The Time Value of Money (abbreviated as TVM) is a concept in which both the present value of cash inflows and that of cash outflows is taken into consideration. Time Value of Money (TVM) is an important concept in financial management. It can be used to compare investment alternatives and to solve problems involving loans, mortgages, leases, savings, and annuities. TVM is based on the concept that a rupee that you have today is worth more than the promise or expectation that you will receive a rupee in the future. Money that you hold today is worth more because you can invest it and earn interest. After all, you should receive some compensation for foregoing spending. Let us take an example to understand the concept better:-
Receive $10,000 now OR receive $10,000 in three years. Which option would you choose?
If you are choosing Option A, your future value will be $10,000 plus any interest acquired over the three years. The future value for Option B, on the other hand, would only be $10,000. So how can you calculate exactly how much more Option A is worth, compared to Option B? If you choose Option A and invest the total amount at a simple annual rate of 4.5%, the future value of your investment at the end of the first year is $10,450, which of course is calculated by multiplying the principal amount of $10,000 by the interest rate of 4.5% :-
Future value of investment at end of first year: =($10,000x0.045)+$10,000 = $10,450
If the $10,450 left in your investment account at the end of the first year is left untouched and you invested it at 4.5% for another year, how much would you have?
Future value of investment at end of second year: =$10,450x(1+0.045) =$ 10,920.25
Or we can say:-
So, the equation for calculating the three-year future value of the investment would be:
This calculation shows us that we don't need to calculate the future value after the first year, then the second year, then the third year, and so on. If you know how many years you would like to hold a present amount of money in an investment, the future value can be calculated by the following:
Let's walk backwards for Option B. Remember; the $10,000 to be received in three years is really the same as the future value of an investment. If today we were at the two-year mark, we would discount the payment back one year. At the two-year mark, the present value of the $10,000 to be received in one year is represented as the following:
Present value of future payment of $10,000 at end of year two:
Continuing on, at the end of the first year we would be expecting to receive the payment of $10,000 in two years. At an interest rate of 4.5%, the calculation for the present value of a $10,000 payment expected in two years would be the following:
Present value of $10,000 in one year:
Of course, because of the rule of exponents, we don't have to calculate the future value of the investment every year counting back from the $10,000 investment at the third year. We could put the equation more concisely and use the $10,000 as FV. So, here is how you can calculate today's present value of the $10,000 expected from a three-year investment earning 4.5%:
So the present value of a future payment of $10,000 is worth $8,762.97 today if interest rates are 4.5% per year. In other words, choosing Option B is like taking $8,762.97 now and then investing it for three years. The equations above illustrate that Option A is better not only because it offers you money right now but because it offers you $1,237.03 ($10,000 - $8,762.97) more in cash! Furthermore, if you invest the $10,000 that you receive from Option A, your choice gives you a future value that is $1,411.66 ($11,411.66 - $10,000) greater than the future value of Option B.
So, Time value of money is an important aspect of wealth maximization. As it is one of the objectives of wealth maximization. From this concept we have learnt that money received today is more valuable than money received tomorrow.
Sunday, October 4, 2009
What are Forwards, Futures, options & Swaps?
Derivatives are financial instruments that do not represent ownership rights in any physical asset but, rather, derive their value from the value of some other underlying commodity or other asset.
Derivatives are efficient and effective tools for isolating financial risk and hedging to reduce exposure to risk. Derivative is a product whose value is derived from the value of one or more basic variables, called bases or underlying asset in a contractual manner. The underlying asset can be equity, forex, or commodity like crude oil, agri-products. Derivatives allow investors to transfer risk to others who could profit from taking the risk. Because of their flexibility in dealing with price risk, derivatives have become an increasingly popular way to isolate cash earnings from price fluctuations.
The most commonly used derivative contracts are forward contracts, futures contracts, options, and swaps.
1. Forwards
A forward contract is an agreement between buyer and seller parties for delivery of a specified quality and quantity of a good at an agreed date in the future at a specific price or at a price determined by formula at the time of delivery to the location specified in the contract.
