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India's
29th Competitive Nation, US Retains Top
Slot
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India
has moved up 10 notches to the 29th position,
compared with 39th last year, in the global
competitive survey of 61 national and
regional economies. Maharashtra is the
only state to figure in the survey and
has improved its position by bagging the
37th place against 41 last year. "This
shows Maharashtra's importance in the
national economy," said chief minister
Vilasrao Deshmukh. In the World Competitiveness
Yearbook '06, published by Switzerland-based
International Institute for Management
Development (IMD), the US has maintained
its numero uno position but Hong Kong
seems to be catching up fast. The IMD
survey, released last week, analyses and
ranks the ability of nations to create
and maintain an environment that sustains
the competitiveness of enterprises. The
survey is being published since 1989 and
ranks 61 national and regional economies
using 312 criteria. "Although the US is
still number one, other economies, especially
Hong Kong and Singapore, are closing the
gap fast," the survey notes. Hong Kong
and Singapore are catching up with the
US because their governments are more
in synchronisation with the economic performance.
Finland and Denmark also fare well; others
less. A growing gap between governments
and economic performance is always a bad
omen for the future," the study cautions.
The survey notes a striking difference
between the achievements of the US economy
in '05 that grew at 3.5%, and the US'
$318bn budget deficit accumulated by the
federal government and the $8,000bn debt.
The survey has calculated the biggest
negative differences between the contribution
of the government and that of the economy
to the overall competitiveness of a country.
And according to it, the governments of
Venezuela, Argentina, Brazil, Mexico and
Italy show the weakest performance; they
significantly lag behind their economic
performance. They also fail to perform
on several fronts: budget deficits, debt,
taxes, bureaucracy, etc. In some cases,
like Venezuela and Argentina, the economy
still performs well for external reasons,
such as oil prices or exports. On the
other hand, Brazil and Mexico remain weak
for growth.
Courtesy:
Economic Times, May 29, 2006
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India
Gains New Ground at Cannes
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The
Cannes film market ended on a high note
for the Indian contingent with a majority
of the participant companies signing up
a raft of new deals at the world's largest
film market. The India pavilion organised
by the Confederation of Indian Industry
(CII) and National Films Development Corporation
generated high interest and the Indian
cinema buzz was carried throughout the
12-day festival and market participated
by over 70 countries. India will also
be a major attraction at 60th Festival
de Cannes next year as synergies are being
worked out to combine it with the 60th
anniversary of Indian Independence celebrating
cinema and democracy. The biggest attraction
for India at Cannes is positioning the
country as a shooting location, new biz
in post-production, special effects outsourcing
and the wide acceptance of Indian film
content beyond the Indian Diaspora audience.
"We made a real breakthrough this year
at Cannes," said Mr Bobby Bedi, chairman
of the CII National Entertainment Committee.
Courtesy:
The Statesman, 29 May, 2006
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Shareholders
Reap Rich Dividends
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India
Inc lavish in dividend dole-out for '05-06
on strong results. Riding on a strong
performance in 2005-06, India Inc seems
to be in a generous mood over dividend
payouts. Forty companies that had skipped
dividends in the last few years have decided
to open their purse strings for shareholders,
announcing dividends between 1 and 50
per cent for 2005-06. Forty companies
have reported net profit growth of more
than 100 per cent in 2005-06. Their aggregate
net profit more than doubled from Rs 928.66
crore in 2004-05 to Rs 1,907.80 crore
in 2005-06. The list includes Allsec Techno
(50 per cent dividend), India Infoline
and IL&FS Investmarts (30 per cent each),
TTK Healthcare, Kojam Investments, Sherton,
Siel and Vardhman Holdings (20 per cent
each), among others. Overall, the dividend
payout ratio of corporate India has remained
unchanged at 24 per cent. So far, 302
companies have announced a dividend payout
of Rs 18,216 crore for 2005-06, against
Rs 16,342 crore in 2004-05. The rise in
quantum of payout is on account of high
net profit. Collectively, their net profit
stands at Rs 75,762 crore in 2005-06,
up from Rs 66,989 crore in 2004-05. A
Business Standard Research Bureau study
shows that out of 302 companies, 140 firms
have increased their 2005-06 dividend
payout, while another 68 have proposed
