Kazakhstan will buy ConocoPhillips out of the Kashagan oilfield for about $5 billion in a possible prelude to inviting China to join development of the world's biggest oil discovery in half a century. Kazakhstan's Oil and Gas Ministry said on Tuesday it would exercise its pre-emptive right to acquire an 8.4 per cent stake in the consortium developing Kashagan, thereby blocking a proposed sale to India's Oil and Natural Gas Corp. Lyazzat Kiinov, chief executive of national oil company KazMunaiGas -- which will buy the stake on behalf of the state -- told Reuters on Monday that Chinese state oil firm CNPC would buy a stake in the project. Ex-Soviet Kazakhstan, home to 3 per cent of the world's recoverable oil reserves, has moved in recent years to exert greater management control and secure bigger revenues from foreign-owned oil and gas projects. The Central Asian country, four times the size of Texas, is also diverting more of its oil eastward toward energy-hungry China and away from saturated European markets. Houston-based ConocoPhillips, in the process of whittling down its worldwide portfolio of assets, last year announced its intention to sell out of the international consortium developing the Kashagan field in the Kazakh portion of the Caspian Sea. In November, the company said it had agreed to sell the stake to ONGC Videsh, the overseas arm of the Indian state-owned company, for about $5 billion. In a statement on Tuesday, ConocoPhillips said the proceeds from the sale to KazMunaiGas would remain unchanged at about $5 billion. The US company said it expected the transaction to close in the fourth quarter of 2013. KazMunaiGas CEO Kiinov, speaking on the sidelines of a gas summit in Moscow on Monday, said CNPC would pay more than $5 billion for the stake. Sources familiar with the deal told Reuters last Friday that CNPC was set to win Conoco's stake. One of the three sources said the Chinese company would pay around $5.3-5.4 billion for the stake. Kashagan and neighbouring fields in the North Caspian Sea hold estimated reserves of 35 billion barrels of oil in place, with 9 billion to 13 billion barrels being recoverable. KazMunaiGas entered the Kashagan consortium as a shareholder in 2005 and has since then doubled its stake to 16.81 per cent. Kazakh President Nursultan Nazarbayev, who has ruled his resource-rich Central Asian nation of 17 million people for more than two decades, said last week that a multinational consortium developing the field had invested $48 billion in about 13 years, making it the costliest oil project in the world. During Kashagan's development, production will be gradually ramped up to 370,000 barrels per day (bpd) in a second stage from 180,000 bpd in the first stage in 2013-14, according to North Caspian Operating Company, which is developing the field. Italy's ENI, US major ExxonMobil, Royal Dutch Shell and France's Total, as well as KazMunaiGas, each hold 16.81 per cent stakes in Kashagan. Japan's Inpex <1605.T> owns 7.56 per cent. (Reuters)
Read More
The NCR Planning Board's decision to include Bhiwani and Mahendragarh, in Haryana, and Bharatpur, in Rajasthan under the National Capital Region (NCR) has received mixed reactions from the industry. While some see this as an essential need for the housing segment within the city, much needed after Sheila Dikshit’s opposition of vertical growth within Delhi, others believe it is a long haul. However, all seem to agree that if the right infrastructure is developed, it could be a push in the right direction.For Mayank Saksena, Managing Director – Land Services, Jones Lang LaSalle India, this means reducing the pressure on the housing sector within NCR. “With the current property prices, in NCR, you need a minimum of Rs 30-35 lakh to buy a house. In Gurgaon, alone, one would need a minimum of Rs 60 lakh,” says Saksena. There is also the plus point of decongestion within the city which has a population of more than 20 million people.With the right connectivity, these areas could help decongest Delhi and its satellite cities. “Metros are facing acute problem of traffic jam, hence, the authorities are opting for multi-transportation facilities to reduce the burden on roads. In this backdrop, there is urgent need to connect various areas of NCR through multiple mode of transport, including Regional Rapid Transit System,” says Dr Anil Kumar Sharma, President, CREDAI-NCR.Read Also: Real Estate Bill: What It MeansThis move will have multiple implications for the districts of Bhiwani, Mahendragarh and Bharatpur. Following the inclusion under NCR region, they will now have access to lower interest rates, enabling them to access cheaper loans. As mentioned by Lalit Kumar Jain, National Chairman of Confederation of Real Estate Developers’ Associations of India (CREDAI), the inclusion will bring these cities under the comprehensive planning of Jawaharlal Nehru National Urban Renewal Mission (JnNURM). “The funding provided to these regions will see a major thrust to the physical and social infrastructure of these areas. “Lalit Jain, Chairman of Parsvnath Developers, seems less optimistic about the situation, saying that the areas already included within NCR region, need to be developed before promising development for newly included areas. “There are areas in north-east Delhi which have seen little or no development. The budget of NCR Planning board has not been utilized in these areas.” So whether inclusion in NCR ensures infrastructural development or not is yet to be seen.Anshuman Magazine, Chairman of CB Richard Ellis (CBRE), a real estate consultancy, believes that while infrastructure may be provided, it will still take efforts from the local municipality in developing these regions. “While it is a welcome move, since these areas will receive the much needed infrastructural aid from the government, I don’t think we’re looking at any immediate impact. It will take a good 10-15 years to see the impact such a move could have on the housing sector. Look at Gurgaon, it took a good 30-40 years to reach where it is today,” says Magazine.email: ankita(dot)ramgopal(at)abp(dot)inemail: ankitaramgopal(at)gmail(dot)comTwitter: (at)ankitaramgopal
