Reliance Industries is considering taking an 11 per cent stake in one of Venezuela's biggest petroleum projects, the energy major said on Tuesday, strengthening ties between the Latin American nation and its top Indian customer.Reliance, controlled by billionaire Mukesh Ambani, operates the world's biggest refining complex in Gujarat and derives nearly 80 per cent of its revenue from refining. It is hunting for cheaper, heavier crude oil to feed its refineries.Venezuela has been Reliance's top crude oil supplier, and in 2012 the company signed a 15-year deal to buy up to 400,000 barrels per day (bpd) of heavy oil from its state-run oil company, PDVSA."We are looking to participate in the heavy oil upgrades project and a farm-in in the Carabobo-1 block, taking over the participating interest of Petronas," Swagat Bam, senior vice-president at Reliance said at the Petrotech conference.Reliance is also examining entry into the Ayacucho-8 block in a joint venture with PDVSA, Bam said.Malaysia's Petronas said in September it is exiting the Petrocarabobo project in Venezuela's Orinoco belt, after what sources said were disagreements with Venezuelan authorities and PDVSA.The project plans to invest around $20 billion over 25 years and involves building a 200,000 barrel per day upgrader to convert heavy crude into light crude oil.Venezuela's PDVSA holds 60 per cent of the project. Other partners are Spain's Repsol, India's ONGC, Oil India and Indian Oil Corp.After recent regulatory changes in Mexico, Reliance is looking at exploration opportunities there, but has so far not committed any investments in that country, Bam said. Reliance currently buys 60,000 bpd of oil from Mexico.In December, Mexico's Congress voted to open up its oil and gas sector to private investment in the biggest overhaul of the industry since it was nationalized, as the country seeks to revive flagging output."Our working relationship with petroleum regulators and NOCs (national oil companies) in LatAm countries has always been exemplary and this has given us great sense of confidence," Bam said.Reliance, India's largest private sector company by revenue, has seen a sharp fall in output at its KG D6 gas block off the east coast, since 2010, raising investor concerns over its exploration business.Its overseas exploration business mainly comprises stakes in three shale gas joint ventures in the United States that it acquired in 2010.(Reuters)
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Intelligent Energy, a British hydrogen fuel cell developer and manufacturer, said it had signed an $82 million contract, its biggest so far, to provide its technology for mobile phone masts in India.Chief Executive Henri Winand said the technology, originally developed with Suzuki Motor Corp to power motor scooters, was cheaper and more reliable than diesel generators, which have provided back-up power for the towers.The agreement with India's Ascend Telecom Infrastructure covers 4,000 towers serving some 10 million mobile phone users, said Intelligent Energy, a privately owned company named by Deloitte as one of the fastest growing UK technology companies in 2013."We have been generating power quietly for two years (in India), but now we are taking contracts where we are competitive and more cost-effective than the distributed diesel generation baseline," he said in an telephone interview."It's the first contract we have taken of this nature and this size and scope."The hydrogen fuel cell systems provide back-up power when electricity from the grid fails, which can happen for up to 12 hours of each 24, Winand said.The contract lasts more than five years and has the potential to grow to about $200 million as Ascend's mast coverage grows, he said. (Reuters)
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Shares of Indian oil and gas companies gained after the government officially notified a decision taken last year to change the pricing formula for domestic natural gas from April 1, removing the uncertainty on what effectively constitutes a price hike.Deutsche Bank says the hike will be positive for the sector, and says Oil and Natural Gas Corp Ltd and Oil India Ltd will be the biggest beneficiaries, followed by Reliance Industries Ltd.Shares of ONGC and Reliance Industries gained more than 2 per cent, while Oil India rose 3.3 per cent.(Reuters)
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Reliance Industries, which operates the Krishna-Godavari basin's D6 block off the east coast, has started producing gas from the MA-8 well on 1 January, its spokesman said on 9 January.The well has potential to produce 1 million to 2 million standard cubic metres per day (mscmd) of gas from the well and the output is expected to stabilise by the middle of the month, the Reliance official said.Reliance is currently producing about 10 mscmd gas from the KG D6 block, sharply lower from the 60 mscmd production at the end of 2010. Reliance and partner BP have cited geological complexities for the fall in output but the oil regulator believes they have failed to drill enough wells.Falling output had already prompted the government to disallow proportionate cost recovery to Reliance, leading to arbitration proceedings over the issue.Last month, India allowed Reliance to charge higher prices for gas from April only after the company offered financial guarantees to the government to settle any claims against it over a shortfall in its gas output.(Reuters)