Characteristics of Forward Contract:
· Terms and conditions are negotiated
· Illiquid market
· Credit risk
· Unregulated market (not exchange-traded)
The specifications included in a forward contract are:
· Product
· Price – The price at which delivery will be made in the future
· Quantity – Any number of units as mutually agreed
· Quality – Type
· Future Delivery date
· Delivery Place – How and where delivery will be made at maturity
2. Futures
A Futures contract is an agreement between two parties to buy (long position) or sell (short position) an asset at a certain time in the future at a certain price. Future contracts are standardized exchange-traded contracts. The quantity of the underlying, quality of the underlying, the date and month of expiry and minimum price change are standardized. Like a forward contract, a futures contract obligates each party to buy or sell a specific amount of a commodity at a specified price. Unlike a forward contract, buyers and sellers of futures contracts deal with an exchange, not with each other.
3. Options
Options are derivative instruments that provide the holder with the right, but not the obligation, to, pay or receive some quantity of cash or commodity, at an agreed strike price. An option is a contract that gives the buyer of the contract the right to buy (a call or put option) or sell (a put or call option) at a specified price (the “strike price”) over a specified period of time.
Advantages of Call option:
· Protection against rising markets
· Benefit from falling markets
· Flexibility to deal at the money level or at higher level
· Flexibility in physical supply
Advantages of Put Options (Floors):
· Protection against falling market
· Benefit from rising markets
· Physical flexibility
4. Swaps
A swap can be most simply defined as an agreement between two parties to exchange, at some future point, one product, either physical or financial, for another. But, in derivative form swap is purely cash settled.
Derivatives are efficient and effective tools for isolating financial risk and hedging to reduce exposure to risk. Derivative is a product whose value is derived from the value of one or more basic variables, called bases or underlying asset in a contractual manner. The underlying asset can be equity, forex, or commodity like crude oil, agri-products. Derivatives allow investors to transfer risk to others who could profit from taking the risk. Because of their flexibility in dealing with price risk, derivatives have become an increasingly popular way to isolate cash earnings from price fluctuations.
The most commonly used derivative contracts are forward contracts, futures contracts, options, and swaps.
1. Forwards
A forward contract is an agreement between buyer and seller parties for delivery of a specified quality and quantity of a good at an agreed date in the future at a specific price or at a price determined by formula at the time of delivery to the location specified in the contract.
Characteristics of Forward Contract:
· Terms and conditions are negotiated
· Illiquid market
· Credit risk
· Unregulated market (not exchange-traded)
The specifications included in a forward contract are:
· Product
· Price – The price at which delivery will be made in the future
· Quantity – Any number of units as mutually agreed
· Quality – Type
· Future Delivery date
· Delivery Place – How and where delivery will be made at maturity
2. Futures
A Futures contract is an agreement between two parties to buy (long position) or sell (short position) an asset at a certain time in the future at a certain price. Future contracts are standardized exchange-traded contracts. The quantity of the underlying, quality of the underlying, the date and month of expiry and minimum price change are standardized. Like a forward contract, a futures contract obligates each party to buy or sell a specific amount of a commodity at a specified price. Unlike a forward contract, buyers and sellers of futures contracts deal with an exchange, not with each other.
3. Options
Options are derivative instruments that provide the holder with the right, but not the obligation, to, pay or receive some quantity of cash or commodity, at an agreed strike price. An option is a contract that gives the buyer of the contract the right to buy (a call or put option) or sell (a put or call option) at a specified price (the “strike price”) over a specified period of time.
Advantages of Call option:
· Protection against rising markets
· Benefit from falling markets
· Flexibility to deal at the money level or at higher level
· Flexibility in physical supply
Advantages of Put Options (Floors):
· Protection against falling market
· Benefit from rising markets
· Physical flexibility
4. Swaps
A swap can be most simply defined as an agreement between two parties to exchange, at some future point, one product, either physical or financial, for another. But, in derivative form swap is purely cash settled.
Sampling Procedures in Petrol Pumps
Correct Sampling procedures are extremely important if accurate information is to be obtained from the sample being taken.
Improper containers or badly drawn non-representative samples can cause laboratory results to be meaningless.
It is most important that the person assigned to take samples must be trained for this responsibility and is competent.
Sampling is very important phenomenon for the quality control. Samples are drawn for the purpose of ascertaining the conformity of the stock/product to the relevant specifications. For taken the samples from storage tanks we use the weighted sampling cage. To ensure the good sample we follow a sampling procedure:
1. The sampling bottle and sample containers shall always be kept clean.
2. Before use, they shall be rinsed with the product under sampling.
3. Only the type of sample required for the relevant specification to be tested, shall be taken.
4. The sample quantity collected shall be sufficient for carrying out the relevant tests.
5. Sample shall be taken preferably during the cooler part of the day and under shade.
6. The sample container shall be filled maximum 95% of the container capacity. Properly closed and it shall be ensured that there are no leaks.
