Iran may offer 40% stake in South Pars gas field to Indians

Iran is believed to be ready to offer a 40% stake in a giant gas field in the Persian Gulf to India's ONGC Videsh Ltd (OVL) and non-resident Indian (NRI) business conglomerate of the Hindujas.

On the second day of talks the two held with a delegation led by Iran's deputy oil minister and managing director of National Iranian Oil Co (NIOC) Seifollah Jashnsaz, sources in the know said that Tehran offered a 40% interest in the development of Phase-12 of South Pars gas field. London-based Hinduja Group is also interested in the $7.5 billion South Pars Phase-12 (SP-12) project, but the two entities are independently pursuing the deal, the sources said.
 
Iran, they said, stated that it can offer a maximum 40% interest in SP-12 to Indians and it was for OVL and the Hindujas to decide among themselves how it would be split among them.
 
ONGC Videsh, the overseas investment arm of the state explorer Oil and Natural Gas Corp (ONGC), was clamouring for 25%-30%, they said, adding that the remaining stake could be taken by the Hindujas.
 
Sources said OVL wanted liquefied natural gas (LNG) in return for its efforts in the project. SP-12 is to produce 3 billion cubic feet per day of gas, two-thirds of which is to be converted into LNG for export.
 
OVL wants at least half of the 10 million tonnes a year of LNG to be produced from the SP-12 project.
Yogesh Sapkale [email protected]
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Three ADA group companies under scanner for violating ECB norms: Govt

The Indian government on Tuesday said three companies of the Anil Dhirubhai Ambani (ADA) group—Reliance Infrastructure Ltd (RInfra), Reliance Natural Resources Ltd (RNRL) and Reliance Communications Ltd (RCom)—have violated overseas debt norms, reports PTI.

While the matter pertaining to RInfra has been referred to the Enforcement Directorate (ED) over non-payment of penalty, the RNRL case has also been handed over to the ED for further investigation.
 
In a written reply in the Rajya Sabha, minister of state for finance Namo Narain Meena said end-use violations have been detected by the Reserve Bank of India (RBI) in respect of two external commercial borrowing (ECB) transactions of $360 million and $150 million by RInfra.
 
The company brought the proceeds raised through the ECBs to India and kept these invested in debt mutual funds, pending utilisation for the declared end-use, in gross violation of the existing guidelines, the minister said.
 
A penalty of Rs124.7 crore was imposed on RInfra, he said, adding that since it did not pay the penalty in accordance with the rules and provisions of the Foreign Exchange Management Act (FEMA), the violations were referred to the ED in December 2008 for adjudication.
 
RNRL had issued foreign currency convertible bonds worth $300 million for a project under the automatic route. As much as $275 million (about Rs1,127 crore) was brought to India in May 2007 and parked in debt mutual funds pending utilisation.
 
Subsequently, in August 2008, Rs1,160 crore ($275 million) was invested in a wholly-owned subsidiary in Singapore, the minister said.
 
Since the alleged transactions have a cross-border angle and since the RBI does not have privileges of investigation, the issue has been referred to the ED for further investigation, he said.
 
He added that RCom’s audited annual report for 2007 revealed that Rs5,142 crore of unutilised funds raised through foreign currency convertible bonds (FCCBs) had been deposited interest-free with a wholly-owned subsidiary, which in turn has parked the money in bank deposits.
 
After ascertaining the facts, the company was advised to apply for ‘compounding’. In its response, RCom denied any contravention of the regulations and maintained that the FCCB proceeds were utilised for telecom capital expenditure, taking into account the business exigencies. The minister said the company’s reply is being examined before initiating further action.
Yogesh Sapkale [email protected]
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GMR Energy to invest Rs18,000 crore by 2012

GMR group company GMR Energy Ltd on Tuesday said it would invest Rs18,000 crore over the next three years to increase its electricity generation capacity to around 3,300MW from a little over 800MW now, reports PTI.

"These projects would be funded in a debt-equity ratio of 75:25. For the equity portion, we have internal accruals and short-term loans," said Raaj Kumar, chief executive, GMR Energy.
 
The company is in talks with various banks, including State Bank of India and Axis Bank, and has also approached SBI Capital Markets to mobilise debt funds for these projects. "These lenders have been with us for a long time," Mr Kumar said.
 
The company currently operates three plants in India—a 380MW unit at Vemagiri in Andhra Pradesh, a 200MW plant in Chennai and a 235MW plant in Mangalore.
 
GMR Energy's projects in the pipeline include a 1,050MW plant at Kamalanga in Orissa and an 800MW expansion at the Vemagiri plant. It is also implementing a 600MW project for its subsidiary, Emco Energy. These three projects are scheduled to be commissioned by 2012.
 
The company is also setting up a 1,320MW plant in Chhattisgarh, which will be commissioned in early 2013. "We are investing Rs4,540 crore in Orissa, Rs3,360 crore for the Emco project, Rs2,800 crore in Vemagiri and Rs5,500 crore in Chhattisgarh," Mr Kumar said.
 
GMR Energy is also setting up five hydro-power projects—three in India and two in Nepal. The financial closure for the company's 300MW hydro plant at Uttarakhand will be completed by March 2010, after which it would take 54 months to complete the project, he said.
 
He said the debt component for the Emco project would be arranged from Axis Bank and the company is in talks with SBI for the Chhattisgarh project and the gas-based project in Andhra Pradesh.
Yogesh Sapkale [email protected]
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