The chief executive officer of Cairn India has sold more than half his shareholding in the oil and gas explorer for 512.68 million rupees, the company said in a stock exchange filing on Thursday.Rahul Dhir has sold 1.5 million shares between January 30 and February 1, Cairn said, but did not disclose any reason for the sale.Dhir, who has been CEO since August 2006, held 2.78 million shares or 0.15 per cent of the company's equity before these transactions.London-listed miner Vedanta Resources acquired majority stake in Cairn India last year in a $8.7 billion deal, buying most of the stake from Cairn Energy Plc.(Reuters)
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Exporters body Fieo said on Friday the long-standing payment problem with Iran has been resolved as shipments to the Islamic nation will now be paid in the Indian rupee."The payment problem with Iran has been resolved with operationalisation of rupee payment mechanism through UCO Bank. The payments which have been stuck in the past will be cleared expeditiously," Federation of Indian Export Organisations (Fieo) President Rafeeque Ahmed said in a statement here.He said "such positive action" by the government will encourage exporters to aggressively export to Iran and optimise utilisation of Rupee balance in oil import pool.The Department of Financial Services, Ahmed said, has asked the Fieo to bring cases where an exporter is facing payment problem with regard to export to Iran before the government.Following resolution of the payment issue, he said the Indian business delegation, which is going to Iran on March 10-14, will be able to negotiate new contracts with their Iranian counterparts.The Directorate General of Foreign Trade (DGFT) has also agreed to grant all export benefits to exports for which the payment is received in Indian rupee, he said, adding the notifications would be issued soon.The problem with Iran began after the Reserve Bank of India (RBI) in December 2010 withdrew the Asian Clearing Union (ACU) mechanism under which payments were made to Iran. India imports 12 million barrels of crude oil every month from Iran, which is the nation's second-largest supplier after Saudi Arabia.After the scrapping of the ACU mechanism, Iran, which makes up for over 12 per cent of India's oil needs, had continued to supply oil on credit despite the outstanding amount crossing $3 billion.(PTI)
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There is a bright side to the plunge in solar panel prices that has brought down some U.S. and German manufacturers which relied too heavily on subsidies for green energy - solar power costs have fallen faster than anyone thought possible.The falls in prices for photovoltaic components, pushed down by economies of scale and fierce competition from China, have made solar nearly as cheap as conventional sources in Germany's electricity grid.The boom in Germany, the world's biggest photovoltaic market with 24,000 megawatts of installed capacity, has also helped to drive down costs worldwide, making solar a more viable and accessible alternative to fossil fuels in places ranging from India and the Middle East to Africa and North America.The unexpectedly rapid drop in global solar prices has nevertheless hit some equipment makers hard - producers like Solyndra in the United States and Solon in Germany that failed to keep pace and ended up in bankruptcy protection.The demise of Solyndra, which had got $535 million in loans from the U.S. government, is sometimes cited by sceptics as evidence of the dangers associated with supporting the industry with incentives. They argue subsidies waste public money."Everyone's missing the real story and it's amazing how brain dead some people are," said Jeremy Rifkin, an adviser to the German government and European Union on climate change and energy security. "It's absolutely a positive thing that solar prices are dropping faster than anyone thought they could."It's actually a great success," the U.S. economist told Reuters. "Those criticising solar for that are being ignorant or disingenuous. It's a winnowing out process similar to what the computer and communications sectors went through. More companies that can't stay ahead of the curve will go belly up."Cheap PowerGermany is the biggest market for solar power despite its heavy clouds and northern latitude. A robust legal framework that forces utilities to buy solar power at above-market rates has more than negated these disadvantages, turning Germany into the world's top testing ground for photovoltaic energy.Yet due to plunging prices for components, solar power prices in Germany have been halved in the last five years and solar now generates electricity at levels only a few cents above what consumers pay. The subsidies will disappear entirely within a few years, the German BSW solar association says, when solar will be as cheap as conventional fossil fuels.Germany has added 14,000 megawatts capacity in the last two years alone