7. Sample details shall be entered in the form as applicable and fixed to the container.
8. An depot attendant / dealer well conversant with the procedure shall personally supervise sampling and filling of the sample container.
Improper containers or badly drawn non-representative samples can cause laboratory results to be meaningless.
It is most important that the person assigned to take samples must be trained for this responsibility and is competent.
Sampling is very important phenomenon for the quality control. Samples are drawn for the purpose of ascertaining the conformity of the stock/product to the relevant specifications. For taken the samples from storage tanks we use the weighted sampling cage. To ensure the good sample we follow a sampling procedure:
1. The sampling bottle and sample containers shall always be kept clean.
2. Before use, they shall be rinsed with the product under sampling.
3. Only the type of sample required for the relevant specification to be tested, shall be taken.
4. The sample quantity collected shall be sufficient for carrying out the relevant tests.
5. Sample shall be taken preferably during the cooler part of the day and under shade.
6. The sample container shall be filled maximum 95% of the container capacity. Properly closed and it shall be ensured that there are no leaks.
7. Sample details shall be entered in the form as applicable and fixed to the container.
8. An depot attendant / dealer well conversant with the procedure shall personally supervise sampling and filling of the sample container.
Oil and gas industry in India
Oil & Gas Sector in India
Ministry of Petroleum & Natural gas
Petroleum Industry
Exploration & production
Refining
Marketing
ONGC
ONGC VIDESH
OIL
NG processing by:
GAIL
ONGC & OIL
Indian Oil Corporation
Bharat Petroleum Corporation
Hindustan Petroleum Corpn.
Numaligarh Refineries Ltd
Chennai PCL (now in IOC)
BRPL (now in IOC)
Kochi Ref. (now in BPC)
MRPL (Mangalore Refinery & Petrochemicals Ltd.)
In Pvt. Sector:
Reliance Petroleum
Essar
Indian Oil Corporation
Bharat Petroleum Corporation
Hindustan Petroleum Corpn.
IBP Co. Ltd
Balmer Lawrie & Co. Ltd
NRL
Reliance
Essar
Shell
Other Organizations under Ministry of Petroleum & Natural gas:
DGH (Directorate General of Hydrocarbons)
Petroleum Planning & Analysis Cell
OISD (Oil Industry Safety Directorate)
PCRA (Petroleum Conservation Research Association)
PII (Petroleum India International)
CHT (Centre For High Technology)
Petrofed (Peetroleum Federation of India)
Important Data (All India – Industry)
(2007-08)
(MMT)
Refinery Crude Thru’put: 156.1
Product Production: 144.93
Crude Production: 34.117
Imports:
-Crude: 121.67 equivalent to Rs. 2726.99 billion
-Products: 22.72 Rs. 764.43 billion
-Total Imports: 144.39 Rs. 3491.42 billion
Exports : Products 39.33 Rs. 1076.03 billion
Product Sales: 131.01
Imports as %age of India’s
Total exports:
-Gross Imports: 55.8%
-Net Imports: 38.6%
Natural Gas:
- Gross Production: 32.274 Bn. Cub.meter
Marketing Infrastructure
(As on 01.04.2007)
Number of retail outlets: 32149
SKO Dealers: 6607
LPG Distributors 9365
Projected Production Crude oil Nat. Gas
Year (MMT) (MMSCMD)
2009-10 42.49 151.86
2010-11 41.19 150.79
2011-12 39.52 173.23
Ministry of Petroleum & Natural gas
Petroleum Industry
Exploration & production
Refining
Marketing
ONGC
ONGC VIDESH
OIL
NG processing by:
GAIL
ONGC & OIL
Indian Oil Corporation
Bharat Petroleum Corporation
Hindustan Petroleum Corpn.
Numaligarh Refineries Ltd
Chennai PCL (now in IOC)
BRPL (now in IOC)
Kochi Ref. (now in BPC)
MRPL (Mangalore Refinery & Petrochemicals Ltd.)
In Pvt. Sector:
Reliance Petroleum
Essar
Indian Oil Corporation
Bharat Petroleum Corporation
Hindustan Petroleum Corpn.
