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Saudis Set to Select Firms for Gas Projects
The Wall Street Journal, 05/14/01 Cheney task force seeks input from interest groups Associated Press Newswires, 05/14/01 COMPANIES & FINANCE UK: Independents drill deep to strike rich seams: A new generation of smaller oil companies is emerging; a group that has discovered how to be competitive, writes David Buchan: Financial Times; May 14, 2001 Bush energy team covers all the bases Chicago Tribune, 05/14/01 QATAR: UAE's Dolphin may seek new partners if Enron exits. Reuters English News Service, 05/14/01 UAE: UPDATE 1-Saudi expected to name gas race winners on Tuesday. Reuters English News Service, 05/14/01 Saudi Oil Council To Meet Tue On Gas Projects -Sources Dow Jones Energy Service, 05/14/01 RFID chip will help speed up business The New Straits Times, 05/14/01 India: Godbole panel report may suggest MSEB bifurcation Business Line, 05/14/01 Tertiary will be primary Business Standard, 05/14/01 Acegas shares, potential for growth (Acegas, le potenzialita di crescita del titolo) La Repubblica, 05/14/01 Roundabout to the Oval Office The Washington Post, 05/14/01 Largest LNG 13 Conference Opens Today Korea Times, 05/14/01 International Saudis Set to Select Firms for Gas Projects By Bhushan Bahree Staff Reporter of The Wall Street Journal 05/14/2001 The Wall Street Journal A16 (Copyright © 2001, Dow Jones & Company, Inc.) NEW YORK -- After more than two years of talks, Saudi Arabia is about to announce its choice of international oil companies for three huge natural-gas projects that will mark a reopening of the kingdom's energy sector to Western investment, a quarter century after it was nationalized. But the announcement, and the signing of memorandums of understanding early next month, will mark only the beginning of serious negotiations on terms for the three ventures, which together will need investment of some $25 billion. It will be months before final agreements are signed. "We expect to have an agreement -- a final agreement -- signed somewhere at the end of the year, or, hopefully, the first quarter of next year," said Saudi Oil Minister Ali Naimi in an interview last week. Saudi Arabia's 11-member Supreme Petroleum Council is expected to meet today to endorse the companies recommended by a ministerial committee led by Foreign Minister Prince Saud al-Faisal. In the following week, Saudi Arabia is expected to communicate its decision to the oil companies from both sides of the Atlantic that have been vying for a role in the three projects. By the end of the month, the chosen consortium members and Saudi officials are expected to agree on which three companies will lead the projects. This will be a prestigious role in a country that is the world's largest oil exporter, has more than a quarter of the world's oil reserves and has the fifth-largest reserves of natural gas. As with any negotiations for such huge projects, industry rumors abound. All three so-called oil supermajors -- Exxon Mobil Corp., Royal Dutch/Shell Group and BP PLC -- have been mentioned as project leaders, particularly for the plum Ghawar project, named after the world's largest onshore oil field, whose environs are expected to yield large volumes of gas. The Ghawar project, known as Core Venture 1, is projected to require about $15 billion in investment. Core Venture 2 is on the Red Sea coast. The third project is in Shaybah, a recently developed oil field in the kingdom's Empty Quarter, a southeastern region bordering the United Arab Emirates. The companies say they have no idea who will be named to the consortia, or who the Saudis will choose from a short list of 11 companies -- Exxon Mobil, Shell, BP, Chevron Corp., TotalFinaElf SA, ENI SpA, Enron Corp., Occidental Petroleum Corp., Marathon Oil Canada Inc., Conoco Inc. and Phillips Petroleum Corp. -- to lead each project. But they all have their hopes. "We would be very disappointed if we are not the lead operator" for the Shaybah project, said Archie Dunham, Conoco's chairman and chief executive. Since Saudi Crown Prince Abdullah invited major oil companies to return to the kingdom in October 1998, negotiations have focused on such broad issues as the scope of the projects and their integrated nature -- from exploration and production of gas to the making of petrochemicals and electricity -- as well as the notion that the companies will need adequate returns on their investment. Soon, the project leaders will have to start the bargaining on such issues as the roles to be played by national champions Aramco and petrochemicals company Saudi Basic Industries Corp. --- Alexei Barrionuevo in Houston contributed to this article. --- Population Pressure Saudi Arabia is opening up its energy sector, in a bid to bolster the economy as population grows -- Population 21.3 million (growing over 3.5% per year) -- Unemployment rate* 