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Reliance bags two oil blocks in Iraq
New Delhi, November 7
Mukesh Ambani-run Reliance Industries (RIL) has bagged two oil blocks in the Kurdish region of Iraq that may hold one billion barrels of oil reserves.

  • Finds more gas in KG basin

Oil prices gather steam
Crude on verge of hitting a century
London, November 7
Oil stormed towards $99 a barrel on Wednesday, closing in on a triple-digit all-time high, driven by a slumping US dollar and concern about a fuel supply crunch heading into the peak demand winter season.

Subsidy a drag, says ONGC boss
New Delhi, November 7
Subsidy-induced under realisation is capping the growth potential of ONGC - country's most valued state-run oil and gas firm - leading to heavy undervaluation of its shares, company's CMD R.S. Sharma said today.

Govt to process steel at Nahan
Chandigarh, November 7
Ministry of Chemical, Fertiliser and Steel Ram Vilas Paswan is in favour of regulating the export of iron ore to meet the increased production targets of steel within the country. The view was also shared by members of the consultative committee, attached to the Union Ministry of Chemicals, Fertilisers and Steel.

Cabinet to consider coal special purpose vehicle option
New Delhi, November 7
The government has offered to jointly allocate two coal blocks in Orissa to six companies, including Reliance Energy and GMR, for meeting the fuel requirements of their proposed power plants.

Mauritius invites IOC for LPG distribution
New Delhi, November 7
Mauritius has invited oil PSU, IndianOil Corporation (IOC), to develop and engage itself in the LPG marketing and distribution in the island country.


A customer selects gold bangles at a Tanishq jewellery showroom in Mumbai
A customer selects gold bangles at a Tanishq jewellery showroom in Mumbai on Wednesday. Gold prices soared to a fresh 17-and-a-half month high of Rs 10,620 ($271) per 10 gm as stockists and traders indulged in heavy buying on the Hindu festival of ‘Dhunteras’ expecting huge demand for the precious metal from customers. — AFP



 
Chairman and managing director of Xenitis Group Santanu Ghosh introduces the 100 cc bike 'Rock 100' in Kolkata
Chairman and managing director of Xenitis Group Santanu Ghosh introduces the 100 cc bike 'Rock 100' in Kolkata on Wednesday. The motorcycle is priced at Rs 19,990, which according to the company, is the lowest ever cost for a two-wheeler in India. — AFP

FDI norms may be eased
New Delhi, November 7
The Eleventh Plan draft document has built a strong case for relaxing foreign direct investment (FDI) norms in key sectors like insurance, private banking, single brand retailing and broadcasting.

Pension Bill awaits clearance
Employees fail to encash D-Street boom 
New Delhi November 7
The central government employees could have gained additional 6 to 21 per cent on their savings in the pension fund had the Pension Bill, pending in Parliament since 2005, been enacted, as it would have allowed investment of part of their savings in the booming stock market.

UB group to promote fashion mall 
Bangalore, November 7
After IT and biotech placed Bangalore on the world map, fashion is making headlines for the city, with a flourish that is truly global. The UB group, headed by Vijay Mallya, is leading the charge through the introduction of a fashion mall, which will house the best international brands in the world.

Rupee ends flat after nearing 10-yr high
Mumbai, November 7
The rupee today cruised to Rs 39.16 per dollar, reaching close to a 10-year high, during the day following heavy dollar selling by exporters, but ended steady after Reserve Bank's intervention.

Usha Martin sells arm
Kolkata, November 7
Wire rope manufacturer Usha Martin Ltd today entered into an agreement with Manchester-based B3 Cable Solutions for transferring its subsidiary company UM Cables to the latter.

 

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Reliance bags two oil blocks in Iraq

New Delhi, November 7
Mukesh Ambani-run Reliance Industries (RIL) has bagged two oil blocks in the Kurdish region of Iraq that may hold one billion barrels of oil reserves.

Finds more gas in KG basin

Reliance Industries today said it has discovered more gas in one of its offshore blocks in the Krishna Godavari basin, off the east coast.

