Oil PSUs to seek legal opinion on impact of sanctions on Iran

Dalat (Vietnam): The Indian government has asked its public sector oil companies to seek legal opinion on the impact of the latest round of US sanctions on Iran on their investment in the Persian Gulf nation, oil secretary S Sundareshan said here, reports PTI

The Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 provides for sanctions against persons, including foreign firms, who invest more than $20 million in Iran's energy sector in any 12-month period.

“These are listed companies pursing opportunities in Iran. There is a need to access the potential impact of sanctions (on these investments),” Mr Sundareshan said. “The companies have been asked to seek legal opinion.”

The new US law targets companies investing, assisting or transferring technology to Iranian oil and gas companies.

The US administration had in May named Oil and Natural Gas Corporation, ONGC Videsh Ltd (OVL), Oil India Ltd (OIL), IndianOil (IOC), Hinduja Group and Petronet LNG among the 41 companies worldwide having energy ties with Iran, an act for which it may impose sanctions on them.

OVL, IOC and OIL explored for oil and gas in Farsi block and have proposed investing $5.5 billion in producing gas from the 21.68 trillion cubic feet discovery they made in the offshore block located near the Saudi Arabian border.

Besides, ONGC, OVL, Petronet and Hinduja Group last year signed agreements with Iran to develop one of the 28 phases of the giant South Pars gas field and convert the fuel into liquefied natural gas (LNG) for exports at an investment of over $10 billion. Besides, state gas utility GAIL India is spearheading talks on Iran-Pakistan-India gas pipeline project.

The US administration has not imposed sanctions on any firm for their Iran energy ties since 1998, also names Hinduja for ties with Iran but lists it as a UK firm.

Foreign Secretary Nirupama Rao this month had stated that India was “justifiably concerned that the extra-territorial nature of certain unilateral sanctions recently imposed by individual countries, with their restrictions on investment by third countries in Iran’s energy sector, can have a direct and adverse impact on Indian companies and more importantly, on our energy security and our attempts to meet the development needs of our people.”

“The Indian government does not invest in Iran. It is the publicly listed companies which are investing or are proposing to invest. Naturally, we want to assess if there will be any impact (of US sanctions) on such investment,” Mr Sundareshan said adding IOC, ONGC, OVL and GAIL will be seeking separate legal opinions.


Govt to divest 10% stake in PowerGrid through FPO

New Delhi: The Indian government on Thursday approved disinvestment in transmission firm PowerGrid Corporation through a follow-on public offer (FPO) to raise about Rs8,400 crore, reports PTI.

The Cabinet Committee on Economic Affairs gave its nod to the 20% FPO by PowerGrid, an official statement said.

The company would issue 10% fresh equity, while the Centre would divest 10% of its stake in the public sector undertaking (PSU). The government holds 86.36% stake in PowerGrid.

The offer comprises over 84 crore shares of Rs10 each constituting 20% of existing paid-up capital. At current market valuation, the FPO is likely to mop up about Rs8,400 crore.

Besides disinvestment of the government stake, the fresh capital raising would be used for part funding investment requirement of about Rs58,000 crore of the public sector unit (PSU).

The company had hit the capital market in October, 2007, with its maiden public offer and raise 10% fresh equity and the government divested 5% of its stake.

In an effort to raise Rs40,000 crore from disinvestment during the current financial year, the government would sell stake in about 10 more PSUs, including IndianOil, Coal India, SAIL, RINL and Shipping Corporation.

Powergrid targets to augment transmission capacity to 23,400 MW in the current fiscal from 19,800 MW at present.


Food inflation falls to 12.47%

New Delhi: Annual food inflation fell to 12.47% for the week ended 10th July from 12.81% in the previous week on back of decline in prices of vegetables, especially potato and onion, reports PTI.

On a yearly basis, potato became cheaper by over 45% and onion by nearly 8%. Overall vegetable prices fell by 9.92%. Prices of pulses, however, were higher by 23.79% during the week under review over the same period last year. On a weekly basis, pulses rates softened by 0.84%. Wheat prices were higher by 5.81% during the week on yearly basis.

Overall inflation for June was 10.55%, led by high food prices. Food inflation has remained above the 16% level for most part of the year, before falling sharply to below 13% since mid-June.


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