IBP Co. Ltd
Balmer Lawrie & Co. Ltd
NRL
Reliance
Essar
Shell
Other Organizations under Ministry of Petroleum & Natural gas:
DGH (Directorate General of Hydrocarbons)
Petroleum Planning & Analysis Cell
OISD (Oil Industry Safety Directorate)
PCRA (Petroleum Conservation Research Association)
PII (Petroleum India International)
CHT (Centre For High Technology)
Petrofed (Peetroleum Federation of India)
Important Data (All India – Industry)
(2007-08)
(MMT)
Refinery Crude Thru’put: 156.1
Product Production: 144.93
Crude Production: 34.117
Imports:
-Crude: 121.67 equivalent to Rs. 2726.99 billion
-Products: 22.72 Rs. 764.43 billion
-Total Imports: 144.39 Rs. 3491.42 billion
Exports : Products 39.33 Rs. 1076.03 billion
Product Sales: 131.01
Imports as %age of India’s
Total exports:
-Gross Imports: 55.8%
-Net Imports: 38.6%
Natural Gas:
- Gross Production: 32.274 Bn. Cub.meter
Marketing Infrastructure
(As on 01.04.2007)
Number of retail outlets: 32149
SKO Dealers: 6607
LPG Distributors 9365
Projected Production Crude oil Nat. Gas
Year (MMT) (MMSCMD)
2009-10 42.49 151.86
2010-11 41.19 150.79
2011-12 39.52 173.23
CHARACTERISTICS OF FUTURES TRADING
A "Futures Contract" is a highly standardized contract with certain distinct features. Some of the important features are as under:
a. Future trading is necessarily organized under the auspices of a market association so that such trading is confined to or conducted through members of the association in accordance with the procedure laid down in the Rules & Bye-laws of the association.
b. It is invariably entered into for a standard variety known as the "basis variety" with permission to deliver other identified varieties known as "tenderable varieties".
c. The units of price quotation and trading are fixed in these contracts, parties to the contracts not being capable of altering these units.
d. The delivery periods are specified.
e. The seller in a futures market has the choice to decide whether to deliver goods against outstanding sale contracts. In case he decides to deliver goods, he can do so not only at the location of the Association through which trading is organized but also at a number of other pre-specified delivery centres.
f. In futures market actual delivery of goods takes place only in a very few cases. Transactions are mostly squared up before the due date of the contract and contracts are settled by payment of differences without any physical delivery of goods taking place.
a. Future trading is necessarily organized under the auspices of a market association so that such trading is confined to or conducted through members of the association in accordance with the procedure laid down in the Rules & Bye-laws of the association.
b. It is invariably entered into for a standard variety known as the "basis variety" with permission to deliver other identified varieties known as "tenderable varieties".
c. The units of price quotation and trading are fixed in these contracts, parties to the contracts not being capable of altering these units.
d. The delivery periods are specified.
e. The seller in a futures market has the choice to decide whether to deliver goods against outstanding sale contracts. In case he decides to deliver goods, he can do so not only at the location of the Association through which trading is organized but also at a number of other pre-specified delivery centres.
f. In futures market actual delivery of goods takes place only in a very few cases. Transactions are mostly squared up before the due date of the contract and contracts are settled by payment of differences without any physical delivery of goods taking place.
ECONOMIC BENEFITS OF THE FUTURES TRADING AND ITS PROSPECTS
Futures contracts perform two important functions of price discovery and price risk management with reference to the given commodity. It is useful to all segments of economy. It is useful to producer because he can get an idea of the price likely to prevail at a future point of time and therefore can decide between various competing commodities, the best that suits him. It enables the consumer get an idea of the price at which the commodity would be available at a future point of time. He can do proper costing and also cover his purchases by making forward contracts. The futures trading is very useful to the exporters as it provides an advance indication of the price likely to prevail and thereby help the exporter in quoting a realistic price and thereby secure export contract in a competitive market. Having entered into an export contract, it enables him to hedge his risk by operating in futures market. Other benefits of futures trading are:
(i) Price stabilization-in times of violent price fluctuations - this mechanism dampens the peaks and lifts up the valleys i.e. the amplititude of price variation is reduced.
(ii) Leads to integrated price structure throughout the country.Facilitates lengthy and complex, production and manufacturing activities.