The well (KGIII5-PI) is the second gas discovery in the Miocene clastics reservoir in the Krishna basin, a statement said.

This shallow water block, with an area of 1,100 sq km, was awarded to the company under biding round of NELP-III. The company holds 100 per cent interest in this block, the statement added.— UNI

Reliance Industries has signed a contract for the blocks Rovi and Sarta in northern Iraq with the autonomous Kurdish Regional Government (KRG), company sources said.

The blocks measuring 450-500 sq km have almost 80 per cent oil bearing structure and Reliance is confident of making a discovery soon.

Reliance Industries paid a signing amount of $15.5-17.5 million for the two blocks.

When asked if the KRG had awarded the two blocks to RIL along with five others to foreign companies defying Baghdad's proposed new oil law, the source said: "As per our understanding, KRG has made the awards in accordance with the proposed law."

Meanwhile, an AFP report said the oil deals may anger Baghdad, which opposes the unilateral sell-off of crude blocks in the absence of a national oil law.

Prime Minister Nri al-Maliki's government had urged the KRG not to sign any deals until the new national oil law is passed in parliament, AFP said.

The KRG's minister for natural resources Ashti Hawrami said with the signing of these contracts, 20 international oil companies are now working in the region.

"A further 24 blocks in the region are the subject of intense interest from international companies. There will be more announcements soon," he was quoted by AFP as saying.

Iraq's Oil Minister Hussein Shahristani had previously said that all oil contracts signed before the passing of the oil law would be considered "illegal".

The hydrocarbons law is stalled before Parliament due to bitter differences between warring political factions over the sharing of lucrative revenues from Iraq's crude, the third-largest proven reserves in the world.

KRG said two production sharing contracts have been signed with Austria's OMV Petroleum Exploration Gmbh for Mala Omar and Shorish blocks.

Another block in Dohuk province has been awarded to a Western company, the statement said without giving any further details.— PTI 

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Oil prices gather steam
Crude on verge of hitting a century

London, November 7
Oil stormed towards $99 a barrel on Wednesday, closing in on a triple-digit all-time high, driven by a slumping US dollar and concern about a fuel supply crunch heading into the peak demand winter season.

The surge brings oil within a hair of the inflation-adjusted record peak of $101.70 hit in 1980 when war between OPEC producers Iran and Iraq ignited an oil supply crisis.

But this time round, demand - fuelled by exploding growth in China and a steady increase from the United States - has been a major drive behind a more-than-quadrupling in the oil price since 2002.

Analysts said it was only a matter of time before oil hits the landmark level, with evidence of tightening stocks aiding a nearly 8 per cent rise over the past two weeks alone.

“We are going to get $100 before too long,” said Kevin Norrish of Barclays Capital.

U.S. crude rose $1.55 by 0955 GMT to $98.25 having earlier hit a record $98.62.

London Brent crude also hit a new peak of $95.19, and was later up $1.63 at $94.89 a barrel.

Oil gained momentum on Wednesday after the US dollar hit an all-time low against the euro, as global credit market turmoil kept expectations of another Federal Reserve rate cut alive.

Investors bracing for more fallout from the U.S. subprime mortgage crisis and seeking shelter from the sliding US dollar have driven oil nearly $30 higher since mid-August and lifted other commodities including gold, now at a 28-year high.

The US Energy Information Administration (EIA) flagged the risk to winter supply on Tuesday, saying stocks in industrialised nations would drop some 20 million barrels below the five-year average by the end of this year amid robust demand and continued caps on output from producer-group OPEC.

The Organisation of the Petroleum Exporting countries, source of more than a third of the world's oil, has agreed to raise production by 5,00,000 bpd from November 1 and shrugged off calls to expand on that, blaming the rally on speculators and politics. — Reuters

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Subsidy a drag, says ONGC boss

New Delhi, November 7
Subsidy-induced under realisation is capping the growth potential of ONGC - country's most valued state-run oil and gas firm - leading to heavy undervaluation of its shares, company's CMD R.S. Sharma said today.

