Oil&Gas Eurasia Blog

American Society for Training and Development (ASTD) has honored the Reliance Industries Ltd’s (RIL) Nagothane petrochemical manufacturing unit ‘Excellence in Practice’ to achieve world-class safety in plant operation. Board of Directors of ASTD, which is the world’s largest association dedicated to workplace learning and performance professionals, will honor the team of Nagothane Manufacturing Division during its international conference and exposition on May 10, 2010.

RIL’s Nagothane petrochemical manufacturing division had initiated the practice of ‘Empowering Employees with Knowledge, to attain the safety in plant operation. The practice initiated by the RIL’s Nagothane Manufacturing Division clearly attracted the ASTD, which has members from more than 100 countries who work in thousands of organizations of all sizes. The practice has been selected for the ASTD honour on account of clear demonstration and measurable results of achieving organizational goals, strong evaluation plan and appropriate design values.

The ASTD award is a testimony of demonstration of sincere efforts of RIL’s Nagothane manufacturing unit employees, in line with RIL’s mission of achieving excellence in workplace and its operations. Indirectly, the ASTD has recognised RIL’s practice of relating learning to workplace safety performance through enterprise-wide awareness.

It’s hardly news that Anil Ambani has a major D6 gas pricing dispute against his brother Mukesh awaiting judgement in India’s Supreme Court. But PETROWATCH learns the younger son of legendary Indian industrialist the late Dhirubhai Ambani - and the world’s third richest Indian after brother Mukesh and steel magnate Lakshmi Mittal - has thousands of legal cases pending against him.

On January 14, Anil’s telecommunications company Reliance Infratel filed a Draft Red Herring Prospectus (DRHP) with the Indian stock market regulator, Securities and Exchange Board of India (SEBI), for its IPO. Seen by this report, the prospectus lists 1768 criminal, civil, taxation, consumer, anti-monopoly, labour and class action cases from across industry and the general public faced by Anil’s 11 telecommunications businesses. Most interesting are 17 criminal cases: four were filed by investors before the 2005 split of Reliance Industries, which Anil and Mukesh headed together before their acrimonious fallout.

Eight cases allege forgery and cheating by Anil’s Reliance Communications, and one ex-employee has even brought a case claiming his salary was ‘misappropriated’! Equally interesting are four election related cases, brought against Anil during his brief tenure as a Samajwadi (Socialist) Party MP in the Rajya Sabha (India’s upper house) from June 2004 to March 2006. Anil’s term as MP should have lasted till June 2010 but he quit early thanks to controversy over a perceived conflict of interest with his job at the Uttar Pradesh State Industrial Development Corporation, deemed an ‘office of profit’. To be fair, getting sued is an occupational hazard for the chairman and promoter of any company in India, given the convoluted legal system and the local propensity to take the slightest grievance to court. But Reliance’s stock market prospectus also reminds us that the group’s promoters and companies have themselves “from time to time initiated legal proceedings relating to their businesses and operations.”

Source: Petrowatch

More than a month after putting its biggest global assets up for sale, Reliance Communications has found few callers for a package that includes its prized FLAG undersea cable network.

Sources close to the deal said Reliance Comm had already extended an initial deadline of late-January for submissions once, but had still attracted little interest for the deal seeking $3 billion.

The sources spoke on condition of anonymity because of the sensitivity of the situation.

One source said Singapore Technologies Telemedia - which owns stakes in Singapore’s StarHub and undersea cable operator Global Crossing — is contemplating a bid.

A spokeswoman for Singapore Technologies Telemedia, a fully-owned unit of state investor Temasek, declined comment.

The source added that another company said to have expressed interest was NTT Corp, though an NTT spokesman said the company was not considering a bid.

Sources said complaints surrounding the deal, being shopped by Deutsche Bank, include a dearth of financial information, concerns about debt and over-abundance of the kinds of assets and services being offered.

“It is no longer something which is in short supply,” said Arun Kejriwal of Mumbai-based investment advisory firm KRIS. “Earlier you thought you cannot do without a cable system of your own. But now it’s not the case. You can hire whatever you want.”
Reliance Comm previously denied it was trying to sell the assets, and had no immediate comment on any recent developments. Sources and documents obtained by Reuters show that the assets are up for sale.