and now has 24,000 MW in total - enough green electricity to meet nearly 4 per cent of the country's power demand. That is expected to rise to 10 per cent by 2020. Germany now has almost 10 times more installed capacity than the United States.Germany's government-mandated "feed-in tariff" (FIT) is the engine of growth. The FIT is the guaranteed fee utilities are obligated to pay a million producers of solar power for a period of 20 years. It fell to 24 euro cents per kWh for new plants in 2012 from 57 cents in 2004. Since 2010 semi-annual cuts in the incentives have accelerated, dropping the FIT from 43 cents."The growth of solar in Germany in the last few years has been just incredible," said Martin Jaenicke, head of environment policy research at Berlin's Free University, noting solar power is the world's most abundant source of energy."People sometimes call solar power expensive. But once the capital equipment is paid off, it's an unbelievably cheap source of energy. Ideally, subsidies eventually eliminate themselves and that is exactly what is happening in Germany."Yet solar remains a relatively expensive source of power, even in Germany where consumers are forced to pay a surcharge of some 7 billion euros annually on their electricity bill to pay for the above-market rates that solar power producers get.The incentives pay for the costs of the 1 million rooftop power plants installed in the last decade. The German government that wrote the Renewable Energy Act in 2000 had had more modest ambitions. They hoped to have 100,000 rooftop power plants."It's important that electricity remains affordable," said Economy Minister Philip Roesler, who argues new installations should be capped at 1,000 MW per year. "We need to tackle the causes of rising costs and it is above all photovoltaic."Tom Mayer, chief economist of Deutsche Bank, said it was reasonable to support the sector before but it's now "high time" to cut the subsidies by 30 to 40 percent with prices falling to about 15 cents per kWh - 8 cents below the retail price."Now that the technology is mature, high subsidies are no longer needed," Mayer said in a research note. Even if some firms will perish, he said: "Leading producers on the world market can cope with (lower) prices."Survival Of Fittest"It's remarkable how fast photovoltaic prices fell towards grid parity," said Peter Ahmels, head of renewable energy at the German Environmental Aid Association (DUH). "Germany will hit grid power parity next year - three years faster than thought."As solar gained popularity in Germany and market prices for components fell, the government reacted by speeding up cuts in the FIT and is now mulling plans to cut the incentives faster to under 20 cents later this year.Claudia Kemfert, an energy expert at the DIW economic think-tank, said economies of scale from Germany's boom and technology innovations are behind the fall in solar prices. But she agreed Germany's FIT should fall faster."The competition is getting tougher all the time," she said. "That's why some German solar companies might not survive."Falling prices for solar power have hit the earnings and the stocks of many solar firms. Along with Solon and Solyndra, Solar Millennium, Evergreen Solar and SpectraWatt have sunk into insolvency.Rifkin, the U.S. economist, said more firms that cannot keep up will fail."This is disruptive but it's a success and it's moving so quickly," he said. "Germany is leading the way. Solar prices will keep falling. Grid parity is going to be reached in many countries between now and 2015 and that's a good thing. I don't think the world will need any more subsidies for solar by 2020." (Reuters)
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Brent crude rose above $107 on Thursday, recovering from the previous day's losses, as potential strong winter fuel demand and turmoil in the Middle East offset fears that a global economic slowdown could hurt consumption.Crude stockpiles in the United States fell more than expected last week as refinery rates rose and crude imports fell. A botched German bond sale on Wednesday raised alarm that the crisis could hit even Europe's largest economy.ICE January Brent futures rose 63 cents to $107.65 a barrel by 0502 GMT. Brent is poised for a third year of gains because of the political turmoil in the Middle East.US January crude, set for its second week of decline, was up 37 cents at $96.55 a barrel. Trading volume is expected to remain thin as the United States is closed for the Thanksgiving holiday.Both contracts lost nearly 2 per cent on Wednesday as weak economic data from Europe, China and the United States painted a somber outlook for global oil demand.Tony Nunan, a risk manager at Mitsubishi Corp, said winter and the uncertainty in the Middle East would support the market in the short term."OECD inventories are so low and we're running into winter," he said. "Seasonally December is the highest demand period."US crude inventories fell 6.22 million