27%-35% of males -- Real GDP Growth Rate 7.6% -- Oil Production 9.3 million barrels per day -- Natural-Gas Reserves 204.5 trillion cubic feet -- Natural-Gas Production/Consumption 1.68 trillion cubic feet *Unofficial estimate for 1999 Note: Figures are estimates for 2000 except natural-gas production, which is for 1999 Source: U.S. Energy Information Administration Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Cheney task force seeks input from interest groups By SHARON THEIMER Associated Press Writer 05/14/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. WASHINGTON (AP) - The White House team developing a national energy plan has met with more than 130 interest groups, from environmentalists and unions often at odds with Republicans to major Bush supporters given private sessions with Vice President Dick Cheney. The vice president, Cabinet secretaries and others on a special task force have solicited ideas behind closed doors, hoping the privacy would encourage a free exchange of ideas. The White House has declined to provide names of participants - even to Congress. But interviews with participants detail a massive outreach where diverse interests have met with task force executive director Andrew Lundquist. Cheney's time has been reserved for meetings with more select participants such as power wholesaler Enron Corp. and the Edison Electric Institute, both GOP donors. Houston-based Enron is the world's top buyer and seller of natural gas and electricity. "The way the task force is set up, they don't have the staff or time to have a huge host of companies come through the door. They have told us to work through our associations to the extent we can," said Don Duncan, vice president of government relations for Phillips Petroleum Co. Participants said the meetings, typically 20 minutes to 45 minutes, included about a dozen to 100 interest group members and a few task force members and staff. No details were disclosed. Instead, administration representatives summarized the nation's energy problems or listened as groups briefly offered background and proposals. Many sent detailed materials to the task force outlining their priorities. At a half-hour meeting in late March with White House strategist Karl Rove and Bush economic adviser Larry Lindsey, nuclear energy executives tried to make sure the two knew about the production records the industry has set over the past few years. At one point, Rove asked if anyone was looking to build a nuclear power plant. An executive with Exelon replied that his company was thinking about it, meeting participants said. Energy Secretary Spencer Abraham has attended several meetings, including one with Teamsters President James Hoffa and an hourlong session in California with Democratic Gov. Gray Davis, who contends the administration has done little to help the power-strapped state. Like other governors, Davis was asked to provide one page on the state's power crisis, including a description of the problem, an anecdote about it and possible solutions. "They're asking for a one-page memo on possibly the biggest crisis ever affecting the state, with a massive ripple effect for the nation," Davis spokesman Steve Maviglio said. "I think it demands more attention than a one-page memo." Cheney spokeswoman Juleanna Glover Weiss said the task force has been studying the California problem almost daily. At a meeting between Abraham and about 100 coal industry representatives in late April, task force staffers handed out a briefing packet that outlined national energy needs, and then they listened to industry proposals. "I thought the purpose was one, to reassure people in the coal industry that coal was going to play a large role in the energy mix, and essentially when the plan is unveiled that they're going to be looking to people to help martial this through Congress," said Bill Banig, a lobbyist for the United Mineworkers Union. White House officials said the meetings are not designed to encourage lobbying and that task force members were carefully instructed on what was permissible under federal law. Cheney's meetings included Enron, Edison Electric Institute, California Republicans, and the senators from Nevada, home to the proposed Yucca Mountain federal nuclear waste site. The vice president plans to meet with the renewable-energy industry this week. Enron ranked among Bush's top 10 presidential campaign contributors, giving more than $110,000, and helped sponsor a $7 million party fund-raiser last month. The Edison Electric Institute gave Republican candidates more than two-thirds of its $193,000 in contributions last year. Edison International, whose holdings include the Southern California Edison electric utility, is also a major donor, giving $535,000 to Republicans last year and $330,000 to Democrats. Enron spokesman Mark Palmer said Cheney met with Enron executives because the power wholesaler is a respected