In a statement previously, the company had said FLAG, the undersea cable network operator, spans 65,000 kilometres and described it as the world’s largest private undersea cable system.

Three of the main assets in the sale package are FLAG, which Reliance Comm bought for $207 million in 2003; Yipes, a California-based ethernet service provider purchased in $300 million in 2007; and Vanco, a British telecoms services provider purchased for $77 million in 2008.

All three were struggling when Reliance Comm bought them, with FLAG purchased directly out of bankruptcy and Yipes acquired from a third party that took it over out of bankruptcy.

RICH VALUATIONS

A source close to the deal said many potential buyers were scratching their heads at Reliance Comm’s asking price, said to be around $3 billion, for assets it collectively purchased over the last seven years for less than $600 million combined.

“How could they possibly believe the thing is worth five times what it was four years earlier?” the source said.
Two other sources close to the deal said the company, controlled by billionaire Anil Ambani, has ruled out selling the assets to a local rival such as Bharti Airtel, due in part to the fierce rivalry among India’s top business families.

“The reason they don’t want to sell it to a Bharti is because if Bharti turns around the business and does a better job with it, it’s a big embarrassment for Reliance,” said one source.

Reliance Comm is looking to unload the business as revenue at its global division fell 12.5 percent in October-December from the previous quarter to 19.82 billion rupees ($428 million). Revenue at the unit rose 20 percent sequentially in the previous quarter.
With such figures hardly reassuring, some potential buyers have complained that Reliance Comm has been particularly parsimonious with the financial information it is willing to give out, and is being overly optimistic about its financial projections.

“They’re making you base your bids on supplying you with six or seven numbers,” said one of the sources. “They give you almost nothing to go on. No cash numbers. It’s very limited information.”

Source: http://indianbusinessnewsupdate.blogspot.com/2010/02/few-come-calling-for-reliance-comm.html

KG D-6’s gas has affected the LNG’s spot market. Power and Fertilizer company have diverted their attention towards KG D-6 for the gas supply. In last one month, in Hazira and Dahej terminals, not even a single cargo of LNG spot cargo has been arrived.

The spot market of Liquid Natural Gas (LNG) is shrinking. This could well be estimated from the fact that the business has faced beating in last one month at the Hazira LNG terminal of Shell and Dahej terminal of Petronet LNG. KG D-6’s gas has affected the LNG’s spot market to a great extent during the recent times. Reliance Industries’ (RIL) prolific KG D-6 is now producing 60 million standard cubic metre of natural gas every day (mmscmd) and has almost replaced the spot LNG demand in the country.

Most of the power and fertilizer companies have diverted their attention from the spot market of LNG to KG D-6. Supply of KG D-6 gas has largely replaced the demand of spot LNG. This is evident from the fact that before the allocation of KG D-6 gas, RIL itself was consuming almost 4 cargoes of LNG every month. According to the government sources, in last one month, in Hazira and Dahej terminals, not even a single cargo of LNG spot cargo has come.

Chief Executive Officer and Managing Director of Petronet Mr P Dasgupta said, “Today no one is making any LNG’s spot deal, the last LNG spot cargo was arrived in November 2009. The demand can only be there with advent of new energy and fertlizer companies. The present demand for the gas is being met by KG D-6 gas and the long term gas demand is being met by import of LNG by Petronet.”

According to the sources the future price of LNG is close to $8.2 per mmbtu, while KG D-6 gas is available at $4.20 per mmbtu. Till December last year even RIL was buying spot LNG from Hazira, every month for its Jamnagar Refinery. After it was allotted KG D-6 gas, no one is buying at spot LNG from Hazira. One of the officers of Shell India, also confirmed low spot LNG business, however, he refused to shares the figures.

Prior to KG D-6 gas supply, total gas supply in the country was staggering at around 110 mmscmd, including the long-term LNG sourced by PLL and Shell, as against the demand of about 175 mmscmd. Remaining gas demand was met through spot LNG. With the production of 60 mmscmd gas from KG D-6 field, the present demand of gas in the country is satisfied. However, the gas demand in the future is likely to rise again in the coming years as the domestic supply is unexpected to match the pace of growing energy demand of the nation.

Source: Contribution from Business Standard

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