Read More
Vowing to get manufacturing and economy out of the downturn, Finance Minister P Chidambaram on 2 July' 2013 said key infrastructure projects facing delays have been identified and will be cleared in the next few weeks. However, he admitted that there was no quick-fixes to economic problems and the government is working to stabilise the economy which may take time. "Manufacturing is not picking up because demand is sluggish. Demand for cars, two-wheelers, white goods is sluggish. Consumer non-durables, the growth is over 12 per cent. It is the consumer durable which is sluggish and in negative growth," he told PTI in an interview here. He said manufacturing capacity is there but sentiments must change for buying durable goods. "That is one part of manufacturing. The other part of manufacturing is the core sectors -- steel, iron ore, coal, power, minerals. Manufacturing must grow there also. Output must increase. We must produce more coal, more iron ore, more steel, more aluminium. That will happen as the upturn takes place," he said. For example, the minister said, coal production has improved while iron ore which is caught in a number of litigations will hopefully clear with Supreme Court hearing the case. "But many other core industries, the projects are stalled which is why we have now identified the projects which are stalled and we are trying to remove these bottlenecks and things will begin to move. "I think work is at pace. A special cell has been constituted. The Cabinet Secretariat is looking at the projects that can be cleared in next few week. If they require a decision by the Cabinet Committee on Investment (CCI), we will bring it. Once the core sector production goes up, you will find the industrial sector moves up and manufacturing also moves up," he said. Chidambaram said the Indian economy was taking time to return to high growth trajectory because of the problems in the western economies. "The upturn (in global economy) that is expected has not taken place. At the same time there is no spiralling down either. I think our economy is getting stabilised. There are some weaknesses ... There are signs that we are moving towards a more stable period. It will take time," he said. The Minister said the upturn will not happen quickly. "It is a slow climb. The correct approach is to keep the focus on long term. There are no quick fixes. Take measures for long term and while these measures get implemented, the medium and short term will be addressed," he said. The government in recent weeks taken a number of decisions like hiking gas prices, setting up of coal regulator and allowing power producers to import coal to meet shortage. "The last few weeks we have taken a number of measures keeping the long term in mind. They will yield result on the long term, but as they yield result in long term the medium and short term problems will be addressed. There will be many more decisions in July," Chidambaram said. He said the Union Cabinet will decide on raising FDI caps in different sectors in the second or third week of this month. "Papers will have to come from the Ministry of Railway, from the Ministry of Coal, Ministry of Mines, from Planning Commission, from the Ministry of Petroleum, Ministry of Fertilisers. So hopefully many of these papers will come in July and we will take decisions on them," Chidambaram said. The government, the Minister said, has been successful in containing fiscal deficit, increasing revenue collection and promoting savings. Chidambaram said the fiscal deficit target of 4.8 per cent of GDP would be met in the current fiscal. In 2012-13 fiscal the government had contained the fiscal deficit at 4.9 per cent, much lower than the budgeted 5.2 per cent. "It might appear to be a small step from 4.9 to 4.8 per cent, but to achieve 4.8 per cent we have to very very watchful and I am confident this year also we will achieve the fiscal deficit target of 4.8 per cent," he said. On steps being taken to boost exports, he said Commerce Minister Anand Sharma has held one round of meeting with industries last week and would be meeting this week to explore how outward shipments can be increased. "I think they are now looking at sectorally to see which are the sector in which we can quick rise in exports. I think they are looking at engineering, looking at gems and jewellery. So I think he will take the decisions and then perhaps speak to the media," he said. To a question whether decisions like hiking price of natural gas could result in unpopular effects like rise in electricity tariff and prices, Chidambaram said, "We are not taking these decisions to make ourselves more popular or less popular. "These are decisions which have to be taken in order to stabilise economy. We are in a very difficult global situation where every country has to make the