Ashwani Narula – Furniture Prince of India

By Sushma Arora

NEW DELHI: We talk about a magic mantra for success with a young self made dynamic entrepreneur who has not only risen to fame from ground levels but has motivated and inspired several in the home decoration business.

Ashwani Narula of the brand – Benchcraft Concept, creates ripples in the décor business with his inimitable style and approach. Blessed with nerves made of Steel and a humour to match, Ashwani captures the imagination of his clients while spinning the magic yarn of colours shapes and style.

While we keep reading about India, emerging as a brand to reckon with, we wonder simultaneous about the key players tugging the success forward. While the industrialists of our country are inspiring global businesses, people like Ashwani have risen to fame thanks to their persistence, perseverance and sheer hard work and are a motivational force for the upcoming young entrepreneurs.

"I believe the only way to gain wealth and fame is to either earn it or inherit it." In his case it surely has been earned. Having lost his father early, the young lad with family responsibilities to shoulder Ashwani, decided to get in the furniture and furnishing business rolling with what ever resources he could muster.

He got his first contract from his maternal uncle to furnish the upcoming Canada Colony at the Napth Japhri project. There was no stopping him after that. Fearless, ruthless at work and practically no personal life were the few highlights of his early years.

In 1997, he launched his own firm, A.N. Enterprises. He began supplying furniture to big showrooms from his small factory in Kirti Nagar, a furniture hub in West Delhi, with one carpenter and one polisher. Today his firm employs 150 skilled people.

Of course, in the intervening period, Ashwani launched his own brand name "Benchcraft" in 2001 with his first showroom spread over 2,000 sq ft in upscale Ghitorni, Mehrauli Gurgaon Road, bordering Delhi and Gurgaon. End 2004, he opened another showroom spread over 25,000 sq ft in the same area. He reached the big league in mid-2006 with the launch of 65,000 sq ft showroom in the same area.

There was no looking back for him as he opened one show room after another. He launched his 7,500 sq ft showroom in Mumbai on September 3, 2006 in Raghuvanshi Mills, an interior and furniture hub for rich and famous.

In January this year, Benchcraft made inroads in Hyderabad. Soon he is launching another showroom at Grand Mall in Gurgaon. Next month is is launching another showpiece in Gurgaon which one can visit only on invitation.

Commenting on his firm, Ashwani says: A.N. Enterprises carries out the business of interior designing and manufacturing of all kinds of furnishing and allied accessories.

Needless to say, the firm is professionally managed with full time professionals, in-house employees and consultants.

"It is totally self sufficient in terms of designing turnkey execution and manufacturing of furniture and has a comprehensive setup in form of office as well as manufacturing unit," he adds.

Some of companies for whom he has done the turnkey projects include Pizza Corner, McKinsey, Unitech, Siemens, Hindustan Lever, Sukam, Flex Industries, Patni Computers, Hutch and three properties of Hotel Jukso in Pune, Gurgaon and Delhi.

Popularity of his furniture and furnishing can be gauged from the fact that it also travels to far off places in Australia, the US, the UK, Hungary, Dubai and Singapore.

In its endeavor to remain ahead of the competitors, Benchcraft as a brand caters to individual interior designing requirements of the clients. The firm is constantly engaged in providing the latest and the best designs.

A.N Enterprises has its own chain of competent fabricators having excellent facilities of carpentry and joining with specialized workers who work directly under the supervision of the firm through its representative for different projects, with a view to completing each project within the stipulated time and ensuring strict quality control.

His business travels have taken him to Italy, Dubai and Turkey.

Ashwani is single and lives with his mother and sister in Gurgaon, Haryana.

Australia and India Agree to Joint Study on a Bilateral FTA

By Deepak Arora

NEW DELHI, Aug 31: The Australian Government Minister for Trade, Warren Truss, today announced that Australia and India have agreed to undertake a joint feasibility study into the merits of a free trade agreement (FTA) between the two countries.

Mr Truss said the study will provide an opportunity to consider the potential for benefits which might flow to Australia and India from an FTA.

“The study will examine the potential gains for both countries, in particular the impact a comprehensive and genuinely liberalising FTA could have on promoting economic growth, trade in goods and services, investment and other commercial linkages,” Mr Truss said.

“The relationship between Australia and India has been one of rapid growth in trade and investment.

“The FTA feasibility study is a natural extension of the Australian Government’s efforts to look at ways to tap the potential of India’s rise as a major economic power,” he said.

2006-07 preliminary figures show India is now our fourth-largest merchandise export market - recording $10.1 billion worth of exports - equivalent to six per cent of Australia’s total merchandise exports.

Mr Truss said India is also Australia’s fastest-growing major merchandise export market, increasing at more than 34 per cent per annum over the past five years.

“India is a emerging as one of the key drivers for global economic growth and its economic rise will be increasingly critical to world economic development,” he said.

“India’s middle class will especially present important opportunities for Australian business. India also stands to benefit from Australia’s significant economic strength and competencies.”

The Australian Government will consult widely in Australia, including with the States and Territories, relevant industry bodies and others stakeholders during the feasibility study.

The process will ensure that all views are taken into account in developing our position on any future FTA negotiations with India.

Mr Truss said that the Australian Government will initially hold bilateral meetings with India to discuss the study’s terms of reference. The FTA feasibility study will commence in late 2007 and is expected to be completed in 2009.

Australia’s two-way trade in goods with India reached $11.4 billion in 2006-07, making India our ninth-largest trading partner. Services trade with India in 2006 was $1.9 billion.

Deora asks for second opinion on RIL's $ 8.8 b investment

NEW DELHI, Aug 26: Petroleum Minister Murli Deora has asked for an independent review of Reliance Industries' proposed investment of US $ 8.8 billion in developing its eastern offshore KG-D6 fields to allay fears of 'gold plating'.

Eminent reservoir engineer P Gopalakrishnan has been engaged to look into the reasons for rise in Phase-I capital expenditure from US $ 2.47 billion to US $ 5.2 billion and an additional USD 3.6 billion proposed for Phase-II beginning 2010 for maintain plateau production of 80 million standard cubic meters per day.

Besides, one of the six short listed international consultants including Mustang Engineering of US, Pajak Engineering of Canada, Petrofac of UK and Beicip Franlab of France will be appointed to carry out validation of the proposed field development plan, according to oil regulator V K Sibal.

In a letter to the ministry, Sibal said the USD 8.8-billion investment approval was limited only to establish techno-economic feasibility of producing gas from Dhirubhai-1 and 3 fields in KG-D6. RIL will however be reimbursed cost from gas sales based on actual independently audited expenditure and not on approved Field Development Plan.

E&P companies in India are under tremendous financial pressures on account of worldwide increase in the input costs in tandem with the increase in crude oil prices, according to Prabh Das, Joint Secretary in the Petroleum Ministry.

Giving an example in a letter to the Finance Minister, Das has stated that the cost of chartered hiring of drilling rigs, a major input for E&P operations, has increased between 75 to 228 per cent in the past two to three years.

As per the Production Sharing Contract, all capital commitments are made on the basis of a tendering process through international competitive bidding (ICB) mechanism and detailed procurement procedures are laid out in the PSC based on the concept of optimal pricing.

Sibal said initially US $ 2.47-billion development plan was approved in 2004 to produce 5.3 Trillion cubic feet of gas at a peak production rate of 40 mmscmd. However, on subsequent exploration, the block was found to hold higher gas potential and development plan was revised to produce 10.02 Tcf of gas at a peak production rate of 80 mmscmd.

"The contractors' estimate of the revised investment is higher due to the increase in number of wells and production and pipeline facilities to produce a higher volume of gas and also due to the increase in price levels in global market for E&P operations," he said.

He said the cost per barrel of D6 block is estimated to be very competitive when compared to international companies and other discoveries in the country.

"The per barrel finding cost of KG-D6 is estimated at US $ 5.69, compared to US $ 10.61 for PY-1 (in Cauvery basin), US $ 34.21 for CN-ON-3 (in Cambay basin) and US $ 5.74 for Rajasthan block. The cost of British Petroleum in 2005 was US $ 5.79."

The regulator said development cost globally are revised suitably when there is escalation in price levels or change in production capacity. "For instance, Sakhalin project cost was revised by Shell from US $ 11 billion to US $ 20 billion. In India, during the current year, PY-1 investment was revised from US $ 138 million (2004) to US $ 371 million."

Sibal said the idea of 'gold plating' was misplaced and "was coined out of sheer ignorance of business economics. Inflating the expenditure does not benefit any body, neither the companies nor the Government... Every additional rupee of wasteful investment eats into the profit of the companies.”

Deora asked for an independent opinion after charges of 'gold plating' of investment to get higher gas price surfaced. Gopalakrishnan will submit his report by September 15.

A Reliance spokesman, when contacted, said that RIL costs were lowest in the world, including India and the track record of the company to build the most advanced plants is a public knowledge.

“We have already informed the Committee of Secretaries (COS) and various government functionaries that the capital cost to be recovered by the company are open to all for scrutiny. Basically an attempt is being made by a section of polity to mislead the public to meet their narrow interests,” added the spokesman.

Rich should share wealth with poor: Mukesh Ambani

NEW DELHI, Aug 21: Reliance Industries chairman Mukesh Ambani has said the rich must share wealth with the poor. He also pushed for a new development model for India to reduce disparities.

'India is definitely turning a new leaf though there are concerns on many fronts,' Ambani said, delivering the sixth Darbari Seth Memorial Lecture organised by The Energy and Resources Institute (TERI) here.

'In the new developmental model, there is need for a comprehensive vision and some exemplary leadership so as to place higher income among the people. And in this, there is need to substantially involve the corporate sector,' he said.

'What India needs is not conflict but cooperation among all sections.'

On the energy front, he declined to be drawn into making any comments on the impact of the Indo-US civil nuclear cooperation except to say 'noble metals is one solution for energy but renewable energy is another.'

However, he stressed on the need for largescale use of solar energy as in the 'next 20 years, it is going to transform the world. In the coming eight to ten months, we are setting up 30 pilot projects in Maharashtra.'

Making a strong case for his retail outlets, he said: 'Indian farmer bears the highest risks. So, by unleashing a genuine pro-farmer and pro-consumer retail, it would help both and put them in a win-win situation.'

As part of this, a brief film on the Reliance retail was screened for the jam-packed hall at the India Habitat Centre having interviews with farmers and consumers and the benefits of the retail outlets.

Reliance opens country's first hypermarket

NEW DELHI, Aug 14: To coincide with India’s Independence Day, Reliance Retail has opened its first hypermarket in Ahmedabad, with plans to open 30 more such superstores across the country at an investment of over Rs 375 crore by this year end.

The hypermarket in Ahmedabad, which at over 1,65,000 sq ft is by far the largest retail facility under a single roof, has over 95,000 products ranging from full line of groceries to garments, consumer durables to garden equipment.