barrels last week, against an expected increase of 500,000 barrels, data from the US Energy Information (EIA) showed.Nunan expects Brent to average at $110-$113 a barrel while maintaining a $7-$10 spread with US crude.Brent's premium against US crude widened to $11.11, from $10.85 at Wednesday's close.Goldman Sachs said on Wednesday the WTI-Brent crude oil spread was likely to widen in the near term following a rapid unwinding in recent weeks, but the reversal of the Seaway pipeline would see it narrow again by the end of 2012.Euro ZoneThe debt crisis in the euro zone combined with weaker economic data from China and the United States increased worries that global growth could slow and reduce fuel demand.A majority of 20 prominent economists polled by Reuters also predicted the euro zone was unlikely to survive the crisis in its current form, with some envisaging a "core" group that would exclude Greece.Weaker Chinese factory output worried investors while US consumer spending growth slowed in October and business capital investment plans were weak, raising questions about expectations for solid economic performance in the fourth quarter.In the Middle East, street clashes flared in Cairo again on Wednesday while an eight-month revolt in Syria dragged on."The big issue is, of course, Iran," added Mitsubishi's Nunan. "It's slow moving but sanctions are ratcheting up and it's a question of whether Israel can wait."Israeli Prime Minister Benjamin Netanyahu called on Wednesday for stronger sanctions on Iran than those imposed this week by the United States, Britain and Canada to try to curb its nuclear ambitions.(Reuters)
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The auction for sale of government's 5 per cent stake in ONGC on Thursday got bids for 29.22 crore shares worth about Rs 8,500 crore, but could fetch only about two-third of the targetted proceeds of over Rs 12,000 crore.At the end of the one-day auction, the auction got total bids for 29.22 crore shares, including 19.92 crore on the NSE and about 9.3 crore on the BSE platform, exchange official said. The final figures were yet to be updated on the websites of the two bourses.The total bids were worth about Rs 8,500 crore and accounted for 68.3 per cent of the total offer size.Analysts said that a poor response to the bidding could be attributed to the fact that ONGC shares were trading very close to the offer price in the secondary market and even slipped below the floor price by afternoon trade."I think greed played out here. This should be one of the lessons - not to try and price the offering at a premium, especially when a reference point is available in the market price," said Ambareesh Baliga, chief operating officer at Mumbai's Way2Wealth Securities.Market commentators were quick to slam the government's handling of the long-delayed ONGC sale, which was conducted via auction on the stock exchanges in a test case for a newly approved method."The ONGC issue should have been priced at a discount and planned out well, which would have created a positive sentiment for future disinvestments," said Sunil Jain, vice president of equity research at Nirmal Bang.There was chaos with TV channels saying it had generated bids for just two-thirds of the shares on offer, but both of the country's main stock exchanges saying they were still counting orders."I'm in a crisis meeting. I can't talk," Sidhartha Pradhan, additional secretary in the government's Department of Disinvestment, told reporters outside his office in New Delhi before shutting the door.One channel, NDTV Profit, said state-owned Life Insurance Corp of India (LIC) had stepped in to buy up the remainder of the shares, but another channel said this was not the case.The National Stock Exchange and the Bombay Stock Exchange said they were still counting bids that had been entered.The government had proposed to sell about 42.77 crore shares through the auction at a floor price of Rs 290 a piece. The government on Tuesday decided to offload five per cent stake in ONGC through the auction route and the planned sale could fetch the government about Rs 12,000-13,000 crore.In the event of the total number of orders received at or above the floor price being less than the number of shares being offered for sale, the government would have the right to either conclude the sale to the extent of subscription or cancel the sale.The shares would be allocated on 'price-priority' basis, meaning the bidders at highest price would be allotted shares.The bids were mostly in the price range of Rs 290-293 per share for the auction, which commenced at 0915 hours and closed at 1530 hours today.The government had fixed a floor price of Rs 290 per share for the share sale through this one-day auction, wherein it was targetting to raise about Rs 12,000-13,000 crore.The bidding began on a weak note and only about 37,500 shares were bid for in the first hour. Till 1500 hours also, total bids had come in for only about 1.43 crore