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Besides buying a 12.5% stake in the pipeline that China is building in Myanmar, the Indian companies will also invest $1 billion in fields
The Indian government on Thursday permitted state-run Oil and Natural Gas Corp (ONGC) and GAIL to pick 12.5% stake in a pipeline that China is building in Myanmar, and allowed them to invest another $1 billion in fields that will provide gas to be shipped to China through the pipeline, reports PTI.
The Cabinet Committee on Economic Affairs (CCEA) headed by prime minister Manmohan Singh allowed ONGC Videsh Ltd, the overseas investment arm of ONGC, to invest $167.84 million in taking 8.35% stake in the pipeline.
GAIL will invest $83.88 million for taking 4.17% stake in the pipeline being constructed by China National Petroleum Corp (CNPC) to transport gas found in block A-1 and A-3 off the Myanmar coast, an official spokesperson said.
CNPC is building the $2.01-billion pipeline to ship gas from blocks A-1 and A-3, where OVL and GAIL India hold 17% and 8.5% stakes respectively, to China.
Gas from the blocks would be sold to China for $7.72 per million British thermal unit at the landfall point in Myanmar. The block is operated by South Korea's Daewoo which holds 51% stake.
Daewoo, OVL, GAIL and Korea Gas, which has 8.5% stake, are investing $2.79 billion in three gas fields in Block A-1 and A-3 off the Myanmar coast and another $936.26 million in laying a separate undersea pipeline to take the gas to the shore.
An official said that CNPC had offered 49.9% stake to the consortium developing gas fields in blocks A-1 and A-3. South Korea's Daewoo Corp holds 51% stake each in Block A-1 and A-3, while OVL has 17% stake.
GAIL and Korea Gas Corp have 8.5% each while the remaining 15% is with Myanmar's Myanma Oil and Gas Enterprise (MOGE). The consortium is investing $3.61 billion in bringing to production gas fields in the two blocks.
"The 49% stake is being apportioned in the same ratio as individual stakes in Block A-1 and A-3," the official said.
Daewoo too was inclined to participate in the 40-inch, 870-km pipeline and final shareholding in the pipeline project would be CNPC (50.9%), MOGE (7.37%), Daewoo (25.04%), OVL (8.35%), GAIL and KOGAS (4.17% each).
The official said that Shwe and Shwe Phyu gas fields in Block A-1 and Mya discovery in Block A-3 would be tied together to produce a plateau of 500 million standard cubic feet per day of gas for 19 years. The field life is envisaged for 28 years.
The first gas flow is anticipated in the first quarter of 2013.
Myanmar has decided that the gas from A-1 and A-3 would go to China. CNPC will pay $6.71 per mmBtu for the gas plus an offshore pipeline tariff of $1.02 per mmBtu.
The 30-year sale contract is indexed to US inflation, sources said. Sources said that the gas in A-1 and A-3 is lean (99% methane) with less impurities. Gas reserves of 4.532 trillion cubic feet in Blocks A-1 and A-3 have been certified.
Indian corporates have urged the finance minister not to raise excise or service tax till economic growth rate reaches the pre-crisis level of 9%
Concerned over the possibility of withdrawal of stimulus packages in the upcoming Budget, Indian corporates have urged finance minister Pranab Mukherjee not to raise excise or service tax till the economic growth rate reaches the pre-crisis level of 9%, reports PTI.
"We are afraid that rollback of stimulus packages, even partially, could derail the growth process and adversely impact the industrial sector," FICCI president Harsh Pati Singhania told PTI.
The stimulus packages should continue for another year or at least till 31st October, he said, pointing out that the economy is yet to achieve the pre-crisis growth level of 9%.
The finance ministry is believed to be considering partial withdrawal of stimulus given to the industry to combat the impact of the global financial crisis triggered by the fall of financial services firm Lehman Brothers in September 2008.
The Budget is slated to be presented on 26th February.
As part of the stimulus, the government reduced the excise duty in two tranches from 14% to 8% and service tax from 12% to 10%.
Chandrajit Banerjee, director general, Confederation of Indian Industries (CII), while responding to queries send by PTI on withdrawal of stimulus said, "The very fact that we have had the worst financial crisis since 1929, involving the entire globe, reflects that recovery will be slow and enduring, with ample risk of double-dip recession on the way."
Almost 23 companies are waiting for an approval from SEBI to enter the MF space which is already overcrowded with 37 players managing assets over Rs7 lakh crore
As many as 23 companies are awaiting an approval from the market regulator Securities and Exchange Board of India (SEBI) to enter the mutual fund (MF) space, which is already overcrowded with 37 players managing assets over Rs7 lakh crore, reports PTI.
Companies have filed for regulatory approvals, which are being processed by SEBI, sources said.
Some of the Indian companies whose applications are with the market regulator include Indiabulls Ltd, Future Finance Ltd, SREI Infrastructure Finance Ltd and ASK Investment Holdings Pvt Ltd.
Besides these entities, brokerage firms like India Infoline, Prime Securities Ltd, Karvy Stock Broking Ltd and Jaypee Capital Services Ltd have also sought licences from SEBI for asset management.
Two state-run banks—Union Bank of India and IDBI Bank—are also planning to venture into the asset management space and have approached the regulatory authority.
While IDBI Bank had filed an application for a licence in June last year, Union Bank had submitted its papers in February 2009.
Meanwhile, IDBI Bank and the country's third largest private sector lender Axis Bank have already got the regulator's approval to start an asset management business.
Union Bank has set up an asset management firm with KBC Group of Belgium. The joint venture, in which the state-run lender owns 51% stake, expects to start operations during the current fiscal.