member of the industry, not because it was a contributor. Enron wants the administration's energy plan to ease electricity transmission bottlenecks, give companies incentives to invest in new transmission and make the wholesale power market as open as possible, he said. Tom Kuhn, the institute's president, said it is "totally ludicrous" to think political donations played a role. Cheney's meeting with Edison board members, held at the institute's invitation, lasted 15 minutes to 20 minutes. Cheney spoke about the task force process, Kuhn said. He said Cheney's remarks were consistent with the vice president's public statements. Edison wants to see new generation and transmission systems built, including coal, natural gas and nuclear and hydroelectric power, Kuhn said. Democrats in Congress sought a list of participants in the meetings, but Cheney's office responded by only listing broad categories and no names. That has left fodder for political attack. "You can't just take advice from one interest group or set of interest groups when you do these things," said Dave Albersworth of the Wilderness Society, whose group has met with Lundquist but was denied its request to talk with Cheney. Weiss countered that the energy task force has collected information from more than 130 groups since January in an "almost Herculean effort" to draw input from all sides. "People deserve the right to petition their government and not expect a full laundry list of who's called to be announced," she said. Enron spokesman Palmer said he is not seeking such privacy. "I'm happy to tell people what we're advocating for. I'd rather be talking about policy than about politics," he said. --- On the Net: White House Energy Task Force: http://www.whitehouse.gov/news/usbudget/blueprint/bud10.html Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. COMPANIES & FINANCE UK: Independents drill deep to strike rich seams: A new generation of smaller oil companies is emerging; a group that has discovered how to be competitive, writes David Buchan: Financial Times; May 14, 2001 By DAVID BUCHAN The UK's listed small oil companies may have dwindled in number. But they can rightly say, echoing Mark Twain's words, that reports of their collective demise are exaggerated. Indeed, many in the UK-based exploration and production companies, dubbed "independents" in the sense of being untied to any refining and marketing, believe they have more of a role than when their kind first started operating in the North Sea 30 years ago. After the takeovers in recent years of Lasmo, Monument and British Borneo, there may only be about a dozen significant UK-based "independents" left. Yet they amount to virtually the entire European E&P sector: the only significant exception being Lundin Oil of Sweden. Many of the UK independents began life as local partners of US companies in the 1970s when the Labour government of the period gave preference to consortia with a local flavour. But this rationale disappeared when the Thatcher government took a more free-for-all approach to letting anyone develop the North Sea - though at the same time it did create the biggest UK independent by floating off British Gas' oil interests as Enterprise Oil. Enterprise is the only UK independent that is more than a niche or regional player. As such its E&P assets would be a significant addition to an oil major, hence the persistently rumoured interest in taking it over. As the North Sea became more competitive and difficult, some of the UK-based independents began to look elsewhere. "Unlike US independents which have always tended to be less interested in drilling outside North America, those in the UK have always tended to be more sympathetic to exotic parts of the world", says Mark Redway of Teather and Greenwood. Unfortunately, the obvious exotic new province that happened to open up in the early 1990s was the former Soviet Union. One company, Ramco Energy, dipped in and out very successfully, recently selling its 2 per cent stake in the Azerbaijan International Oil Consortium for Dollars 150m (Pounds 104.8m). Other UK independents - Aminex, Soco and Dana Petroleum - ventured into Russia and got stuck. While Aminex finds it hard to downplay Russia (because it has little elsewhere), Soco these days stresses its Mongolia and Vietnam operations. Another UK independent, JKX Oil & Gas, went into Ukraine, a country notorious for non-payment of energy bills. With diplomatic help from Tony Blair, the prime minister, JKX has just survived a legal attempt to rob it of its Ukraine assets. Two other independents have sunk more fruitful roots in Asia. "Cairn Energy now has as big a stake in Bangladesh's gas production as Shell, and it would be left, if Enron (the US energy company) were to quit India, as the biggest foreign player in India," says Iain Reid of UBS Warburg. Premier Oil is now a substantial Asian gas company, with production