Andhranews

New Delhi, Sept. 21: The 50:50 joint venture of ONGC Videsh subsidiary, ONGC Mansarovar, and a subsidiary of China’s Sinopec, has acquired Colu-mbian oil firm Omimex de Columbia from Texas-based Omimex Resources. ONGC Mansarovar and a subsidiary of Sinopec International Petroleum Exploration and Production Corporation (SIPC) will pay $425 million each for acquiring Omimex de Columbia.

Omimex has oil and gas operations exclusively in Colombia, which include onshore production and exploration areas with gross proved reserves of more than 300 million barrels of oil and current production at approximately 20,000 barrels of oil per day. Omimex’s assets constitute a 100 per cent interest in the light oil Velasquez mineral property and 50 per cent interest in the Nare and Cocorna Association contracts, where as the Colombian national oil company, Ecopetrol S.A., holds the remaining 50 per cent.

Omimex also owns 100 per cent of Velasquez-Galan pipeline, which runs 189 km from the Velasquez property to Ecopetrol’s Barrancabermeja refinery. The acquisition of Omimex is the first acquisition made jointly by ONGC Videsh and SIPC. SIPC, founded in January 2001, is a wholly owned subsidiary of China Petrochemical Corporation (Sinopec Group). Sinopec is a major petroleum and petrochemical entity incorporated in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec is China’s largest producer and supplier of oil products. It is also the second-largest crude oil producer in China.

Hyderabad, Sept. 21: In August last year, ONGC Videsh Ltd, the overseas arm of ONGC Ltd, lost its battle to acquire Petro Kazakhstan, a Canadian company, to China National Petroleum Corp, which paid $4.18 billion, substantially higher than offered by the Indian company. ONGC-VL had bid for Petro Kazakhstan in partnership with the L.N. Mittal group.

More than a year later, OVL’s partnership with Sinopec International Petroleum Corporation and Production Corp, a Chinese company, appears to have paid off with the 50:50 JV acquiring Omimex de Colombia in Colombia from the Texas-based Omimex Resources, Inc. While ONGC has not indicated how much the JV would be paying for acquiring the in-production assets of Omimex, earlier reports have indicated that it could be $850 million.

The Colombia push appears to be part of ONGC’s strategy to acquire potential oil-bearing blocks in Latin America (Latam), because the protectionist tendencies in the Western world have made in difficult for exploration and production companies from the developing world to acquire energy companies, according to oil industry analysts. Last year, the Chinese government-controlled CNOOC dropped its $19.6 bid, in cash, to acquire Unocal Corp., the ninth largest company in the US, after US legislators raised “security” concerns.

The Colombian deal is the latest undertaken by OVL in Latin America. Earlier this month, the company entered into a production sharing contract with CUPET, the state-owned oil company in Cuba. In May, OVL acquired a 30 per cent participating interest in six exploratory blocks in offshore Cuba from Repsol YPF. And in July, OVL signed an MoU with ith PetroEcuador, the state oil company of Ecuador, under which the two energy firms will collaborate in the area of exploration and exploitation of hydrocarbons in Ecuador.

It isn’t Latam alone where OVL has been scouting for potential E&P contracts. ONGC Mittal Energy Ltd, its JV with steel tycoon L.N. Mittal, won two prospective oil and gas blocks in Nigeria. It’s most productive assets are in Sudan, where OVL has a 25 per cent in the Greater Nile Oil Project, while China National Petroleum has a 40 per cent stake. GNOP produces three lakh barrels of crude oil per day, and is estimated to have oil reserves of over one billion barrels. OVL also has interests in Libya, Egypt and the Ivory Coast.

New Delhi, Sept. 21: With the Left criticising the special economic zones (SEZ) as an opportunity for builders to grab land, the government on Thursday finalised guidelines for developing social infrastructure in SEZs, besides setting a criteria for developers. This is being done to prevent the SEZ from becoming a mere real estate opportunity. The Board of Approvals for SEZs, which met on Thursday, has made it mandatory for the SEZ developers to invest a specific amount or have a stipulated network to be eligible for setting up sector-specific and multi-products’ zones.

