Even the enemies of Randeep S. Grewal admire his business savvy. Few may possibly be surprised if the CEO of Environmentally friendly Dragon demonstrates up some day over the Forbes magazine listing of billionaires. His company's new share supplying on the London Stock Trade's AIM, commencing which has a market place capitalization of US£525 million, was very the Daring stroke, raising some eyebrows. Green Dragon positioned a bit in excess of 4.5 million shares, a lot less than five percent of the corporate's outstanding shares, to raise $25 million. Randeep Grewal saved the remaining ninety five.2 % of Inexperienced Dragon for himself.
On the company's admission for the Intention sector Grewal remarked, "2007 promises for being a landmark 12 months for CBM and its contribution to your Chinese energy provide...This listing is a vital and timely milestone within our progress pushed tactic." The final time Grewal stooped to handle the insignificant annoyances of the capital markets, he Individually acquired up all of the shares of Greka Vitality Corp, then trading within the NASDAQ. Shareholders cherished him - he paid a 69 p.c quality for his or her shares in 2003. Greka delisted from NASDAQ and deregistered with the U.S. Securities Fee.
Considering the fact that then, it has been tougher to track Grewal's most recent accomplishments, but based on the cost of oil, his privately owned fiefdom is likely flush with money. Inside a 2002 information release, Grewal uncovered the then-public Greka Energy owned 800 million barrels of recoverable major gravity oil, which is right as feedstock for his asphalt refinery. That yr Greka's throughput was 3400 barrels of asphalt each day. Based on ABC Information, the state of California compensated $359/ton for asphalt - up 61 percent in the last year. High gasoline selling prices are driving key oil organizations to squeeze more gasoline output out of their crude oil. In almost any occasion, Grewal simply will get wealthier with each new barrel of asphalt or crude oil his enterprise generates.
A minimum of Inexperienced Dragon Gas is currently publicly traded, offering shareholder participation. But, number of shares are available to the public. Grewal may be generous to shareholders at the end of the working day, but he is not parting with his shares this early in the game. In his submitting assertion with AIM, the corporate noted that issuing even more shares to lift extra funds would occur as A final resort, or more delicately said, "... as correct under the situations." Grewal would initially turn to debt financings and various steps prior to giving shareholders more liquidity.
It isn't an accident the share price of GDG, which opened for trading at US$5.56/share rapidly rose to some latest substantial of $six.60/share. An in depth examine of Grewal's previous firm points out the substantial self esteem in Environmentally friendly Dragon Gasoline. To not be baffled with his previously named Grewal Power, which can be now known as Greka Integrated, Environmentally friendly Dragon Gasoline would be the mum or dad firm of Hong-Kong primarily based Greka Power. They keep 5 CBM manufacturing-sharing contracts with China's point out-owned CUCBM (China United Coalbed Methane Corporation). Inexperienced Dragon's contracts are upon significant tracts of land (in excess of twice the scale of Rhode Island), which could most likely host 16.five trillion cubic feet of methane fuel.
Based on the Environmentally friendly Dragon Gasoline website, Grewal is usually chairman and chief govt in the California-based Greka Built-in, a company and that is described as remaining "associated with major oil and gas transportation, refining, housing and with interests in Electricity Qualities and refining property." It is Santa Barbara County' premier onshore oil company with holdings in Bakersfield, Orange County and The la basin, Greka operates Pretty much 70 onshore manufacturing, processing and transportation services in Santa Barbara (California), as well as the Santa Maria Asphalt Refinery. It is similar a person which made 3400 barrels of asphalt on a daily basis throughout 2002.
While others chat a very good sport, Grewal excels with the Electrical power sport. In his final revealed job interview which we were capable of dig up (August 2001), Grewal discussed accurately how he prepared to help make Greka Power a success Tale, i.e. selling oil or utilizing it solution asphalt then market asphalt, dependent upon the price. And after that he did. Inside a July 2002 news launch, Grewal stated his corporation might have prolonged-phrase actions in China. And now it does - via Green Dragon Fuel.
In detailing the business's enterprise strategy, during his 2001 job interview, Grewal unabashedly boasted, "We're profitable at $ten oil. We're financially rewarding at $30 oil. We are successful at $2 fuel, and we're financially rewarding at $16 fuel." He named his asphalt plant "a organic hedge to fluctuating commodity prices." In addition it supplies constant hard cash circulation. And there's no doubt Grewal is ever more rewarding with crude oil promoting all over $70/barrel.
