NEW DELHI/MUMBAI: “This is probably Modi Sarkar’s message that it is against crony capitalism”. “At least now, there will be a level playing field”. “We won’t have to depend on these tactics anymore”. “It’s good for us foreign firms”.
These largely positive sentiments are coming from none other than senior executives of India’s mighty energy companies, which are squarely in the focus of a continuing police investigation into corporate espionage. These executives spoke on the condition they not be identified.
There’s of course nervousness. “How far will the government go?” and “who will be arrested next?” are questions uppermost on these companies’ mind. But even as they prepare for police and possibly judicial attention, these big companies, their top executives say, are preparing for new ground rules.
Some executives told ET the current investigation ends all hopes that Modi Sarkar will encourage government-business nexus of the kind that have flourished over the years.
These experienced corporate hands point out that police action against company spies and lobbyists comes from the same policy mindset that’s made companies bid high for coal blocks in a “clean auction”.
The government seems to want to clean up the policy set-up, an executive said. In an earlier regime, some companies would have bid according to information they received from secret government files and the bids would have been lower because some would have had an idea on tariff policy, this executive explained. But this time, the bids are happening “blind”, its executive said.
“PM Modi wants to send a clear message to the public that his government is against crony capitalism,” a corporate official observed.
“It may be a broad message to the corporate sector on the whole about certain things that the Modi government will not tolerate under any circumstance,” an oil company executive said.
A senior oil ministry official had told ET that the broad message from the government was that it would not tolerate “external influence” in policy making and that corporate interest would not be allowed to hurt national interest or public interest.
Many executives admit however it is hard for their companies to come to terms with the fact that a system that had become a way of life for a decade has suddenly collapsed. They say information leakage had become so deeply entrenched that any company that mattered made sure it got hold of critical, secret information. And middlemen came up to serve this market.
Indianpetro.com, at the heart of the dramatic episode of classified information reaching corporate hands, was a convenient way for companies to get information, one executive said.
(Source: The Economic Times, February 23, 2015)
THOSE WHO SUBVERTED SYSTEM WILL BE PUNISHED: OIL MINISTER DHARMENDRA PRADHAN
NEW DELHI: Against the backdrop of leakage of documents from his ministry, Oil and Petroleum Minister Dharmendra Pradhan today asserted that all those who subverted the system would be punished but made it clear that the government was not targeting any particular corporate.
He also said that his ministry is ascertaining whether standard operating procedures (SOPs) for handling confidential information was violated.
“Yeh kisi ek ke bare mein ya kisi ek ki khilaf nahi hai. Hamare ghar mein chori hui hai and humne competent system ko approach kiya is cheeze ko throughly investigate karne ke liye. (this is not about anyone (corporate) or against anyone. Our house has been burguled and we approached the competent authority for investigation,” Pradhan told PTI here.
“One thing is clear that this government will not allow anybody to subvert the system. This government is determined to punish those who break law,” he told PTI here.
His comments came as the probe by Delhi Police continued to expand with 12 people, including five executives of private companies, being arrested and raids being carried out at various places. Those arrested include two staffers of the ministry.
According to police, some of the accused allegedly used fake ID cards to gain access to Shastri Bhawan, the building that houses the Petroleum Ministry on the second floor, in the middle of the night to get hold of confidential documents and allegedly sold them to purported agents of certain corporates.
“Nobody is above law. Nobody will be spared. Law will take its own course,” Pradhan has said.
“Nobody will be spared… nobody can breach law, howsoever powerful he may be… We will not allow anyone to breach the system,” he said.
Asked if there were indications of involvement of senior officials including at the level of joint secretary, the Oil Minister said, “all this is speculation. I do not have any information… let the probe be completed.
Keys to as many as seven rooms including that of Special Secretary, two joint secretaries – and some directors dealing with sensitives issues like exploration policy, petroleum pricing and gas pricing were found to have been duplicated.
Pradhan refused to identify the specific instance that led to the complaint but said “we had discomfort (over a certain incident) and competent authorities were informed”.
While locks of all the rooms in the ministry have been changed, it is now strictly adhering to the Standard Operating Procedure (SOP) of handing criticial information.
“Any secret file or document has to be hand delivered or has to be sent in sealed envelop,” Oil Secretary Saurabh Chandra explained.
This as also other standard drills will be followed in letter and spirit.