“Our enterprise value is about $9 per barrel as against $13-14 for Cairn Energy, while the global average for a company of size equivalent to us is $15-16,” Sharma told reporters here.

The enterprise value is determined on the basis of oil and gas reserves of a company and is equal to the market capitalisation (about $70 billion for ONGC) divided by proven reserves (8 billion barrels of oil and oil-equivalent of gas in the case of ONGC).

ONGC has a market capitalisation of about Rs 2,76,000 crore, which is only next to private sector petrochemicals major Reliance Industries in India.

Even though ONGC used to be bigger than RIL some months ago, currently RIL has a market cap over Rs 1,25,000 crore higher than ONGC. RIL has a market cap of over Rs 4,00,000 crore at present.

“Markets have realised that ONGC would not be able to get a high price realisation as it has to provide subsidised rates for cooking oil and LPG,” Sharma said while talking about the undervaluation of the company’s shares.

“In the second quarter we had to give $22 a barrel towards subsidy by selling crude at about 55 dollars a barrel to state-run refiners," Sharma said.

“If we do not produce any (gas) we would make more profits,” he noted.

The company's subsidy bill in the July-September quarter stood at about Rs 3,800 crore. — PTI 

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Govt to process steel at Nahan
Tribune News Service

Chandigarh, November 7
Ministry of Chemical, Fertiliser and Steel Ram Vilas Paswan is in favour of regulating the export of iron ore to meet the increased production targets of steel within the country.

The view was also shared by members of the consultative committee, attached to the Union Ministry of Chemicals, Fertilisers and Steel.

Paswan was in Chandigarh today to chair a meeting of the consultative committee. The members of the committee also expressed concerns over shortage of raw materials for steel, iron ore and coking coal.

The committee has suggested that allocation of iron ore mines at Chiria and Rowghat be expedited and said PSUs such as SAIL and RINL should not suffer on account of delays and difficulties in allocation of captive mines. It was also pointed out that the expansion plans of the PSUs should be adhered to in the given time frame.

The minister said under the expansion programme, SAIL aims to increase production capacity from present level of 14.6 million tonne of hot metal per annum to around 26 million tonne per annum by 2010 at an estimated cost of Rs 53,000 crore.

While RINL was expanding its capacity from 3 million tonne to 6.3 million tonne with an investment of Rs 10,000 crore. Enthused by a healthy rate of 12 per cent growth in steel sector, the government today said the target for steel output has been revised upwards to 80 million tonne from 60 million tonne by 2010. The country’s production capacity stands at 50 million tonne now.

Paswan further said the government had planned to set up a steel processing facility at Nahan in Himachal Pradesh and it would have a capacity of 50,000 tonne per annum. “For this purpose, 100 acres of land has been sought from the state government for setting up this facility,” he said.

On being asked about the shortage of DAP in Punjab, there was enough availability of DAP in the country and Punjab was getting sufficient quantity of DAP. He said the problem could with the distribution system of the state.

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Cabinet to consider coal special purpose vehicle option

New Delhi, November 7
The government has offered to jointly allocate two coal blocks in Orissa to six companies, including Reliance Energy and GMR, for meeting the fuel requirements of their proposed power plants.

The Coal Ministry has offered Rampia and dip side of Rampia blocks with gross reserves of 645 million tons to the six companies, which also include Sterlite Energy, Mittal Steel, Lanco Group and Navbharat Power Pvt Ltd.

All companies have been asked to submit a mutually acceptable agreement within a month to the ministry, which will take a final decision thereafter.

Meanwhile, the Union Cabinet is likely to consider a special purpose vehicle (SPV) proposed by leading public sector utilities in the country to acquire stake in overseas coal mines for meeting the growing production needs.

“The Cabinet is likely to deliberate on the SPV formed by CIL, NTPC, RINL, SAIL and NMDC when it meets tomorrow. The proposed SPV will have an initial capital base of Rs 3,500 crore which will eventually go up to Rs 10,000 crore,” a top government official told PTI today.

Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL), Coal India Ltd (CIL), NMDC Ltd and NTPC Ltd have joined hands to source coal from abroad, especially Australia and Canada, to increase their output.

SAIL and CIL has decided to pump in Rs 1,000 crore each for the proposed SPV, while NTPC, RINL and NMDC will invest Rs 500 crore each. “Initially the SPV would function as an unincorporated company and after shortlisting coal properties abroad, they would jointly launch a formal company,” he said.

The company would be worth Rs 3,500 crore, the official said, adding that “in due course of time the stakeholders would pump in more money to raise its corpus to Rs 10,000 crore.” But “for any investment above Rs 3,500 crore they would have to seek the nod of the Empowered Committee of Secretaries to be set up for the purpose,” he said.

The SPV will have a three-tier decision making body. It will have an apex committee comprising the chiefs of the participating companies, besides a steering committee formed of functional directors of these companies. — PTI 

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Mauritius invites IOC for LPG distribution
Tribune News Service

New Delhi, November 7
Mauritius has invited oil PSU, IndianOil Corporation (IOC), to develop and engage itself in the LPG marketing and distribution in the island country.

This emerged at a meeting here today between petroleum minister Murli Deora and Mauritian industry, small and medium enterprises minister Rajeshwar Jeetah on the occasion of the first-ever India African Hydrocarbon Conference & Exhibition organised by petroleum ministry and Ficci in association with Unctad.

Jeetah informed that Mauritius was planning to increase its LPG consumption from about 60,000 tonnes at present to about 1,00,000 tonnes. Deora pointed out that the cooperation between India and Mauritius was making a satisfactory progress in various areas of hydrocarbon sector.

He informed that IOML plans to lay a pipeline of 50-60 km from its terminal to SSR International Airport to cater to the growing aviation business.

During his meeting with Chimunthu Banda, energy minister of Malawi, Deora expressed keen interest for cooperation with Malawi in the hydrocarbon sector.

Banda sought Indian corporates’ participation in opening up E&P sector of Malawi.

Banda also sought participation of Indian companies in exploring the potential of coal bed methane (CBM) gas in the areas bordering Mozambique.

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FDI norms may be eased

New Delhi, November 7
The Eleventh Plan draft document has built a strong case for relaxing foreign direct investment (FDI) norms in key sectors like insurance, private banking, single brand retailing and broadcasting.

“The progress regarding elimination of FDI limits in key sectors also needs to continue in order to increase FDI flows and stimulate transfer of technology, which is critical for improving competitiveness,” said the 11th Plan draft document.

The draft would be discussed at full Planning Commission panel meeting tomorrow.

Presently, the FDI insurance sector is capped at 26 per cent, while it is at 51 per cent in single brand retailing.

In case of FM radio broadcasting, the government allows foreign investment up to 20 per cent. The FDI cap in sectors like defence production and print and electronic media is 26 per cent. — PTI

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Pension Bill awaits clearance
Employees fail to encash D-Street boom 

New Delhi November 7
The central government employees could have gained additional 6 to 21 per cent on their savings in the pension fund had the Pension Bill, pending in Parliament since 2005, been enacted, as it would have allowed investment of part of their savings in the booming stock market.

“The government employees would have earned 14 to 29 per cent interest on their savings in pension fund, depending on the equity option opted to invest in stocks, against mere 8 per cent returns from investment in government securities,” Pension Fund Regulatory and Development Authority (PFRDA) chairman D Swarup said.

The delay in passing the Bill has resulted in huge losses to the government employees, who could not benefit from the booming stock markets, he said.

The BSE Sensex has moved from around 5,500 in March 2005 to 20,000.

Swarup added the new pension system (NPS) would have allowed three options to invest in stock market - 10 per cent, 30 per cent and 50 per cent of the pension fund, depending upon the risk appetite of the employees.

“Employees would have got minimum returns of 29 per cent, if they opted for high risk option of 50 per cent investment in stocks, and at least 14 per cent if 10 per cent of their funds were invested in the equity, Swarup added.

