Rogers says bull market in oil has `years to go'

Betty Liu, Bloomberg

Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg's Betty Liu from Singapore about Lehman Brothers Holdings Inc. and other investment banks, Federal Reserve policy, airline stocks and the outlook for oil. Rogers said the increase in the price of crude oil has ``years to go'' as known sources of petroleum are dwindling.

LIU: All right. Jim, also talk to us about oil. You know, you've been very bullish on oil. We've had a lot of people talk about, you and I had a debate about whether or not there's speculation in oil markets right now.

You say no, others say yes, like Soros, he says it's going to bubble. What do you know that others don't about the oil market?

ROGERS: Look, look, Betty, there are always speculators in every market. Look at the New York Stock Exchange right now. You think there aren't any speculators down there on the floor of the stock exchange? There are always speculators. That's what business is all about.

I submit to you that most of the people and - I don't know about most of the people, I shouldn't say that, but we know that the IEA, the definitive authority on oil has said that the world has an oil problem. The Saudis have told Bush that we have an oil problem.

Betty, if there is lot of oil, please, would somebody tell us where it is, so we can all invest in it? The world has a serious oil problem.

Now, Betty, that does not mean that oil cannot go down 50 percent. During this bull market since 1999, oil has gone down twice by 50 percent, going down by 50 percent in 2001 and again, in 2000 whatever it was, '05 or '06. So sure, you can have big reaction in any bull market.

But that's not the end of the bull market. There is no supply of oil unless you - somebody can tell us where the oil is, the bull market in oil has years to go despite new corrections which may or may not come.

LIU: Well, but you know, and I know you always hate having me ask you about - about limits or caps and all of that. But, given the supply/demand situation that you're talking about, how high can oil go?

ROGERS: Betty, I know you - how you're paid to ask questions like that, but I don't know the answer. I'm not smart enough. I know that unless somebody discovers a lot of oil, the price of oil can go to $150, $200. You pick the number.

Eventually, if it goes high enough, if oil goes to $300, there will be drilling for oil on the White House lawn. Hillary Clinton won't be speculating in cattle futures anymore, she will be speculating in oil futures. She will be out there drilling for oil.

If it goes to $300, there will be drilling at Buckingham Palace. I don't know how high it's going to go, Betty, but unless somebody discovers a lot of oil very quickly and very accessible areas, the facts are the world is running out of oil - out of known oil - known oil reserves.

Global cue: Indian firm eyes wastelands for jatropha cultivation to produce biofuel

Sandip Das
Posted online: Thursday , June 26, 2008 at 22:24 hrs
Updated On: Thursday , June 26, 2008 at 22:24 hrs

At a time when developed countries like America are coming under fire for their policy of encouraging biofuel cultivation instead of foodgrains and aggravating the global food crisis, a home-grown Indian firm is embarking on an aggressive drive to use wastelands across the country to produce biofuels.

IKF Green Fuel plans to invest more than Rs 400 crore to take up Jatropha plantation and processing, including over Rs 100 crore in the farmer suicide capital of the country , Vidarbha and Marathwada. “We ensure that agricultural land is not diverted for jatropha cultivation through checking of crop records of the farmers,” says Vishal Rawat, president, Biodiesel, IKF Green Fuel.

Incidentally, a national bio fuel policy has been in the works for a while now but there has been no progress on it despite a Group of Ministers (GoM) headed by agriculture minister Sharad Pawar mulling over it since last year. The national mission on bio-diesel envisages plantation of Jatropha and Pongamia over 5 lakh hectares of non-agricultural and degraded land. “We have been taking up jatropha plantation in company-owned land, government land and through contracting farming,” Rawat told FE . IKF Green has already acquired and initiated Jatropha plantations in more than 54,000 hectares of land mostly degraded or with low agricultural output or without any secured source of irrigation across Maharashtra, Meghalaya, Rajasthan, Gujarat and Jharkhand. IKF technologies would raise the required resources through a Global Depository Receipt (GDR) for which approval has been received. However, the company expects to get bio diesel out of its plantation for commercial supply by 2011 as it takes about 3-5 years before a Jatropha plant is ready for processing. The company has tied up with more than 6000 farmers mostly in Maharashtra , Karnataka, Rajasthan, Jharkhand and Tamil Nadu for initiating contract farming for Jatropha cultivation. “We are targeting around 10,000 hectares of land to given on contract farming during the current year,” Rawat said.

Besides arranging for loans facilities from the bank, the company has been providing technical support for plantation and its maintenance for 3 years to the farmers. Rawat said that the company is assuring farmers Rs 6 kg of seeds or the prices fixed by the respective state government. More than 35% oil can be extracted from Jatropha seeds and rest is glycerine. The oil seeds cake can be used for fertiliser.

IKF has already signed an agreement with Indian Oil Corporation's Research and Development wing for transferring of technology and providing technical assistance for conversion of jatropha oil into bio-fuel. “We have been in talks with Punjab National Bank, Corporation Bank and others for providing loans to farmers for jatropha cultivation,” Rawat said. With a small processing plant of 3000 litres capacity per day at Udaipur , IKF has already signed memoranda of understanding with the state governments of Gujarat and Meghalaya to set up Jatropha seed processing plants with an annual capacity of 1 lakh tonne.