to maintain the level of payout at the
previous year's level and 54 have reduced
it. Thirty-six firms including Infosys
Technologies, Wipro, Suzlon Energy, NMDC,
Parry Agro, Finolex Industries, Dabur
Pharma, Gabriel, Hindustan Oil Explorations
and Rallis have doubled their dividend
payouts. On the other hand, public sector
companies like HPCL, IBP, Bongaingaon
Refineries and SAIL have reduced their
dividend payout rates for 2005-06. Infosys
Technologies declared 900 per cent dividend
(Rs 45 on Rs 5 paid up) in 2005-06, against
230 per cent in the previous year. This
included a special silver jubilee dividend
of 600 per cent (Rs 30 per share). In
absolute terms, Indian Oil Corporation
paid the largest dividend of Rs 1,460
crore for 2005-06. In the private sector,
Reliance Industries is the largest dividend
payer at Rs 1,394 crore, against Rs 1,045.13
crore last year. Infosys Technologies
is the second biggest dividend payer in
the private sector, with a payout of Rs
1,238 crore, against Rs 309.80 crore in
the previous year. Among newly listed
firms, Emkay Share, Nitco Tiles, Sunil
Hitech Engineering and PVR have each declared
10 per cent dividend, while the figure
is 20 per cent each for Ramsarup Industries
and Bannari Aman Spinning. The list also
includes Everest Kanto Cylinder (35 per
cent), ABG Shipyard (12 per cent) and
Sasken Communication Technologies (30
per cent).
Courtesy:
Business Standard, May 29, 2006
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India
Targets $12 Billion FDI in 2006-07
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India
expects an inflow of $12 billion foreign
direct investment into the country during
the 2006-07 fiscal, a government official
said on Satarday. Last year, the FDI flow
was 8.4 billion, Secretary in the department
of industrial policy promotion, Ajay Dua
said. He said during the current year,
out of the USD 12 billion, USD eight billion
was expected to come in the form of equity
and the balance from re-invested earnings
and other capital inflows. Speaking at
the Bengal National Chamber of Commerce
here, Dua said countries like Taiwan,
Japan and South Korea would be investing
in India in a big way. According to him,
the three nations would bring huge FDI
inflows in the country. A few Taiwanese
firms were already in the process of setting
up manufacturing units in India, he said.
However, Dua said the US was the largest
contributor, followed by European Union
states and the Netherlands. He said that
the government was also simplifying procedures
as well to boost FDI inflow.
Courtesy:
Economic Times, May 28, 2006
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India's
Exports Grow 27% in April
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India's
merchandise exports showed a record increase
of more than 27 per cent in US dollar
terms in the first month of the current
financial year (April), touching $8,346.79
million. Expressing satisfaction at the
export growth rate over the last two years,
the commerce and industry minister, Mr
Kamal Nath, said the growth rate was not
only being maintained but had accelerated.
Exports during April is 27.08 per cent
higher than the level of $6,567.99 million
(provisional) during April 2005. In rupee
terms, the exports were pegged at Rs 37,518.08
crore, which is 30.59 per cent higher
than the provisional value of exports
during April 2005. The final reconciled
exports figure for April 2005 is $7,627.20
million (Rs 33,362.30 crore). India's
imports during April, 2006 are provisionally
valued at $12,560.93 million, an increase
of 20.52 per cent over the level of imports
valued at $10,422.54 million (provisional)
in April 2005. In rupee terms, the imports
increased by 23.84 per cent. The final
reconciled figure of imports for April
2005 is $10,764.70 million (Rs 47,086.10
crore).
Courtesy:
The Statesman, May 28, 2006
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Exports
have shot up by 27 per cent in the first
month of the current financial year (April
2006), continuing the high growth path
of the last fiscal. A 25 per cent growth
in merchandise exports was achieved in
2005-06, bringing the total volumes to
$101 billion. Commenting on this trend,
Commerce and Industry Minister expressed
satisfaction that the growth rate witnessed
in the last two years was not only being
maintained but also accelerated. According
to the latest official data released here
on Friday, exports are valued at $8.3
billion in April, 27.08 per cent higher
than the level of $6.5 billion during
the same month last year. Imports during
the month are estimated at $12.5 billion,
an increase of 20.5 per cent over the
level of $10.4 billion recorded in the
same month in 2005. As a result, the trade
deficit for the month has gone up from
$3.8 billion to $4.2 billion. Oil imports
in April were 34.6 per cent higher at
$4.1 billion compared to $3.08 billion
in the same month last year. Non-oil imports
were 14.56 per cent higher at $8.4 billion
as against $7.33 billion.