"The company will open 30 hypermarkets by this year end of 40,000 to 60,000 sq ft each," according to K Radhakrishnan, CEO of Reliance Hypermarket.

Radhakrishnan said six malls under the Reliance Mart brand would come up in the national capital, five each in Punjab and Andhra Pradesh, three in Gujarat and two in Bangalore.

Over 500 such superstores are planned by 2010.

The hypermarket format is the latest to be unveiled by Reliance Retail, which last year unveiled its fresh food format store Reliance Fresh, followed by consumer electronics store Reliance Digital.

ONGC demands over 12% hike in APM gas price

NEW DELHI, Aug 9: State-run Oil and Natural Gas Corp (ONGC) has demanded a 12.5 pc hike in price of natural gas it produces from fields given to it on nomination basis as it was incurring losses at the present price of Rs 3.2 per cubic meter (1.97 dollars per million British thermal units).

ONGC Chairman and Managing Director R S Sharma has stated that the company's realisation was only Rs 2.97 per cubic meters after paying for royalties and taxes.

Against this, the cost of production was Rs 3.272 per cubic meter.

"As per the cost accounting records for the year 2005-06 duly audited by cost auditors, ONGC had negative margin of Rs 0.302 per cubic meter on gas business," he wrote to Petroleum Secretary M S Srinivasan on 30th July.

ONGC is to produce 38.77 million standard cubic meters per day of gas from fields given to it on nomination basis and priced by government orders (called APM gas) in 2007-08.

It would produce another 8.38 mmscmd from fields operated outside the APM regime.

Sharma, said the APM gas price should be raised to Rs 3.6 per cubic meter as recommended by the tariff commission and it year a 20 per cent hike should be effected so that the prices are gradually aligned to market standards.

For non-APM gas, he sought a minimum price of 4.75 dollars per mbtu, the price of gas sold from Panna/Mukta and Tapti fields off Mumbai.

The ONGC demand comes at a time when Prime Minister Manmohan Singh has referred the issue of gas pricing to a Group of Ministers after power and fertiliser sectors in general and Anil Ambani Group in particular wanted the government to renege on its promise of giving market price to companies investing in gas exploration.

PM sets up EGoM on natural gas price

By Deepak Arora

NEW DELHI, Aug 6: Prime Minister Manmohan Singh has constituted an Empowered Group of Ministers (EG0M) to go into the issue of pricing of natural gas to be produced by Mukesh Ambani's Reliance Industries from its eastern offshore Krishna Godavari basin block.

The Prime Minister conveyed the decision to set up the EGOM when Petroleum Minister Murli Deora met him this morning on the issue, official sources said.

RIL, drawing from its right under the contract for KG-D6 block, proposed to price the gas between 4.33 dollars per million British thermal unit and 4.58 dollars per mBtu.

Though the Petroleum Ministry was the competent authority to decide on the issue, Deora asked the Prime Minister's Office to constitute a Committee of Secretaries to look into the issue.

The CoS, headed by Cabinet Secretary K M Chandrasekhar, in its report relied heavily on the 'emotive' issue of RIL gas supply to state-run power utility NTPC.

Sources said the EGOM would be headed by External Affairs Minister Pranab Mukherjee and would give its decision on the issue within a month.

Deora said the sanctity of the contracts signed under New Exploration Licensing Policy (NELP) would not be compromised.

``The government will stand by its commitment on the contracts,'' Deora said. ``Contracts for those companies who have completed their work as per schedule must be honored by the government.''

Meanwhile, the petroleum ministry has welcomed the Anil Ambani Group company Reliance Energy's demand for a gas utilisation policy saying it should withdraw all court cases seeking at least half the output from RIL' gas from the Krishna-Godavari basin.

"If they are serious about their demand for a gas utilisation policy, we welcome it. For that, they should first withdraw all cases in various courts where they had, by virtue of a private family agreement, claimed ownership of at least half the 80 million standard cubic metres per day of gas to be produced from KG-D6. Unless that happens, how can anyone decide how much gas can be allocated to different sectors," a top petroleum ministry official said.

The ministry's comment came in response to Reliance Energy Director JP Chalsani demanding that a gas utilisation and pricing policy be put in place before deciding the pricing of gas from the KG-D6 fields of Reliance Industries.

Reliance Industries challenged Chalsani's assertion that the company was targeting an exorbitant return of up to 225 per cent in the KG-D6 investments, saying its investment of $5.2 billion can be audited by an independent consultant.

A Reliance Industries official said its capital expenditure was the lowest in a similar gas field anywhere in the world.
On this, a DGH official said that there is a procurement process manual that is comprehensive with extensive procedures and checks and balances on the costing. Any amount that is extravagent or could have been managed prudently will not be approved for cost recovery.

The official added that RIL has categorically welcomed any verification or auditing by the government and CAG or others as they have innovatively finalised the inputs at the lowest cost/ unit basis anywhere in the world.

The RIL official challenged Chalsani's assertion for a regulated price for gas since consuming sectors like power and fertiliser were regulated, saying in the exploration and production business model, as inputs (rig cost and services) are deterministic (at market prices) and outputs probabilistic, no regulated price regime could provide an adequate risk-reward balance.

"By making such comments, the ADAG is only showing off its lack of knowledge about E&P business," he said.

Canara Bank pays highest-ever dividend

By Deepak Arora

NEW DELHI, Aug 4: Canara Bank has achieved its highest ever net profit of Rs 1,421 crore for the financial year 2006-07 on the back of a strong top line growth.

With the growth in profitability, Canara Bank has declared a dividend of 70 per cent, the highest since it went public as compared to 66 per cent dividend declared for the financial year 2005-06.

On Thursday, the bank’s Chairman and Managing Director, Mr M B N Rao, presented a cheque amounting to Rs 210 crore as dividend for the financial year 2006-07 to the Finance Minister, Mr P Chidambaram.

Canara Bank has the record of paying dividend to the Government without break since nationalization in 1969.

Govt may allow market price for RIL KG gas

NEW DELHI, Aug 2:The government is likely to clear the price quoted by Reliance Industries Ltd for its gas from the Krishna-Godavari basin without seeking to control the price.

"Depressing gas prices artificially will lead to arbitration, which we cannot hope to win," said a government official. He said a meeting in the law ministry a couple of days ago discussed the legal issues that might come up if the gas price was administered.

"The case for depressing prices was found to be weak," the official added.

He said as the production-sharing contract allowed for a market-driven price, the government could not afford to set a benchmark for administering prices under the New Exploration and Licensing Policy as the pricing formula for the RIL gas would apply to gas from the country's other deep waters as well.

"There are many such issues which we cannot overlook," the official added.

RIL, along with partners Oil and Natural Gas Corporation and British Gas, is selling gas from the Panna-Mukta and Tapti fields for around $4.75 per million British thermal unit (mBtu). It has "discovered" a well-head price of $4.33 per mBtu for its K-G basin gas.

The gas pricing issue is not likely to go to the petroleum regulator, though officials in the petroleum ministry say if the regulator decides the price, there will be no accusations of favouritism. "However, gas pricing is outside the scope of the regulator in its present form," a petroleum ministry official said.

The fertiliser and power ministries, which together consume around 70 per cent of the gas, said they should get supplies at a subsidised rate of less than $3 per mBtu. These companies get gas at an administered price from ONGC and Oil India or use expensive naphtha or fuel oil.

They said since there was no efficient gas market in the country, as demand far outstrips supply, RIL could not claim to have discovered a market-driven price for its gas.

The government has been deliberating on the issue through a committee of secretaries led by the Cabinet secretary. "We are going to reach a decision very soon," the government official said.

The country's deep water and ultra-deepwater regions are believed to hold enough gas to meet the country's demand. The present demand is double the supply of around 85 million cubic metres per day (mcmd).

The government has projected the 2011-12 demand at 283 mcmd, against the domestic production of 108 mcmd and LNG imports of 82 mcmd.

Morgan Stanley: RIL to be $100bn m-cap company

NEW DELHI, Aug 1: Reliance Industries, India`s most valued firm, may become the first in the country to achieve a market capitalisation of USD 100 bn, international brokerage and equity research major Morgan Stanley said on Tuesday.

Morgan Stanley`s India-based analysts said in a research note sent to the firm`s institutional clients that they were raising the consolidated earnings forecasts for RIL in the current and next fiscals.

They also revised upward their one-year price target for RIL shares, while projecting a 35 per cent surge from the current levels in its "base case" scenario.

Morgan Stanley further said in "bull case" scenario, the shares could rise by about 37 per cent, which when translated into market capitalisation would amount to over USD 100 bn.

RIL`s market cap currently stands at about USD 64 bn, the highest for any listed entity in the country. However, this pales in comparison to the US, where the most valued listed entity Exxonmobil, which is also into the energy business, has a market value of close to USD 485 bn.

None of the Indian companies have ever achieved this mark, even though at least 30 companies in the us have a market capitalisation of more than USD 100 bn. These include tobacco giant Altria Group, insurance major AIG, telecom firm AT&T, Coca-Cola, General Electric, Google, Hewlett Packard, IBM, Intel, JP Morgan, Johnson and Johnson, Merck, Microsoft, Procter and Gamble, Verizon Communications and Wal-Mart.

The combined market cap of all the 30 constituents of the Dow Jones Industrial Average, the benchmark index of the US market, is more than four trillion dollars, which is over four times the entire market capitalisation of all the listed entities here in India.

Rising cotton prices will result in a windfall gain for RIL

NEW DELHI, July 30: Polyester margins are expected to move up as high cotton prices will divert demand to synthetic fibers. Reliance, which is claimed to be world’s largest yarn producer will benefit immensely from the change in business cycle.

Rising cotton prices along with falling area under sowing for cotton is further expected to result in improved margins for the polyester business. This along with rejuvenation of downstream textile industry and a greater thrust towards value added exports will improve margins for the polyester business.

In the last one-year global cotton prices have moved up by 23 per cent to US $ 1574 per ton and expected to rise further. Higher cotton prices, historically have resulted in a shift in consumption pattern towards polyester, resulting in better margins for the latter.

Also in the last few years there has been a greater thrust on increasing exports from countries like India and China. Both the countries are looking at increasing high value added exports of textiles and here too they will have to rely upon polyester exports as rising cotton prices will make it uncompetitive.

What will work in Reliance’s favour is a slow down in the Chinese addition of polyester capacity. Since RIL is an integrated player and virtually controls the entire value-chain and hence costs.

Interestingly US, which is world’s largest cotton grower and consumer has seen a 28 percent fall in acreage under cotton production. Most of the farmers have shifted to corn, which is currently yielding better returns on account of the demand from the bio fuel industry

Besides world’s cotton stock has also seen a 13 per cent decline, which will further fuel hike in cotton prices. China too has started using its stock as it has seen higher capacity addition in the downstream processing, which will put additional pressure on global demand-supply scenario for cotton.

In India we are seeing a divergent trend where acreage is under plantation as the sowing season is currently under progress. Indian textile industry, spurred by concession on loan rates from government, is likely to see a spurt in cotton exports from India.

