State-run explorer Oil and Natural Gas Corp said its overseas arm has agreed to buy an additional 12 percent stake in a Brazilian oil block from Brazil's Petrobras for $529 million.Petrobras had earlier agreed to sell its 35 per cent stake in the block to China's Sinochem Group for $1.54 billion, but the deal was subject to pre-emption rights of ONGC and Royal Dutch Shell.Shell is the operator of the block with a 50 per cent stake, while ONGC already owns 15 per cent of the block.Shell and ONGC Videsh served a pre-emption notice on September 17 to jointly acquire the 35 per cent stake, ONGC said in a statement to Indian stock exchanges on Monday.Reuters last month reported that the companies were planning to exercise their pre-emption right on the stake.(Reuters)
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State-run Indian explorer Oil and Natural Gas Corp (ONGC) aims to commence commercial drilling for shale gas next year, its chairman said."We hope to take up at least 10 wells for parameters this year and to start commercial drilling next year," Sudhir Vasudeva told reporters.India approved a policy to allow state-owned companies to start exploration for shale oil and gas last month, as the world's fourth-biggest energy consumer moves slowly to seek alternatives to expensive oil imports.Of about 356 blocks held by ONGC and Oil India, India's upstream regulator has said 176 could hold shale resources.India could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of its gas demand, according to the US Energy Information Administration.(Reuters)
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The unearthing of the allocation scam and the findings of the CAG have brought the coal industry to its knees. The spate of deallocations and the ongoing CBI probe that followed have played havoc with production and hit supply to power producers. A lowdown...Click here to view graphicCompiled by Moyna; Graphic by Prashant Chaudhary(This story was published in BW | Businessworld Issue Dated 21-10-2013)
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Brazil's state-led oil company, Petroleo Brasileiro SA, and its Indian partners have made a "beautiful" oil discovery off Brazil's northeast coast and it will produce a minimum 100,000 barrels of petroleum a day starting in 2018, the company's chief executive officer said on Friday. Maria das Graças Foster, the chief executive, declined to say how big the discovery is but said it was an important new oil "province" for Brazil and that its large potential reserves would create a rush of jobs and activity to the area that will need to be managed carefully. On 27 September, Reuters exclusively reported that the discovery, centered on the SEAL-11 offshore exploration block, likely holds more than 1 billion barrels of oil and that the region will soon become Brazil's biggest new oil frontier. The SEAL-11 block is 60 per cent-owned by Petrobras and 40 per cent-owned by IBV Brasil, a 50-50 joint venture between India's Bharat Petroleum Corp (BPCL) and Videocon Industries Ltd. "In 2008 we decided to do a very extensive investigation of the area, and the results we have got have been very good," Foster told reporters at company headquarters in Rio de Janeiro. "This is a beautiful discovery, beautiful discoveries." In addition to light, high-quality crude oil, the region has important quantities of gas, she added. Two prospects in the area, known as Farfan and Muriu, are expected to be developed as a single or integrated unit, with at least one floating production, storage and offloading ship (FPSO) producing oil and gas from the area in 2018, Foster said. Foster said that was the minimum outlook for the area based on spending in the company's $237 billion 2013-2017 investment plan drawn up before the latest drilling and tests in the area. If confirmed, the new find could make the region the country's biggest new oil frontier since the government unveiled the massive subsalt discoveries off the coast of Rio de Janeiro and Sao Paulo states in 2007. Refinery PlansFoster also said that Petrobras is totally reforming its plans to build two low-sulfur diesel refineries in Brazil's northeast. The so-called premium refineries planned for the states of Maranhao and Ceara were showing signs they would not be profitable. The Maranhao refinery is expected to cost about $20 billion to build. Petrobras, however, has reworked the projects with the help of U.S. based consultants, Foster said, and those projects are now looking stronger. The company hopes to start putting the refineries out to tender as early as March, she said. The company is also in talks with a Chinese company to take a stake in the Maranhao project, Foster said. The project could lead to the Chinese partner taking a majority stake, she added.(Reuters)
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The overseas unit of Indian state explorer Oil and Natural Gas Corp plans to raise $1.5 billion to refinance a bridge loan that it expects to finalise soon to buy a 10 per cent stake in Mozambique's Rovuma gas field from Videocon group."Currently the market conditions are good. We have time of about one year, but we will refinance the bridge loan in three to four months," ONGC Videsh finance director S.P Garg told reporters.ONGC, along with state firm Oil India, acquired a 10 per cent stake in the Mozambique gas field from Videocon for $2.48 billion. ONGC separately acquired another 10 per cent stake in the block from Anadarko Petroleum Corp for $2.64 billion later.(Reuters)