Courtesy:
The Hindu, May 27, 2006
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Now,
Indian IT Cos Challenge EDS, IBM
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The
infrastructure outsourcing market is becoming
increasingly disruptive. Indian IT majors
such as HCL Comnet, Infosys, Wipro Infotech,
TCS and Accenture India are gearing up
to challenge established players such
as EDS, CSC, and IBM in the infrastructure
outsourcing market. While the earlier
trend was to give the entire contract
to a single player, multiple sourcing
is now gaining ground. This will benefit
Indian players who are comparatively recent
entrants. Restructuring the established
$130bn market includes the advent of multi-sourcing,
changes in technology, seperation of assets
from services and newer entrants challenging
legacy players. "The market is restructuring
internally with the larger players looking
at multi-sourcing like their software
and BPO counterparts," says James Harris,
global MD for infrastructure outsourcing
at Accenture. With networks becoming increasingly
commoditised, clients are no longer ready
to pay a mark up on servers but would
rather buy-on-demand in smaller increments
to suit their capacity needs. While the
traditional model of infrastructure outsourcing
meant long term deals with companies taking
over assets to manage them today the appoach
has changed. There is concentration on
short term, selective outsourcing and
consolidations in business is leading
to standardisation in infrastructure outsourcing.
"IT infrastructure is a complex beast
and best practice sharing which was lacking
earlier can come in now," says Anant Gupta,
COO HCL Comnet. Incidentally the remote
infrastructure outsourcing model (RIM)is
the fastest growing segment of the infrastructure
outsourcing pie. According to Nasscom,
the RIM market in India is pegged at $500m
and is expected to hit $7bn by '10 and
this is where newer entrants are expected
to make significant contributions. According
to an Edelweiss IT report, a large number
of multi-billion contracts are coming
up for renewal, and the client organisations
are likely to segregate them into several
smaller deals. Infrastructure outsourcing
will continue to grow as a on-shore, off-shore
mix model with an emphasis on global delivery
systems and disaster recovery management.
The importance of getting best of breed
solutions will continue as India's global
delivery model is maturing. With the likes
of Accenture's Bangalore centre getting
a ISO 20000 certification, the client
faith is only set to increase. With 80%
of the infrastructure the same, companies
will have to differenciate on the basis
of catering to industry segments.
Courtesy:
The Economic Times, May 27, 2006
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'Top
3 Indian Services Cos Way Ahead of Global
Peers'
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The
Boston Consulting Group (BCG) has predicted
that one of the top Indian IT services
firm was poised to become the most valuable
company globally by 2012. The top three
Indian IT services firms are way ahead
of their global counterparts like IBM,
Accenture and EDS in terms of the price
to revenues ratio. "If they could sustain
their growth momentum, there is a possibility
that one of them could break into the
top league by becoming the most valuable
firm six years from now," said Mr James
Abraham, Director, BCG India, at a roundtable
on "The IT Sector - Imperatives and Future
Outlook". Drawing a parallel between the
growth of the Japanese auto industry and
the Indian IT services industry, Mr Abraham
said the Indian IT vendors are well poised
to increase their global market share
the way the Japanese auto companies did
in the mid-70s and 80s by challenging
the incumbent US companies. The Indian
IT firms are also competing with incumbents,
which are predominantly the US firms.
"While the challengers in the auto industry
moved from cost-advantage to other bases
of competition, the Indian IT services
companies are increasing their service
offerings and using the global delivery
model in areas like consulting," he said.