“There is SOP. That has to be strictly adhered to, right from my office to down below,” Pradhan said.
Ministry is now looking into how the alleged thiefs could lay a hand over keys to seven rooms.
After arrest of five people — two Petroleum Ministry staffers and three middlemen — Delhi Police Commissioner B S Bassi had said action was taken on a tip off that two persons along with their associates were involved in “procuring, obtaining and stealing the official documents by trespassing into the offices of Ministry of Petroleum and Natural Gas at Shastri Bhawan on February 17.”
Police yesterday told a Delhi court that “national interest was taken for a ride” and talked about possibility of invoking Official Secrets Act.
(Source: Business Standard, February 23, 2015)
OIL INDIA ON SLIPPERY GROUND
After encountering a key resistance at Rs. 650 in September 2014, the stock changed direction. Since then, it has been on an intermediate-term downtrend. The short-term trend is also down.
While trending down, the stock decisively broke through a key support at Rs. 550 this January. It now tets a key support band between Rs. 490 and Rs. 500.
Indicators and oscillators in both the daily and weekly charts indicate bearishness. An emphatic fall can drag the stock down to the next significant long-term support in the band between Rs. 440 and Rs. 450.
Hence, investors looking for a long-term buy can wait and buy at the long-term support band with a stop-loss at Rs. 425. An upward reversal can take the stock higher to Rs. 550.
If it breaks past this level, it will alter the downtrend and the stock can rise to Rs. 570, Rs. 600 and then to Rs. 650 in the long term.
(Source: Business Line, February 23, 2015)
SHELL LAUNCHES BIKE LUBES FROM NATURAL GAS
MUMBAI: The world’s largest lubes player Shell Lubricants has launched its next generation bike oil, Shell Advance Ultra, developed from natural gas, in the domestic market.
The company said new lube is produced using its advanced ultra pure-plus technology through a revolutionary gas-to-liquid process that converts natural gas into a crystal-clear base oil with none of the impurities found in crude oil.
Launching the new lubes at Asia’s biggest biking festival, India Bike Week, held over the weekend in Goa, Shell Lubricants India Managing Director Nitin Prasad said the new lube is a revolutionary motorcycle oil which is the result of intensive R&D.
“With an ever increasing number of motorcycles on our roads, we believe Shell Advance Ultra will improve the riding experiences of bikers, given varied climatic and geographical conditions in the country.
“With the new lube, Shell aims at providing bikers a clean bike engine with better protection and an optimised, more efficient power transmission that can further contribute to their perfect riding experience,” said the company’s Chief Marketing Officer Mansi Tripathy.
Shell’s portfolio of lubes brands includes Shell Helix, Pennzoil, Quaker State, Shell Rotella, Shell Tellus and Shell Rimula.
The company manufactures base oils in eight plants and blends base oils with additives to make lubes in over 50 plants spanning over 100 countries.
(Source: The Economic Times, February 23, 2015)
UBI NO TO HALDIA PETRO LOAN
Calcutta: City-based United Bank of India (UBI), a member of the consortium of lenders to cash-starved Haldia Petrochemicals Ltd (HPL), will not extend any further financial assistance to the company.
“HPL needs funds to sustain operations, which have started lately after a period of prolonged closure. But we are not going to extend further assistance to the company,” an UBI official said, adding that the bank has loaned Rs 275 crore to Haldia Petro .
Senior officials of the bank said the petrochemical company had turned into a non-performing asset (NPA) and the decision to discontinue credit was in view of the restrictions imposed on the lender by the Reserve Bank of India on account of its high NPA level.
In 2013, the apex bank had imposed restrictions on the UBI, particularly on lending to low-rated corporate houses, because of high bad assets on its books.
United Bank’s gross NPA had touched 10.82 per cent of its advances as of December 2013 and rose to 12.03 per cent at the end of the third quarter of the ongoing financial year.
HPL is running at 50 per cent of its installed capacity in the absence of credit from banks such as the UBI.
It is far lower than what the present management, under the leadership of The Chatterjee Group (TCG), had predicted when the plant resumed operations earlier this month after a gap of seven months.
Industry observers said HPL would have to ramp up production if it wanted to avoid a situation it faced before shutdown – low production leading to operational losses that ate into the working capital.