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The Supreme Court on Wednesday (8 January, 2014) said huge investment made by companies in coal blocks without getting clearance cannot be a ground for not cancelling licences and asked the Centre to respond whether it intends to de-allocate such allocations.A three-judge bench headed by Justice R L Lodha said that the companies which invested money on blocks without getting all clearances took the decision at their own risk."They (companies) must suffer consequences no matter how much investment has been made by them. The alleged illegality cannot be compounded," the bench said when the Attorney General contended that around Rs two lakh crore has been invested in such blocks and it will be difficult to cancel the licence for want of clearances."All such investments would go in drain and it cannot be a defence and no law would help them," the bench said.The apex court said any investment made in anticipation of clearances cannot be justified and such blocks cannot be protected if the companies fail to get clearances within a time frame fixed under the law."Such investments are made at their own risk if their rights have not matured. All such investments would be unauthorised," the bench said.The court asked the Centre to respond whether it intends to de-allocate such allocations.Meanwhile, in an embarrassment to the Centre, Maharashtra which is a Congress-ruled state also submitted before the apex court that coal blocks allocation is "entirely controlled and regulated" by the Union of India and the state government is just a subordinate party.The state government's stand assumes significance as it virtually puts the blame on the Centre for the alleged irregularities in the coal blocks allocation and contradicted the stand taken by Attorney General G E Vahanvati who had contended that Centre's role is confined just to identification of coal block.Andhra Pradesh Government also took a stand similar to Maharashtra. West Bengal, Madhya Pradesh, Jharkahand, Odisha and Chhatisgarh had earlier told the apex court that they played a minimal role in coal blocks allocation and had squarely blamed the Centre for alleged irregularities in coal blocks allocation.Odisha government had also submitted that the central government had exercised "pervasive control" in allocation of coal blocks and framed its own guidelines for it."The allocation of coal blocks was made by the central government from 1993 to 2012 by evolving its own mechanism by constituting a screening committee which framed its own guidelines and also followed the guidelines framed by the Ministry of Coal from time to time," the Odisha's counsel had said.West Bengal and Madhya Pradesh had also said they were merely following the Centre's directions.The apex court had sought responses from seven mining states-- Madhya Pradesh, Andhra Pradesh, Odisha, Jharkhand, Maharashtra, Chhattisgarh and West Bengal-- after it had observed that the Centre was giving "contradictory" stands on allocations.The Centre had earlier termed allocation by it as just an exercise of identification of blocks and at the most a letter of intent given to the companies by it.The Attorney General had in September 2013, submitted that coal blocks allocation was merely a letter of intent and does not confer any right to the companies over the natural resource which is decided by the state government.He had contended that decision of coal block allocation to companies is only the first stage and firms get rights over coal only when they start mining for which they have to take various clearances.The court is scrutinising coal block allocation since 1993 on three PILs seeking cancellation of blocks on the ground that rules were flouted in giving away the natural resources and that certain companies were favoured in this process.(PTI)
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A list of the country’s most competitive cities with key parameters rankedClick here to view graphic(This story was published in BW | Businessworld Issue Dated 27-01-2014)
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Mumbai had many things going for it in the year gone by. Several infrastructure projects were launched — or are close to opening. The 14-km Eastern Freeway that runs from South Mumbai to the eastern suburb of Chembur has opened, providing a quick exit and entry point to those commuting by car from the satellite towns of Navi Mumbai, and the more distant Pune. Then, the much-needed flyover connecting the suburbs of Santa Cruz and Khar to the Western Expressway and the airport was finally inaugurated. The first leg of both the monorail network and the Metro is complete and they are ready to go. In the first phase — Chembur to Wadala — the monorail will have a run of 9 km. The Metro’s first phase, Versova on the coast to Ghatkopar, will create the first east-west corridor for the city. Having missed six deadlines, the Santa Cruz-Chembur Link Road, a double-decker flyover — a 6.5-km link between Mumbai’s eastern and western suburbs — is now ready. These projects, worth some Rs 6,500 crore, have helped keep Mumbai at No. 2 in the City Competitiveness Index of 50 cities across India. Delhi beat Mumbai by a whisker. While Delhi scored 69.89, Mumbai was just a fraction of a point behind at 69.88. Expectedly, Mumbai topped in financial infrastructure and in terms of access to high quality business inputs, including natural and human resources and capital availability. However, it fell behind in ‘administrative’ performance — a poor show at No. 26; and was also marked down in ‘physical’ outlook, where it stood at No. 7. The old ‘inner city’, bounded by the sea, has a sprawl of just 603 sq. km and houses more than 12 million people. The key to the city’s survival and growth lies in connecting to the hinterland by a network of roads and rail corridors; to the new towns in the extended metropolitan region. A crucial project to serve this end is the Sewree-Uran Sea Link, a 22-km sea bridge connecting the district of Raigad to the city. It will also provide access to a new airport at Navi Mumbai. Within the city, where long commutes are a way of life, the Rs 24,340-crore Metro phase-II will connect Nariman Point in the south to Bandra-Kurla Complex — two key commercial hubs — and then go north to the international airport and Marol industrial centre. Expected to carry around 22 lakh commuters daily, it will ease the pressure on