in Burma, Indonesia and Pakistan and long term contracts in Thailand and Singapore. But there are risks in these Asian ties. The obvious political one concerns Burma. Last year the UK government asked Premier to quit Burma because its presence was helping the military regime. Premier refused, and said it would carry on. The other risk, according to Mr Redway, is economic and it applies also to Cairn. Because there is no real world market for gas, Cairn and Premier are "very dependent on the strength of the local economies". But then, Mr Redway is an analyst who believes that independents' competitive edge lies in exploration rather than production. He therefore rates Fusion Oil & Gas highly as "the purest exploration investment opportunity in the E&P sector". Dana similarly vaunts its exploration expertise, but to a different end. Its goal, according to Tom Cross, chief executive, is to find oil and then swap exploration for production assets. "This avoids the expensive development stage of building platforms and pipelines and so on". Then at the other end of the spectrum are production-focused companies, such as Paladin, Tullow Oil or Venture Production. Roy Franklin, Paladin's chief executive, makes no bones about his company's scavenger strategy, spotting rich pickings overlooked by the majors. The majors are not always ready to sell, particularly recently when the oil price rise has widened the gap in price expectations between buyers and sellers. But Paladin was last year able to buy PetroCanada's assets in Norway, and is this year interested in bidding for some of what the Norwegian state is selling off. As its name suggests, Venture Production, a private Aberdeen-based company with North Sea and Trinidad operations, is focused on extraction, not exploration. And so are other private companies such as Intrepid, Consort Energy and Highland Energy, formed in the past three or four years. This new generation of company tends to be more cautious than the older one. "Exploration has probably been the best way to destroy shareholder value," says one executive. The other risk the new oilmen want to avoid is the vagaries of the stock market. "By focusing on production, the new companies are more predictable in terms of cash flow and earnings," says Mike Wagstaff, Venture's finance director. Copyright: The Financial Times Limited News Bush energy team covers all the bases Sharon Theimer, Associated Press 05/14/2001 Chicago Tribune North Sports Final ; N 13 (Copyright 2001 by the Chicago Tribune) The White House team developing a national energy plan has met with more than 130 interest groups, from environmentalists and unions often at odds with Republicans to major Bush supporters. Vice President Dick Cheney, Cabinet secretaries and others have solicited ideas behind closed doors, hoping the privacy would encourage a free exchange of ideas. The White House has declined to provide names of participants even to Congress. But interviews with participants detail an outreach program where diverse interests have met with task force executive director Andrew Lundquist. Cheney's time has been reserved for meetings with more select participants such as power wholesaler Enron Corp. and the Edison Electric Institute, both GOP donors. "The way the task force is set up, they don't have the staff or time to have a huge host of companies come through the door. They have told us to work through our associations to the extent we can," said Don Duncan, vice president of government relations for Phillips Petroleum Co. Participants said the meetings, typically 20 minutes to 45 minutes, included a dozen to 100 interest group members and a few task force members and staff. No details were disclosed. Instead, administration representatives summarized the nation's energy problems or listened as groups briefly offered background and proposals. Many sent detailed materials to the task force outlining priorities. Energy Secretary Spencer Abraham has attended several meetings, including one with Teamsters President James Hoffa and an hourlong session in California with Democratic Gov. Gray Davis, who contends the administration has done little to help the power-strapped state. Like other governors, Davis was asked to provide one page on the state's power crisis, including a description of the problem, an anecdote about it and possible solutions. "They're asking for a one-page memo on possibly the biggest crisis ever affecting the state, with a massive ripple effect for the nation," Davis spokesman Steve Maviglio said. "I think it demands more attention than a one-page memo." Cheney spokeswoman Juleanna Glover Weiss said the task force has been studying the California problem almost daily. At a meeting between Abraham and 100 coal industry representatives in late April, task force staffers handed out a briefing packet that outlined national energy needs, and then they listened to industry proposals. "I thought the purpose was one, to reassure people in the coal industry that coal was going to play a large role in the energy mix, and essentially when the plan is unveiled that they're going to be looking to people to help marshal this through Congress," said Bill Banig, a lobbyist for the United Mineworkers Union. White House officials said the meetings are not designed to encourage lobbying. