New Delhi, February 19
Reliance Industries Ltd (RIL) and the United Kingdom’s oil and gas exploration company BP today announced an oil and gas partnership in which BP will pay $ 7.2 billion to acquire 30 per cent equity stake in RIL’s oil and gas blocks. These payments and combined investment could amount to $ 20 billion. The companies termed the partnership as ‘historic’ and ‘transformational’. Mukesh Ambani, chairman and managing director RIL and Robert Dudley, BP Group Chief Executive, signed the deal in London.

According to a statement, the partnership across the full value chain of oil and gas comprises BP taking 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the KG D6 block. The two companies will also form a 50:50 joint venture for the sourcing and marketing of gas in India. The joint venture will also try and accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.

BP will pay Reliance Industries Ltd an aggregate consideration of $7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to $1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to $20 billion.

BP’s confidence in India is evident from the fact that the transaction constitutes one of the largest foreign direct investments into India, the statement said.

The partnership will combine BP’s world-class deepwater exploration and development capabilities with Reliance’s project management and operations expertise.

Mukesh Ambani said: “We are delighted to partner with BP, one of the largest energy majors and one of the finest deep water exploration companies in the world. This partnership combines the skills of both companies and will be focused on finding more hydrocarbons in the deep water blocks of India and significantly contribute to India’s energy security.”

For BP, Reliance is a natural partner in India, given its strong position in the Indian market. “This partnership meets BP’s strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets,” said Carl-Henric Svanberg, chairman, BP.

The 23 oil and gas blocks cover approximately 270,000 sq km. This will make the partnership India’s largest private sector holder of exploration acreage.

New Delhi, February 21
The CBI today questioned Videocon group Chairman Venugopal Dhoot, and his brother and Rajya Sabha MP Rajkumar Dhoot in connection with the probe into allocation of Spectrum in 2008.

The duo were called to the CBI headquarters this afternoon and questioned for over seven hours and confronted with documents on increasing their share capital from Rs 1 lakh to Rs 150 crore, official sources said here today.

Sources said that statement of their Company Secretary, submitted to the Department of Telecom, claiming change in the share capital, was also shown to them and asked to explain the minutes of the meeting of an extra-ordinary general body of the company held on August 27, 2007.

The questioning of the duo was part of the CBI questioning all the chiefs of the nine companies which were allocated Spectrum in 2008. Videocon was allocated a start-up Spectrum of 4.4 MHz in all circles except Delhi. The company could not be contacted for comments.

The Comptroller and Auditor General in its report had alleged that Datacom Solutions, which later changed to Videocon Telecommunications, while submitting its application for 22 licences on August 28, 2007, had "made a false claim of the paid-up capital of Rs 150 crore through company secretary although documents attached with indicated that the authorised share capital of the company as Rs 1 lakh only".

Since the requirement of the requisite amount of the paid -up capital was an important eligibility criterion, their applications ought to have been rejected forthwith. — PTI

Chandigarh, February 21
Textile industry did recover smartly from the global recession. However, this year sky-rocketing cotton prices have put a lot of pressure on profit margins of the textile industry. The industry expects a slew of concessions from the government.

The wish-list includes introduction of a technical upgradation fund for textile engineering; doing away with Excise duty on textile machines; allowing CENVAT credit on fuel used for power generation and abolition of Customs duty on man- made fibre.

Ashish Bagrodia, President, Northern India Textile Mills Association (NITMA), said that association hoped that the 10 per cent Excise duty on man-made fibre would be reduced and the Customs duty on man-made fibre would be abolished.

“There is a mandatory Excise duty of 10 per cent on all man made fibre. Due to rising prices of fibre, the landed cost of all man-made fibre has increased substantially. We hope that this is reduced to at least 4 per cent to boost consumption. We also hope that the Excise duty on domestic procurement of capital goods under EPCG licences should be done away with, and special additional duty be reduced to 1 per cent (equivalent to CST) from 2 per cent now,” he said. He demanded exemption from service tax export-related services.

Ajit Lakra, president, Ludhiana Knitwear Association, hoped that the Budget would allow the textile industry some relief in the form of abolition of Excise duty and Customs duty on textile machines/ spares.

“China’s growth in the textile sector has been possible because of a strong manufacturing base for the textile machinery manufacturing industry. Here, too, government support can help us capture a major share in the global textile market,” he said. Lakra also hoped that the TUFS for textile sector is extended for 5 years industry dues are cleared on time.

Satish Bagrodia, MD, Winsome Textile Industries, hoped that the Budget this year would abolish Customs duty on speciality fibres like nylon, bamboo, linen etc, making the fibre available to textile industry at international prices. He also hoped for a reduction in interest rate on working capital for cotton to 7 per cent.