The biggest shift will happen when the
Indian companies will move beyond the
labour advantage to both intellectual
property and labour, he added. Mr Neeraj
Aggarwal, Principal, BCG India, said that
global IT majors are ramping up their
India presence pretty fast. Companies
like IBM are taking the Indian threat
seriously. "Today around 11 per cent of
IBM global workforce is in India and they
plan to add on thousands of people every
year," he said. BCG, Mr Aggarwal said,
estimated that by 2020, India would have
one of the largest workforce surplus of
around 47 million, while countries such
as the US, China and Japan would face
a labour pool deficit of 17 million, 10
million and nine million, respectively.
Courtesy:
www.thehindubusinessline.com, May 27,
2006
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Wipro
Eyes US & UK For Acquisitions
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Wipro
Ltd, India's third-largest software exporter,
is scouring Europe and the United States
for acquisitions and is on track to boost
IT services revenues by one-third this
quarter, its billionaire chairman said
on Friday. Azim Premji, one of India's
richest men by virtue of his more than
80 per cent stake in the $15 billion company,
said in an interview that Wipro aimed
to boost sales in Japan by more than 50
per cent in the year to next March to
$9 million. Japanese and European companies
have aggressively embraced Indian software
services firms, keen to cut costs by outsourcing
key processes such as supply chain design
and payroll accounting to India's army
of low-cost, English-speaking developers.
Wipro has been swallowing up smaller players
to help it remain ahead of the industry's
growth. Armed with about $1 billion in
cash, it has made four acquisitions since
December including Quantech Global Services,
which provides computer-aided design and
engineering services to the auto and aerospace
sectors. It is eyeing more targets in
Europe and the United States. "It is a
string-of-pearls approach. We are not
doing large acquisitions. We are doing
mid- to small-sized acquisitions, typically
companies between $20 million and $70
million in terms of revenue," said Premji,
in Tokyo to meet with clients and staff.
Industry revenue for the year ended in
March 2006 is expected to have surpassed
$23 billion, compared with $17.5 billion
in the previous year, as outsourcing to
Asia's third-largest economy shifts to
longer-term contracts from piecemeal deals.
Against that backdrop, Premji said Wipro
was on track to hit its forecast for IT
services revenues to rise 34 per cent
to $533 million in its fiscal first quarter
to end-June, with operating margins holding
"steady" around the prior quarter's 24.5
per cent.
Courtesy:
The Economic Times, May 27, 2006
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Acquisitions
on The Radar For Ranbaxy's Promoter-Scions
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After
three overseas acquisitions on a trot
in March, one would think home-spun drug-maker
Ranbaxy's appetite for the same would
be a little satiated. But it does not
seem so, with both brothers of the Ranbaxy-promoter
family having acquisitions on their mind
in their respective businesses. "This
is not the end," Mr Malvinder Mohan Singh,
Chief Executive Officer and Managing Director
of Ranbaxy Laboratories told Business
Line, indicating that acquisition-plans
were alive in Europe, the United States
and India. Consolidation is on the cards,
he said, adding that it was "way overdue"
in India. There were several "soft" reasons
for acquisitions not happening in the
domestic market, including the fact that
some companies were family-run, he observed.
However, he added, one trigger would set
the process on the roll, as seen in markets
overseas. In just one week in March, Ranbaxy
acquired Belgium's Ethimed NV, GlaxoSmithKline's
generic business Allen SpA of Italy and
Terapia in Romania. Ranbaxy has got a
green signal for an enabling resolution
to raise up to $1.5 billion through appropriate
securities and had raised $440 million
through the foreign currency convertible
bonds (FCCBs). Inorganic growth is one
of the strategies that younger brother
Mr Shivinder Mohan Singh, too, would adopt
to grow the Fortis network of hospitals
across the country. The junior Mr Singh
is Managing Director of Fortis Healthcare,
promoted by the Ranbaxy-family.
Courtesy:
www.thehindubusinessline.com, May 26,
2006
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500
Million Phones For India by 2010
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Telecom
Minister Dayanidhi Maran today projected
that India would have 500 million telephones
by 2010, to facilitate which the government
was making efforts to release 45 mhz of
spectrum by the end of this year. "The
current subscribers base in the country
is 150 million. The target for 2007, which
has already been announced earlier, is
250 million new phone connections. Now
we are setting a target of 500 million
telephone connections by 2010," he said
at a press conference outlining achievements
of his ministry in the last two years.