Steve Chase, Santa Barbara County's deputy Vitality director, who regulates Greka's refinery (and it has participated in fining Greka - see below), calls the corporate's small business prepare "absolutely excellent." Chase praised Greka in a New Instances newspaper posting, describing the corporate's economics, "Oil sells possibly high or minimal, but asphalt won't. If you are an oil firm by having an asphalt refinery, you can promote into two diverse marketplaces. When oil is very low, you utilize it to help make asphalt. When It is large, you (just) market it."
Even with Chase's praise, Grewal's street to results hasn't been and not using a several motor vehicle wrecks together how. In 2002 and 2003, his corporation was cited for in excess of 70 violations, which bundled oil spills and gasoline releases, based on the Santa Barbara News-Push newspaper. The place's district lawyer filed felony costs against Greka after an explosion close to the asphalt refinery hurt two workers. Greka settled for civil penalties of $two hundred,000.
In November 2005, Greka Integrated misplaced its breach-of-deal lawsuit from a former safety supervisor, Gary Lowery. In June of this calendar year, the U.S. Environmental Defense Agency fined the company $127,five hundred for "unauthorized disposal of oil refinery wastewater into the facility's injection wells, in violation of the federal Safe and sound Consuming H2o Act." This Greka has paid out out about $700,000 in settlements considering the fact that Grewal took the corporate private. Everyday living's minor annoyance turn out to be fewer problematic when one particular is promoting oil for A great deal a lot more than $thirty/barrel. Particularly when this exact oil was rewarding at $ten/barrel.
Grewal Turns to China to construct His Fortune
Randeep Grewal's arrived into the Strength marketplaces as chairman and chief executive of an oil and fuel horizontal drilling business, Horizontal Ventures. Over the Power bear current market, Grewal cleverly commenced a series of mergers and getting oil and gasoline belongings, which led to his very first Greka Electricity Corp. He realized exactly where to search out deals and deftly began assembling his Strength empire. Horizontal drilling is integral to coalbed methane enhancement, which brings Grewal back to wherever he commenced - like a gasoline China corporation verification drilling enterprise.
Also together just how, two of Grewal's businesses have suffered bankruptcies. This past November, Saba Enterprises, formerly Greka Power Corporation, filed for Chapter seven individual bankruptcy, after two creditors received judgments totaling $19.five million. In its petition the corporate declared it had no assets. The entire creditor shortfall could rise to greater than $24 million. In 1999, An additional business of which Grewal was a director, Sabacol - a subsidiary of Saba Petroleum, was dissolved following the sale of its belongings just after working its way through Chapter eleven personal bankruptcy proceedings.
Existence is additionally filled with many next odds. This time, nonetheless, via Greka Energy (Hong Kong) and Environmentally friendly Dragon Gasoline (GDG), Grewal owns what may sometime become a multi-billion greenback gas challenge. Smith & Williamson, Inexperienced Dragon's IPO underwriter valued the organization at $973 million, depending on its achievements in recovering GDG's approximated methane fuel in place as well as wellhead price tag at time of delivery.
Until eventually not too long ago, coalbed methane was addressed like a harmful waste merchandise which killed coal miners in tunnel explosions. In China, depending upon whose figures you suspect, among four,000 and six,000 coal miners die annually. At most effective, methane was an unwelcome byproduct of coal mining, which the Chinese vented in to the environment aggravating an already atrocious air pollution crisis.
If the Chinese commenced to realize CBM was delivering a bigger percentage in the U.S. gasoline generation, they wanted to build their own large assets. In fact, the Chinese are pragmatists. Why pay out throughout the nose to import LNG, while you are throwing absent everything methane? In 2004, coalbed methane accounted for eight p.c of U.S. fuel output. That is the exact share selection China mandated in its eleventh 5-calendar year approach with the role of fuel in its Electrical power blend. And as we have stated in past article content, China has idled about forty % of its gas-fired plants mainly because it couldn't receive adequate gas materials.
Methane or C4, which happens to be a far more pure gas than conventional fuel, is observed inside the carbon lattice of coal at a molecular stage. The considerably less "sweet" organic gas, which happens to be present in much more conventional fields, was produced by hydrocarbon source rocks and is particularly trapped in the porous and permeable reservoir rock, like carbonate reserve or sandstone. H2o strain retains coalbed methane in position, which needed new drilling technological know-how, to successfully extract.
To extract coalbed methane, an organization drills wells into your coal seam, then perforates and fractures the coal seams. By increasing permeability by this process, drinking water will be able to be pumped out on the coal seam. During this de-watering course of action, pressure holding the gasoline set up is lowered. This force differential vents the gas throughout the fracture units in to the very well. Voila! What were killing coal miners and polluting China's atmosphere could now be utilized to electric power fuel-fired Power plants.