These factors will drive polyester demand and push up prices of polyester further, thus improving RIL’s margins in the polyester business.

RIL reports yet another quarter of outstanding performance

NEW DELHI, July 30: Reliance Industries Limited (RIL) has once again announced good results for the first quarter of FY2007-08. The GRM for the first quarter was US$ 15.4 /bbl as against US$ 12.4 / bbl in the corresponding period of the previous year.

RIL’s outstanding performance is a result of a highly complex refinery along with most efficient liquid port, location advantage and following sound economics of buying cheap and selling premium products.

The complex refineries allows RIL to buy and process some of the heaviest and sour crude the world has seen and which only a handful of refineries have the capability to process. The refinery regularly tries out crude from new sources, which are both cheaper and challenging to process.

During the last quarter RIL tried out crude with an API of 21 - 24. API is an indicator of how heavy, sour and difficult the crude is to process. The differential in light and heavy margins has been growing in the past few quarters and today it stands at US $ 5 - 5.5/bbl.

With RIL refinery converted into EoU the company has focused on exports with reducing sales in the local market where it is incurring losses as government refuses to give RIL subsidy at par with what it gives to the PSU oil companies.

For a long time now RIL has outperformed the Singapore complex benchmark GRM by a wide margin. In fact the margin has become so wide that there is no point in comparing RIL’s refining margins with the Singapore complex benchmark. The factors that have contributed to high GRMs are:

Cost of sourcing crude oil; Manufacturing reliability and efficiency; Ability to produce quality transportation fuels; Flexibility of crude oil receipt and product evacuation infrastructure.

The highly complex configuration of the RIL refinery gives it the ability to process heavy and sour crude. The incremental oil supply through new discoveries is also in this category.
Further, many of these crudes are in the "challenged" category and require unique technical capabilities for processing. These factors continue to support high levels of light heavy differentials and provide a unique advantage to the refineries who posses the capability to process heavy and sour crude oils.
During the quarter RIL processed 4 new crudes which it procured at a substantial discount.

The RIL refinery continues to reap the benefits of access to world class logistical infrastructure. This allows the refinery to import up to 100 percent of its crude oil requirement in VLCC’s (Very Large Crude Carrier) capable of bringing up to 2 million barrels in each shipment.

This reduces the freight costs considerably and optimizes the overall landed cost of crude oil. The product evacuation infrastructure again provides the flexibility to evacuate the products in varying parcel sizes and optimizes the supply chain costs of the buyers. This again results in higher realization to RIL for its products.

RIL continues to demonstrate its superior manufacturing capabilities by continuing to run its refinery in a smooth, safe and flexible manner. While worldwide refinery outages have led to spikes in margins, RIL refinery has maintained its reliable operations to take advantage of these opportunities.
Efficiencies in energy consumption, ability to swing production and quality at short notices, readiness and adaptability to accept different crude blends on a continues basis, adjusting operating parameters, blending management and several other factors all add up to a significant contribution to RIL’s GRM.

Growing concerns on the environmental front have lead to most countries making their fuel specifications stringent. As RIL is critically dependent on export markets, it continuously optimizes its product pattern to maximize netbacks to the refinery. This is done while feeding fuels to suit requirements of different quality conscious markets across the world on the one hand and simultaneously making its crude slate heavier and sourer and maximizing "bottom of the barrel" conversion.

In summary while market condition have remained favourable, the large scale, flexible and complex configuration, path breaking efficiency in operations, innovation around crude procurement and the structural advantages of the refinery have uniquely positioned RIL to take advantage of the unfolding opportunities in the refining sector.

Anil, Amar fail once again in attacking Mukesh

MUMBAI, July 27: Wakf property controversy going on relating to the new dream house of Reliance's Mukesh Ambani met with an anti climax on Friday and brought to light some more interesting aspects about the controversy and throwing in a completely new perspective.

Anil Ambani's friend - Samajwadi party leader Amar Singh arranged a rally to embarrass Mukesh Ambani in this controversy. Samajwadi party issued a press release on Thursday saying there will be a rally of 8000 students who will march and collect donations to give it to Mukesh Ambani as he has taken the alleged wakf property on which an orphanage is supposed to have been built.

However, when people came to know that the so called Wakf property belonged to Madhavarao Scindia and was sold recently to a trust and it is not a wakf property, they decided not to make their children instrument of this blackmail and fight between two rival brothers Anil and Mukesh Ambani.

Rally was to be organised from Govandi, Geeta Vikas School.
On Friday at 2.30 PM, when newsmen from several media agencies went to the site, they realised that there were not more than 10 students there. In fact, there were more media people than the number of protesting students.

After going for a few meters, the rally was abruptly called off after the organisers realised that parents of children have seen through the game of corporate rivalry between two brothers being given communcal colours which none of them want to participate.

When asked to the Maulana leading the rally of less than few students that when there are several properties in dispute on wakf, why Mukesh Ambani is being targeted by Samjawadi party? He answerd that they are not interested any inquiry which is instituted by government and the Wakf board. They will fight for this land without knowing facts that original owners were Madhav Rao Scindia Trust.

When he was further probed why he was using his community angel to help the friend of Samajwadi party head honcho to achieve his corporate objectives, he chose to stay silent.

The rally was finally over within 10 minutes and all children were whisked away some of whom were crying and wanting to go home as soon as possible.

Nervousness over Govt’s gas pricing

NEW DELHI, July 27: More trouble is brewing for the next round of exploration acreage auction, with more companies and investment bankers expressing nervousness over political pressure on the government to renege on contractual commitment to allow market-pricing of oil/gas from new finds.

The latest to join the chorus on the issue is British major BP (formerly British Petroleum). The Times of India had on July 10 first reported that Chevron, Niko, BG (British Gas) and Hardy had written to the government expressing apprehensions over the government reneging on the terms of contracts due to political interference. Such views among global majors will hit efforts to attract investments during the coming auction.

In a letter to oil minister Murli Deora, BP's India head Ashok K Jhawar says, "Were the government to consider the reintroduction of some form of administered pricing for natural gas, we would be concerned since, as a long-term investor in India, of primary importance to us is fiscal stability for the life of our contract''.

"Subsidies in energy pricing should come at the consumer end, not at the exploration end, otherwise experience shows that countries which set an unrealistic well head price of gas suffer from lack of exploration and development since investment tend to flow to higher-price locations."

Even investment bankers are getting jittery over demands from Andhra CM YSR Reddy and state-owned entities that will require the government to renege on contractual commitments.

"Investor nervousness increases when government arms like NTPC and a chief minister, who is from the same party ruling the Centre, challenge existing law and policies," a Singapore-based investment banker said on condition of anonymity.

Though oil/gas is a Central subject, Reddy has rejected market-pricing for gas from Reliance Industries' find off his state's shores and is pressuring the Prime Minister for preferential pricing and first right of use.

NTPC, which has dragged Reliance to court on the liability clause of a gas sale agreement, is also asking the government to take its share of profit in kind. A panel of secretaries is now grappling to form a gas pricing policy, which could undo the benefits of auctioning acreages.

"Investors are not worried about court battles. But when ruling party voices oppose a policy (acreage auction) that had been put in place by Parliament and received wide support from parties that rule today as well as those in the opposition, it signals a politically risky situation to be pumping money," the investment banker said.

MUL profit up 35 pc, to become Maruti Suzuki

NEW DELHI, July 27: New launches and rural marketing initiatives helped market leader — Maruti Udyog — post a 35.18% jump in net profit at Rs 499.6 crore for the first quarter ended June 31, against Rs 369.57 crore during the same period last year.

Total income (net of excise) during the quarter also increased by 27.08% to Rs 4,154.07 crore against Rs 3,268.77 crore in the same period a year ago.

To encash the Suzuki’s success in the global markets, the company’s board has also approved a proposal to change its name to Maruti Suzuki India Ltd subject to shareholders’ and other regulatory approvals.

"This international dimension in the company’s name will help Maruti as it expands its role in the global markets," it said. Shares of the company witness a jump of 3.88% or Rs 31.40 to close at Rs 841 after touching a high of Rs 857.90 after the company announced its results.

Maruti has recently tied up with regional rural banks to provide loans at lower rate of interest. This helped the auto major register a jump of about 105 in sales during the quarter.

During the quarter, the company sold a total of 1,69,669 units as against 1,44,948 units in the same period last year, up 17.1 per cent. In the domestic market it clocked 1,60,604 units, while it exported 9,065 units.

Besides, the company is also focussing on global markets such as Europe along with Afro-Asian markets like where it is already fetching numbers.

The company is currently working on a small car at its Manesar plant and will roll-out 2,00,000 units to cater to the European market.

"Maruti is also developing capabilities to become Suzuki’s R&D hub for Asia outside Japan," it added. MUL’s strong performance comes at a time when the industry is grappling with subdued sales due to increase in interest rates and most of the manufacturers resorting to discounts.

New launches like SX4 and diesel variant of its runaway success ‘Swift’ has helped the company maintain its growth. It had also undertaken various marketing strategies like rural sales and employees scheme to enhance sales.

BP, BG, Hardy slam govt on gas pricing under NELP areas

NEW DELHI, July 22: Slamming the move to regulate gas prices, global giants British Petroleum, Hardy Exploration and British Gas have warned the government of investor backlash if it reneges on its commitment of giving freedom to sell gas at market price from areas auctioned under NELP.

India has attracted 7.2 billion dollar investment in oil and gas hunt through New Exploration Licensing Policy that promised the right to sell the discovered oil and gas at market prices. However, international investors took a serious note when the government formed a committee to look into pricing of gas from Reliance Industries' NELP-I block.

"Were the Government to consider the reintroduction of some form of administered pricing for natural gas, we would be concerned since, as a long term investor in India, of primary importance to us is fiscal stability for the life of our contract," Ashok K Jhawar, country head, BP, which had won to areas for extraction of gas from coal seams (CBM), wrote to Petroleum Minister Murli Deora.

BG India managing director William Adamson on July 10 wrote to Cabinet Secretary K M Chandrasekhar that such a development "would dampen the pace of exploration and erode the confidence of the international companies in the forthcoming bidding rounds".

India is planning the seventh round of auction in August.

Chevron India president John R Digby wrote to Deora on July 2 that "market forces should drive the destination, customer selection and pricing of gas in India".

Hardy Exploration vice president Ashu Sagar wrote "any action to renege on commitments will weaken investor confidence not only in NELP but also in Indian contracts."

BP said subsidies in energy pricing should come at the consumer end, not at exploration end. Otherwise, "countries which set an unrealistic wellhead price for gas suffer from lack of exploration and development since exploration investment tend to flow to higher-priced locations".

Niko Resources, one of the first foreign firms to invest in country's oil and gas hunt, said "we are concerned with the recent developments, wherein there is sustained pressure and coercion being exerted (on Reliance) from various sectors (notably power) to reconsider market-determined price".

