Companies & Sectors
RIL to sell stake in US-based shale gas operations for $1.07 bn

According to the company, Reliance Holding USA, a subsidiary of Reliance Industries, has entered into a definitive agreements for the sale of its entire holding of 49.9 percent interest in EFS Midstream to an affiliate of Enterprise Products Partners

 

Oil refiner-to-retail major Reliance Industries on Monday said it has entered into a deal to sell its stake in its US-based shale gas operations for $1.07 billion.
 
According to the company, Reliance Holding USA, a subsidiary of Reliance Industries, has entered into a definitive agreements for the sale of its entire holding of 49.9 percent interest in EFS Midstream to an affiliate of Enterprise Products Partners.
 
"EFS has succeeded in its objective of building the gathering and midstream infrastructure in a timely manner to support ramp-up of the 'Reliance-Pioneer Eagle Ford Upstream' joint development operations," Walter Van de Vijver, president and chief executive of Reliance Holding USA was quoted in a statement.
 
"EFS has now transitioned from a 'development’ mode to ‘stable operations’ mode, generating free cash flows since 2013. EFS monetization thus provides a significant opportunity for unlocking value for our shareholders."
 
Currently, EFS is jointly owned by Reliance Holding USA and an affiliate of 'Pioneer Natural Resources Company', with their respective ownership interests being 49.9 percent and 50.1 percent.
 
The company's agreement to sell it's interest in EFS is part of a joint transaction, wherein both Reliance and Pioneer have agreed to sell their entire respective holdings in EFS, for $2.15 billion.
 
The company added that it has also concluded certain long term agreements with Enterprise for continued provision of gathering, treating and compression services and condensate stabilisation services for its 'Eagle Ford Upstream Joint Development'. 
 
"Certain additional long term arrangements have also been agreed with affiliates of Enterprise for processing and transportation of natural gas, crude oil and condensate," the statement added.
 
EFS provides gathering, treating and compression services and condensate stabilisation operations in the 'Eagle Ford Shale' for the Reliance-Pioneer upstream joint development and to third parties. 
 
Since inception in 2010, EFS has built significant midstream infrastructure, which now comprises of 10 central gathering points, 460 miles of gathering pipelines, 119 Mboepd (thousand barrels of oil equivalents per day) of condensate stabilisation capacity and 780 MMcfd (millions of cubic feet per day) of natural gas treating capacity.

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Names for CVC, CIC finalised, sent to president
There has been an agreement on the names to fill the vacant posts of the chief information commissioner (CIC) and central vigilance commissioner (CVC) at meetings held on Monday, official sources said.
 
They said that the agreement came after two meetings between Prime Minister Narendra Modi and Leader of Congress in Lok Sabha Mallikarjun Kharge which were also attended by union ministers.
 
The sources said that Home Minister Rajnath Singh attended the meeting on CVC and Finance Minister Arun Jaitley attended the meeting concerning the CIC.
 
They said that the recommendations have been sent to President Pranab Mukerjee for his assent. The president is presently on a visit to Sweden and Belarus.
 
Meetings to select the CVC and CIC were also held last month but remained inconclusive.
 
The Congress has attacked the government over the "delay" in the appointments of CIC, CVC and Lokpal.
 
The party has said that the post of CIC has been lying vacant for the last eight months and that of CVC since September last year. 

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May auto sales show green shoots of recovery
Sales of India's largest passenger car manufacturer Maruti Suzuki grew by 13.8 percent in its total sales for May which stood at 114,825 units, up from 100,925 units sold in the corresponding month of 2014
 
Recovering from high fuel and interest costs, automobile manufacturers showed healthy sales performances during May.
 
Sales of India's largest passenger car manufacturer Maruti Suzuki grew by 13.8 percent in its total sales for May which stood at 114,825 units, up from 100,925 units sold in the corresponding month of 2014.
 
Domestic sales of the company during the month under review grew by 13 percent at 102,359 units from 90,560 units sold in May 2014.
 
Exports during May zoomed by 20.3 percent at 12,466 units from 10,365 units shipped out during the corresponding month of 2014.
 
Chennai-based automobile manufacturer Hyundai Motor's (HMIL) overall sales including exports grew by 1.5 percent and stood at 52,515 units from 51,718 units sold in the corresponding month of 2014.
 
"In a market experiencing low growth with decreasing contribution of rural and diesel vehicles sales, Hyundai volumes grew to 37,450 units," said Rakesh Srivastava, senior vice president for sales and marketing, HMIL.
 
The company's domestic market sales grew by 3.4 percent and stood at 37,450 units during the month under review from 36,205 units sold in May, 2014.
 
However, the largest passenger car exporter in the country only managed to ship-out 15,065 units in May, 2015, which is a decline of 2.9 percent from 15,513 units being sold abroad in the corresponding month of the previous year.
 
Other major players in the Indian auto market, Tata Motors and Mahindra & Mahindra (M&M) reported a mixed sales results.
 
Tata Motors' overall sales, including exports, during May increased by five percent and stood at 39,496 units from 37,538 units sold during the like period of last year.
 
Mahindra and Mahindra's overall sales including exports during May declined by 3 percent and stood at 36,706 units down from 37,869 units in the corresponding month of 2014.
 
“The auto industry has been showing signs of recovery and it is important that factors like an interest rate cut if considered, would accelerate growth," said Pravin Shah, chief executive of the automotive division, Mahindra and Mahindra.
 
Japanese automobile major Honda's domestic sales during the month under review marginally grew by just one percent at 13,431 units from 13,362 units sold in the corresponding month last year.
 
Two-and-three-wheeler maker TVS Motor Company closed last month with a six percent growth in sales 220,079 units from 206,813 units sold in the corresponding month of 2014.
 
Suzuki Motorcycle India registered a 3.64 percent increase in its May 2015 sales which stood at 33,287 units from 32,117 units sold in the corresponding month of last year.
 
Two-wheeler major Honda Motorcycle and Scooter India's sales grew by three percent and stood at 367,226 units from 355,530 units sold in May, 2014.
 
However, Hero MotoCorp's May sales declined by 5.41 percent and stood at 569,876 units from 602,481 units sold in the corresponding month of last year.
 
According to analyst, the results show conditions for a demand growth getting built. 
 
"Typically, the urban demand for cars is supported by the growth of disposable income being significantly greater than the growth of inflation. What is critical would be the extent to which this is sustained - while inflation may stay low, salary growth will happen if jobs are created," said Kumar Kandaswami, senior director with Deloitte in India.
 
"The other variables that come into play are the household savings that the potential car buyers will want to take back to the levels they were at in the high growth years and the ability of the potential customers to accept the varying fuel prices."
 
He added that any rural slow-down will impact the entry level hatchbacks in passenger cars and SUVs (sports utility vehicles) and the economy motorcycles. 
 
However, the results failed to impress the markets. The automobile index on the Bombay Stock Exchange (BSE) declined by 65.71 points and stood at 19,014.08 points.
 
"Auto industry monthly sales numbers failed to cheer the street," said Gaurav Jain, director, Hem Securities.
 

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