He added that DOT along with Ministry
of Defence had already taken up a Rs 1,000
crore project to release 45 mhz of spectrum,
a key resource for the mobile telephone
industry, by the end of this year.y 2007,
mobile telephony will cover 85 per cent
of the country. Maran said the government
will also make spectrum available for
the third generation mobile services (3G).
Courtesy:
The Financial Express, May 25, 2006
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API
Manufacturing: India Set to Overtake Italy
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The
Indian pharmaceutical industry is all
set to overtake Italy as the world's second
largest manufacturer of active pharmaceutical
ingredients (API). The Indian API manufacturing
industry is currently the third largest
in the world and is expected to generate
sales of $4.8 billion by 2010 from $2
billion in 2005, at an average yearly
growth rate of 19.3 per cent, according
to a study conducted by Italy's Chemical
Pharmaceutical Generic Association. Indian
industry officials, however, are of the
opinion that India would achieve this
landmark in 2007 itself, going by the
number of DMF (drug master file) submissions.
According to Mr D.G. Shah, Secretary-General,
Indian Pharmaceutical Alliance, exports
of API from India are expected to touch
$10 billion by 2010, if one takes into
consideration the number of DMF submissions.
"The API sales are expected to grow at
a CAGR of 30 plus per cent in the current
decade, particularly because of the breakthroughs
Indian manufacturers have been able to
make in highly regulated markets such
as the US and Europe," Mr Shah said. Indian
API makers made some 579 DMF submissions
in 2004. Meanwhile, according to the CPA
study, sales by Italian API manufacturers
are expected to increase to $3.3 billion
by 2010 from $3.2 billion in 2005. The
report also said that India, with low
labour costs and focus on innovation,
can hit the margins of not only Europe-based
manufacturers but even Chinese firms.
For example, India's API exports growth
rates are the highest in the world, including
exports to highly regulated markets like
the US. Further, India's API sales in
overseas markets are expected to increase
at a rate higher than domestic sales.
India also has the largest number of US
Food and Drug Administration approved
plants on a worldwide scale.
Courtesy:
The Hindu Business Line, May 25, 2006
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Harting
to Open Indian Operations in Chennai
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Harting
Technology Group, the Germany-based electrical
and electronic technology company that
develops customised solutions and products
such as connectors for energy and data
transmission applications, announced the
opening of its India operations here in
Chennai on Wednesday. The Indian subsidiary
has about 15 personnel manning the operations,
and will look to double the headcount
by the end of the year. The company will
operate sales offices in Delhi, Mumbai,
Pune and Bangalore, and will develop distribution
channels additionally. The India division
of the company would be looking to provide
interconnect solutions in the field of
machinery manufacturing, energy, transportation,
telecommunications and factory automation,
according to a press release. Mr Dietmar
Harting, Founder, Harting Technology Group,
was quoted in the release as saying that
Tamil Nadu's excellent communication and
transport facilities, infrastructure,
peaceful investment climate and availability
of skilled labour are some of the factors
that prompted the choice of location for
the subsidiary.
Courtesy:
The Hindu Business Line, May 25, 2006
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India
Inc. Takes M&A Route For Growth
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Lakshmi
Mittal is not the only Indian on the prowl
who is thinking big. Corporate India at
large, is looking forward to aggressive
growth through the mergers and acquisition
(M&A) route. In an exclusive M&A survey
done by Grant Thornton India, 81% of the
respondents say that their company is
exploring M&A option to grow in future.
With only 30% of the surveyed companies
admitting to having actually undertaken
any M&A in the past, this points to a
sharp surge in M&A activity in future.
The main drivers of M&A, respondents say,
is faster growth as compared to what can
be achieved organically. "M&A had been
rising in India, but it seems it will
only get bigger and better in future,"
says Harish HV, head (M&A), Grant Thornton
India. The Grant Thornton survey reached
out to top and middle management executives
in 200 corporate houses for the survey.
The sample base was evenly spread among
sectors like BFSI, manufacturing & engineering,
media & entertainment, pharma and healthcare.