shares, but the momentum picked up in the last 30 minutes.After an initial spike of about one per cent, ONGC shares had also turned weak and even slipped below Rs 290 level by afternoon trade. The stock finally closed 1.87 per cent down at Rs 287.85 at the BSE.The government owns 74.14 per cent stake in ONGC and has proposed to sell 427.77 million shares or 5 per cent equity.The BSE (Bombay Stock Exchange) was the designated exchange for the proposed share sale, but orders were placed on both the BSE and NSE (National Stock Exchange).The sale of shares took place at a separate window of the two bourses. Any modification or cancellation of the orders would not be allowed in the last 30 minutes.No single buyer, other than mutual funds and insurance companies, would be allocated more than 25 per cent of the size of the offer.Still Counting....More than two-and-a-half hours after the auction closed, official data was not available on how many shares had been bid for, but TV channels reported bids had been received for about 290 million of the 427.77 million shares on offer.A company official said he could not immediately comment, while LIC officials were not available for comment.Shares in ONGC, the country's largest oil and gas producer and second-most valuable listed firm, ended the day down 1.7 per cent at 288.2 rupees.The government had earlier planned to sell ONGC shares through a public offer, but that was scrapped last October after a tepid response from investors amid weak equity markets.If fully subscribed, the offer would rank among India's five biggest equity offerings.Citigroup, Bank of America Merrill Lynch, HSBC, Morgan Stanley, Nomura and India's JM Financial were the banks on the ONGC deal.(BW Online Bureau With Agencies)
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US Secretary of State Hillary Clinton has warned Pakistan of "damaging consequences" over multi-billion gas pipeline with Iran, saying Islamabad could face sanctions if it went ahead with the ambitious project."We believe that actually beginning the construction of such a pipeline either as an Iranian project or as a joint project would violate our Iran sanctions law," Clinton told lawmakers at a Congressional hearing."We have been very clear in pointing out the consequences of building this pipeline," she said.She warned that sanctions could be triggered if the pipeline is constructed either as an Iranian project or a joint project with Islamabad."So, you know, we all know what the consequences of that are, and it would be particularly damaging to Pakistan because their economy is already quite shaky," she said.The top diplomat said the additional pressure on Pakistan that "the United States would be compelled to apply would further undermine their economic status".Clinton was responding to a question from Congressman Jerry Lewis on US response to Pakistan's insistence that it would go ahead with the Iran gas pipeline project.She made it clear that as the US was "ratcheting up pressure on Iran, it seems somewhat inexplicable that Pakistan would be trying to negotiate a pipeline."Clinton said the US recognises that Pakistan has significant energy requirements, and for the last three years Washington has been working to help them upgrade their existing energy infrastructure, to look at potential new sources of energy.The Iran-Pakistan pipeline aims to export a daily amount of 21.5 million cubic meters of the Iranian natural gas to Pakistan.(PTI)
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U.N. nuclear experts have endorsed stress tests designed to show that Japanese nuclear plants could withstand a repeat of last year's quake and tsunami, as the government campaigns to restart idled reactors and avoid a summer power crunch.The government, though, still faces an uphill battle to restore public trust in the nation's power utilities after the March 11 disaster wrecked the Fukushima nuclear power plant, triggering the world's worst nuclear crisis in 25 years.The Vienna-based International Atomic Agency's (IAEA) team has been in Japan at the request of the government to review stress tests conducted by its Nuclear and Industrial Safety Agency (NISA) on halted nuclear reactors to verify their safety."We concluded that NISA's instructions to power plants and its review process for the comprehensive safety assessments are generally consistent with IAEA safety standards," James Lyons, the leader of the 10-member IAEA team, said on Tuesday."We were very impressed with the way Japan quickly implemented the emergency safety measures after the accident in March. They have also been very active in participating in the international community to determine the steps forward," Lyons added to reporters.He also pointed out areas that Japan could improve upon, such as communicating with local communities about stress tests."NISA had done a good job in the transparency of information on their website, but we feel that it is also important for them to hold