Mumbai’s overcrowded trains. But, nobody has a clue to when the project will start — and its completion date. Mumbai’s nearly 150-year-old industrial past has given it a work culture and access to human resources that can scarcely be rivalled. However, for want of investment and administrative bungling, the city has seen little modernisation. The roads are a mess and every monsoon the city shuts down. Mumbai’s famous storm water drains are of British vintage. Good residential property is exorbitantly expensive. “A lot of talent is leaving this city because the quality of life is poor and too expensive,” admitted Maharashtra chief minister Prithviraj Chavan in an earlier interview with BW|Businessworld. Key to building a modern city is providing good transport infrastructure, including mass rapid public transport and a network of roads and bridges that allow people to commute easily and quickly. And, expanding the urban sprawl to take the pressure off the city’s inner core. Can the government come up with a workable plan for affordable housing in satellite towns? There is a plan for a multi-modal corridor, 126-km long, that will run in a semi-circle, skirting the city, from Virar in the north to Alibaug, south of Mumbai. It will connect the towns of Bhiwandi, Kalyan, Dombivili and Panvel. The Rs 10,000-crore corridor will have eight lanes; with dedicated lanes for buses, two-wheelers and non-motorised transport. The corridor will become a magnet for alternative and modern city development, the government is hoping. Again, nobody knows if the plan will materialise and, if so, how long it will take for fruition. gurbir1@gmail.com twitter@stayalive (This story was published in BW | Businessworld Issue Dated 27-01-2014)
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This is one record that Delhi’s former chief minister Sheila Dikshit can be proud of despite her Congress party suffering its worst rout under her stewardship. The city remains India’s most competitive for the fourth year running.Delhi’s superior infrastructure, better communication services and the large talent pool helped it continue its winning streak in the City Competitiveness Index 2013, brought out by the Institute for Competitiveness, India.The biggest attraction in the city, apart from its sprawling network of flyovers, is the Metro. Over the last decade, the Delhi Metro has proven to be one of the best initiatives in sustainable urban transportation in the country, notes the institute in its report. “The Metro and the road networks are a tremendous strength when it comes to the competitiveness of Delhi,” says Ajay S. Shriram, president-designate, Confederation of Indian Industry (CII). The Metro today has an operational network covering 190 km in Delhi and neighbouring Gurgaon, Ghaziabad and Noida, with 142 stations. Approx-imately 1.5 million passengers commute by the Metro on a daily basis. In the last five years, Delhi saw the completion of 16 flyovers, with work in progress on 44 more flyovers-cum-grade separators.Infrastructure apart, Delhi’s ability to draw skilled manpower from the National Capital Region (NCR) and other states provides the essential human resource requirement of businesses. “Delhi is like a magnet for people from surrounding areas,” notes Shriram. “People in Delhi tend to be very competitive. They are go-getters,” says Alok B. Shriram, senior vice-president, PHD Chamber of Commerce and Industry.A quick look at Delhi’s outlay explains why the state remains competitive in terms of infrastructure. In 2012-13, Delhi had earmarked Rs 2,650 crore, or 20 per cent of its total budgetary expenditure, on the transport sector. The outlay increased by 46 per cent during 2013-14, with the government deciding to spend Rs 3,876 crore to improve transport infrastructure. The outlay is 24 per cent of the overall plan expenditure. Urban development and housing, water supply and sanitation, and energy were the other sectors that received priority treatment in the last budget. The results were impressive. “The whole of Delhi gets almost uninterrupted supply of power. This is a positive,” says the CII president-designate. Fortunately for the Aam Aadmi Party and its leader — new chief minister Arvind Kejriwal — Delhi has the wherewithal to spend. Kejriwal has inherited a state that has shown 10.3 per cent growth in gross domestic product (GDP) as against a national average of 7.9 per cent in the past five years. Delhi’s per capita income, at Rs 2 lakh, is among the highest when compared to other states. Its outstanding debt as a percentage of state GDP was 8 per cent, among the lowest in 2012-13. The state spends less than 10 per cent of its tax revenues on servicing its debt. Most importantly, 93 per cent of the state’s financial outlay of Rs 16,000 crore for 2013-14 comes from internal resources, and not central or multilateral funds. Given its level of urban concentration, Delhi has been emphasising the promotion of high-tech, low-energy-intensive and non-polluting industries. The government has also taken measures to retain its household industrial manufacturing base by regularising over two dozen small-scale industrial clusters, where industrial activity spans over 70 per cent of the total area. As the report shows, Delhi retains its top rank not only because of its physical infrastructure and communication network, but also due to the presence of a diversified range of business entities that support the overall industry ecosystem. Delhi ranks high in terms of institutional support, incentives to businesses, demand conditions, innovations and a host of other parameters. It, however, lags (in 45th position) in terms of ‘administrative’ competitiveness. This could perhaps be the reason why the newly formed AAP won the hearts of Delhi’s electorate. joecmathew@gmail.com twitter@joecmathew (This story was published in BW | Businessworld Issue Dated 27-01-2014)
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