WASHINGTON, Feb. 21 (UPI) — Mittal Investment’s announced 49-percent stake in a state-run Indian refinery and reported plans by Chevron Corp. to expand its share in a private facility show a growing interest in the Indian refining sector.

On Tuesday Luxembourg-based Mittal agreed to a $725 million stake in India’s Guru Gobind Singh Refinery Ltd. refinery, which has a capacity of 180,000 barrels per day. Under the deal Mittal will own 49 percent of the refinery, state-owned Hindustan Petroleum Corp. Ltd. will own 49 percent, and the rest will be offered to financial institutions.

The 9 million ton, $3.78 billion refinery is likely to be commissioned by 2010 and is to be located in Bhatinda, in the Indian state of Punjab. It will handle heavy crude from South America and the Middle East, Indian news reports said. But plans are already afoot to widen the crude slate so the refinery can accept a wider range of crude that can be sold on the lucrative export market.

“The high-margin export market is what’s going to drive their margins up,” Ajith Murthy, a senior consultant at PFC Energy in Houston, told United Press International. “So they are certainly going to divert some of the products to the export market.”

India’s deal with Mittal comes amid speculation that Chevron will expand its stake in privately owned Reliance Petroleum’s proposed 27 million-ton, 580,000 barrels-per-day export refinery in Jamnagar, in the state of Gujarat, from 5 percent to 29 percent. Chevron bought the stake last April for $300 million, and under the deal it had the option of increasing its share to 29 percent. The $6 billion refinery is expected to begin operations in late 2008.

Chevron Chairman and Chief Executive Officer David J. O’Reilly refused to confirm the speculation.

“We are here for a few days … to visit the refinery under construction where we are a partner at Jamnagar,” he said in New Delhi Tuesday. “That is the primary purpose of the visit. We want to see the construction ourselves.

“We have an agreement with them (Reliance). If everything does well we will see further together. I can’t speculate on the timing,” he said.

Still, the announced deals and the trend in India to build large refineries are unlikely to have a short-term effect, experts say.

“Looking at what the demand for products are and what the current capacity is, there is a still a huge gap,” Murthy said. “All these (other refineries being planned or under construction) put together are going to increase the capacity, but still in five, seven years there won’t be a surplus, but after that there might be a surplus in terms of capacity for products.”

Murthy said, however, the refineries could still present a strong opportunity for overseas revenues.

“Clearly, foreign companies are seeing this as a great opportunity because the demand for product is increasing at a rapid pace,” he said. “India is certainly a good destination. There’s a market, there is potential for growth, and there is also this export component.”

And the entry into India may lead to greater opportunities for upstream activities and for exploration both in India and overseas.

Indian news reports said Chevron and Reliance may partner on the Krishna-Godavari Basin’s D6 deep-sea gas block, which is believed to hold 35 trillion cubic feet of reserves. And HPCL and Mittal are exploring overseas refining and marketing opportunities and are looking to bid for foreign oil and gas assets. They have formed a joint venture to bid on a 51-percent stake in the 9 million-ton refinery in Port Harcourt, Nigeria.

“This is a nice entry point to integrate later upstream,” Murthy said.

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(Comments to energy@upi.com)

On Feb. 5, Humana (http://www.businessweek.com/ticker/) is slated to report fourth-quarter results. Analysts expect the health insurer to post earnings of 88 cents per share on $5.7 billion in revenue, up from 46 cents a share on $3.7 billion a year earlier, according to Reuters Estimates. The Louisville (Ky.) company will also likely be one of several outfits in the managed-care sector benefiting from recent growth in private Medicare plans.