New Delhi, February 21
In its pre-Budget recommendations on direct taxes, Audit, Tax and Advisory services network KPMG has said a reduction in tax rates seems unlikely taking into account the spiraling inflation and budget deficits.

KPMG said the good news is that since the government is committed to lower taxes in the Direct Taxes Code (DTC), it probably will not increase tax rates either.

Personal income tax rates are at a maximum of 30 per cent and corporate tax rates are also at 30 per cent.

It is accepted that lower tax rates set into motion a chain reaction-when people are left with more disposable income, savings and consumption rise, it leads to a more buoyant economy and in turn increases income and fosters increased tax compliance and collection. However, given the budgetary deficits, it may not happen in the Budget.

KPMG says there might be some measures on cross border taxation to check treaty shopping as companies seek favourable tax environments. The government might bring in General Anti-Avoidance Regulations (GAAR) which allow treaty override or separate provisions that pierce the corporate veil.

Currently, the Indian government is working to renegotiate Double Tax Avoidance Agreements (DTAA) to bring back money from tax havens. The government is already working to renegotiate the Mauritius DTAA to tighten capital gains tax exemption in the DTAA.

KPMG also says that the tax holiday for IT and software companies under Section 10 A/B should be continued for another three years. The government had introduced a sunset clause in which the tax holiday will not be available from fiscal year 2011-12 onwards. 

Tripoli, February 21
Global oil production companies prepared to fly out international staff from Libya on Monday as violence spread in Africa's third-largest oil producer.

Wintershall, the oil and gas exploration arm of BASF, prepared to shut down its output in Libya and on Monday it was winding down Libyan oil production of as much as 100,000 barrels per day (bpd). Companies including Royal Dutch Shell and OMV said they were withdrawing expatriate staff.

Norway's Statoil, Austria's OMV and Anglo-Dutch Shell acted as scores of anti-government protesters were killed in Benghazi and unrest spread to the capital Tripoli over the weekend. Wintershall's move would amount to a sizeable drop in supply from Libya, most of whose oil exports flow to Europe and which pumps about 1.6 million bpd of crude oil, making it Africa's third-largest producer after Nigeria and Angola. — Reuters

New Delhi , February 21
Honda Siel Cars India (HSCI) today brought in an upgraded version of its Accord luxury sedan with enhanced features. The new version is priced between Rs 19.60 lakh and Rs 25.41 lakh.

"The new Accord has more style, more comfort and more sophistication than ever before. A bold and aggressive look and striking interiors will make it the most commanding premium sedan on Indian roads," the company said.

The inside wooden panel makes it look even more exquisite. The new Accord has an advanced improved audio system for improved usability and readability and Jackknife key.

"Our belief in constantly upgrading our products based on customer feedback prompted this launch of an upgraded version of the 'Accord' with unique styling in combination with luxurious features," Honda Siel Cars India ( HSCI )) President and CEO Takashi Nagai said in a statement.

The 'Accord' has registered sales of over 25,000 units since its launch in India. — TNS

BRIEFLY

Unitech to build township project at Rewari
New Delhi: Unitech Ltd, the country’s second largest realty firm, will develop an integrated township at Rewari in Haryana with an estimated construction cost of Rs 55 crore.Unitech had recently announced that it will launch 10 million sq ft of saleable area in the next four months, at an estimated construction cost of Rs 1,500-2,000 crore. Sources said the company would build 350 housing units at Rewari in the first phase as part of its strategy to utilise the land bank in smaller cities. The 83-acre project would be developed under mid-income housing brand 'UniHomes'. The company would sell majority of these units in a price range of Rs 20-30 lakh, sources said, adding that construction work is expected to commence in the next two-three months. — PTI

Anand Mahindra offers to resign from NACIL board
New Delhi: Mahindra & Mahindra Vice-Chairman, Mr Anand Mahindra, on Monday offered to resign from the board of NACIL that runs state owned carrier Air India, citing conflict of interest. In a letter to Civil Aviation Minister, Mr Vayalar Ravi, he sought permission to step down from the board of National Aviation Company of India Ltd (NACIL). “The recently concluded Aero India 2011 at Bangalore has thrown up business opportunities for my company Mahindra & Mahindra Ltd, which was a potential conflict of interest and thereby throws up questions of good board practice. Hence my request,” the letter said. In March 2010, Mahindra along with Air Chief Marshal, Mr Fali H Major (Retd), FICCI Secretary General, Mr Amit Mitra, Ambuja Realty Group Chairman, Mr Harsh Neotia were inducted as independent directors. — PTI