"We consider such influence being made on gas pricing to be non-compliant with the rights provided to the contractor for marketing of gas at 'arms-length prices to the benefit of parties to the contract (Reliance and Government)' under the Production Sharing Contract," Niko chairman Edward S Sampson wrote to Petroleum Secretary M S Srinivasan on July 3.

Hardy said the Production Sharing Contract for areas auctioned in six NELP rounds guarantee a market determined price. "By artifically imposing (price) restriction, the Government shall impose a country and political risk."

BG said Indian exploration and production scenario had undergone profound changes post NELP and some dramatic results have been obtained in terms of discovery of large oil and gas reserves as well as the emergence of the East coast offshore as a major hydrocarbon province.

Niko said contractors like Reliance invested in fields "keeping in mind the favourable fiscal terms offered under PSC and the anticipated decent return on investment based on competitive hydrocarbon pricing that the PSC provides for.

"The establishment and realisation of a market determined price is what will allow for ensuring the fiscal terms remain internationally competitive, which in turn will induce more such investment from companies like ours," it said.

Much Ado About Nothing

NEW DELHI, July 9: The Chairman of Maharashtra Wakf Board M A Aziz, embroiled in a controversy over the acquisition of land for a residential complex by Mukesh Ambani-owned company Antilia, today said the state government has no jurisdiction to interfere in Wakf-run matters.

In his reply to the notice served on him by the state Revenue and Forest Department, Aziz alleged Wakf Minister Anees Ahmad was "out to exact personal vendetta because I exposed his role in a land deal in Nagpur".

He said he had sent the reply and the government has no jurisdiction in Wakf matters which are to be decided only by Wakf tribunal.

The Wakf Board had earlier issued a notice asking Antilia to explain within seven days why the plot should not be restored to the Board as it was acquired "in contravention of Wakf rules".

The move came two days after the state government termed the deal as "illegal" and directed the Wakf Board to "take back possession" of the property.

However, Chief Minister Vilasrao Deshmukh has said that "as far as I know, the Wakf Board had given a no-objection certificate (for five land deals, including that of Antilia)." Ambani is building a 27-storey skyscraper on a 4,532 sq m plot in south Mumbai.

The Currimbhoy Ebrahim Khoja Orphanage, a charitable Trust, was in acute shortage of funds. The Trust therefore decided to sell the said property and utilise the sale proceeds to shift the Orphanage to an alternate complex. It issued Public Notices in Times of India and Navbharat Times on April 17, 2002, inviting offers from public for the sale of the property. The Trust received many offers and the offer of Antilia Commercial Pvt Ltd of Rs.21.05 crore being highest was accepted and MOU was entered into with them on May 9, 2002.

The Trust submitted its application for permission of Charity Commissioner for the sale of the said property. Permission was granted by the Charity Commissioner on August 27, 2002. As required under the provisions of the Income Tax Act 1961, Form 37-1 was filed with the Appropriate Authority which vide their Certificate dated Sept 11, 2002, certified that it has no objection to the transfer of the said property by the Trust to Antilia Commercial Pvt Ltd for Rs. 21.05 crore.

In April 2004, Antilia Commercial Pvt Ltd received a notice from Maharashtra State Board of Wakfs to explain why action should not be taken to recover the said property from them. In response, Antilia Commercial Pvt Ltd filed a case before the Tribunal constituted under the Wakf Act, 1995 submitting that they have acquired the property after due process of law. In the meantime, the Trust obtained opinion of Dr Tahir Mahmood of National Human Rights Commission that Currimbhoy Ebrahim Khoja Orphanage remains a trust and cannot be regarded as a Wakf.

The Trust represented that it has always been a Public Charitable Trust and is not a Wakf. The Wakf Board after having been satisfied that the sale of the said property is beneficial to the Trust, decided to ratify the sale of the said property in favour of Antilia Commercial Pvt Ltd and accordingly informed the Trust vide its letter dated March 19, 2005. The notice issued by the Wakf Board to Antilia Commercial Pvt Ltd was withdrawn vide letter dated March 23, 2005

As the matter was resolved amicably, the suit filed by Antilia Commercial Pvt Ltd was withdrawn. Since the Wakf Board continued to maintain that the Trust is a Wakf, the Trust has filed a writ petition in 2005 in the High Court of Judicature at Bombay that the Trust is not a Wakf. The Writ Petition is presently pending.

Court defers decision on RIL gas dispute to July 12

MUMBAI, July 5: The Bombay High Court has said it would give its final order on July 12 on the issue of restraining Reliance Industries Ltd. (RIL) from selling gas produced from one of its prime blocks in the Krishna-Godavari basin to a third party.

The high court, which had passed an interim order on June 22 on a petition filed by Anil Ambani owned Reliance Natural Resources Ltd. (RNRL) and state-owned NTPC Ltd., was hearing a review petition filed by the Mukesh Ambani owned RIL Thursday.

The court had stated in its interim order that 81.6 million cubic meters of gas per day (mmscmd) was earmarked for RNRL, NTPC or for RIL's captive use for the next eight years.

RIL filed a petition seeking an injunction on the order and argued Thursday that since there was no power project at the blocks and the gas was lying unused it should be permitted to sell the gas to other companies.

Reliance indicated that the sole objective of Anil Ambani owned energy utility is to procure gas by any means through media campaigns and misinformation and thereafter sell the same to end users at a much higher rate and earn huge brokerage without either setting up gas fields or putting up power plants.

It is believed that Anil Ambani group has assured Government that it has most of the approvals and plans would be implemented soon. However, industry experts say that if Anil Ambani would even try in all possibility, no power plant would be ready before 2012, while the gas production from KG basin is expected to start flowing in less than a year if the interim order vacated.

Interestingly the question on the ability of private companies in power sector for setting up mega projects has been questioned as most companies including Anil Ambani group had hardly contributed to additional capacity despite India facing crunch over the last decade.

The country needs natural gas for its energy requirement and the gas in the Krishna-Godavari basin in eastern India should not be allowed to lie idle at a time when we are paying heavily to meet our energy requirements, said RIL counsel Harish Salve.

'We told the court that since the proposed work on the project has not yet started and production of gas will not commence before 2012, what is the point of keeping the gas underground. We have requested the court to review its order,' Salve told reporters after the hearing.

RIL had in the June called for competitive bids for selling the 80 mmscmd of gas and received price bids from various power and fertiliser companies.

'RIL's deal with RNRL was confined to only 40 mmscmd. We should be free to sell the remaining 40 mmscmd to third parties as the volumes being referred to are only on discoveries made before the agreement before June 2005,' he said, referring to the settlement between the two Ambani brothers.

RIL argued on the basis of arguments of Ministry of Petroleum and public at large that the pricing of gas should be market determined and not artificially suppressed.

Reliance had appealed to the division bench to overturn the order which had in effect stalled gas projects thereby delaying nearly 50 per cent of the Indian gas requirement and undermining energy and security.

Reliance in its argument has conveyed to the High Court that it must be allowed to negotiate with the buyers as gas cannot be stored and should not be flared in the hope that Reliance Energy would one day set up its power plant.

USIBC awards for Mukesh Ambani, Boeing's McNerney

By Deepak Arora

NEW DELHI, June 25: Chairman of Reliance Industries Ltd (RIL) Mukesh Ambani and Boeing chief James W. McNerney will receive the United States-India Business Council (USIBC) leadership award for "Global Vision" 2007 in Washington on Wednesday.

US Secretary of State Condoleezza Rice will also be honoured with the USIBC distinguished service award.

The awards will be given at the two-day USIBC 32nd anniversary summit at the US Chambers of Commerce, a statement from Washington Sunday said.

US Commerce Secretary Carlos Guteirrez will deliver the inaugural speech at the summit that US Trade Representative Susan Schwab and Indian Commerce Minister Kamal Nath will also attend.

Rice will deliver the keynote speech on "Uniting Two Great Democracies for 21st Century", the statement said.

Kicking off the summit Tuesday will be the 32nd Anniversary Cultural Recital and Gala Dinner at the John F. Kennedy Center for the Performing Arts with a sarod recital by maestro Amjad Ali Khan, whose sons Amaan Ali Khan and Ayaan Ali Khan will accompany him.

Meanwhile, sources here said Ambani would meet three top US officials, including Rice, at the event and was likely to hold discussions on a range of issues like outsourcing and energy security.

"Discussions are also likely on alternative energy sources in the wake of growing international concerns over global warming," the sources added.

The Washington headquartered USIBC, a premier advocacy organization, promotes economic reforms to deepen trade relations and broaden commercial ties between the two countries.

"USIBC formulates an annual work plan that targets specific issues important to its 250 member-companies, compiled from progress on-the-ground and to devise strategies and prepare representations to advance sector-specific reforms in India," council president Somers said in the statement.

Toward this, USIBC has partnered with premier Indian business organizations like the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI), the American Chamber of Commerce in India (AmCham India), National Association of Software and Service Companies (NASSCOM), The Indus Entrepreneurs (TiE), and the Indo-American Chamber of Commerce (IACC).

Govt to lose $10 bn if RIL gas priced at subsidised rates

NEW DELHI: The government will lose USD 10 billion in revenues and Reliance Industries will make no profit if natural gas from its KG basin fields are sold at subsidised rates instead of the market price, a petroleum ministry official said.

Government will get USD 4.6 billion in royalty, profit share and corporate tax if RIL gas is priced at current subsidised rate of USD 2.50 per million British thermal unit (mBtu). This could go up to USD 14.5 billion if gas is sold at a market-determined price of USD 4.5 per mBtu.

Reliance, which plans to begin production from its KG-D6 block off the east coast from July 2008, stands to get 6.6 billion dollars in revenues at USD 2.5 per mBtu gas price, almost all of which will go into recovering USD 5.2-billion investment being made for developing the field and the project financing cost, the official said.

At USD 4.5 per mBtu, Reliance will get USD 14.9 billion in revenues, he said, indicating the government may accept the price formulation proposed by the company that caps it at 4.58 dollars per mBtu at rupee-to-dollar rate of 41.

RIL plans to index gas price to crude oil with a floor of USD 25 a barrel and a cap of USD 65 per barrel. At the lower level, the gas price comes at USD 2.5 per mBtu.

"This price compares very favourably to the current price of gas being sold by private operators like British Gas (USD 4.75 per mBtu for Panna/Mukta and Tapti fields) and imported LNG (USD 4.8 per mBtu)," he said.

The delivered price of Reliance gas at power and fertiliser plants would be between USD 5.2-6.2 per mBtu, depending on location and taxes.

Industry seeks declared goods status for natural gas

By Deepak Arora

NEW DELHI, June 14: Industry has sought declared good status for natural gas which is fuel of the future for the power, fertilizer and other sectors.

Different Chambers of Commerce and Members of Parliament have sent representations in this regard to several Ministers and officials in various Ministries as well as Empowered Committee of State Finance Ministers on VAT that is meeting on Friday.