Medicare beneficiaries have been able to receive their benefits through private plans since President Clinton signed the Balanced Budget Act of 1997. In 2003, Congress passed the Medicare Prescription Drug, Improvement & Modernization Act, which overhauled the rules for these programs and gave them the name Medicare Advantage (see BusinessWeek, 10/25/06, ). Now some analysts see signs Medicare Advantage programs could be a boon for investors seeking growth in the health-care market. Rising Enrollment

More and more seniors are signing up for Medicare Advantage, recent reports indicate. As of the latest data, 19% of eligible Americans are enrolled in a private Medicare plan from Humana, UnitedHealth (http://www.businessweek.com/ticker/), or another provider, according to Citigroup (http://www.businessweek.com/ticker/). That’s an increase from 11% in mid-2004. Citigroup projects 25% of seniors will have signed up for Medicare Advantage by the end of 2009.

Private Medicare plans offer opportunities for expansion in an industry where growth typically comes from market share gains, rather than new customers, analysts say. “Enormous growth prospects remain,” says Citigroup analyst Charles Boorady in a Feb. 1 report.

He adds that the program’s potential success may pressure other insurers like Aetna (http://www.businessweek.com/ticker/) and Cigna (http://www.businessweek.com/ticker/) to step up their efforts to grab a piece of the Medicare market. (Citigroup has investment banking relationships with Aetna, Cigna, Coventry, Humana, and UnitedHealth.)

Recent data could brighten the outlook for Humana when the U.S. Centers for Medicare & Medicaid Services (CMS) reports results this week. CMS issued figures on Jan. 31 indicating a hefty increase in Medicare Advantage enrollment. “We suspect that Humana may see earnings upside between a nickel and a dime during 2007 as a result of this increase in participation,” says Prudential (http://www.businessweek.com/ticker/) analyst David Shove in a Jan. 31 report. Smaller Players Also Benefit

The news for Humana improved a day later, when CMS clarified that the bulk of Medicare Advantage gains came in more comprehensive plans that include a prescription drug component. “The clarification from CMS should bode well for Humana’s [Medicare Advantage] enrollment outlook,” says Goldman Sachs (http://www.businessweek.com/ticker/) analyst Matthew Borsch in a Feb. 1 report. (Goldman has an investment banking relationship with Humana.)

Big players like Humana and UnitedHealth aren’t the only ones that might benefit from projected growth in private Medicare programs. Medicare Advantage makes up a more sizable portion of business for smaller players like Coventry Health Care (http://www.businessweek.com/ticker/) or WellCare Health Plans (http://www.businessweek.com/ticker/), so the impact on the those companies’ bottom lines could be particularly notable.

Standard & Poor’s equity analyst Phillip Seligman has a strong buy recommendation on Coventry, noting the Bethesda (Md.) company’s emphasis on cost control (see BusinessWeek.com, 12/4/06, ). Seligman looks for revenues to increase to roughly $8.4 billion in 2007, from an expected $7.8 billion in 2006, helped by 5% to 10% higher Medicare Advantage enrollment.

Seligman has a hold recommendation on WellCare, but he projects even more dramatic private Medicare gains. He sees premium revenues rising about 33%, to $4.8 billion in 2007, after an estimated 97% surge to $3.7 billion in 2006. An expected 30% jump in Medicare Advantage enrollment could be a key driver of this revenue growth, Seligman says in a recent research report. Dems May Change the Rx

Meanwhile, the latest data from CMS also include modestly encouraging signs for some drugstore chains. CVS (http://www.businessweek.com/ticker/) and Longs Drug Store (http://www.businessweek.com/ticker/) realized the highest organic percentage growth in prescription-drug plan enrollment among the top 15 plans, according to Bear Stearns (http://www.businessweek.com/ticker/). “While we believe profitability of the plans will be lower in 2006 than 2007 due to more competitive pricing, the enrollment gains represent a modest positive to partially offset,” says Bear Stearns analyst Robert Summers in a Feb. 1 report.

To be sure, the long-term viability of Medicare Advantage business depends on the political environment. Leading up to last November’s elections, some analysts expected the Democrats to push Medicare changes that might hamper stocks in the managed-care sector (see BusinessWeek.com, 9/21/06, ). “The government hasn’t historically been a good long-term partner to managed-care companies,” Morningstar (http://www.businessweek.com/ticker/) analyst Brandon Troegle notes in a Jan. 29 report.

