04 Sept 2009;economictimes.indiatimes.com:Rajeev Jayaswal:NEW DELHI: Cairn India has agreed to pay an estimated $9 a barrel levy on crude oil produced from its Rajasthan fields, ending a dispute involving the Indian arm of the UK-based Cairn Energy, its equity partner ONGC and the Union government, a petroleum ministry official said. “Cairn said it will pay the cess under protest,” he said, requesting anonymity. Cairn India, the operator of the Barmer Basin oil field in Rajasthan that holds a 70% participating interest in the project, will bear a burden of around $1 billion over the life of the project, which could impact its bottom line. A Cairn India spokesman neither confirmed nor denied the development. “We are in discussions with the government of India on this issue,” he said. Cairn India, which made the country’s largest onland oil discovery in Barmer in 2003, started production from the field last month. The crude it produces will fetch a lower price compared with the oil produced at ONGC’s Bombay High or Reliance Industries’ MA oilfield due to its high sulphur content. The production will be ramped up to 175,000 barrels of oil per day in two years. Oil from Rajasthan will account for over 20% of India’s domestic oil production. The production sharing agreement, the legal contract between the oil producing company and the government, is silent as to who should bear the cess burden. Earlier, Cairn had threatened to challenge the government’s demand for a cess of Rs 2,500 per tonne at a London-based arbitration forum. Commenting on the cess issue in January at a conference call, Cairn India CEO & managing director Rahul Dhir had said, “We have been in discussions with the government to see if there is a resolution, in the absence of that we will look at arbitration.”
04 Sept 2009;business-standard.com:Chennai: Ford India has expanded the capacity of its Chennai plant ahead of the production of its new small car. Speaking to reporters, Michael Boneham, president and managing director, said around 70 per cent of the proposed $500 million (around Rs 2,000 crore) investment has been utilised for expansion of the capacity of its facility and building of an integrated diesel engine manufacturing facility. It has increased the plant footprint to 353 acres from 250 acres and introduced a 30-acre supplier park to house automotive components and parts. The company has planned to localise around 85 per cent of its components. The company has also increased automation in the factory by 30 per cent and has installed 92 robots in the facility that was previously in zero-automation mode. “The plan is to increase production to 330 units per shift by next year, compared to the present 150 per day. In this way, we can double the installed capacity by 100,000 units per year,” he said. The engine manufacturing facility will start operations next year, added Boneham. On the small car, he said the company would focus on domestic markets before starting to export it. The Chennai plant will also be the first volume car plant of Ford globally to introduce the new paint process called Three-Wet High, and the company plans to launch the new ‘Endeavor’ with this process. The process increases durability and is scratch-resistant, according to Tom Chackalackal, vice-president, manufacturing.
03 Sept 2009;hindustantimes.com:Suprotip Ghosh:Buoyed by the success of its 100 cc motorcycle relaunch, Bajaj Auto Limited (BAL), the country’s second largest maker of motorcycles and scooters, will expand its portfolio of 100 cc motorcycles to include new variants in the coming six months. The company reintroduced the 100 cc motorcycle to its portfolio in July after year-on-year sales for the company fell drastically, while number one motorcycle maker Hero Honda continued adding marker share to its kitty. However, Bajaj has repeatedly said that the company had always wanted to provide value for money to the customer, and not stay away from the 100 cc market. The company has sold 48,000 units of its new 100 cc Discover motorcycle in August, the first full month of sales since the company restarted its foray into the 100 cc segment, said Rajiv Bajaj, managing director, BAL. “We will introduce new variants and models in the 100 cc segment once the sales of the Discover reaches about 80,000 a month and stabilises. The challenge is to sustain the numbers after the festive season is over,” said Bajaj. The festive season starts in September and continues till early November. Discover, which BAL is trying to turn into the company’s flagship model at the lower end, has sold a cumulative 65,000 units this month including the 135 cc variant, Bajaj said. The company’s primary breadwinner is still the Pulsar, which is the dominant player in the 150cc and above segment of motorcycles with close to half the market share. The foray is part of the company’s future plans at revamping and launching a slew of new models and innovations. BAL has hired Edgar Heinrich, an engineer from BMW motorcycles to head its design function, the department that would design new motorcycles and models.