(iii) Helps balance in supply and demand position throughout the year.
(iv) Encourages competition and acts as a price barometer to farmers and other trade functionaries.
Future trading is also capable of being misused by unscrupulous speculators. In order to safeguard against uncontrolled speculation certain regulatory measures are introduced from time to time. They are:
a. Limit on open position of an individual operator to prevent over trading;
b. Limit on price fluctuation (daily/weekly) to prevent abrupt upswing or downswing in prices;
c. Special margin deposits to be collected on outstanding purchases or sales to curb excessive speculative activity through financial restraints;
d. Minimum/maximum prices to be prescribed to prevent future prices from falling below the levels that are un remunerative and from rising above the levels not warranted by genuine supply and demand factors.
e. During shortages, extreme steps like skipping trading in certain deliveries of the contract, closing the markets for a specified period and even closing out the contract to overcome emergency situations are taken.
(i) Price stabilization-in times of violent price fluctuations - this mechanism dampens the peaks and lifts up the valleys i.e. the amplititude of price variation is reduced.
(ii) Leads to integrated price structure throughout the country.Facilitates lengthy and complex, production and manufacturing activities.
(iii) Helps balance in supply and demand position throughout the year.
(iv) Encourages competition and acts as a price barometer to farmers and other trade functionaries.
Future trading is also capable of being misused by unscrupulous speculators. In order to safeguard against uncontrolled speculation certain regulatory measures are introduced from time to time. They are:
a. Limit on open position of an individual operator to prevent over trading;
b. Limit on price fluctuation (daily/weekly) to prevent abrupt upswing or downswing in prices;
c. Special margin deposits to be collected on outstanding purchases or sales to curb excessive speculative activity through financial restraints;
d. Minimum/maximum prices to be prescribed to prevent future prices from falling below the levels that are un remunerative and from rising above the levels not warranted by genuine supply and demand factors.
e. During shortages, extreme steps like skipping trading in certain deliveries of the contract, closing the markets for a specified period and even closing out the contract to overcome emergency situations are taken.
Upcoming & ongoing Refinery projects
1. The Hindustan Petroleum Corp Ltd and its partners, including Total S A of France, will decide in April/May 2009 on setting up a 14-15 million tonnes oil refinery cum petrochemical project at Visakhapatnam in Andhra Pradesh.
Besides HPCL and Total, other partners in the project that may cost $US10 billion are gas utility GAIL India Ltd, Oil India Ltd and Mittal Energy Investments Pte Ltd. Mittal has already put on hold investing in the project, due to the global financial woes.
2. Mangalore Refinery and Petrochemicals Ltd (MRPL) has stated that mechanical completion of its capacity enhancement project's third phase at its refinery will be delayed till Oct 2011 from Jun 2010. The estimated cost of the project has gone up to Rs12,412 crore from Rs7,943 crore. The company has been affected by overheated market, which has adversely affected appointment of process licensors, delay in land acquisitions and rise in steel and cement prices since 2007.
3. BPCL-Kochi Refinery Ltd intends to set up refinery bottoms upgrading facilities at Kochi with an investment of Rs8,000 crore. BPCL currently has Bina Refinery in MP which is a JV Bharat Oman Resources Ltd. (BORL). Cost-Around Rs. 10,300 crore and will end at dec.2009. Both the refineries after their completion will lead to the production of 30 MMTPA.
4. IOCL is to start construction on Paradip refinery in Orissa by April 2009. It will be commissioned by 2011-12. Capacity-15MMTPA, Cost-Rs25,000 crore.
5. Guru Gobind Singh Refinery at Bhatinda in Punjab, promoted by HPCL-Mittal Energy at a cost of Rs18,900 crore, will be commissioned by Mar 2011. While Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Ltd hold 49 percent stake each in the project, the financial institutions hold the remaining stake.
6. ONGC has exited the Rs. 25,600 crore Kakinada Refinery project and is replaced by GMR group which will held 51% stake in the project. After completion it will produce 15MMTPA of refined products.
7. IOC is planning to expand its Panipat refinery from 3MMTPA to 15MMTPA in 2009. Also it is planning to commission a Hydrocracker project at Haldia this year.