It was pointed out that natural gas and RLNG are subject to varying rates of Sales Tax in different States. In few States, the rate is as high as 20 per cent.

Besides, the high rate of tax, some States such as Assam and Madhya Pradesh also do not allow input tax credit under VAT law to the gas consumers. As electric energy is exempt from VAT, the power generating companies have no choice but to absorb the entire burden as they cannot avail input tax credit.

Similarly, goods used as fuel are not eligible for VAT credit due to restriction imposed by the states. This restriction badly affects all sectors that are using natural gas as fuel.

Since natural gas is a key input, due to this high and multiple point sales tax structure, the consumers are adversely affected particularly in the fertilizers and power sectors.

Importance of natural gas is likely to increase due to increase in production of natural gas in the coming years with interstate trade also increasing consequently.

It is important to note that suitable relief in sales tax will not only ensure that cost of gas to the end consumer is kept low but will also facilitate development of National Gas Grid in the country.

As a fuel, natural gas has to compete with coal, which enjoys “declared goods” status under Section 14 of the Central Sales Tax Act 1956 thus attracting maximum 4 per cent sales tax.

Also, natural gas and crude belong to the same category – “petroleum”. Thus, when crude enjoys “declared goods” status under CST Act, 1956 natural gas should also be extended the same benefit, it was pointed out.

It may be mentioned that natural gas is the fuel for the future given that it is clean, abundantly available and cost competitive. Projections available from alternative sources on gas consumption points to the fact, that natural gas would be the most preferred fuel in the global energy basket by the year 2025.

The major factors contributing to this include the increasing globalization of gas business, recent discoveries, inherent fuel efficiencies, opening up of the major gas markets and projected growth in imports in the Asia-pacific region, Europe and North America and environmental concerns.

Natural gas is an important source of energy in power, fertilizer, petrochemical and other industries. The Government policy have been promoting investment in the gas sector by providing sops for LNG and is a proof that it recognizes the importance of this sector.

A report of the Sub-Group on Natural Gas and marking of petroleum products for XI Five Year Plan states that natural gas, accounting for 24 per cent of the total global primary energy supply, is the third largest contributor to the global energy basket and with a CAGR of about 3 per cent over the last five years, it is growing at the fastest rate among fossil fuels.

In the power sector, only 11 per cent of total power generation capacity of 1,26,839 MW is based on gas whereas in the fertilizer sector, about 58 per cent of production is based on gas. The corresponding figures in the petrochemicals and LPG/Liquid Hydrocarbon Sectors are 43 per cent and 31 per cent respectively.

The Sub-Group on Gas Hydrocarbon Vision – 2025 has also estimated a long term demand for gas. According to this report, as against the requirement of 151 MMSCMD in 2001-02, the domestic gas supply was 70 MMSCMD. The Report forecast that in future, the demand supply gap would continue to exist, which will have to be met from imports and increase in domestic production.

The Ministry of Power had also undertaken an exercise to identify gas based projects likely benefits from which could accrue during the XI plan period and beyond. The estimated capacity for these gas based power plants is of the order of 31765 MW.

Thus the overall new gas based capacity addition identified for future during XIth / XIIth Plan periods by the Power Sector are of the order of 33,655 MW. The magnitude of gas requirement for all these plants would be of the order of 100 to 120 MMSCMD, when the plants are set up.

Department of fertilizers has proposed the case for switch over to 100 per cent natural gas in the fertilizer sector, which is expected to give a push to gas demand in this sector during the XI Five Year Plan. The projected gas demand in the XI plan period would increase from 40.82 MMSCMD in the year 2007-08 to 79.36 MMSCMD in 2011-12.

The estimated demand as per the current industry estimates in the petrochemicals/refineries and internal consumption (of gas industries) sectors is about 25.37 MMSCMD in 2005-06. These industries are estimated to grow in line with the economic growth. Hence, an annual growth rate of about 7 per cent is assumed during the XI plan period, which would result in demand of 33.25 MMSCMD by the terminal year of the XI Plan.

BoA nod to RIL's Gurgaon, Rewas SEZs

NEW DELHI: The government on Tuesday gave formal approval to the multi-services SEZ of Mukesh Ambani promoted Reliance Industries in Gurgaon and in principle approval to the company's port-based SEZ in Rewas.

The Board of Approval, which met on Tuesday, gave formal approval to 24 proposals and in principle approval to nine other zones.

Apart from Reliance, the SEZs of GMR, Indiabulls and Gitanjali Gems were also approved.

Mukesh Ambani is India's first trillionaire

NEW DELHI, May 28: A sharp surge in share prices of his group companies has earned Reliance Industries Chairman Mukesh Ambani a rare distinction. He is India’s only trillionaire. He has more than Rs 1,00,000 crore of wealth through his shareholdings.

Younger brother Anil trail close with nearly Rs 90,000 crore in the stock market through his holdings.

Now, just how big is a trillion? For those who are blasé about figures, writer Bill Bryson has a useful perspective. In his book Notes From a Big Country, he writes: “If you were locked in a vault and you could keep every dollar bill you initialled, (we’re assuming that you initial one bill every second and that you don’t need to eat, sleep or take comfort breaks) do you know how long it would take you to make a million dollars?”

It would take you 31,709.8 years to get to your first trillion.

That sorted, one must note that the figures depend on fluctuating share prices, and rich-list rankings can be influenced by the exchange rate of the rupee.

Mukesh, based on his direct and indirect holdings in various group companies, is estimated to have control of about Rs 1,11,000 crore worth shares.

The wealth of the two Ambanis include value of shares held in their names, as well as those held in the names of their children, wives and various holding companies.

In March, Forbes estimated Mukesh’s stakes at $20.1 billion; London-based steel tycoon LN Mittal was then at $32 billion. Together, the Ambanis are worth more than Mittal.

Other Indian billionaires include Azim Premji of Wipro, Kushal Pal Singh of DLF, Sunil Mittal of Bharti, Kumar Mangalam Birla of AVB, Shashi & Ravi Ruia of Essar, Ramesh Chandra of Unitech and Pallonji Mistry of Shapoorji.

Indian Govt to device gas pricing regime

By Deepak Arora

NEW DELHI, May 22: With India's domestic natural gas output projected to nearly double by 2010, the government has undertaken an exercise to device a pricing regime for the fuel that will aid growth in Asia 's fourth largest economy.

Reliance will start gas production from its prolific Krishna Godavari field next year while GSPC and ONGC are to follow suit in the next couple of years, triggering a mammoth exercise to fix a right pricing regime that is beneficial to both, producers and consumers.

"Currently, we have two regimes - administered pricing for gas produced by ONGC/OIL and free market pricing for small quantities of gas produced by joint venture fields. With 120 million standard cubic meters per day output (more than current availability at 91 mmscmd) expected from Bay of Bengal fields,
inputs have been called from industry for shaping the
policy," according to an official.

He said opinions expressed by experts on the issue at a recent industry seminar are being examined by the ministry.

At the seminar, Paul Deemer, a partner with Vinson and Elkins, said that regulated gas pricing deters investment and the government should leave prices to be fixed by free market forces. It should not get involved in gas pricing as long as it is an arms-length transaction.

David Victor, professor of law at Stanford Law School, said pricing of gas in India would be driven by LNG which in-turn takes cues from prices at international gas exchange, Henry Hub.

Claire Spottiswoode of UK said regulators have no role in setting prices in upstream oil and gas exploration because suppliers need adequate incentives to compensate them for investment risks.

Spottiswoode said multiple suppliers aided by third party access, which is competing for consumers, would encourage gas competition.

" India should adopt a single legal jurisdiction, which would deal with all the issues at the national, state and the local
level."

Noting that India would continue to import liquefied natural gas (LNG), which would drive the prices, Victor said gas prices are more volatile than oil. "Higher volatility of gas implies India should have derivatives and other tools for risk management in place."

State-owned companies, according to him, are very poor in developing gas resources. "More important than geology, the business and regulatory environment should encourage the private sector. Private sector will only be encouraged if there is free market pricing of gas."

Deemer said production sharing contract (PSC) for gas fields should allow for transfer of Minimum Work Programme obligations from a not-so-prospective block to the one that has better prospects.

"In some cases, after carrying out some of the minimum work obligations it becomes clear to the company that the remainder of the work in a particular block is futile. Hence, the money earmarked for a not-very-prospective block would be better utilised in the interests of the nation in another block that is more prospective," he said.

He also said PSCs were designed primarily for oil. "Oil and gas cater to different markets and are different animals. There has to be a separate PSC for gas."

Securing natural gas as national asset

By Deepak Arora

NEW DELHI, May 8: Petroleum and natural gas reserves are nation’s strategic assets as the country is facing extreme shortage of this valuable natural resource. To secure the country’s future needs, India has been making efforts to secure petroleum and natural gas supplies from abroad.

In this direction, the government has been securing future needs from the Gulf, including Iran, and even neighbouring countries like Myanmar.

The government also expects to wipe out the current gas deficit of 80 million standard cubic meters per day (mscmd) once the RIL-promoted prolific KG-D6 block begins production beginning July next year.

Though Mukesh Ambani-run Reliance Industries Limited (RIL) had committed 5.2-billion dollar investment in the KGD-6 gas field, it’s the government that’s would own the 85 per cent of the gas. In other words, the gas from this block is a national reserve and cannot be allowed to be shared between the Ambani brothers – Mukesh and Anil.

Anil-led RNRL has not made any investment in exploration or development of the gas fields. With none of its proposed power projects, including Dadri, having not progressed beyond the drawing room stage, his company intents to make trading profit by sale of gas, a national asset that RIL would supply to it.

RIL has been exploring KGD-6 gas field under the Production Sharing Contract (PSC). All the capital and revenue expenses incurred by RIL in exploration and production of gas from the gas field are to be met from sale proceeds of a specified percentage of gas actually produced and sold. The other constituents which have a share in the gas produced from the field are the Government of India and NIKO.

As RIL recovers the expenses incurred by it in exploration and production of gas, the Government’s share of the gas produced from the KGD-6 Block goes up and would at some stage be as high as 85 per cent. In other words, the government can trade this gas for cash or kind and is termed as “profit petroleum”.

It may also be mentioned that many of the existing power and fertilizer producers in the country are operating under-capacity, in spite of the huge unmet demand, only for the reason of inadequate production of natural gas in the country.

In such a situation an order of restraint preventing RIL from producing certain quantity of gas which could have been made available to other operating companies in these priority sectors, is a retrograde step and completely contrary to public interest.

RIL to appeal against order on sale of gas

By Deepak Arora

NEW DELHI, May 6: Mukesh Ambani-run Reliance Industries Ltd (RIL) is expected to appeal in a day or two against the Bombay High Court that restrained it from selling half of the intended gas output from its prolific KG-D6 block to parties other than firms owned by his brother.

The High Court has in its May 3 ad-interim order asked RIL not to sell the volumes committed in the 2005 demerger agreement that split the Dhirubhai Ambani empire between Mukesh and Anil.