03 Sept 2009;timesofindia.indiatimes.com:LONDON: Energy giant BP has made a 'giant' oil discovery in the Gulf of Mexico after drilling one of the industry's deepest-ever wells, it said Wednesday, in a further boost for crude supplies. "BP announced today (Wednesday) a giant oil discovery at its Tiber Prospect (well) in the deepwater Gulf of Mexico," the company said in a statement. "The Tiber well was drilled to a total depth of approximately 35,055 feet (10,685 metres) making it one of the deepest wells ever drilled by the oil and gas industry," it added. BP's discovery comes as the industry this week marks 150 years since crude was first drilled and days after Scottish group Cairn Energy began pumping out oil in India as exploration in the North Sea dwindles. The discovery is larger than BP's Kaskida discovery in the same geological area three years ago, which contains around three billion barrels of oil. Peter Hutton, an analyst at NCB Oils, said BP's announcement would be seen as "confirmation of BP's strong focus on Gulf of Mexico" exploration. Energy groups are increasingly drilling in the Gulf of Mexico and elsewhere as North Sea oil fields dry up. Cairn Energy on Saturday began pumping crude from a vast oilfield in the Indian desert state of Rajasthan that is set to increase India's crude output by 20%. Cairn's field - the country's largest onland field and the biggest find in over two decades - will increase India's oil output by a fifth once it hits its initial peak production target of 175,000 barrels a day in 2011. This is in contrast to the North Sea, where expenditure on exploration was down 70% at the start of 2009 compared to a year earlier, according to industry body Oil & Gas UK. In the Gulf of Mexico BP operates Tiber, owing to its 62% stake in the well.
03 Sept 2009;business-standard.com:T E Narasimhan:Chennai: Having threatened to do so for months, Hyundai Motor said it has finally decided to move production of the premium hatchback i20 model for the European markets to Turkey, from its Sriperumpudur facility near Chennai. The Chennai facility will continue to service Indian and non-European markets. In July 2009, Hyundai India’s Managing Director H S Lheem had said the company was planning to move production to Turkey, the Czech Republic or Slovakia. Lheem had explained that exports from India to Europe had become uncompetitive because the country did not have free trade agreements with European countries. Recent labour problems in the factory — the workers went on strike between April 20 and May 7 and again from July 23 to July 28 against a wage settlement agreement — also prompted the decision. Confirming the development, Hyundai Motor spokesperson Rajiv Mitra said the company will manufacture the i20 from its unit which was set up by Hyundai Assan, a joint venture between Hyundai Motor and Turkish industrial conglomerate Kibar Holding in Izmit, Turkey. The plant produces the Verna and Lavita models and has an annual capacity of 100,000 units. The company plans to produce 70,000 to 80,000 units of the i20 from the Turkish plant. According to reports, Hyundai is expected to invest $75 million (around Rs 375 crore) in the Izmit plant. Meanwhile, the Sriperumpudur facility has set a target to manufacture 50,000 units of the i20 for the Indian market and 20,000 units for non-European markets including Vietnam, Australia, New Zealand, Latin America and other South East Asian countries. The facility currently produces around 12,000 i20s both for export and domestic market.
02 Sept 2009;business-standard.com:Nevin John & Pb Jayakumar:Mumbai :Reliance Industries (RIL), India’s largest private sector firm by market capitalisation, is planning a foray into the global pipeline construction business with a bid for building Rs 3,000 crore worth of oil and gas pipeline in Mexico. The company, which built a pipeline worth Rs 20,000 crore from Kakinada in Andhra Pradesh to Bharuch in Gujarat for transporting natural gas from its Krishna-Godavari (KG) basin, will be scouting for opportunities abroad, as its pipeline division itself has the size of a mid-cap company, said an executive who did not wish to be identified. Mexico’s state-owned oil company, Petroleos Mexicanos, had recently announced it would take bids from international firms to build a $600 million, 230 km, natural gas pipeline to increase transmission capacities in the central and western parts of the country. The award will go to the lead bidder within six months. An RIL spokesperson declined to comment on the developments. However, the executive said, “We are looking to cash in on our construction and engineering expertise. The successful completion of our first project gives us confidence to grow the business separately.” RIL has also expressed its desire to build two pipelines in India, which are yet to get the government’s nod. The two projects from Kakinada, to Tuticorin in Tamil Nadu and to Bardhaman in West Bengal, will require the same investment incurred for the first pipeline, said other company sources. RIL’s first pipeline, spanning 1,440 km, had become operational five months earlier, along with the beginning of gas production from the KG basin. The pipeline, which is the country’s longest for gas transportation, was constructed in three years. More than 1,500 workers, including skilled ones from China, had worked to lay the pipeline, coordinated by offices in Mumbai and Kakinada.
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