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The cabinet has approved auction of coal blocks to private companies, Coal Minister Sriprakash Jaiswal said on Tuesday, enabling the government to allot coal mining licences through competitive bidding for the first time.Coal mining licences used to be allocated on recommendations of a panel of top bureaucrats across ministries, but the federal auditor censured the process last year saying it lacked "transparency" and probably deprived the government of billions of dollars of potential revenue between 2004 and 2011.India relies on coal to fuel more than half of its power generation, but state-run monopoly Coal India Ltd, that accounts for around 80 percent of the country's output has been unable to dig out coal fast enough to feed the country's growing power demand.(Reuters)
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The cabinet approved its shale gas and oil exploration policy on Tuesday, 24 September, a minister said, but gave no further details.India, the world's fourth-largest consumer of energy, could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, equivalent to about 26 years of the country's gas demand, according to the U.S. Energy Information Administration.But production from shale remains a long way off for India, which relies on imports for much of its energy needs.(Reuters)
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Goa's shipping industry, which is struggling to survive after the last year's ban on mining and export of iron ore, is pinning hopes on alternative cargoes to salvage their sinking business. The shipping industry in the State was catering to 90-odd mining leases before the temporary ban came into force. The central government has been encouraging the shift of cargo from roads to sea transport to reduce carbon footprint and also pressure on highways infrastructure. This has given a new lease of life to Goa's barge (ship) industry. "Nationally, there is shift of cargo from road-rail to shipping. You can also get carbon credit for such shift," Atul Jadhav, President, Goa Barge Owners Association, told PTI. The barge industry is looking for incentives to assist the logistics and transport industry achieve sustained and long-term shift from road freight to short sea and inland waterway transportation. Jadhav said the Kerala government has already started giving per tonne per kilometre subsidy to shippers for the cargo shift from road to waterways. He said the Centre can offer similar subsidy for the barges in Goa, which are left without cargo since September last year, when mining leases were suspended and iron ore exports from the state came to a halt. The fate of 400-odd barges, which generally operate in Goa's rivers, is hanging in balance, waiting for the Supreme Court to allow iron ore export. Jadhav said the barges from Goa can venture into deep sea and collect mining cargo from bigger vessels once the Ministry of Shipping declares waters up to four nautical miles off Goa shore as "partially smooth waters". The vessels can operate in the deep sea only when an area is declared as "partially smooth water", he said. Atul Pai Kane, Chairman, Confederation of Indian Industries (CII) Goa Chapter, said once these issues are settled, cargoes like cement, steel and coal can be transported with the state through barges instead of roads. "Two companies have already sought permission from the government to construct jetties in inland waters," he said. (PTI)
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GMR Infrastructure has sold its majority stake in a highway project for about $35 million, as debt-laden companies step up sales of some assets to boost earnings in a sector struggling with a weak economy. GMR, one of the country's best known infrastructure groups, whose interests span airports to power plants, said it had sold its 74 per cent stake in Ulundurpet Expressways to the India Infrastructure Fund of IDFC Ltd. It is the company's second sale in less than six months and more could be in the pipeline, GMR officials said. The deal will give GMR, whose outstanding debt was at $5.7 billion as of end June, an equity infusion of $35 million and also take about $73 million worth of consolidated debt off its books. The sale of GMR's 73 km (45 mile) highway in the southern coastal state of Tamil Nadu is the latest example of Indian infrastructure companies selling or trying to sell stakes in projects in order to reduce their debts. India sees ramping up the construction of new roads, power plants and ports as crucial to making its businesses more internationally competitive and lifting economic growth out of its worst slowdown in a decade. But the private sector's efforts to build new projects have been derailed by problems ranging from coal and gas supply shortages in the power sector to a throttling bureaucracy and a lack of bank funding in the roads sector. A drop of nearly 13 percent in the value of the rupee so far this year has also raised the cost of servicing dollar loans for companies. That has tipped companies into losses and forced them to sell off assets to reduce the debt pile. "We at GMR Group, continue to focus on creating liquidity and reducing our leveraged position, as part of the strategy of churning of assets," said Madhu Terdal, the chief financial officer of the GMR Group, in a statement. Its rival GVK Power and Infrastructure Ltd has asked lenders to reschedule loans worth more than $200 million to its power business and is looking to sell a stake in a unit that runs airports in Mumbai and Bangalore. Lanco Infratech Ltd is trying to sell stakes in its power plants. India's Jaiprakash Associates Ltd last week announced the sale of its cement plant in Gujarat state to UltraTech Cement Ltd. GMR shares ended up 2.1 per cent on Tuesday, outperforming a flat broader market. (Reuters)