The board has decided the procedure to be adopted while approving infrastructure in non-processing area of SEZs. The government will shortly notify the list of activities that will qualify for tax exemptions. The activities include building of basic infrastructure, water and sewage treatment plants, office space, shopping areas, schools, houses, hospitals, recreational and sports facilities, restaurants, power and gas connections.

But multi-product zones, that are spread over a minimum area of 1,000 hectares, would also be allowed to build ports, airports, banks, rail heads and golf courses. However, developers need to have a net worth of at least Rs 250 crores and invest a minimum of Rs 1,000 crores for a multi-product SEZ. For sector-specific zones, the board fixed the minimum investment at Rs 250 crores or a net worth of Rs 50 crores.

Sector-specific SEZs developers can build a maximum of 7,500 houses, a 100-room hotel, a 25-bed hospital and have an office space of up to 50,000 sq.m in non-processing area. In multi-product zones, developers can build a maximum of 25,000 houses, a hotel with 250 rooms, a 100-bed hospital and office space of not more than 250,000 square meters. Moreover, developers can build houses only in stages, which cannot be sold and the board may allow additional houses if developers require for employees working within the zone.

New Delhi, Sept. 21: In a notification, the Reserve Bank of India directed commercial banks to “treat exposure to special economic zones” as “lending to commercial real estate sector”. The directive has come into operation with immediate effect. “Keeping in view the current market conditions, it has been decided that the exposure of banks to entities for setting up SEZs, or for acquisition of units in SEZs, which includes real estate, will be treated as exposure to commercial real estate sector and banks will have to make provisions as also assign appropriate risk weights for such exposures as per the existing guidelines,” the RBI notification said.

This means that SEZs, which so far have been treated as “infrastructure”, are being looked at by RBI as a real estate ventures. Since banks have a ceiling on real estate exposure, and SEZs too will be clubbed with real estate, both will vie for the same limited resources. Realty carries a higher risk weight and, hence, higher lending rates. The notification comes in the wake of the tug-of-war between the finance ministry and Planning Commission on one side and the commerce ministry on the other.

Hyderabad, Sept. 21: Concerned over the trend of too many venture capital funds chasing few bankable ideas in the country, experts at the TiE ISB Connect on Thursday asked entrepreneurs to bank upon technology as the prime differentiator. Speaking at a panel discussion on Internet Technologies, entrepreneurs led by Mr Ajit Balakrishnan of Rediff and Mr Ganesh Rengaswamy, managing director of Greylock Partners, stressed that there were too many “me-too” enterprises.

“Although there are ideas, return on investments and the exit option are also important from their (VC’s) point of view,” Mr Rengaswamy said, adding that the spurt in funding activity in the country is also not a healthy scenario. “In fact, there is more money and less bankable ideas,” he added. Echoing Mr Rengaswamy’s views, Mr Balakrishnan said that there are more VCs than entrepreneurs.

Earlier kicking off the proceedings on the second day of the event, Mr C. Srinivasa Raju, CEO of iLabs Funds, said that India and China have been the key regions for growth which was primarily driven by demographics and urbanisation. There has been a significant shift in the expansion of mindset as Indian companies become cost competitive on a global stage to better the sourcing hub model. This has translated into an increase in FDI inflows by 40 per cent to touch $7.5 billion in FY05-06, with private equity commitments of about $2 billion.

Additionally, the total private equity and venture capital investment committed by various industry verticals is close to over $2,000 million between April-June 2006, Mr Raju said. Although issues related to seed funding remain, the risk portion is taken care of as only execution risk exists and idea risk in the early stages is absent.

On the current VC scenario, Mr Raju said, that there are a number of VC/PE funds that specialise in various segments and there is plenty of money in the market which has led to increased competition among funds. In fact, this has led to a heated market leading to over valuations in the IT and ITeS sectors.