necessary adjustments to deal with the impact of what is happening in the rest of the world." He conceded that if some price corrections are made on some commodities or inputs, it will have an impact on the prices of downstream products and services. The Minister cited the example of the hike in MSP of paddy and said it would certainly have an impact on the price of rice. "If for some reasons some sections cannot afford that price, then the government has to subsidise that. So I don't think you can look at decisions as decisions that are no impact on other aspects of economy. Every decision will an impact," he said. Asked if the government will subsidise gas to power and fertiliser units on account of the decision to hike natural gas price, Chidambaram said currently only price for gas producers has been fixed and there was still time to fix the input price for user industries. (PTI)
Read More
State-run explorer Oil India expects to raise 80-90 per cent of the $1 billion it has agreed to pay for a stake in a Mozambique offshore gas block through overseas debt, its chief financial officer said on Monday. The company has not yet decided the instruments it will tap to raise the debt, T.K. Ananth Kumar told reporters.Last week, state oil firms ONGC and Oil India agreed to buy a 10 per cent stake in Rovuma Area 1 block off Mozambique's coast from India's Videocon Group for $2.48 billion. Oil India will pay $1 billion for a 4 per cent stake, while ONGC Videsh will hold the balance.Anadarko Petroleum Corp, the operator of Rovuma's Area 1 block, in which it holds a 36.5 per cent stake, and Videocon had each launched an auction of a 10 per cent stake in the block earlier this year.Ananth Kumar said ONGC's overseas business unit was in talks to buy Anadarko's 10 per cent stake, and Oil India was not in the fray for the same. Sources told Reuters last month the two Indian companies had also made a bid for Anadarko's 10 per cent stake. (Reuters)
Read More
Indian firm Reliance Infra blamed DMRC's "persistent" failure to cure defects in the civil structure for termination of the concession agreement to run the Delhi Airport Metro Line and claimed termination payment from it.The body, which owned Delhi Airport Metro Express Private Limited (DAMEPL), had written a letter to Delhi Metro Rail Corporation (DMRC) on 27 June expressing its inability to continue operations of the line.DMRC has, however, rejected the notice given by Reliance Infra, terming the move as a "violation" of the concession agreement and the ongoing arbitration proceedings. It though has decided to take over the operations of the 22.7 km-long link from Monday.In a statement, Reliance Infra said DMRC is now liable to pay DAMEPL a termination payment equal to 130 per cent of the adjusted equity and 100 per cent of the debt due for the project. Sources said this could translate to Rs 2,800 crore though Reliance Infra did not specify the amount. It argued that the termination has arisen owing to DMRCs event of default.It further said that despite the lapse of nine months and repeated requests by DAMEPL, DMRC failed to make alternate arrangements for taking over the operations of the metro line, even after the termination of the concession agreement in October 2012."The termination clause had to be invoked by DAMEPL, as DMRC had persistently failed to cure substantial defects in the civil structure designed and built by DMRC, within the period prescribed under the concession agreement, and on account of material breach and event of default by DMRC arising under the agreement", it said.It contended that DAMEPL's claims for the termination payment are fully justified and enforceable, and Reliance Infra is confident of recovering its entire investment in DAMEPL.The Airport Metro line, which is the country's first Public Private Partnership (PPP), has had a tumultuous run beset with controversies after it began operations in February 2011.The services were suspended from July 7, 2012 to January 22, 2013 due to technical problems and after reopening, the speed was cut to 50 km per hour, extending journey time from the airport to New Delhi Railway Station to over 40 minutes, which resulted in a fall in ridership.Before the suspension of services, the ridership hovered around 20,000 to 21,000 per day but after the resumption, the ridership was nearly halved to around 10,000.(PTI)
Read More
Seeking a sizeable pie in India's fast emerging solar energy market, the American solar industry has asked it to remove the trade barriers which discriminates against US solar exports. Testifying before a Congressional committee, Solar Energy Industry Association vice president John Smirnow alleged that India's local content requirement "discriminates against US solar exports and, thereby, provides an unfair competitive advantage to India's domestic solar manufacturers." With some of the best solar resources in the world and the cost of solar continuing to decline, India's solar sector is poised for explosive growth, providing an important export opportunity for US solar manufacturers, he told lawmakers. However, India's growing use of an industrial policy which discriminates against US solar exports, thereby providing an unfair competitive advantage to India's domestic solar manufacturers, Smirnow said yesterday during the Congressional hearing on "A Tangle of Trade Barriers: How India's Industrial Policy is Hurting US Companies" convened by the Commerce, Manufacturing, and Trade Subcommittee of the House