However, IT & ITeS had a relatively larger
representation of 31% in the sample. In
'05, India Inc undertook M&A transactions
worth $18bn as against $12bn in '04. Grant
Thornton expects it to touch $24bn in
'06. Already in the first four months,
M&A deals worth $8bn has been undertaken.
But these are small numbers as compared
to the global scale - $10bn of M&A transaction
takes place every day. Significantly,
of those who had undertaken acquisitions
in the past, over 70% said it was a cross-border
acquisition? In fact, going forward, this
will get bigger as a resounding 94% expect
to do a cross-border acquisition out of
those who expect to strike a deal in the
next 3 years. So far, M&A activity in
India has been concentrated in the new
economy emerging sectors like IT & ITeS,
telecom and biotech. Going forward, it
is expected to also grow in old economy
sectors like media & entertainment, paper
and banking sector. "Some of these sectors
are fairly fragmented, a legacy of the
licence era. Expect some more consolidation
there," he says. The survey also revealed
a growth in private equity investments.
Around 54% of the respondents who do not
have private equity investment in their
companies, expect to have it in the next
3-4 years.
Courtesy:
The Economic Times, May 25, 2006
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Essar
Steel in Joint Venture With UK's Stemcor
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Essar
Steel has entered into a joint venture
with Stemcor of UK for setting up a plate
mill at Hazira with an estimated investment
of US$ 433 million. The new venture -
Hazira Plate Mill - will be a 76:24 partnership
between the Essar group and Stemcor, one
of the world's largest metal trading groups.
Hazira Plate Mill will have a capacity
of 1.5mt per annum. It will be the first
plate mill of its kind in India with the
capacity to produce ultra wide plates
of five metre width. This kind of plate
is currently produced only by six international
steel companies. The technology for the
mill is being provided by VAI Clecim,
France. Incidentally, ET had reported
on October 21 last year that the Essar
group is planning to set up a new company
for setting up a plate mill at Hazira.
The plates are likely to find application
in varied industries including, manufacture
of large diameter oil and gas pipelines,
ship-building, boiler vessels and construction
industry. The new venture is slated to
come up next to Essar Steel's existing
3mt hot-rolled steel making unit at Hazira.
The new plate mill is likely to add substantial
muscle to Essar's product basket. Plates
command a significant premium over cold-rolled
(CR) coils in the international market,
since there are few players capable of
producing requisite grades for critical
applications. However, details regarding
the capacity of the unit or the required
investment for it could not be ascertained.
The project recently achieved full financial
closure. SBI Capital Markets and IDBI
Capital Market Services have syndicated
the term loan facility. The mill is scheduled
to be commissioned by the end of '07.
Courtesy:
The Economic Times, May 24, 2006
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Gujarat
Alkalies in Deal With Dutch Company to
Sell Carbon Credits
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Gujarat
Alkalies and Chemicals (GACL) is set to
enter into an agreement with the US$ 6.4
billion Netherlands-based energy company
Nuon Netherlands, for selling about 1m
certified emission reduction certificates
(CERs) or carbon credits. The agreement
is likely to create an additional revenue
of about Rs 60 crore or above by '12 for
GACL by selling carbon credits. "We are
in final stages of signing the emission
reductions purchase agreement (ERPA) for
over 0.9m CERs, which shall be produced
from two carbon reducing projects," PK
Taneja, managing director, GACL told ET.
The two projects of GACL, which have been
validated by DNV of Norway, have been
projects involving switching of fuels
from naphtha to gas. "The price of carbon
credit is variable and will depend upon
the prevailing price. The total revenue
through carbon credit could be anywhere
upwards of Rs 60 crore," Mr Taneja said.
So far, GACL has identified four projects
under clean development mechanism (CDM)
for generating carbon credits as per the
Kyoto Protocol agreement, of which two
have been validated. The process of validation
for the two smaller projects totalling
about 0.3m CERs is likely to be by the
end of the year. "After the ERPA with
Nuon is signed, the buying process of
first carbon credit should start by September
or October," sources in the company told
ET. The CDM is one of the two project-based
flexible mechanisms of the Kyoto Protocol.