Explaining the current challenges, Mr Raju said winners have been declared in the IT services, telecom, banking, insurance, construction, infrastructure and media sectors. “But the next in line, which are up for grabs, are healthcare and life sciences, retail, logistics and distribution, entertainment and defence,” Mr Raju noted.

New Delhi, Sept. 21: Indian millionaires are growing in numbers and the population of individuals with liquid wealth of $1 million is expected to touch 1.1 million by 2009, says a survey by plastic card major American Express. The millionaire club, which is currently pegged at 71,000, is expected to expand by 12.8 per cent annually, the report titled ‘Inside the Affluent Space’ said.

It said their estimated cumulative liquid wealth of $203 billion is expected to increase to $322 billion by 2009. The study also offers an insight into attitudes, behaviour and expectations of the rapidly growing population of affluent consumers in India. Releasing the report, American Express senior vice-president Atul Mathur said: “India’s strong economic growth, combined with other social factors and increasing consumerism is steering a dramatic change in the lifestyle aspirations of the country’s rapidly growing affluent segment.”

The research was conducted to understand the marketplace and underlying consumer lifestyle desires, he said. “The affluent population is growing very rapidly and is expected to grow 12 per cent on an average across both the mass affluent and high net worth individual segments over the next few years,” American Express country manager Rob Hennin said.

‘Inside the Affluent Space’ shows that affluent consumers in India have a very clear idea about what they expect from their lifestyles and from those who provide it to them. If businesses want to attract and retain these customers, they need to be very clear about these expectations too. The new insights into the affluent consumers’ mindset are powerful and will compel luxury marketers to refine and even change their approach to this consumer segment in India.

“The affluent population is growing rapidly. In fact, it is expected to grow at a rate of approximately 12 per cent on average across both the mass affluent and high net worth individual segments over the next several years. Today in India, these consumers already account for nearly US$203 million in cumulative wealth,” said Mr Hennin.

The study said that women, in particular, emerged as a distinct voice signaling a micro-trend in the marketplace. As more and more women acquire their own status as affluent individuals —with their own money —their expectation is escalating specifically around “the best” and more of it when it comes to personal indulgence, pampering and the pursuit of “refined living”.

Kolkata, Sept. 21: IBM India on Thursday announced the expansion of its global delivery capacity in Kolkata by opening its fourth facility in DLF IT Park, Rajarhat. IBM plans to hire over 3,000 new employees at the facility. IBM has been one of most aggressive recruiters in the Indian marketplace. From 38,500 employees in December 2005, IBM augmented its workforce to 43,000 as of June 2006.

This facility will enable IBM to scale its existing application services delivery capabilities in India in keeping with the growing client needs. Kolkata houses IBM’s second-largest pool of employees after Bangalore. IBM plans to ramp up its technical talent in areas such as SAP, mainframe, web technologies and business consulting at the new center.

Buddhadeb Bhattacharjee, Chief Minister of West Bengal, while inaugurating the facility, said: “We believe that the information technology industry will fuel the future growth for West Bengal. It will open up new opportunities for the talented workforce of the State. We welcome innovative companies like IBM to invest and partner with us in the development of our State. I am confident that this association will bring desired gains to both IBM and West Bengal.”

“As a globally integrated company, IBM has oriented itself to lead in high-value creation and delivery of services led by our strategy of doing the right tasks, with the right skills, in the right places. Our new facility in Kolkata will further augment our vast global delivery network that spans three dozen countries including India that deliver high value solutions to help our clients innovate globally,” said Shanker Annaswamy, managing director, IBM India, during the inauguration.

With a strong campus relations strategy in India, IBM continues to contribute to innovative academic programmes in the state such as its MOU with Jadhavpur University that led to the 'Centre for Mobile Computing' (CMCC) a centre of excellence for wireless, RFID/ sensor technologies.