Energy and Commerce Committee. While local content requirements may provide some protection for domestic manufacturers, they also stifle innovation, limit a country's access to next-generation technologies and increase costs, not to mention the fact that local content requirements are explicitly prohibited by global trading rules, he explained. "Returning to the specifics of India's solar industrial policy, the national solar mission is divided into three phases. Under the first traunch of phase one, India required that eligible products - projects based on crystalline silicon technology - that's the other half of the solar panel industry - versus thin film," he said. "That is where the US has a technological advantage - in this first phase India required that one half meet a local content requirement for cells, and solar cells are the heart of a solar panel for this technology," Smirnow said. "So while US companies could sell cells into India or they could sell modules but they weren't able to sell cells, US-origin panels were thus barred from competing. For the second traunch of phase one, India broadened this local content requirement to mandate that national solar mission products use only crystalline silicon cells and panels manufactured in India, a significant lost opportunity for US exports," he alleged. Looking forward, the US solar industry is concerned that India will expand its local content requirement yet again to cover thin film technology, effectively targeting hundreds of millions of dollars of US exports. "Our only hope is that the US government's recent decision to initiate a WTO case against India will eventually cause India to reverse course," he said. "The US-India dispute follows on the heels of a recent WTO finding that Ontario, Canada's local content requirement for solar goods, substantially similar to India's, violated Canada's WTO obligations. In response, Canada has indicated that the solar program will be brought into compliance with the WTO decision, which we presume means that Canada will remove the local content provision," he said. Smirnow said India should follow Canada's lead and remove the local content provision from its national solar mission.(PTI)
Read More
The Athashri retirement community offers the over-55 crowd Western-style amenities such as a clubhouse, gym, library and pool but with a distinctly Indian twist: a temple on site where residents worship Ganesh, a god followed by many Hindus in Maharashtra. The 180-unit development in Pune, which enjoys better weather and less bustle than nearby Mumbai, overlooks open fields and hills and is set in lush gardens - an appealing escape from the crowds and grime of India's mega-cities. Retirement communities like this one are just beginning to gain traction in India, where the multi-generational "joint family" structure endures despite rampant modernisation. The concept of housing for the elderly still carries a social stigma in the country, which accounts for less than 1 per cent of the $25 billion senior housing industry worldwide. But rising incomes, longer life expectancy and the rise of nuclear families as more people relocate for jobs are driving demand for retirement homes in Asia's third-largest economy, and attracting developers and investors. Paranjape Schemes, which manages Athashri, is among a handful of companies tapping the burgeoning senior living sector including Max India, backed by Goldman Sachs Group Inc, LIC Housing Finance, The Covai Group and Ashiana Housing. Tata Housing Development Co, part of India's biggest conglomerate, launched its first senior housing project in May in Bangalore, and plans at least four more, catering to independent retirees looking for better security and services than what is available in ordinary housing. "A significant section of seniors today are independent, financially stable, well-travelled and socially connected, and as a result have a fairly good idea of how they want to spend time after retirement," said Brotin Banerjee, CEO, Tata Housing, which expects revenues of 950 million rupees from its 700 million rupee project investment over three years. While India is much younger than Japan, China or the United States, the number of people over age 60 is expected to more than double to 173 million by 2025. Real estate consultant Jones Lang LaSalle estimates current annual demand for senior homes across 135 Indian cities at 312,000, far outstripping supply of 10,000 to 15,000 new homes now in the pipeline. Young At HeartAfter spending two decades in Houston looking after their grandchildren, Vidyadhar and Aruna Gokhale returned to India last year and moved into a retirement home. Developers view such Indians returning from overseas, the vast and often prosperous diaspora known as non-resident Indians or NRIs, as a key target market. "Nobody needs us there so we thought we should live our lives the way we want to because we are young enough to be able to enjoy it," Aruna Gokhale, 81, said in her apartment at Athashri in Pune, where she and her husband, now 84, grew up. Most of India's retirement homes are targeted at urban middle- and upper-income buyers who can afford to pay between 3 million and 6 million rupees for an apartment, which is cheap by Western standards but beyond the reach of the average Indian. Max India is building a project in Dehradun that aims higher, with villas priced above 10 million rupees. Unlike the United States, where retirement housing is typically rented, providing recurring