These mechanisms are designed to make
it easier and cheaper for industrialised
countries to meet the greenhouse gas (GHG)
emission reduction targets that they agreed
to under the Protocol. CDM is also mandated
to assist developing countries in achieving
sustainable development. Earlier, Gujarat
Flourochemicals, a Gujarat-based refrigerant
gas manufacturing company, was the first
company in India to receive project registration
from executive board of CDM established
under CDM. GFL has now successfully commissioned
its project for green house gas emission
reduction and has recently been issued
its first Certified Emission Reductions
(CERs) executive board of the Clean Development
Mechanism. The company expects to produce
about 3m certified emissions annually.
Courtesy:
The Economic Times, May 24, 2006
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India,
Norway Join Spain in Cuba Oil Prospect
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Spanish
oil company Repsol YPF teamed up on Tuesday
with Norway's Norsk Hydro and India's
ONGC Videsh to explore six offshore blocks
in Cuban waters where good-quality oil
was found two years ago, the companies
said. The prospect of finding commercial
quantities of oil in Cuban waters of the
Gulf of Mexico at a time of soaring prices
has set off a political debate over whether
U.S. companies, sidelined by American
sanctions against Cuba, should be allowed
to explore there. At the moment the US
companies have been banned from drilling
in what is virtually next door to that
country. Under the deal signed with Cuba's
state-owned Cuba Petroleo (Cupet), operator
Repsol will have a 40-percent share in
the project, while Norsk Hydro and ONGC
Videsh will each have 30 percent. Exploration
plans include 1,158 square miles (3,000
sq km) of three-dimensional seismic studies
to be completed in June, said Egil Gloppen,
Hydro Oil & Energy international business
development director. But drilling is
not expected to begin until 2008 due to
a tight market for deep-water exploration
rigs as the world's search for oil intensifies
to take advantage of tight demand and
high prices for crude. "2008 is probably
the earliest, unless we come across a
rig that can be used immediately, but
that is not very likely," Gloppen told
Reuters. He said there were only 20-30
rigs in the world than can drill at such
depths. Repsol found good-quality light
oil in mile-deep (1.6-km) waters of Cuba's
economic exclusion zone in the Gulf of
Mexico in 2004, but not in commercially
viable quantities. The U.S. Geological
Survey estimated last year that the North
Cuba basin could contain some 4.6 billion
barrels of oil, with a high-end potential
of 9.3 billion barrels. "Our technical
people see this as a good prospect," said
Uttam Sengupta, senior vice president
of ONGC Videsh, the overseas subsidiary
of Oil and Natural Gas Corp., India's
largest integrated oil and gas company.
U.S. companies are barred from looking
for oil in Communist Cuba under trade
sanctions enforced against President Fidel
Castro's revolutionary government since
1962. Sen. Larry Craig, an Idaho Republican,
last month complained that energy-hungry
China could gain access to oil "within
spitting distance" of the United States.
He introduced legislation that would seek
an exception to the trade embargo for
U.S. oil companies so they could drill
in Cuba. "The U.S. industry thinks it
is too bad they cannot compete so close
to their own turf," Gloppen said. China's
giant oil and gas company Sinopec Corp.
signed an agreement last year to produce
heavy oil with CUPET in Cuba's western-most
Pinar del Rio province from on-shore wells.
Courtesy:
The Financial Express, May 24, 2006
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Business
Headquarters Find New Address in India
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Move
over Singapore and Hong Kong. India is
emerging as the new hub for business headquarters
in the region. A sizzling domestic market,
robust growth in the outsourcing business,
an enviable brand positioning in the tech-led
world, not to mention the stable-democracy-advantage
that is putting the country bang in the
middle of business hubs in the region.
Examples are aplenty and the list is only
getting longer. Naveen Kshatriya is the
regional vice-president of BP's transcontinental
lubricant business and he oversees 20
countries spread across 3 continents and
employs over 1,400 employees including
South Asia, Middle East, Africa and Turkey.
IBM, for which India is the second-largest
operation after the US, has located its
global delivery services business, here,
headed by the VP, Mats Agervi. Adecco,
the global staffing firm, has made India
the regional headquarters for Africa,
the Middle East and India. Arun Tadanki,
president & MD, of Monster Asia, oversees
regional business | |