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. QATAR: UAE's Dolphin may seek new partners if Enron exits. By Kedar Sharma 05/14/2001 Reuters English News Service (C) Reuters Limited 2001. DOHA, May 14 (Reuters) - Dolphin Energy Ltd (DEL) may invite new foreign investors to join its project to route Qatari gas to the United Arab Emirates as U.S. Enron Corp looks set to bow out, industry sources said on Monday. "New partners are a possibility," Khaldoun al-Mubarak, project manager for DEL, majority owned by the UAE's Offsets Group (UOG), told Reuters. "But at the moment we are in the midst of finalising the formal (development and production sharing) agreement with Qatar which should be done by September at the latest." Qatar and DEL in March signed a "commercial term sheet agreement" which outlined the conditions of the upstream agreement for the long-awaited $3.5 billion project. UOG currently owns 51 percent of DEL, with the remainder held equally by France's TotalFinaElf and Enron. "Enron is going through major global restructuring," Mubarak said. "(But) they haven't officially notified us about their intention to pull out." Enron officials declined comment. Mubarak said interest in DEL was running high. "Everyone is asking for a stake," he said. The gas deal would entitle DEL to develop a tract of Qatar's giant North Field and produce up to two billion cubic feet per day (cfd) of gas. UOG is to invest $2 billion in developing the North Field tract, drilling and setting up production facilities. The remaining $1.5 billion would be invested to lay a pipeline and set up receiving terminals at Dubai's Jebel Ali and Taweelah in Abu Dhabi. First gas is targeted to reach the UAE capital Abu Dhabi by late 2004 or early 2005. About one billion to 1.5 billion cfd of Qatari gas would be consumed by utilities in Abu Dhabi with the remainder supplied to Dubai. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. UAE: UPDATE 1-Saudi expected to name gas race winners on Tuesday. By Peg Mackey 05/14/2001 Reuters English News Service (C) Reuters Limited 2001. DUBAI, May 14 (Reuters) - Saudi Arabia's Supreme Petroleum Council (SPC) is expected to meet on Tuesday and announce the oil majors chosen for its multi-billion dollar gas investment opening, industry sources familiar with the negotiations said on Monday. The sources said the SPC is expected to name ExxonMobil and Royal Dutch/Shell as lead players in three so-called core projects involving the kingdom's upstream gas sector - off-limits to foreign oil firms since nationalisation in 1975. Signing of memoranda of understanding (MOUs) would most probably take place in early June, the sources said. The anticipated announcement would mark the biggest advance in the kingdom's gas initiative, valued at an initial $25 billion, since Riyadh unveiled its energy investment opening over two years ago. But the hard work has yet to start on the opening of Saudi Arabia's gas sector, the world's fourth biggest. "The fiscal regime and regulatory details have not been developed," said one source. FINAL CUT Riyadh is expected to trim back its original shortlist of 11 potential foreign investors revealed last summer. Those companies had been grouped under three core venture consortia - South Ghawar, Red Sea and Shaybah. For ExxonMobil and Royal Dutch/Shell, securing the lead role in Saudi Arabia's core ventures would entitle them to operate the package and get the biggest slice of the projects, analysts said. Other industry sources said ExxonMobil, the world's biggest energy company, was tipped for the top slot in core venture 1 (South Ghawar) as well as in core venture 2 (Red Sea). Royal Dutch/Shell was in pole position for core venture 3 (Shaybah), the sources added. Both oil supermajors already have significant foreign investment in the kingdom and feature as top customers of Saudi oil, the analysts said. ENERGY DRIVERS An urgent need to create jobs and grow the economy are driving Saudi Arabia's landmark energy opening. And analysts said big oil companies were prepared to help the kingdom achieve those aims even if the return on their investment was relatively low. "Major oil companies just cannot miss this opportunity," a source said. "The gas projects will show profits." But just how much revenue oil companies will generate by selling water and electricity in the Saudi domestic market remains to be seen. On paper, at least, the kingdom's domestic gas sector looks set for impressive growth. Domestic gas