annual income for investors, in India people prefer to own. That suits developers as well because it means less capital tied up. Investing in Indian retirement homes generates returns of about 25 per cent annually for developers, less than the 35 per cent that is typical for comparable ordinary housing in the country, Jones Lang LaSalle said. That is partly because the retirement communities include more open, communal space. Developers are also keen to keep prices affordable for middle-class buyers who normally must pay cash as Indian banks rarely offer mortgages to seniors. Developers expect economies of scale to bring down costs as the industry grows, and they hope eventually to be able to charge more for amenities such as food and facilities. "There is a margin to be made but today the returns are not as good and we would like to improve that," said Ankur Gupta, joint managing director at Delhi-based Ashiana, which has built three retirement home projects in India. Social StigmaThe biggest challenge for the emerging senior living sector is the social stigma associated with elderly family members living on their own. "Twenty years ago the social fabric of India was very different as we were still a closed economy," said Abdulla Kagalwalla, chief financial officer at Texas-based Signature Senior Living, which in 2010 tied up with Covai to build and manage retirement homes in India. "As the economy opened it brought about a great social change, and an increase in the education and remuneration of middle class families caused a dramatic shift in thinking." The share of households in India with five or fewer members rose to 69 per cent in 2011, from 60 per cent a decade earlier, according to government data, showing a shift away from the traditional multi-generational family system. Later this year, Pune-based Paranjape, which operates the Athashri project and three others in the city, will open a home in Bangalore and start building three more in south India. "When we launched our first project in 2000 it was very difficult to sell but now we have more than 1,500 families staying with us," said Managing Director Shashank Paranjape. Aches And PainsAt Paranjape's Athashri, where the Gokhales live, corridors with handrails, anti-skid tiles, a doctor's room and a 24-hour ambulance set it apart from ordinary housing. All homes have multiple red emergency buttons and a rope in the bathroom for calling a caretaker. It costs up to 30 per cent extra to build senior homes because of the additional features and amenities but they sell for 15 to 20 per cent more than comparable regular homes. Suresh and Rekha Chitre spent their savings of 4.3 million rupees to escape the chaos of Mumbai by moving to Athashri in Pune but are struggling to adjust to life in a retirement home. "It is more comfortable here but everyone is old and always complaining about aches and pains," said Suresh Chitre, 67, who misses interacting with people of different age groups. "In the last few months four people died and that can get depressing." (Reuters)
Read More
Coal India Chairman S. Narsing Rao says the coal monolith has committed to providing 377 million tonnes of coal to the power sector in the current fiscal. This is a 30 million tonne increase from 2012-13, when CIL supplied 347 mt coal to the power sector.Coal India and NTPC will sign a bunch of Fuel Supply Agreements (FSA) in Kolkata on Wednesday, 17 July. According to the existing in-use agreements between the miners and the power sector, CIL was to supply only 275 mt of coal in all.On July 17, NTPC and CIL will sign 5 to 7 FSAs worth 4,000 MW. Already two FSAs for Farakka and Kahalgaon have been signed, said Rao, referring to the two plants in eastern India run by NTPC.The new FSAs require coal India to provide 65 per cent of the power plants' requirement through domestic coal in the current and the next fiscal. The percentage is supposed to go up to 75 by the end of the 12th five year plan. Of the post 2009, a total 67 FSAs are to be signed. Read Also: NTPC Backs Off, To Pay Rs 2,000 Cr Dues To Coal India NTPC is required to sign 29 FSAs of which 17 are for NTPC plants while 12 are joint venture plants. Of the total 17 so far, only two agreements have been signed for the Farakka and Kahalgaon plants (500 MW each), which require 2.312 mt coal for each plant. Confident of meeting the coal requirements, CIL claims that between 2011-12 and 2012-13, the company reported a total increase in production of around 32 mt – almost all of it was given to the power sector to meet the increasing demand, said a CIL spokesperson.CIL subsidiary Eastern Coalfields Ltd (ECL) had in April threatened to halt supplies to these two plants after the latter stopped paying the full price for shipments.NTPC gets the bulk of its coal through long-term FSAs with Coal India. But the power producer has long complained it is forced to accept coal that is heavily adulterated with rocks and stones.Rao said the fuel quality row was "kind of sorted out".Both coal supplier and power producer now jointly monitor coal quality, opening up the possibility of wrangles over its true worth, but the government plans to change that by mandating a third party to judge value."There is some understanding between NTPC and us (as to) ... how do we solve this third-party evaluation and extrapolation into the period from when they started to reduce the payment," Rao said. "Reduced payments affected us from October onwards."mmatbworld(at)gmail(dot)com
Read More