meetings in the vicinities of nuclear power plants to discuss their findings with the local population," Lyons said.Stress tests are computer simulations that evaluate a nuclear reactor's resilience to severe shocks.NISA completed a review of the stress tests earlier in January and said they showed reactors at Fukui prefecture's Ohi plant, the first to be assessed, were capable of withstanding an impact similar to the magnitude 9.0 earthquake and massive tsunami that wrecked the Fukushima plant.Some experts, however, have questioned the validity of the stress tests, charging the IAEA's visit was just for show."It is obvious that a visit by an international organisation advocating nuclear power is part of a political agenda that is built into a story already finished in advance," said University of Tokyo professor Hiromitsu Ino and former nuclear plant design engineer Masashi Goto in a joint statement last week.Ino and Goto, who serve on a committee that advises on NISA's review of the stress tests, said the tests were insufficient as they only simulate one natural disaster at a time and do not take into account the possibility of the sort of equipment failure and human error seen at Fukushima.Others suggested the IAEA's stamp of approval would not be enough to alleviate public concern."The public mistrust towards the government's handling of information over the nuclear accident is high and I don't think the review will change that," said Atsuo Ito, a political analyst.Energy Policy ShiftIn another effort to restore public confidence in nuclear power, the cabinet on Tuesday approved bills that would set up a new nuclear safety agency, separating regulation of the industry from the trade and industry ministry, which has promoted nuclear power and came under criticism for its cozy ties with utilities.The Fukushima disaster has also prompted a major shift in Japan's energy policy.The resource-poor nation had aimed to increase the share of nuclear power from a third to more than half of the power supply by 2030 before the disaster, but it now looks to reduce its reliance on nuclear power and raise the role of renewable sources such as wind and solar power.But with only three of the country's 54 nuclear reactors running, and public anxiety preventing the rest from being restarted after routine checks, the government wants to avoid a an economically crippling power crunch in the summer and hopes the stress tests will help persuade a wary public that it is safe to restart some of the reactors.Local governments hosting nuclear plants, however, have said the stress tests were not sufficient to allow them to give their approval, with some requesting that findings from the Fukushima disaster be considered in drafting new safety standards as well."A utility would not be violating any law if it went ahead and restarted a reactor after properly completing scheduled maintenance. But the Fukushima accident has heightened public concern over nuclear safety, making local consent an important part of the restart process," a trade ministry official said.Japan had promoted nuclear power as safe, cheap and clean before the Fukushima crisis."The myth that nuclear power was absolutely safe is a theme we will explore. We need to find out how such a mindset developed," Kiyoshi Kurokawa, head of a parliamentary committee investigating causes of the Fukushima accident, told reporters on Monday.(Reuters)
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The CBI on Monday arrested senior IAS officer and Andhra Pradesh principal home secretary B P Acharya in a case relating to alleged irregularities in land transfer and sale of villas and apartments in a township in the state.The township has been jointly developed by state-run Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and Dubai-based infrastructure firm Emaar.A 1983 batch IAS officer of Andhra Pradesh cadre, Acharya, who was the then Managing Director of the APIIC, has been named by the agency in the FIR and his residences were searched in August last year.He was called for questioning at the CBI office in Hyderabad and was later taken into custody, agency sources said.Recently, the CBI has arrested Sunil Reddy, said to be a close aide of Kadapa MP Y S Jagan Mohan Reddy, in the case.The CBI on August 17 registered a case against Acharya and the real estate developer on instructions of the state high court under IPC sections pertaining to cheating, criminal conspiracy and provisions of Prevention of Corruption Act.The case relates to alleged dilution of APIIC equity from 49 per cent to 26 per cent in the land development project in Manikonda, Hyderabad, which was being developed jointly by the corporation and Emaar.It has also been alleged that villas and apartments were shown underpriced in the documents causing losses to the exchequer, CBI sources said.The agency has so far made three arrests including that of Acharya in the case. (PTI)
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