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You spent your thirties working hard, aiming for the stars and dreaming about all the good things in life. By the time you hit your forties, you had achieved most of your goals and now, in your fifties, you are basking in your success. You have it all — a sprawling bungalow in a posh locality, fancy cars, kids studying abroad in Ivy League institutes, holidays in exotic locales, and all the other trappings of success, from designer bags to high-end watches. Now at 65, having retired from the board, all you want to do is hang up your boots and enjoy the golden years while still maintaining your luxurious lifestyle. Sure, you have the money, but life as a senior citizen has its pitfalls — from security concerns to the paucity of trained staff to cater to your every need — and worrying about them can take the sheen off life after retirement that you had imagined for yourself.If you were living in the US, you might have moved to a luxurious retirement home in Florida or California for a carefree life. But you wouldn’t dream of doing that in this part of the world. No surprise, considering the fact that, until now, retirement homes in India catered to the middle class where the focus is on keeping body and soul together; maintaining a luxurious lifestyle is nowhere on the agenda.Not anymore. New players such as Antara and Aamoksh One Eighty are taking retirement homes to a whole new level of luxury. So, say goodbye to insipid food and dowdy décor, and welcome communities with designer interiors, state-of-the-art facilities, five-star food and activities that can keep even a teenager engaged.Sample Antara Senior Living, a Max India project. At the Rs 520-crore retirement community under construction at Dehradun, retirees can relax in a 6,000 sq. ft spa or take a dip in an indoor swimming pool. They will watch movies in a 50-seat private theatre and work out in a well equipped gym. And when they are hungry, multi-cuisine chefs trained at some of the best hotels in the country will be on standby to whip up meals that are high on nutrition and taste. TEE TIME: Aanandam, Aamoksh's retirement community in Kodaikanal, will have retirees living in villas next to a golf courseWhat’s more, to ensure your comfort, architects from New York and Spain have been hired to make the project senior-friendly. That means providing step-free access, eliminating tripping hazards, providing 15-20 per cent stronger lighting, creating larger, more open spaces for easy manoeuvrability and several other design elements that add up to a more senior-friendly environment.And all this is done so subtly that you don’t realise you are being treated any different simply because you are older. “Antara is not a real estate project but a lifestyle choice, which independent senior citizens will make willingly,” says Tara Vachani, the 26-year old CEO of Antara Senior Living.Agrees Sanjay Lakhotia, founder director of Aamoksh One Eighty. “It’s a lifestyle choice and not a compulsion.” Lakhotia’s project is a joint venture between Aamoksh and US-based One Eighty, which manages over 40 senior citizen homes in the US, Canada and Mexico. “Earlier, in India, there was a stigma attached to retirement homes. People thought you moved into such facilities because you had uncaring kids,” he says. “But with the kind of facilities we offer, people realise that it’s more comfortable to stay here .”At Aamoksh’s retirement community in Kodaikanal, Aanandam, retirees will live in individual villas overlooking a golf course. They will spend their days engaged in activities that will not only keep them physically and mentally fit but also entertain them. And when they decide to travel, trips will be organised keeping all their special needs in mind. Such a golden lifestyle, of course, comes at a price. “Our target consumer is an evolved, well-travelled independent senior citizen with a net worth of Rs 5 crore or more,” says Vachani. Apartments at Antara cost between Rs 1.5 crore (one bedroom, bath and living area) and Rs 4.4 crore (three bedrooms and bathrooms). There are also three penthouses priced at Rs 7 crore each. Monthly expenses will vary between Rs 60,000 and Rs 1.5 lakh per couple and will include maintenance, housekeeping, laundry, all meals, monthly doctor consultations, annual checkups, etc.In fact, Vachani’s marketing team spends a lot of time with a prospective buyer’s chartered accountants to ensure that his finances are sound enough to maintain such a lifestyle for the rest of his life. “We have had instances where