Mumbai, Sept. 21: Short covering, falling global crude prices and relief that the US Fed was not going to raise interest rates saw the market upbeat for the second day running.
The Sensex closed 165.13 points up at 12,274.27 and saw a high of 12,285.90 during the day. This high was more than the earlier all-time high in May — 12,671. The turnover on both the exchanges was Rs 36,934 crores with the F&O sector accounting for Rs 26,385 crores.

The buoyant sentiment on the exchanges was fuelled also by the news that most companies surpassed their earlier record of advance taxes, indicating a healthy economy. According to these sources, even PSUs like HPCL and BPCL, which did not pay any advance tax last year paid Rs 125 crores and Rs 105 crores this year. ACC and Gujarat Ambuja paid a hefty Rs 125 crores and Rs 120 crores as against Rs 5 crores and Rs 2 crores last year. Grasim paid Rs 155 crores against Rs 80 crores and SBI paid Rs 863 crores.

The wireless industry has become, in the past 10 years, one of the largest enterprises in the world. So, the question, is have mobile carriers convinced themselves that it’s time to take their technology futures into their own hands? Industry analysts believe that the Next Generation Mobile Networks initiative, announced September 14, is a clear indication that the carriers are planning to do their own thing.

The NGMN’s mission statement says, “NGMN intends to complement and support the
work within standardisation bodies by providing a coherent view of what the operator community is going to require in the decade beyond 2010.” It goes on to say that it plans to “provide a set of recommendations for the creation of networks suitable for the competitive delivery of mobile broadband services and cost-efficient eventual replacement of existing networks.”

According to analysts, only mobile carriers will be accepted in the NGMN as members. Conspicuous in their absence are wireless infrastructure vendors from both sides of the aisle as well as the networking companies such as Intel and Cisco. Only carriers can join as members; vendors may be part of the organisation only as “Sponsors” or “Advisors.”

“Competing (and slow-moving) standards bodies such as the 3GPP and 3GPP2 as well as the ITU, IEEE, and other organisations are working toward consensus-based standards that are satisfactory to their constituencies of equipment vendors and suppliers, not the carriers,” says a market research firm.

After the standards are finally agreed upon, the carriers-who will be the ones writing the checks for the technology-must stand by and watch as the weaknesses and benefits of each new offering are argued among financial analysts, industry analysts, white papers, the trade press, the popular press and blogs everywhere. Judgement will be passed and the financial markets will decide how much money the carrier gets to pass on to the infrastructure vendors.

IP telephone

Meanwhile, businesses’ move to IP telephony continues to drive spending, with this area experiencing the greatest growth in spending among business networking infrastructure expenditures. Along with robust growth in IP telephony spending, spending on security appliances and enterprise WLAN will experience strong increases in 2006. While these areas will experience the greatest gains this year, spending on LAN switches, the largest segment of the infrastructure market, will see moderate increases that are expected to continue through 2010, it says.

New Delhi, Sept. 21: The Union Cabinet on Thursday gave its approval for setting up one lakh rural Common Services Centres (CSC) across the country at a total cost of Rs 5,742 crores. Of this, the government of India’s outlay would be Rs 856 crores, and the state governments’ share Rs 793 crores.

The balance amount of Rs 4,093 crores is expected to come from the private sector. The project is proposed to be implemented by the department of information technology through a public private partnership. The CSC is a strategic cornerstone of the National e-Governance Plan (NeGP), approved by the government in May 2006.

Under the project, the CSCs in one lakh villages will be broadband Internet-enabled and would offer a basket of government-to-citizen (G2C) and business-to-customer (B2C) services. The government is putting in place necessary arrangements to provide reliable broadband connectivity (256 Kbps) upto the CSC level. The one lakh CSCs will cater to six lakh villages in the country, which means at least one CSC in a cluster of six villages.

A highlight of the CSCs is that it will offer web-enabled e-governance services in rural areas, including application forms, certificates, and utility payments such as electricity, telephone and water bills. Other significant public and private services that can be accessed through these centres would be remote consulting for healthcare, e-enabled vocational training, market and supply chain linkages, rural BPO, agricultural prices and weather information.