During that period, the average returns by the UTI Retirement Pension Fund, and other mutual funds have been over 20 per cent annually.

Chidambaram had introduced the PFRDA Bill in Parliament in March 2005, which would have enabled the Central government employees, recruited since January 2004, to partly invest their pension funds in the stock markets.

Under NPS, the employees and employer have to contribute 10 per cent each of the employees salary in pension fund.

However, the Bill could not be passed due to strong opposition from the Left parties.

As an interim arrangement, the government has now asked PFRDA to appoint three public sector fund managers for pension of government employees, which would allow partial investment in the stock market.

For this, almost all states- barring Left-ruled West Bengal, Kerala and Tripura -have agreed to join the scheme.

Three PSU fund managers that have been appointed are SBI Capital, LIC and UTI AMC. — PTI 

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UB group to promote fashion mall 
Tribune News Service

Bangalore, November 7
After IT and biotech placed Bangalore on the world map, fashion is making headlines for the city, with a flourish that is truly global. The UB group, headed by Vijay Mallya, is leading the charge through the introduction of a fashion mall, which will house the best international brands in the world.

The mall, which will come up in the Rs 300-crore UB City in the business district in the beginning of next year, has been named ‘UB City - The Collection’ and is a joint venture with Prestige group. The mall will house up market names such as Louis Vuitton, Gucci, Fendi, Dunhill, Canali, Mont Blanc, Van Cleef and Arpels, Zegna and Kimaya among others.

The mall is riding on expanding the current Rs 1,500-crore luxury retail market in the country. “This market is increasing at the rate of 25 per cent every year,” said Prestige group chief Irfan Razack.

He stated that the joint venture would bring an international experience to the city “and once it gets going, we will take it to other parts of the country”. He said to give it an exclusive group, there would not be any cinemas in the mall. “It will be a quite comfortable place to browse around and shop at your will,” Razack said.

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Rupee ends flat after nearing 10-yr high

Mumbai, November 7
The rupee today cruised to Rs 39.16 per dollar, reaching close to a 10-year high, during the day following heavy dollar selling by exporters, but ended steady after Reserve Bank's intervention.

In active trade at the Interbank Foreign Exchange (forex) market, the local currency moved in a range of 39.16 and 39.33 during the day after resuming firm at 39.25/26 a dollar from previous close of 39.30/31 a dollar.

Attributing the rupee's surge to a fresh 9-1/2 year high of 39.16 to dollar sales by exporters and strong Asian markets in early trade, forex dealers said the RBI bought dollar heavily to tranquilise the Indian currency.

Exporters continued dollar selling in the light of weak greenback overseas and expectations of gradual appreciation of the rupee against the US currency on the back of strong economic growth, they added. — PTI

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Usha Martin sells arm

Kolkata, November 7
Wire rope manufacturer Usha Martin Ltd today entered into an agreement with Manchester-based B3 Cable Solutions for transferring its subsidiary company UM Cables to the latter.

A spokesman of Usha Martin said the shift in ownership would take effect early next year, subject to due diligence and necessary approvals.

UM Cables has a modern production facility at Silvassa which manufactures optical fibres and copper telecom cables. The value of deal would be arrived at after the due diligence was over.— PTI 

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BRIEFLY

Order from Orix
New Delhi, November 7
Maruti Suzuki India’s efforts to push sales of multi-purpose vehicle, Versa, received a boost by way of an order from multinational fleet operator Orix for 300 units, estimated to be worth over Rs 10 crore. Orix had approached Maruti Suzuki India (MSI) for a customised version of Versa, which it intends to run as radio taxis in Delhi. — PTI

Glenmark Pharma
New Delhi, November 7
Glenmark Pharmaceuticals Ltd today said it was planning to reorganise generic business into a new company Glenmark Generics. “We plan to reorganise our businesses by moving the generics and API businesses into a wholly-owned subsidiary Glenmark Generics Ltd. The new company will handle the development, manufacture and marketing of generic formulation and API businesses,” Glenmark Pharmaceuticals CEO and MD Glenn Saldanha said. — UNI

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