demand, now running at about 3.4 billion cubic feet per day, is forecast to grow at more than seven percent a year over the coming decade. Saudi Arabia has meanwhile made clear that its prized oil sector, the world's biggest, remains off limits. Even so, oil companies still hold out hope for eventual involvement in oil, the kingdom's lifeblood. "The companies are just as happy with gas, but oil remains the ultimate objective," a regional analyst said. "Saudi Aramco is still putting up strong defence barriers, but eventually they could open up the oil sector once they feel comfortable working with the majors." The Saudi gas initiative seeks foreign oil companies' help in developing the kingdom's known gas reserves as well as investment in downstream projects fed by gas supplies, such as power and desalination. The following companies have been shortlisted for the gas projects: Core venture 1 (South Ghawar Area) - ExxonMobil, Royal Dutch/Shell, BP , TotalFinaElf , Chevron and ENI . Core venture 2 (Red Sea Area) - TotalFinaElf, ExxonMobil, Marathon , Enron /Oxy , Conoco , Royal Dutch/Shell. Core venture 3 (Shaybah Area) - Royal Dutch/Shell, ExxonMobil, Marathon, Conoco, TotalFinaElf, Phillips and Enron/Oxy. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Saudi Oil Council To Meet Tue On Gas Projects -Sources 05/14/2001 Dow Jones Energy Service (Copyright © 2001, Dow Jones & Company, Inc.) DUBAI -(Dow Jones)- International oil companies vying for a stake in Saudi Arabia's downstream gas projects, expect to be notified soon on whether they have been selected to participate, industry sources in the kingdom said Monday. Saudi Arabia's Supreme Petroleum Council is set to meet Tuesday and shortly after, announce its final selection for each of the three core ventures on offer, the sources said. The Saudi Arabian committee negotiating with international oil companies on the Gas Initiative, submitted its proposals for consortium members and leaders to the country's Ministerial Council in April. These were then passed on to the SPC for final approval. Saudi Arabia's Crown Prince Abdullah, who heads the SPC, is in Bahrain Monday attending a Gulf Cooperation Council leaders' summit along with Saudi Arabia's foreign minister, Saud Al Faisal, who heads the gas negotiating committee. Saudi Arabia invited international oil companies in October 1998 to participate in proposals for downstream gas projects and upstream gas enhancement. After a series of meetings between the negotiating committee and IOC's in the past year, the following companies were shortlisted for each project. Royal Dutch/Shell Group (RD), BP PLC (BP), Exxon Mobil Corp. (XOM), Chevron Corp. (CHV), Total Fina Elf S.A. (TOT) and ENI SpA (E) for Core Venture 1, the $15 billion South Ghawar Area Development. For Core Venture 2, the Red Sea Development, Enron Corp. (ENE) and Occidental Petroleum Corp. (OXY) are bidding jointly and Exxon Mobil, Total Fina Elf, Marathon Oil Canada Inc. (T.M), Shell and Conoco Inc. (COCA) were listed. And for Core Venture 3, the Shaybah area, Total Fina Elf, Conoco, Phillips Petroleum (P), Enron and Occidental, Exxon Mobil, Shell and Marathon Oil were listed. With all those shortlisted expected to play some role, the immediate and essential question for each of the IOC's is whether they will be selected to lead and operate a project, with Core Venture 1 the most sought after, industry sources said. Exxon Mobil and Shell have been tipped as frontrunners for this venture. The operator's role will be more crucial than ever here as it will be responsible for directing further negotiations on the projects at hand which will lead to final deals probably by year end. Also, operators are expected to decide and direct how the project's individual and large components will be developed, details the Saudis haven't finalized, sources said. The three ventures have been estimated at a combined value of about $25 billion. -By Dyala Sabbagh, Dow Jones Newswires; 9714-331-4260; dyala.sabbagh@dowjones.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Business RFID chip will help speed up business 05/14/2001 The New Straits Times Main/Lifestyle; 2* 26 (Copyright 2001) THE combination of recently developed "stick-on" Radio Frequency Identification (RFID) chip technology with a global positioning system (GSP) will transform and quicken the pace of doing business in the oil and gas industry. And Malaysia must adapt to this shift to maintain her global positioning. Global management and technology consultant Global Energy Strategy Practice which is working in partnership with Accenture Sdn Bhd wants to promote this idea locally. Global Energy Strategy Practice partner Paul Spence said that applying this latest combined technology, car owners can fill up a petrol tank without resorting to human contact or to the use of a credit card. Relevant personal data embedded in the RFID chip would