Sources said RIL was likely to file an appeal against the order with a division bench of the Bombay High Court by Tuesday as the order would force the company to produce only half of the 80 million standard cubic meters per day of planned production from July 2008 in absence of an infrastructure to take the fuel to power plants owned by Anil Ambani Group.

"Our project financing has been done on the basis of producing 80 mmscmd of gas and recovering the cost through sale of that volume. Now here is a position where we will be investing in creating infrastructure for producing 80 mmscmd but actual output will be only half, playing a havoc on the entire financing," a source close to RIL said.

RIL had committed 5.2-billion dollar investment to produce 80 mmscmd of gas beginning July 2008. But with Anil Ambani Group not in a position to take the gas to any of its power plants in absence of a transport pipeline from east coast, this uncertainty, some say, will jeopardize the nations first deep-sea gas development project that was supposed to wipe out the current 80-90 mmscmd gas deficit of growing economy.

Anil’s mega Dadri Power Project in Uttar Pradesh, which was to consume most of the gas, is at least three to four years away from completion.

On Friday last, Union Power Minister Sushil Kumar Shinde had said in the Lok Sabha that work on Anil Ambani Group's mega Dadri power project in Uttar Pradesh is unlikely to start till gas for the project is tied up. To another question, the Minister said gas from KG Basin was not likely before two years.

The projects depending on gas, Shinde said, should immediately switch over to naphtha to meet the shortage of electricity in the country.

The High Court had also said Reliance Natural Resources Ltd (RNRL) had not specified the year-wise quantities it intends to take.

This has reportedly not happened as Anil’s proposed plans for setting up gas-based power plants, including Dadri, have not progressed beyond drawing board stage, experts pointed out.

"Although the applicant company (RNRL) has specified the quantum of gas which it is entitled to receive fro the respondent company (RIL) by way of supply for their power projects for generation of power, however, it has not disclosed the immediate actual consumption of gas by the existing power projects and future requirements of the concerned power projects."

The court however allowed RIL to go ahead with sale of the remaining 40 MMSCMD volume. "The respondent company (RIL) may proceed with the process of sale of the gas through auction, but of the remainder quantity of the gas explored and produced by it."

Another question being raised is that natural gas is a national asset as the country is facing extreme shortage of this valuable natural resource. There is also a huge deficit of power with no immediate addition to the generating capacity in sight.

RIL has been exploring KGD-6 gas field under the Production Sharing Contract (PSC). All the capital and revenue expenses incurred by RIL in exploration and production of gas from the gas field are to be met from sale proceeds of a specified percentage of gas actually produced and sold. The other constituents which have a share in the gas produced from the field are the Government of India and NIKO.

As RIL recovers the expenses incurred by it in exploration and production of gas, the Government’s share of the gas produced from the KGD-6 Block goes up and would at some stage be as high as 85 per cent. The fact that the gas belongs to the country appears to have been lost sight of completely by the Hon’ble Court while granting the restraining order.

Many of the existing power and fertilizer producers in the country are operating under-capacity, in spite of the huge unmet demand, only for the reason of inadequate production of natural gas in the country. In such a situation an Order of restraint preventing RIL from producing certain quantity of gas which could have been made available to other operating companies in these priority sectors, is a retrograde step and completely contrary to public interest.

RNRL has not and is not required to make any investment in exploration or development of the gas fields. The stated case of RNRL is that it is entitled to make trading profit by sale of gas that RIL supplies to it which is being seriously disputed and resisted by RIL. To permit a private entity with a huge promoter holding to make profits at the cost of the country as a whole is completely contrary to all tenets of public interest.

Buy Canadian citizenship for Rs 45 lakh

NEW DELHI, May 3: There have been reports of people paying huge sums like Rs 30 lakh to go to foreign countries as illegal migrants. However, they seem to have missed a trick. For as little as Rs 45 lakh, an entire family can become Canadian citizens completely legally. In fact, for a somewhat larger amount, a family could get become citizens of the US, UK, Australian or New Zealand too.

The majority of Indians hankering to settle abroad may not know this, but many Indian businessmen have been utilising schemes floated by these countries to gain citizenship in return for investing a few hundred thousand dollars there. What’s more, some foreign banks are even willing to part-finance your investment.

Governments in the US, Canada, UK, New Zealand and Australia, among others, are offering citizenship to anybody (and his/her family) who is willing to invest a certain minimum sum in their country. The sums vary in each case, as do the strings attached.

In the UK, citizenship comes with an investment of £750,000 (about $1.5 million or a little over Rs 6 crore). In the US, $500,000 (Rs 2 crore) will get you and your family citizenship, for New Zealand a million New Zealand dollars (Rs 3 crore).

In Australia, there is no minimum investment stipulated. However, a commitment to start a business within four years will do the trick.

In the case of Canada, the stipulated minimum investment that gets you automatic citizenship is 400,000 Canadian dollars or about Rs 1.4 crore. However, a major Canadian bank, Desjardins — with assets of $130 billion and ranked 92nd internationally — has come up with its own scheme under which it will finance around 70 per cent of the amount if the investor makes a down payment of 30 per cent. That means just Rs 45 lakh will do to get you Canadian citizenship.

Citizenship-for-investment schemes have been around for a couple of years in most cases, but Indians were unable to take advantage of them as they were not allowed to invest more than $25,000 per year abroad till December last year. With the RBI increasing the limit from $25,000 to $50,000 and then to $100,000 last month, ‘buying’ foreign citizenship has become possible. A family of five, for instance, could take out $500,000 in one go without violating RBI guidelines.

Desjardins’ offer is a recognition of this fact. Explaining the scheme, Marc Audet, vice president of Desjardins, said that the bank offers a scheme under which one needs to deposit only C$120,000 with the bank. The bank will finance the remaining C$280,000 to file the application for permanent residency (which entitles you to citizenship after two years) in Canada.

The C$400,000 are invested in interest-free Canadian government bonds. After five years, when the government returns the money, the bank will keep all of it.

In effect, the C$120,000 you pay upfront becomes the interest earned by the bank on the C$280,000 that it lends you to file the application.

RelianceDigital unveiled

By Deepak Arora

NEW DELHI, April 24: To take retail revolution in the country to the international level, Mukesh Ambani's Reliance Industries Ltd (RIL) has launched its first-ever consumer electronics and household appliances mega store called "Reliancedigital" in the national capital region (NCR) on Tuesday.

Launched with the philosophy of "Grahak Devo Bhava" (Customer is God), President and Chief Executive Ajay Baijal said "Reliance Digital will offer the most competitive pricing, solution and servicing for the products."

"The mega store is one stop shop for all technology solutions in the field of consumer electronics, home appliances, information technology and telecommunications," said Mr Baijal.

The first store, unveiled at Shipra Mall in Ghaziabad, would be followed by another pilot outlet in NCR and four more in the country's south in the coming days. He said the stores would be set up at an investment of Rs 3 to 10 crore each.

"These stores will be spread in an area of 15,000-35,000 square feet. We are planning 150 Reliance Digital mega stores in 70 cities over a period of three to four years," he added.

He said these stores would retail some 4,000 products of over 150 brands covering consumer electronics, home and kitchen appliances, computers, televisions, accessories other personal durable products.

Besides Mr Baijal, the top company officials present at the unveiling ceremony of the mega store included Kamal Nanavaty, Adawal Shanker, Raghu Pillai, Jyotindra Thacker, Navneet Saluja and Nitish Tipnis.

Mr Adawal Shanker is assisting RIL Chairman in acquiring key properties and assets in the NCR for locating the bigger format stores including consumer durables and IT. Recently, RIL had acquired properties worth Rs 1,500 crore in Delhi. Though the company has acquired half a million sq ft of space as of today, in the next three years it will acquire 100 million sq ft for its chain of stores.

The digital stores will be in a combination of standalone stores and malls. Reliance Retail had announced an investment of Rs 25,000 crore for its retail expansion by the year 2011. The company had earlier launched Reliance Fresh retail stores in November last year, for selling fruits, vegetables, staples and dairy products.

"Since the opening of Reliance Fresh in Hyderabad six months ago, the group has opened over 134 more stores in 17 cities in 10 states," Baijal said.

To take care of aam aadmi, he said the company will also offer zero per cent finance options to the consumers and also extended warranties.

As a pioneering service trend in the country, Reliancedigital also introduced "RehanceresQ", an end to end solution related to all your technology products. RelianceresQ, through a network of in-house service centers will provide the consumers with pre sales and post sales support services.

"Reliance will also come out with its private label of consumer durables products... that is definitely in the strategy after we open four to five stores," he said.

The company also continues to offer all its customers RelianceOne, a common membership and loyalty program across all its formats, which follows the philosophy of 'Earn Anywhere, Spend Anywhere'.

The Reliance Digital foray is part of the group's plans to invest in multiple formats of malls, hypermarkets, discount stores, supermarkets, specialty stores and convenient stores.

Now Indians can invest $1 lakh abroad

NEW DELHI, April 24: Individuals can now invest more money outside India with RBI increasing the ceiling on such investments from $50,000 to $1 lakh.

RBI's lean season credit policy, announced on Tuesday, allows individuals to book forward contracts up to an annual limit of $1 lakh, which can be freely cancelled and rebooked.

RBI has also increased the aggregate ceiling on overseas investment by mutual funds to $4 bn.

Mukesh Ambani wields willow as he turns 50 and frisky

MUMBAI, April 22: Metre-high cakes, jet-setting parties, performances by film stars and an unabashed show of wealth are usually the ingredients of a business tycoon's birthday bash, but India's richest resident Mukesh Ambani padded up for a game of cricket last week on his 50th birthday that passed with very little notice.

But as the low-profile business mogul paired with his son to defeat the rival team captained by wife Nita, the stock market conjured up the perfect gift for the winner - a 50 billion dollar valuation of his flagship company Reliance Industries (RIL) in terms of market capitalisation.

RIL's market cap increased to Rs 2,14,774.43 crores -- equivalent to over 50 billion dollars on the back of the company's shares touching a 52-week high of Rs 1,545 last week. Ambani, whose net worth was 20.1 billion dollars as of March this year, owns a personal stake of 48 per cent in RIL.

The corporate behemoth had been at Rs 1,38,640 crore level in market cap a year ago.

Sources said Ambani had mooted the idea of a cricket match with family and employees, as he loved sports.

Incidentally, his estranged brother Anil, who was credited with influencing Reliance's decision to sponsor the 1987 Reliance World Cup, was in Mumbai attending the wedding bash of Aishwarya Rai and Abhishek Bachchan.

Mukesh Ambani, ranked 14 among the Forbes's list of world's 100 billionaires, spent the evening with his mother Kokilaben and family, besides friends, including ICICI Bank chief K V Kamath.

Mukesh Ambani's Reliance group has diversified from being a pure petrol-to-petrochemical player to retail business with investments of over 5.5 billion dollars. His other mega plans include 10 billion dollar investment in developing Special Economic Zones.