8. Partners Irving Oil and BP plan to extend the construction period on their planned 300,000 b/d Eider Rock refinery in Nova Scotia, eastern Canada, from four to as many as eight years, Irving says. The slowdown of the $8bn project comes as global refining capacity appears set to exceed demand for the next few years. Construction at Eider Rock is still planned to begin in 2011.
9. Saudi Aramco is deferring construction bids for its 2 refineries(400,000 b/d) at Yanbu and Jubail to first half of2009. Saudi Aramco is working with a JV with Conoco Philips and Total SA of France. They are aiming to cut project costs that are estimated to have risen $12 billion for each refinery. They are planned to start production by 2013. Aramco's 400,000 b/d expansion at the 550,000 b/d Ras Tanura refinery is on course for completion in 2013.Yanbu is the first major project in the Saudi oil sector to be officially delayed due to the global financial crisis and economic slowdown, but Aramco and Conoco insist they remain committed to the 400,000 b/d venture.
10.The completion date for Qatari state-owned QP's 250,000 b/d al-Shaheen refinery has been put back by two years to 2012 because of delays in bidding for contracts. Finance difficulties and expectations of falling costs are prompting Oman to delay its $12bn, 200,000-300,000 b/d Duqm refinery-petrochemical complex. Construction is expected to take five years, although no start-up date has been set.
Besides HPCL and Total, other partners in the project that may cost $US10 billion are gas utility GAIL India Ltd, Oil India Ltd and Mittal Energy Investments Pte Ltd. Mittal has already put on hold investing in the project, due to the global financial woes.
2. Mangalore Refinery and Petrochemicals Ltd (MRPL) has stated that mechanical completion of its capacity enhancement project's third phase at its refinery will be delayed till Oct 2011 from Jun 2010. The estimated cost of the project has gone up to Rs12,412 crore from Rs7,943 crore. The company has been affected by overheated market, which has adversely affected appointment of process licensors, delay in land acquisitions and rise in steel and cement prices since 2007.
3. BPCL-Kochi Refinery Ltd intends to set up refinery bottoms upgrading facilities at Kochi with an investment of Rs8,000 crore. BPCL currently has Bina Refinery in MP which is a JV Bharat Oman Resources Ltd. (BORL). Cost-Around Rs. 10,300 crore and will end at dec.2009. Both the refineries after their completion will lead to the production of 30 MMTPA.
4. IOCL is to start construction on Paradip refinery in Orissa by April 2009. It will be commissioned by 2011-12. Capacity-15MMTPA, Cost-Rs25,000 crore.
5. Guru Gobind Singh Refinery at Bhatinda in Punjab, promoted by HPCL-Mittal Energy at a cost of Rs18,900 crore, will be commissioned by Mar 2011. While Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Ltd hold 49 percent stake each in the project, the financial institutions hold the remaining stake.
6. ONGC has exited the Rs. 25,600 crore Kakinada Refinery project and is replaced by GMR group which will held 51% stake in the project. After completion it will produce 15MMTPA of refined products.
7. IOC is planning to expand its Panipat refinery from 3MMTPA to 15MMTPA in 2009. Also it is planning to commission a Hydrocracker project at Haldia this year.
8. Partners Irving Oil and BP plan to extend the construction period on their planned 300,000 b/d Eider Rock refinery in Nova Scotia, eastern Canada, from four to as many as eight years, Irving says. The slowdown of the $8bn project comes as global refining capacity appears set to exceed demand for the next few years. Construction at Eider Rock is still planned to begin in 2011.
9. Saudi Aramco is deferring construction bids for its 2 refineries(400,000 b/d) at Yanbu and Jubail to first half of2009. Saudi Aramco is working with a JV with Conoco Philips and Total SA of France. They are aiming to cut project costs that are estimated to have risen $12 billion for each refinery. They are planned to start production by 2013. Aramco's 400,000 b/d expansion at the 550,000 b/d Ras Tanura refinery is on course for completion in 2013.Yanbu is the first major project in the Saudi oil sector to be officially delayed due to the global financial crisis and economic slowdown, but Aramco and Conoco insist they remain committed to the 400,000 b/d venture.
10.The completion date for Qatari state-owned QP's 250,000 b/d al-Shaheen refinery has been put back by two years to 2012 because of delays in bidding for contracts. Finance difficulties and expectations of falling costs are prompting Oman to delay its $12bn, 200,000-300,000 b/d Duqm refinery-petrochemical complex. Construction is expected to take five years, although no start-up date has been set.
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