Bengal’s showpiece project, which was closed since July 2014, reopened its plant after promoter TCG provided Rs 100 crore as margin money and the State Bank of India offered loans between Rs 500 crore and Rs 600 crore.
HPL needed Rs 900 crore to resume production and Rs 2,300 crore for financial restructuring.
The Reserve Bank has allowed the UBI to lend up to Rs 200 crore to AAA rated companies.
However, the bank, which is already reeling under the huge burden of NPAs, is wary of offering fresh credit unless there is recovery.
The lender has asked the central bank to ease restrictions on account of its improving operating performance.
(Source: Telegraph, February 23, 2015)
US OIL-WORKER UNION WIDENS BIGGEST PLANT STRIKE SINCE 1980
San Francisco/Houston: The United Steelworkers, which represents 30,000 US oil workers, called on four more plants to join the biggest strike since 1980 as talks dragged on with Royal Dutch Shell Plc, negotiating a labour contract for oil companies.
The USW, with members at more than 200 refineries, fuel terminals, pipelines and chemical plants across the US, asked workers late on Friday at Motiva Enterprises LLC’s Port Arthur refinery in Texas, the nation’s largest, to join a nationwide walkout on Saturday, and issued notices for three other plants to go on strike in 24 hours.
This brings the work stoppage—which began on 1 February at nine sites from California to Texas and expanded to two BP Plc refineries in the Midwest a week later—to 12 refineries and 3 other facilities. The union has rejected seven contract offers from Shell, which is representing companies including Exxon Mobil Corp. and Chevron Corp.
An agreement would end a strike at US plants that account for almost 20% of the country’s refining capacity. It’s the first national walkout of US oil workers since 1980, when a work stoppage lasted three months. The USW represents workers at plants that together account for 64% of US fuel output.
“The industry’s refusal to meaningfully address safety issues through good faith bargaining gave us no other option but to expand our work stoppage,” said USW international president Leo W Gerard in a statement late on Friday. There are no talks scheduled for Saturday, according to the USW.
Ray Fisher, a spokesman for The Hague, Netherlands-based Shell, said on Saturday in an email that Shell was “extremely disappointed” that the USW issued additional strike notices. It sets the “wrong tone” for both parties to move forward, he said.
The USW has been asking for tougher measures to prevent fatigue and to keep union workers rather than contract employees on the job, statements posted on the group’s website show. The union said on Thursday that Shell’s seventh offer failed to address safety concerns “in any sort of meaningful or enforceable way.”
As the oil workers strike expanded, West Coast dockworkers and their employers ended their nine-month standoff with a five- year contract deal, averting a shutdown of 29 ports that could have cost the US economy $2 billion a day.
The USW previously called strikes at: Tesoro Corp.’s plants in Martinez and Carson, California, and Anacortes, Washington; Marathon Petroleum Corp.’s Catlettsburg complex in Kentucky and Galveston Bay site in Texas; Shell’s Deer Park complex; LyondellBasell Industries NV’s Houston facility; and BP Plc’s Whiting and Toledo refineries in the Midwest.
In addition to Port Arthur, Motiva’s refineries in Convent and Norco, Louisiana, and Shell’s chemical facility in Norco received 24-hour notices. Motiva is a joint venture between Shell and Saudi Arabian Oil Co.
The Port Arthur plant was running at about 50% of capacity, with units including a hydrocracker, a coker, a hydotreater and a fluid catalytic cracker shut for repairs, according to Troy Barbay, the USW workmen’s committee chairman and Hoot Landry, the USW staff representative at the site. The facility’s largest crude unit was running at reduced rates, Barbay said.
More than 5,200 workers have walked out, USW statements show. United Steelworkers members operate refinery units, perform maintenance and work in labs at the plants.
The USW and Shell began negotiations on 21 January amid the biggest collapse in oil prices since 2008, driven largely by surging output from US shale formations that cut oil prices by 49% in the second half of 2014.
Refiners in the Standard & Poor’s 500 have tripled in value since the beginning of 2012, when the steelworkers last negotiated an agreement. Marathon and Tesoro went on that year to take their place among the 10 best performers in the S&P 500 Index.
The national agreement, which addresses wages, benefits and health and safety, serves as the pattern that companies use to negotiate local contracts. Individual USW units may still decide to strike if the terms they’re offered locally don’t mirror those in the national agreement.
(Source: Mint, February 23, 2015)