In the meantime, though, Medicare Advantage plans might be the right prescription for growth.

OCEANSIDE, New York: Workers at many airlines have taken huge pay cuts in recent years, and they have watched 100,000 or so of their colleagues lose their jobs.

But for many workers, the financial troubles of the industry have taken another toll: a sense of love lost for the business.

Some airline mechanics, for example, are fond of saying that they have jet fuel in their veins. For the Schalk family of Oceanside, New York, it even coursed through two generations. Until recently.

Charlie Schalk, now 75, was training as a bank teller when he enlisted in the Air Force in 1951 and was sent to Newfoundland and taught to fix planes. He became smitten with the DC-3s he was overhauling. After the service, he fell for the Boeing 707 while working at Pan Am.

“Ill never forget the day that screaming giant came rolling in,” Schalk said. “She was beautiful.”

His three sons inherited his love of planes, and became airline mechanics, too.

But as they approached middle age, the industry went into its steep downturn, and the joy they felt fixing planes turned to anger over the pay cuts, lost jobs and suddenly risky pensions. The brothers make between $60,000 and $75,000 a year. Each of them vowed to start a new career.

“Theres no fun anymore,” said Glenn Schalk, 53, the oldest brother. He blames outsourcing of some other work by his employer, British Airways, for his sense of insecurity about his job fixing planes at John F. Kennedy International Airport near Oceanside.

He started his own business after hours, and watched his brothers take steps to start new careers, too. Then something unexpected happened: The romance of work, something the Schalks long thought was tied exclusively to fixing big jetliners, began to return.

“Its fun. I cant wait to get up in the morning and work in my business,” Glenn Schalk said.

He sells commemorative plaques and trophies to companies, municipal agencies and professional sports teams.

And he now makes more from the business, DS Incorporated, than from his airline job, from which he hopes to retire next year.

“Im into being a businessman,” he said. “I like the respect.”

To be sure, many other airline workers have not managed the transition to other careers as well as the Schalks.

Many of those laid off landed in poorer-paying jobs. And those who have kept their jobs lead a more stressful life, often doing more work for lower pay, and with stripped-down retirement benefits.

Workers in the U.S. automobile industry, many of them car junkies, are going through the same painful process - a wrenching separation from an industry that employed generations of families.

The ranks of budding entrepreneurs among airline workers include Charles Foulkes, 40, who speaks five languages and has a graduate degree from Northwestern University. “Im not an underachiever,” he said.

Still, Foulkes joined American Airlines in 1990 as a flight attendant and expected that to be his career. After his pay was cut in 2003, Foulkes, who lives in Chicago, signed up for cooking school, then baking school.

The business he started, Crust Bread, sells naturally unleavened loaves for $4 to $10 at gourmet shops and now accounts for about one-third of his income. He is trying to expand and now sees his airline work in a slightly different light. “I want to do something more than fly around the world and serve Cokes,” he said.

Many airline employees start businesses that cater to fellow workers. Linda Pinka, a flight attendant at Southwest Airlines for 35 years, makes airline-themed jewelry. She estimated that about half the flight attendants she knew had a second source of income.

Richard Krutenat, a regional jet pilot for American Airlines, runs a business, DFWcrewhouse.com, which matches landlords with pilots and flight attendants who need to rent a place to sleep near Dallas/Fort Worth International Airport.

Krutenat, 36, started the business in 2002 to supplement his airline salary, which is now $80,000 a year. He has since been bitten by the entrepreneurial bug.

He bought a house of his own to rent out and more recently has been mulling how to attract investors to develop dormitory-style housing: “Ive tinkered with the idea of marketing it big time.”

Pilots and flight attendants have more flexible schedules, which has always allowed them to work side jobs and start businesses. But as industry problems worsened, other airline workers found ways to moonlight.

“When I started it was just a handful of guys” working side jobs, said Brad Mueller, a crew chief who for 18 years has worked at the giant American Airlines maintenance base in Tulsa, Oklahoma, which employs about 7,000 people. Now, he estimated, close to 20 percent of the workers have outside jobs.