HPCL, ONGC merger moves Cabinet, but deal may still take 1 year after nod
The Department of Disinvestment has reportedly issued a Cabinet note on the proposed amalgamation of the state-run refiner Hindustan Petroleum Corp Ltd with the giant oil explorer Oil and Natural Gas Corp, amid news reports of the Prime Minister’s Office’s disappointment on the slow progress in the government’s quest to create a huge energy PSU of the global scale. However, a deal may still not be immediately in sight, as the handover of HPCL to ONGC may take one year even after the government securing the Cabinet nod, hindi news channel CNBC Awaaz reported citing unidentified sources. Earlier last week, ET Now had reported that the PMO, which is firm on merging the two oil companies, had expressed unhappiness with the slow pace of movement on the proposed sale of HPCL to ONGC. CNBC Awaaz reported that the government will seek an in-principle approval from the Cabinet for sale of 51% equity stake in HPCL to ONGC. It added that in the process of handover of HPCL’s management control to ONGC, the disinvestment will be done via a strategic stake sale. As has been reported earlier, the government is said to be planning to combine HPCL with ONGC by December this year by selling its 51.1% stake in the former to the latter for $4.5 billion (about Rs 29,000 crore). The Ministry of Petroleum and Natural Gas is learnt to be in favour of adopting a subsidiary model for combining the two oil PSUs instead of merging the companies, making ONGC the parent company of HPCL, the reports had said then, adding that the government would decide final model of combining in few months. Further, the government will form a Group of Ministers (GoM) to frame guidelines, price and timeframe for the share sale, CNBC Awaaz reported, adding that Finance Minister Arun Jaitley, road minister Nitin Gadkari and oil minister Dharmendra Pradhan will be part of the proposed GoM. A vertically integrated oil company would be better able to absorb the fluctuations in the global crude oil prices, as when the exploration unit will suffer from falling prices, the refining unit will benefit, and vice versa. Earlier in February, Finance Minister Arun Jaitley proposed setting up an integrated oil PSU (public sector undertaking) by merging companies with synergy in order to match the scale of the global oil giants. India’s largest oil and gas exploration and production company ONGC said then that the proposed integration of oil PSUs will be a big positive for the sector as an integrated company is well positioned to handle volatility in crude oil prices. Negotiation power of a large oil company is better with its business partners, it had said. Jake Gardiner Womens Jersey
Renewable energy boost: 4 Indian solar, wind power firms plan to raise $2.5 billion in offshore bonds
Four Indian renewable power producers are planning to raise up to $2.5 billion via dollar bonds offshore because of caution among domestic lenders, banking sources said. In addition to the four solar and wind power firms, a fifth company that invests in renewable projects, Adani Group, has raised $250 million via a loan but has yet to publicly announce the borrowing, the sources told Reuters. A source working with one of the bond issues said foreign borrowing was attractive because state banks were reluctant to lend due to existing bad loans to the power sector, while domestic banks worried about falling tariffs for solar power. Foreign investors have been attracted to the sector by India’s commitment to expand renewable power capacity, with plans to invest close to $150 billion to meet its 2022 targets, analysts and bankers said. New York-listed Azure Power Global Ltd, which has projects in the states of Rajasthan, Punjab and elsewhere, planned to raise $500 million via a dollar issuance, two bankers said. Continuum Energy, a firm backed by U.S. bank Morgan Stanley that has projects in the southern state of Tamil Nadu and western state of Gujarat, planned to raise $400 million, the two bankers added. Wind and solar power firm Greenko Group, backed by Singapore sovereign wealth fund GIC and Abu Dhabi Investment Authority (ADIA), planned a $1 billion issuance to refinance a dollar bond raised three years ago, three bankers said. IL&FS Energy, which has thermal and solar power projects, was considering a dollar bond issue worth $500 million, said a source with knowledge of the deal but not involved in the process. The fifth firm, Adani Group, which is controlled by billionaire Gautam Adani, has already raised $250 million via an offshore loan to invest in its solar power project in Karnataka, one of the bankers said. The companies did not immediately respond to requests for comment. Solar tariffs hit a new low in May when SBG Cleantech, which has SoftBank Chairman Masayoshi Son as one of its promoters, bid 2.44 per unit for building a solar park in the western state of Rajasthan. Solar power players bid for the right to build projects on parcels of land that are set aside by the government. The player agreeing to sell the power it generates at the lowest price per kilowatt hour, are leased the land at a nominal price. Despite the decline in tariffs, overseas investors scouting for higher yields are keen on such dollar bond issues, the bankers said, adding many were drawn by Indian Prime Minister Narendra Modi’s commitment to boosting renewable power output. India, a signatory to the Paris climate accord, has an ambitious plan to raise renewable energy capacity to 175 gigawatts (GW) by 2022 from a current capacity of 57 GW. Abhishek Tyagi, senior analyst at Moody’s, said India would have to invest “close to $150 billion to meet its 2022 renewable energy targets”, adding much of that was expected to come from foreign financing due to constraints among domestic lenders. Ndamukong Suh Authentic Jersey
ONGC Videsh to acquire 30% petroleum participating interest in Namibia
ONGC Videsh has signed definitive binding agreements with Tullow Namibia Limited (Tullow), a wholly owned subsidiary of Tullow Oil plc, on 28th June 2017 for acquiring 30 percent participating interest in Namibia Petroleum Exploration License 0037 for Blocks 2112A, 2012B and 2113B and related agreements (License) out of Tullow’s existing participating interest of 65 percent in the license. Pancontinental Namibia (Pty) Limited with 30 per cent Participating interest and Paragon Oil and Gas (Pty) Limited with 5 per cent participating interest are other partners in the License. Tullow is the operator of the License and shall continue to remain operator after acquisition by ONGC Videsh. The acquisition is subject to satisfaction of customary conditions precedents including approvals of Namibian regulatory authorities and joint venture partners. The completion of the present transaction would mark ONGC Videsh entry in Namibian offshore and is consistent with its strategic objective of adding high impact exploration and production assets to its existing E&P portfolio. Johnathan Joseph Authentic Jersey