Montek favours market price for fresh gas finds

By Deepak Arora

NEW DELHI, April 17: Planning Commission Deputy Chairman Montek Singh Ahluwalia has favoured moving progressively toward market-determined gas prices as the country is on the verge of making gas finds and attracting investment in the sector.

Addressing a seminar on “Expansion of the gas markets”, organized here by Observer Research Foundation, a non-governmental think tank, Mr Ahluwalia said the government has doubts about the gas-pricing issue, which the country has not yet defined despite adopting a market-determined pricing system for petroleum products.

"We should progressively move toward market-determined prices of gas as we have done in the case of petroleum products," he said.

"This is required as in the next few years we would see a lot of new gas discoveries being made particularly in the private sector."

"I am of the view that market-determined gas pricing would allow us to experiment with a system where a very substantial volume of gas would not be put under the administered-price mechanism," he said.

Touching upon the difficulty faced by the power generators regarding gas-based capacities -- both existing and projected -- Mr Ahluwalia said, "It’s clear that one of the key issues really is pricing of gas.

Administered price mechanism created expectations somehow that gas will be available at relatively low prices and for a sustained period. This led to a lot of power capacity being set up based on loose assurances of gas supply which were not actually legally enforceable."

Mr Ahluwalia said very little investment was being planned for gas-fired power plants now, signifying investors have learnt their lessons.

Investors are being dissuaded by shortage as well as market-driven price for quantities that are not controlled by government.

Since coal still remains -- and will remain -- a key fuel for generating electricity, producers attuned to APM gas find the market price prohibitive.

One way to bring some sort of parity in the two fuels could be to put a premium on environmental impact of power generation.

Mr Ahluwalia suggested levying a ‘carbon tax’ -- a euphemism for taxing polluting industrial emissions — on electricity generation units to prod the power sector to accept a market-driven price for natural gas. Such a tax will raise the cost of coal, which is more polluting than gas.

Ashwani Narula – Furniture Prince of India

By Sushma Arora

NEW DELHI: We talk about a magic mantra for success with a young self made dynamic entrepreneur who has not only risen to fame from ground levels but has motivated and inspired several in the home decoration business.

Ashwani Narula of the brand – Benchcraft Concept, creates ripples in the décor business with his inimitable style and approach. Blessed with nerves made of Steel and a humour to match, Ashwani captures the imagination of his clients while spinning the magic yarn of colours shapes and style.

While we keep reading about India, emerging as a brand to reckon with, we wonder simultaneous about the key players tugging the success forward. While the industrialists of our country are inspiring global businesses, people like Ashwani have risen to fame thanks to their persistence, perseverance and sheer hard work and are a motivational force for the upcoming young entrepreneurs.

"I believe the only way to gain wealth and fame is to either earn it or inherit it." In his case it surely has been earned. Having lost his father early, the young lad with family responsibilities to shoulder Ashwani, decided to get in the furniture and furnishing business rolling with what ever resources he could muster.

He got his first contract from his maternal uncle to furnish the upcoming Canada Colony at the Napth Japhri project. There was no stopping him after that. Fearless, ruthless at work and practically no personal life were the few highlights of his early years.

In 1997, he launched his own firm, A.N. Enterprises. He began supplying furniture to big showrooms from his small factory in Kirti Nagar, a furniture hub in West Delhi, with one carpenter and one polisher. Today his firm employs 150 skilled people.

Of course, in the intervening period, Ashwani launched his own brand name "Benchcraft" in 2001 with his first showroom spread over 2,000 sq ft in upscale Ghitorni, Mehrauli Gurgaon Road, bordering Delhi and Gurgaon. End 2004, he opened another showroom spread over 25,000 sq ft in the same area. He reached the big league in mid-2006 with the launch of 65,000 sq ft showroom in the same area.

There was no looking back for him as he opened one show room after another. He launched his 7,500 sq ft showroom in Mumbai on September 3, 2006 in Raghuvanshi Mills, an interior and furniture hub for rich and famous.

In January this year, Benchcraft made inroads in Hyderabad. Ashwani is opening his next showroom shortly in Bangalore, the IT capital of India.

Commenting on his firm, Ashwani says: A.N. Enterprises carries out the business of interior designing and manufacturing of all kinds of furnishing and allied accessories.

Needless to say, the firm is professionally managed with full time professionals, in-house employees and consultants.

"It is totally self sufficient in terms of designing turnkey execution and manufacturing of furniture and has a comprehensive setup in form of office as well as manufacturing unit," he adds.

Some of companies for whom he has done the turnkey projects include Pizza Corner, McKinsey, Unitech, Siemens, Hindustan Lever, Sukam, Flex Industries, Patni Computers, Hutch and three properties of Hotel Jukso in Pune, Gurgaon and Delhi.

Popularity of his furniture and furnishing can be gauged from the fact that it also travels to far off places in Australia, the US, the UK, Hungary, Dubai and Singapore.

In its endeavor to remain ahead of the competitors, Benchcraft as a brand caters to individual interior designing requirements of the clients. The firm is constantly engaged in providing the latest and the best designs.

A.N Enterprises has its own chain of competent fabricators having excellent facilities of carpentry and joining with specialized workers who work directly under the supervision of the firm through its representative for different projects, with a view to completing each project within the stipulated time and ensuring strict quality control.

Ashwani is single and lives with his mother and sister in Gurgaon, Haryana.

Essar acquires Algoma Steel

MUMBAI, April 16: Ruias owned Essar Steel has announced that they have agreed to acquire Canadian Algoma Steel for an aggregate value of 1.8 billion Canadian dollars (approx. USD 1.58 bn) to be paid in cash.

Commenting on the deal Shashi Ruia, Chairman Essar Global Ltd, an arm for Essar Groups' international operations, said "we believe Algoma is an excellent addition to our existing steel business and also offers growth potential. This acquisition fits in with our global steel vision of having world class low cost assets with a global footprint."

Benjamin Duster, Chairman of Algoma's Board of Directors said, "The Board of Directors unanimously supports the Essar proposal as it reflects a significant premium to the historical share price of Algoma."

Algoma Steel is an integrated steel producer based in Sault Ste. Marie, Ontario with steel shipments of 2.4 million tonnes in 2006.

It has revenue of 1.9 billion Canadian dollars which are primarily derived from the manufacture and sale of rolled steel products, including hot and cold rolled steel and plate.

The offer price of 56 Canadian dollars per share represents a premium of 48 percent to Algoma's stock price for the 20-day period ending on February 14, 2007 when Algoma confirmed that it was in discussions regarding a potential transaction, a joint statement by the two companies said.

The arrangement must be approved by Algoma's shareholders by the affirmative vote of at least 66 percent (2/3rd) of the votes cast, in person or by proxy, at a shareholders meeting, and is subject to customary closing conditions including necessary regulatory approvals.

The support agreement provides for payments to Essar in the event that the acquisition is not completed under certain circumstances.

Algoma expects the shareholders meeting to approve the arrangement will be held in June and the acquisition will be completed shortly thereafter if approved by the shareholders.

"The Board of Directors of Algoma has unanimously recommended that Alogma shareholders vote in favour of the transaction," the statement said.

Ruia, said Algoma will provide Essar an excellent platform for the Canadian and North American market.

"We are impressed with Algoma's management team and look forward to working with them to enhance our industrial leadership," he said.

UBS investment bank is acting as exclusive financial adviser to Essar and sole arranger of Essar's transaction financing.

Genuity Capital Market is acting as exclusive financial adviser to Algoma.

Reliance's ‘discovery man’ gets Padmashree

By Deepak Arora

NEW DELHI, March 29: He is not a magician or a tarot card reader. Yet, he can see what lies miles beneath the Mother Earth. Not just beneath, but 3 to 4 miles down below referred to as “Paattaal Lok”. Meet the living wizard, Dr Rabi Narayan Bastia, who has been successfully finding oil and gas reserves for the energy-hungry India for over a decade.

In reorganization of his services in the area of science and technology, the President, Dr A P J Abdul Kalam, has conferred the Padmashree, one of the country's highest civilian honours, on Dr Bastia.

Padmashree is an award given by the Government to Indian citizens to recognize their distinguished contribution in various spheres of activity.

Dr Bastia, who has 28 years of exploring behind him, has worked in India and abroad. He was working as a Chief Geologist with ONGC, when Dirubhai Ambani, a great visionary himself, discovered him and asked him to head the exploration business for the Reliance Industries Ltd (RIL) in 1996.

“Dhirubhai Ambani was a great visionary. He always embarked on where others dread to tread. Though Dhirubahi had no training as geologist, but he saw huge hydrocarbon reserves in the deep waters of the country and had felt that is what the country will need in the future,” said Dr Bastia.

"We were a handful of people in the exploration and production (E&P) division. Apart from being a sleeping partner in Panna/Mukta and Tapti oil and gas fields, Reliance had no experience in this hugely risky business. But Dhirubhai Ambani encouraged us to go into areas never attempted before," he said.

“It was Dhirubhai, Reliance founder, who scripted his dreams and these are being converted into reality with full dedication by his son, Mr Mukesh Ambani, who is the current Chairman of RIL” said Bastia.

It may be mentioned that the national award to Bastia is the first Padam shree received in the Reliance family. “I am delighted to hear this and you have become the first person to bring this national honour to the Reliance family,” Mukesh Ambani told Bastia when he met him after hearing the great news.

When Bastia joined Reliance in 1996, Dhirubhai Ambani was giving shape to energy foray of the company, which till then was into petrochemicals and textiles.

With the backing of Dhirubhai and Mukesh Ambani behind him, Bastia went on discovery spree. His very first gas discovery in the Krishna Godavari basin, some 200-km from Andhra coast, turned out to be the world’s largest deepwater find in the year 2002.

Subsequent to the Dhirubhai-1 discovery, Reliance made 16 more finds in the block KG-DWN-98/3 (also known as KG-D6) in Bay of Bengal.

The block is estimated to hold an in-place reserve of about 35 Trillion cubic feet and when the first two of the finds in the block go on stream mid-2008, the nation's 80 million standard cubic meters per day gas deficit will be wiped out.

Under Bastia, Reliance also found oil in the block and made a sizeable discovery in block NEC-25 off the Orissa coast. The discovery in the Mahanadi offshore is another tribute to his foresight, particularly due to the fact that this discovery was preceded by a long spell of unsuccessful exploration by previous operators.

A famous zoologist, Pratt, had said: “The best discoveries of the world have been found by conviction of the people.” He said “Dhirubhai not oly had such dreams but firm convictions. And we tried to prove him right by connecting his convictions through Pratt.”

On exploration, Bastia said “it is a passion in a sandy desert where one has two conflicting images – a mirage and a real image. So if you hit the right one you have plenty. If not then you burn yourself very fast.”

