NTPC's fuel woes may continue

Tue, 22 Dec 02:30 pm

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The Indian stock markets pared some of their gains during previous two hours of trade. Currently, buying activity is being witnessed in sectors like metals, banking and realty. However, IT and pharma stocks are being favoured the least and are infact witnessing overall declines currently.

BSE Sensex and NSE Nifty are trading in the positive, up by 85 point and 30 points respectively. Midcap and small cap stocks are also trading in the positive, up by 0.6% and 0.8% respectively. The rupee is trading at 46.81 to the dollar.

Power generation utility NTPC's paucity for fuel supplies for its power plants are well known. As per a leading business daily, the company's plans to secure fuel supplies have hit another roadblock. NTPC's securing clearances from India's ministry of environment and forests (MoEF) for its captive coal blocks are poised to get delayed. The PSU major had been allotted eight coal blocks by the government. This was done with the motive of ensuring it a stable source of coal that would help the company prevent its operations from the risk of coal supply and pricing disruptions. But delays have hit the company in the past too. NTPC had earlier planned to start coal mining from the Jharkhand block by the end of 2007. With procedural and infrastructural delays that upset its plans the company had reset to an end-December 2009 target. Reports now suggest that the eight coal blocks allotted by the government are on the way their way to meet similar delays due to approvals from the MoEF.

The implications for NTPC are that it may continue to face fuel shortages for the foreseeable future too. It may be noted that NTPC plans to add 22,430 MW of capacity by 2012 out of which 15,180 MW is planned to be through coal-based power generation. The stock of NTPC is trading higher on the bourses.

As per a leading business daily, RIL has made a third successive gas discovery in the D3 deep-sea block in the Krishna-Godavari basin. The company has found three gas reservoirs in the D3 block. The block is located about 45 kms off the coast in the Bay of Bengal. It is also in the vicinity of its prolific D6 block where there have been 19 oil and gas finds. It may be noted that RIL holds a 90% interest in the block that it won in the fifth round of auction under the New Exploration Licensing Policy (NELP). The company's management has said that besides the above discoveries, several other prospects have been mapped at different levels and would explored going forward.