubic meters a day, he said.

Operating profit fell five per cent to 227.8 billion rupees in the year ended March 31 from a year earlier, the first decline since at least 2003. Net income fell 21 per cent to 42.4 billion rupees in the three months ended March 31, according to a stock exchange filing on April 20. It was the steepest drop in profit since 2008.

Reliance is planning an $8 billion expansion of its petrochemicals business, betting Indian demand for materials used to make plastics and polyester will help counter weak global fuel sales. The proposed spending will be the most since the firm completed its second oil refinery in 2008.  The shares gained as much as 2.2 per cent to 731.90 rupees and traded at 723.05 rupees as of 12.14pm in Mumbai. The stock has gained 4.4 per cent this year, lagging behind a seven per cent advance in the benchmark Sensitive Index.

Output from the KG-D6 field operated by Reliance is expected at 28 million cubic meters a day in the current fiscal year and may decline to 20 million in the year starting April 1, 2014, oil minister S. Jaipal Reddy said in parliament on May 8.

By Bloomberg

June 8, 2012:

A newly commissioned 325,000-barrel-per-day (bpd) crude distillation unit (CDU) remained out of production on Friday at Motiva Enterprises' 600,000-bpd Port Arthur, Texas, refinery, said sources familiar with operations at the plant. No firm date has been set for returning the CDU to production, the sources said. Workers were still attempting to find the source of a leak that is interfering with the unit's operation, they said. Once the source of the leak is found, repairs and restoration to normal operation are expected to take two to three days, they said. A Motiva spokeswoman declined to discuss operations at the refinery. The CDU was taken out of operation on Monday due to the leak but has been kept on circulation, meaning it has crude oil feed running through it and is being kept at its high operating temperature.

Motiva officially commissioned the CDU, the centerpiece of a $10 billion, five-year expansion project that more than doubled the refinery's capacity, in a ceremony last week attended by the chief executives of Motiva owners Royal Dutch Shell Plc and Saudi Aramco. The addition of the CDU made the Motiva Port Arthur refinery the largest in the United States. A CDU does the initial refining of crude oil coming into a refinery and provides feedstock for all other units.

By Reuters

June 7, 2012:

Oil company Shell will close a Sydney refinery in September, creating uncertainty for up to 275 employees and at least 100 contractors. The company on Thursday informed staff at the Clyde refinery, in Sydney's west, that operations will stop from September 30. Staff will be supported in finding other employment, either within the terminal operations at the site, or elsewhere within Shell, the company said. Up to 30 employees had already found other jobs, Shell said.

The decision to close down comes almost one year after Shell decided to convert the Clyde refinery into a dedicated fuel import terminal. 'The initial decision to close and convert Clyde, taken in July last year, was consistent with Shell's strategy to focus its refining portfolio on larger assets and to build a profitable downstream business here in Australia,' Shell Australia downstream president Andrew Smith said in a statement. 'Since the decision was taken, the refinery has continued to struggle against sustained poor industry margins and intense competition from mega-refineries in Asia.'

Downstream refers to distribution and retail operations in the petroleum industry. Shell customers will not be impacted by the closure, Mr Smith said.

By SkyNews.com

June 7, 2012:

Workers at Tesoro Corp's 166,000 barrel per day (bpd) San Francisco Bay-area refinery in Martinez, California, approved a new three-year contract on Wednesday night, said the secretary-treasurer of United Steelworkers union (USW) Local 5. "USW Local 5 members voted to accept the company's proposal," said Local 5 Secretary-Treasurer Jeff Clark. "The negotiating committee would like to thank the members for their support." The more than 450 workers represented by the USW at the Martinez refinery have been working under an extension of the previous contract since it expired on Feb. 1 and had voted in March to authorize union leaders to call a strike if an acceptable agreement could not be reached.

A spokeswoman for San Antonio-based Tesoro said the company was pleased that workers at the last of six refineries with union representation had approved the its contract proposal. "We are pleased with this outcome," said Tesoro spokeswoman Tina Barbee. "All six of our USW-represented refineries - Anacortes, Washington; Kapolei, Hawaii; Los Angeles, California; Mandan, North Dakota; Salt Lake City, Utah and Martinez, California have ratified our fair and competitive settlement offer." Before the offers were accepted, workers at four refineries including Martinez voted to authorize strikes and staged protests at refineries, Tesoro's headquarters and annual meetings of shareholders.