be machine read and the required quantity of petrol delivered, as if right out of a science fiction movie. This surreal development is made possible through the application of ubiquitous-commerce (u-commerce) whereby computers and machines communicate with each other to affect an impression of an omnipresent intelligence. Such technology is economically available today. "There are technology suppliers who are offering these capabilities." The technology also has applications outside the oil and gas industry. Communications between machines can now allow or deny access of individuals to restricted zones. In an interview in Petaling Jaya recently, Spence said: "A lot of my clients now are asking, whether that same technology can be used to restrict access into hazardous areas, plants or production sites. "Can a warning alarm be fitted to the individual or to an assistant? There are lots of safety, health and environment applications around that." "Guru in the field" is another potential application where a combination of RFID chips, video cameras, personal digital assistants (PDA) and personal computers can deliver distant technical advice on- site. "An industry client operating in the North Sea oil fields has a prototype mounted on a workman's helmet which sends snap-shots to experts on the other side of the world. "The effect of this new combined technology on global financial and commodity markets is to lock them in tighter correlation. "The days of being able to arbitrage for profits between geographical markets are shortening within the energy industry. Enron which is the biggest oil trader in the US is now hedging on weather derivatives." Accenture partner Lim Beng Choon said that to compete globally, the oil and gas industry in Malaysia would have to implement this new technology to remain connected to global markets. Caption: Lim ... connected. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. India: Godbole panel report may suggest MSEB bifurcation 05/14/2001 Business Line (The Hindu) Copyright (C) 2001 Kasturi & Sons Ltd (KSL); Source: World Reporter (TM) - Asia Intelligence Wire MUMBAI, May 13. THE second part of the Dr Madhav Godbole committee report is expected to be submitted to the State Government on May 15. While the first part of the report recommended renegotiation of the power purchase agreement with Enron's Dabhol Power Company, the second part is expected to suggest bifurcation of the Maharashtra State Electricity Board, sources said. The committee, which has been given the mandate to negotiate with Enron officials to make DPC power more acceptable, had a marathon meeting on May 11 to finalise the second half of the report. "The committee has been considering the bifurcation of MSEB," a source said. "The idea is to try and separate the distribution from generation and transmission." While generation and transmission can be controlled by the State, there may be a suggestion to privatise the distribution arm. Over 1.5 lakh MSEB employees had gone on a strike to oppose a Bill to unbundle the board into three divisions - generation, transmission and distribution - due to fear of privatisation. MSEB, the State's leading power company, has been facing huge losses due to delay in payments and theft of power. The second part of the report is expected to address the problem in detail. Part one of the report submitted on April 10 had said: "...none of the solutions espoused for independent power producers, in general, and DPC, in particular, is tenable without the reforms of MSEB, especially its distribution business, which it shall address in part II of the report." The report is expected to "suggest appropriate measures to ensure that the interests of the State, MSEB and electricity consumers of the State of Maharashtra are properly and adequately considered, evaluated and safeguarded," according to the terms of reference laid down when forming the committee. The committee originally consisted of Dr Madhav Godbole, Mr Deepak Parekh, Dr E.A.S. Sarma, Dr Rajendra Pachauri and the State Energy Secretary, Mr Vinay Mohan Lal. The MSEB Chairman, Mr Vinay Bansal, has been inducted as part of the panel after the submission of the first part and before the beginning of negotiations with Enron. Archana Chaudhary Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. The Smart Investor Tertiary will be primary Indira Vergis 05/14/2001 Business Standard 2 Copyright © Business Standard These are volatile times for world business. There are increasing jitters that a slowing US economy could dampen prospects for the global economies. Many developing regions, especially in Asia, are bracing themselves for a bout of slightly lower growth. But two countries, India and China which together account for about half the region's gross domestic product (GDP_ will still continue to see their GDP grow at six per cent, forecasts the Asian Development Bank. Many