He said “this is the only science which more of an art. It is only inexact science where two plus two do not make four. Here human ingenuity is coupled with tools, technology etc. It has not set rules and change is name of the game. Of course, one needs plenty of optimism.”

A couple of years after Bastia joined the Reliance Group, the first round of auction of exploration areas under New Exploration Licensing Policy (NELP) happened. “We bid and won KG-D6 block. Using 3D seismic we saw huge hydrocarbon 'plays' (potential) and our assessment proved right when in the very first well we found huge gas reserves."

With a team of 160 people, he now looks after exploration in 36 blocks that Reliance has in India and nine abroad. "Our job is to create value (discover oil and gas) and hand it over to another group which develops the finds."

The company's focus is now on deepwater acreages in the East coast and Bastia feels that three to four big finds may happen over the next couple of years.

“No new oil and gas fields can be discovered with world ideas. No new fields can be discovered with old concepts. But new fields can be discovered in old areas with newer concepts.” That’s my vision for India, says Bastia. Ameen.

SAIL launches exquisite dinner set

By Deepak Arora

NEW DELHI, March 29: The steel major, Steel Authority of India (SAIL), has entered the market with exquisite giftware to give the private players a run for their money. In run up to this, it has launched Odyssey – a 40-piece stainless steel dinner set.

The launch was done by the Minister of Steel and Chemicals & Fertilizers, Mr Ram Vilas Paswan, in the presence of Secretary (Steel), Mr R.S. Pandey, and SAIL Chairman, Mr S.K. Roongta.

The newly designed kitchenware, which is priced at Rs 10,500 and is 30 per cent cheaper than its competitors, is made from stainless steel product of the Salem Steel Plant of SAIL.

The exquisite 12 kg Odyssey collection presents a combination of the conventional bright finish and the contemporary brush finish making it an ideal choice for the dining table. Crafted out of Salem Stainless, the new dinner set is designed for a family of six. The Odyssey dinner set – a lasting gift for a lifetime represents a combination of aesthetics and utility.

In the recent months, SAIL has embarked on several initiatives in the recent months to bring the company closer to the ultimate consumers. This includes measures to expand the distribution outlets by appointing dealer in every district across the country.

Moving in tandem with the new philosophy, the Salem Steel Plant has been giving an added thrust on manufacturing value added stainless steel products – virtually anything in stainless steel right from kitchenware to pipes and tubes, roofing sheets, fabricated products et al.

Salem Steel Plant is the bulk producer of high quality stainless steel and has always been acknowledged as the benchmark in stainless steel.

SAIL is now implementing Rs.1553 crore expansion-cum-backward integration plan to install new SMS and Continuous Casting facility to produce stainless slabs at the annual rate of 180,000 tonnes and to expand capacity of SSP's existing Cold Rolling Mills (CRM) to 146,000 tonnes to meet the growing demand of stainless steel in the country.

Reliance Fresh is numero uno

By Deepak Arora

NEW DELHI, March 29: In an encouraging spate of retail outlets opening in the National Capital Region (NCR) in the past six months, Reliance Fresh has captured the numero uno position and is still rising, giving worry to its competitors.

The sales have exceeded all estimates with average sale by a store being to the tune of Rs 5 lakhs, while the company had estimated the same to be around Rs 2 lakhs. The footfalls are also high being 4,000 per day, sources said.

Reliance Fresh is expected to open its 100th retail store sometime next week. The question being debated is whether Pune can beat Delhi and breast the 100th outlet landmark. If so, Delhi will have the honour of having the 101st shop.

Without wanting to be identified, sources within the Reliance group of companies say the company has so far opened 96 Reliance Fresh stores, spread over a carpet area of 2,50,000 sq ft in different parts of the country .

Delhi has 24 of the 96 shops in the country today and accounts for 30 per cent of the total sale.

The company claims there has been overwhelming response to Reliance retail in the period under review. Looking at the very encouraging response from the public and the buyers, there are plans to commission more city distribution centers and city processing centers that will further strengthen the supply chain.

Also, back end sourcing has been strengthened so that the demand is not left unattended or not met. The effort also is to step up quality controls and checks and help the existing vendors by providing them quality products.

Additionally, it is stated that the mother company of Reliance Fresh, Reliance Industries Ltd is pitted to start in the National Capital Region a hyper market that will sell electronics goods as part of project.

NTPC-SAIL Power JV announces 3 crore interim dividend

By Deepak Arora

NEW DELHI, March 22: NTPC-SAIL Power Company Pvt Limited (NSPCL), a 50:50 joint venture between Steel Authority of India Ltd. (SAIL) and National Thermal Power Corporation Ltd. (NTPC Ltd.), announced an interim dividend of Rs 3 crore for its shareholders.

The company presented an interim dividend cheque of Rs 1.5 crore to SAIL, its joint partners, in a function held here today. Mr S.K. Roongta, Chairman, SAIL, received the cheque from Mr R.C. Shrivastav, Chairman, NSPCL and Director (HR), NTPC. Director (Finance), SAIL, Mr Soiles Bhattacharya and other senior officers were present on the occasion. Final dividend would be paid after finalisation of annual accounts in September 2007.

NSPCL which manages the captive power plants at Rourkela, Durgapur and Bhilai with a combined capacity of 314 megawatts (MW) has been in profit ever since its formation in 2001. The company registered profit after tax of Rs 30.67 crore in 2005-06. It has been distributing dividend continuously for the last five years and has paid a total dividend of Rs 77 crore since 2001-02.

The operational parameters of NSPCL are of high standards with the Plant Load Factor (PLF) of the plants in the range of 85-93% which is much above the national average. The company is presently executing a major capacity enhancement plan. This includes 2X 250 MW Thermal power plants being set up at an estimated project cost of Rs 2,500 crore at Bhilai.

On the occasion, Mr. S.K. Roongta, Chairman, SAIL, appreciated the excellent performance of the SAIL-NTPC JV company since its formation and said “NSPCL will set a new standard in the working of power plants.”

The other Power JV of SAIL, Bokaro Power Supply Company Pvt. Ltd. (BPSCL), a 50:50 joint venture with Damodar Valley Corporation (DVC), which manages the captive power plant at Bokaro Steel Plant having a rated capacity of 302 MW, has been in profit ever since its formation in 2002.

SAIL floats Cement JV with Jaiprakash Associates Ltd

By Deepak Arora

NEW DELHI, March 21: SAIL today signed a shareholder agreement with Jaiprakash Associates Ltd (JAL) to form a Joint Venture Company (JVC) for producing 2.2 Million Tonnes (MT) cement per annum from the slag generated during the Blast Furnace operations at its Bhilai Steel Plant.

The agreement was signed by Mr. G. Ojha, Director (Personnel), SAIL and Mr. Manoj Gaur, Executive Chairman of Jaiprakash Associates Ltd. in presence of Mr. S.K. Roongta, Chairman, SAIL.

Ernst & Young are the lead consultant and financial advisor for this venture and Holtec is the technical consultant. Director (Finance), SAIL, Mr. Soiles Bhattacharya and Regional Director of Ernst & Young, Mr. Prashanto Sengupta were also present on the occasion.

The JVC will have 26 per cent equity contribution from SAIL and 74 per cent from JAL, making it SAIL’s largest joint venture with a private sector player. The Board of the JV Company will have members from both companies in proportion of their equity. The JV will have its unit located at Bhilai and Satna to have better economies of operations.

While SAIL is India’s largest steel producer, Jaiprakash Associates is the fifth largest cement producer in India and the JV will benefit from their strengths in respective areas. The approximate cost of this project is Rs. 600 crore which will be completed in 37 months.

The JVC is being formed as a part of the company’s sustained eco-friendly efforts to explore the alternative mode of slag disposal at its Bhilai Steel Plant. The JV will enable the plant to gainfully utilize the slag generated in its Blast Furnaces and also the idle assets of Satna Mines.

While SAIL will offer 1 MT of granulated slag annually and provide land at Bhilai and Satna on lease to the JVC, JAL will organize debt and ensure project execution within defined scope, cost and time. JAL will also be responsible for project and operations of the JVC.

On the occasion Mr. S.K. Roongta, Chairman, SAIL said “This is the largest joint venture that SAIL was embarking on with a partner from private sector. Steel and cement being the prime inputs for infrastructure development of the country, we are happy for our association with the cement industry.”

Mr. Manoj Gaur, Executive Chairman, JAL, said, “It’s a giant stride for J.P Associates to be a JV partner with a business organization like SAIL. The JV will have state-of-the-art technology and shall be completed ahead of schedule.”

SAIL has plans to set up a similar cement producing unit as a joint venture in Bokaro. The earlier joint ventures of SAIL in power plants at all its major integrated steel plants are running successfully.

RIL, IPCL boards give green signal to merger

MUMBAI, Mar 10: The Board of Mukesh Ambani group's Reliance Industries on Saturday approved the merger of subsidiary IPCL with itself a move that will help push the corporate giant's turnover to about Rs 1,00,000 crore and give it a competitive edge.

The Boards of the two companies have approved a swap ratio of 1:5, which means IPCL shareholders would receive one share of RIL for every five shares held by them.

Through the merger RIL would issue six crore shares to IPCL shareholders, which would expand its equity shares share capital to Rs 145.3 crore resulting in an equity dilution of 4.12 per cent, a company statment said.

Analysts believe that the merger could dilute the stake of RIL's promoters by 1.7 per cent from 43.1 per cent to 41.4 per cent post merger.

RIL's turnover stood at Rs 83,487 crore for the nine months ended December 30, 2006, while IPCL had posted a Rs 10,307 crore turnover in the same period.

Analysts expect the merger to bring additional benefits like reduced management costs for the group, besides marketing synergies already being reaped by the company ever since RIL acquired control of IPCL in 2002.

"We believe that the merger brings benefits like reduced management costs and increased management bandwidth, other benefits like product grade optimisation (and) marketing synergies, had been incorporated earlier after RIL took over the management control in 2002," analysts at domestic brokerage firm Edelweiss Capital said in a report.

"The merger will be earnings accretive for shareholders of RIL and shall provide shareholders of IPCL an opportunity to participate in RIL's diversified business portfolio," RIL Chairman and Managing Director Mukesh Ambani said in a statement.

RIL's board also approved an interim dividend of Rs 11 per share, while IPCL board approved interim dividend of Rs six per share for the shareholders.

The appointed date of merger of IPCL with RIL is April 1, 2006.

The merger would also enhance RIL's profits as it derives 35 per cent of profit after tax from petrochemicals. Net profits of RIL stood at Rs 8,055 crore for the nine months ended December 31, 2006 whereas IPCL had reported a net profit of Rs 1,014 crore in the same period.

The proposed merger is expected to facilitate the integration of management resources with economic interest, while providing for free flow of products and intellectual capital between the two companies.

At present, promoters' stake in IPCL stands at about 47 per cent, FIIs hold 12.5 per cent, insurance companies hold close to nine per cent and the government has a marginal stake.

In June 2002, the Centre as p