Union leaders had said workers were opposed to changes the company wanted in benefits and sought greater protection for worker safety. The worst U.S. refinery accident in a half a decade took place in 2010 at Tesoro's 120,000 bpd Anacortes, Washington, refinery where an explosion claimed the lives of seven workers. Tesoro has agreed to a USW proposal to create a process safety management representative position, Barbee has said. The contract provides an 8.5-percent raise over three years on base pay of $33.85 per hour.

Independent refiner Tesoro has a seventh refinery in Kenai, Alaska, where the workers do not have union representation.

By Reuters

June 7, 2012:

Indian refiners cut imports from Iran by 38% in May from a year ago, tanker discharge data showed, in a second month of steep reductions as they switch suppliers to cushion the impact of new U.S. sanctions on Tehran. The cutbacks raise New Delhi's chances of winning a waiver similar to that granted by the United States to Japan and some European countries after "substantial" reductions in their imports.  India is discussing with Washington an exemption from the sanctions, which focus on banking and are being imposed over Iran's disputed nuclear programme, a source said last month.

China and India are Iran's biggest crude clients and reductions in their purchases are crucial to Western attempts to crank up the pressure on Tehran. Neither has officially sought a waiver, although both have cut volumes. India imported about 243,000 barrels per day (bpd) of oil from Iran in May, down about 10% from April and about 38 percent from 394,000 bpd a year ago, the data made available to Reuters showed. In April - the first month of new contracts - imports from Iran slid nearly 40 percent from a year ago. Falling imports from the OPEC member have pushed Iran to fifth position in the list of India's crude suppliers in April-May, compared with the third position it enjoyed a year ago and second in the first quarter of 2012.

Refiners are expected to cut volumes they ink under term deals that started April 1 by more than 20 percent, according to Reuters calculations, while the government says it aims for imports to be down 11 percent from 2011-12 liftings to about 310,000 bpd. Indian refiners may lift significantly lower volumes out of Iran from July, when European sanctions will severely reduce the availability of insurance cover for cargoes and vessels. Among Iran's other Asian buyers, South Korea plans to halt all imports by the time the European measures hit, industry sources have said, and Japan could follow suit unless Tokyo provides a sovereign insurance guarantee for oil tankers.

Indian refiners have been asked privately by the government to cut Iranian oil imports by at least 15 percent, even though publicly New Delhi does not support unilateral sanctions, according to government officials. The refiners are making up for the shortfall in Iranian cargoes by raising imports from the world's biggest exporter, Saudi Arabia, as well as fellow OPEC member Iraq.

The 12-member Organization of the Petroleum Exporting Countries (OPEC) pumped 31.80 million bpd in May, up from 31.75 million bpd in April, a Reuters survey of sources at oil companies, OPEC officials and analysts found. India's overall oil imports in January-May rose about 11% from a year ago to 3.6 million bpd as the country expanded its refining capacity. With some of that capacity in maintenance in May, however, total oil imports in the month declined 3.6% from April. They were up 14.5% from a year ago, the data showed. Essar replacing MRPL Essar Oil , which raised Iranian imports in January-March to stock up and meet last fiscal year's commitments, bought about 33,000 bpd in May, down more than 70% both from April and a year ago, as it turned to Latin America.

But overall during January-May, Essar was the top Indian client of Tehran, ousting state-run Mangalore Refinery and Petrochemicals Ltd. MRPL nearly halved annual imports from Iran in January-May to about 80,800 bpd. It bought about 52 percent less oil in May from Iran compared with April at 43,000 bpd, the data showed, due to a full shutdown of its refinery during the month.

State-run Hindustan Petroleum Corp emerged as the biggest buyer of Iranian oil in May, importing 99,000 bpd, up 66 percent from April and about 1.4 percent more than a year ago. "May volumes are higher as HPCL took delayed delivery of an April cargo," said a source privy to HPCL's imports.

Essar has renewed its annual deal of 100,000 bpd with Iran for this fiscal year starting April 1 but aims to lift 15 percent less oil from there, while MRPL has reduced the size of its deal to 100,000 bpd compared with 142,000 bpd in 2011/12. HPCL aims to buy 60,000 bpd oil from Iran compared with 70,000 bpd in 2011-12. Indian Oil Corp , the country's biggest refiner, bought 67,600 bpd oil from Iran while Bharat Petroleum Corp. Ltd. did not buy any Iranian oil since February.

By Business Standard