people have showed an interest but their finances did not hold up,” says Vachani.While Lakhotia does not categorise his clientele in terms of net worth, he admits that the prospective buyer has to be reasonably well off. “It’s not just a one-time investment, but an ongoing cost. So you have to have enough of a post-retirement income to sustain a lifestyle for the rest of your life.” At Aamoksh’s Kodaikanal project (200 villas), a one-room villa costs Rs 40 lakh and three-bedroom villas are upwards of Rs 1 crore. Monthly expenses are between Rs 30,000-45,000 per couple. break-page-breakBoth Vachani and Lakhotia are confident that there is a market for luxurious senior citizen homes in the country. Globally, senior living is a $25 billion industry with over 2,000 projects in the US alone. In India, there are less than 2,000 units for formal senior living and those too are in the lower- to middle-class category. With approximately 98 million elderly people in the country, there is enough scope for high-end luxurious senior living communities. “Our research shows 515,000 households in India are the target segment for upmarket senior living, with nearly 165,000 households in north India alone,” says Vachani. No wonder she is convinced her 217 apartments, to be ready by 2016, will find takers. Vachani plans more such projects in NCR and other north Indian cities. Aamoksh has already started an 88-apartment project in Kasauli and has plans for another in Pune.Poonam Bahl, 54, a Delhi-based entrepreneur, is looking forward to moving into Aamoksh’s Kasauli project. “I’m a single parent and, in another three years, my daughter will move out for higher studies.” She says she does not want her daughter to worry about her living alone. “A retirement facility where I get to make new friends and pursue my interests makes a lot of sense,” says Bahl, who loves meeting new people, reading and is an art and history buff. ‘Our target consumer is an evolved, well-trave lled independent senior citizen with a net worth of Rs 5 crore-plus’ Tara Vachani, Chief executive officer, AntaraThen there are others such as a couple who are willing to give up their posh south Delhi address to move to Antara for peace of mind. “We would be able to lead a life of dignity and independence. It is important to have peace of mind and we believe Antara will give us that,” says the couple.Ageing Comfortably For active and independent seniors, luxury senior living facilities also offer a host of activities. At Antara, for instance, residents can engage in yoga, pilates, badminton, gardening, art and craft or take classes in cookery, art, photography or even learn a new language. Facilities aside, says Vachani, the calming atmosphere and care that Antara promises to provide will distinguish it from any other player in the market. “We know more medical care will be needed as residents age, so we are building a health centre just across the street from the community especially for the residents,” says Vachani. The health centre will not only provide medical care, but also rehabilitation and wellness facilities, including occupational therapy and specialised dementia therapies, among others. Being just a short hop from a Max super speciality hospital also ensures that good medical care is close at hand. Antara will also provide assisted living, complete with a 24-hour nurse, for those who require it.Leasing Vs Buying Different players have different norms for who can buy property and how. Aamoksh One Eighty allows you to buy the property outright and puts no restriction on the age of the buyer, but the person cannot be a resident until he crosses the age of 55. “So, you can buy it for your parents, but you cannot live there except for when you are visiting,” says Lakhotia. Also, it does not allow you to purchase the property and lock it up. “If half the properties are locked up, we won’t get a community feel. Either you rent it out or allow us to rent it out on your behalf,” he says. ‘Earlier, there was a stigma attached to retirement homes... now, it’s a lifestyle choice’ Sanjay Lakhotia, Founder director, Aamoksh One EightyFor the model to succeed, it is very important that a community feel is maintained. And, for this, say experts, two things have to be kept in mind — the age group of the residents, and the number of residents. Antara follows a lifetime lease model that entitles the customer (55 years and above) and spouse to live in the property for the rest of their lives. On their death, the title terminates. The property is then auctioned and Antara pays the prevailing market rate to the deceased customer’s nominee after deducting a fee. Similarly, if after having lived for a few years at Antara a customer wants to move out, the property is auctioned and the amount paid to the customer after deduction of a fee, which is approximately 3 per cent of value. “We don’t want people to invest in Antara as a real estate proposition and, therefore, have this model,” explains Vachani.With more projects coming up in the future, there will be a lot more choice for seniors to spend their retirement years in a comfortable and carefree environment. smitatripathi@bworldmail.in; twitter@smitabw(This story was published in BW | Businessworld Issue Dated 07-10-2013)
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