Mumbai, Sept. 21: Automotive major Tata Motors said on Thursday production at its car plant in Pune may get affected following a fire at its paint shop. There was no casualty.
“Preliminary assessments indicate that production from the paint shop may get impaired for about a week,” a company statement said from Mumbai.

The company has about a week’s inventory of supply float in the pipeline, it said. All necessary steps are being taken to resume production at the earliest, simultaneously mobilising alternate painting facilities within Tata Motors' Pune plant, the statement added. Tata Motors said it was ascertaining the extent of damage. The facility is adequately insured for fire, including for loss of operations, the statement added.

Hyderabad, Sept. 21: Infor, a US-based enterprise software solutions provider, which stepped up its Indian presence after the acquisition of SSA Global, will consolidate its businesses here as it seeks to enhance its focus on the small and medium enterprises (SME) market.

“Infor will integrate two of its teams that worked on a product for Sonata and HCL on a bill-for-order basis with SSA Global’s existing business in India based out of Hyderabad,” Mr Jim Schaper, chairman and CEO of Infor, told reporters here on Thursday. “Our solutions in the enterprise, strategic and financial solutions group can be marketed in India because the SME market here is still not crowded with a penetration level of 10 per cent by existing players. We will expand and develop our existing business in India,” Mr Schaper said.

The $2.1-billion Infor is targeting a foothold in the SME market in India as globally, more than 80 per cent of its 70,000 customers, account for this segment. Infor will bank upon its products, that Mr Schaper claims, has the “lowest cost of ownership in the mid-market”.

With 500 customers in India, Mr Schaper said he was bullish on the growth potential of the market and picks India in particular and Asia-Pacific as the geographies that are witnessing the highest growth as far as manufacturing products and Financial Solutions Group are concerned. Commenting on the software industry, Mr Schaper who is also a operating partner in private equity space Golden Gate Capital, said, “We have grown through acquisitions and so have some of our competitors (Oracle, SAP). Consolidation on the market will continue and will accelerate in the next 24-28 months.”

Infor is targeting organic growth of 10-12 per cent this fiscal and in the next two years has plans to be a publicly traded company in the US. Golden Gate Capital, with over $2.5 billion of capital under management owns 80 per cent in Infor.

London, Sept. 21: Citigroup, the world’s largest financial services group, plans to build a retail brokerage network across India to boost its share in one of Asia’s fastest growing markets. The US-based banking group proposed to launch its brokerage under the citigroup Smith Barney name as early as November, initially focusing on clients of citigroup units already active in the country, Financial Times daily on Thursday reported quoting Sanjay Nayar, Citigroup India chief executive officer.

Over the next year, the bank intends to build a 25-branch brokerage network, which would boost its other businesses, such as its nascent private banking operation and its services targeting small and medium enterprises. The move by Citigroup follows a boom in the market for investment banking services in India, with rapid economic growth spurring equity issuance and merger and acquisition activity, the report said.

Citigroup is jostling with DSP Merrill Lynch, JM Morgan Stanley, Deutsche Bank, UBS, JP Morgan, ABN Amro and others for market share in India. Indian retail investors account for about 75 per cent of trading volume in the equity market. Retail interest in shares is growing as more of the traditionally conservative middle classes move their money from safe asset classes into stocks but competition between brokerage houses on fees is cut-throat.

In the first eight months of this year, Indian companies were involved in 798 M&A deals worth $29 billion compared with 1,132 M&A deals worth $25 billion for their Chinese counterparts, according to data from Thomson Financial.

New Delhi, Sept. 21: Bharti Global, the offshore investment arm of Bharti group, has been awarded licences to operate 3G as well as 2G mobile services in Guernsey, an Island located in the English Channel northwest of France. Guernsey Airtel Ltd, a subsidiary of Bharti Global, emerged as the highest ranking applicant for the licence through a competitive selection process. This is the third international telecom venture of Bharti. In May 2006, Bharti was granted a licence to run comprehensive telecom services in Jersey.