Indian economists agree with ADB's projections. In fact, they view the prediction of a six per cent growth in India's GDP as benign. Nearly 54 per cent of India's GDP is delivered by its services sector and a modest performance by this sector, some economists say, will be enough to hold up the GDP at six per cent. There are others who hope that better agricultural performance could prompt the economy to hand in a better scorecard. However, the Indian industry remains trapped in the doldrums, suffering from a lack of consumer confidence and investments. Very few economists expect to see signs of recovery sprouting any time soon. An interest rate cut is considered vital by many to energise the sector. And, they argue, there are certain economic indicators that encourage such a move. Inflation is running at very low levels and the nation's foreign exchange reserves are currently high enough to provide a strong defence to the Indian currency. Surprisingly, our trade balance, which threatened to spiral out of control by surging oil prices last year, has been contained. Since then, oil prices have retreated and are expected to remain subdued. While a rate cut may go some way in reviving sentiment and activity in the industrial sector, stirring up consumer demand will still hinge on a normal monsoon. Rain, rain, come again For many economists, the prediction of India clinging to its current GDP level is heavily contingent on a normal spell of monsoon this year. "According to our assessment, we believe the Indian economy will grow by around 6.5 per cent this fiscal year," says Chetan Ahya, vice president at J M Morgan Stanley Securities. In 2000-01, agricultural growth withered under a poor monsoon and a subsequent drought in many parts of the country. For the second year in a row, growth in the sector sank below one per cent. It stood at 0.9 per cent compared with 0.7 per cent the previous year. While agriculture accounts for only 24 per cent of GDP, it remains the most keenly-watched sector by economists. "The performance of the agricultural sector is important because of its linkages to the economy both on the supply side and on the consumption side," says Mohan Nagarajan, chief economist at Credit Analysis and Research Ltd (CARE). "It would lead to a better performance of agro-based industries," he adds. More significantly, roughly 60 per cent of Indians still depend on agriculture for their livelihood. "A good crop means that demand for everything, from everyday use goods like toothpaste to larger items like tractors will pick up," says Nagarajan. Economists are hoping that a good monsoon will budge growth in the sector to around 1.5 to 2.5 per cent. In service of the economy Another key sector economists will be watching out for will be services. India's services sector ranging from finance, insurance, hospitality to transportation and communication slowed its pace in 2000-01. With growth weakening by a whole per cent to 8.4 in 2000-01, sluggishness in this important sector has been blamed for dragging down the overall GDP. Most economists expect the sector to post either relatively flat growth or edge slightly higher this year. But, it's performance will be vital to ensure that overall GDP holds at six per cent. "Even if the agriculture and industry numbers fall again but services sees even seven to eight per cent growth, it will be enough to keep the GDP around six per cent," says Nagarajan. Construction activity a services component that includes housing, roads and other infrastructure projects demonstrated surprisingly good growth of 8.7 per cent and is expected to maintain the pace. Road construction is tipped to show increasing levels of activity as work on the ambitious highway linking Mumbai, Delhi, Chennai and Calcutta intensifies. Chiming in will be the housing industry, benefiting in recent years from tax reliefs and attractive financing schemes, and which have encouraged more people to buy houses. Another segment slated to witness good growth will be IT-enabled services, says Morgan Stanley's Ahya. "We are emerging as the services workshop of the world," he says. IT-enabled services like call centres and data processing, though currently generating tiny revenues, are slated to turn into big money spinners in the years ahead. The telecommunications industry will also see improving levels of investment. "The penetration of services is so low, that it has an intrinsic high growth rate," says Ahya. For a taste of the market, consider this: out of the 100 Indians, only one uses the Internet and less than three own a telephone. A good home show And there could be a pleasant surprise in store for industry amid all the gloom over its performance. Adequate liquidity conditions are spurring expectations of a cut in interest rates. Broad money(M3) a gauge of total money available in the economy increased 16.2 per cent in 2000-01 against 14.6 per cent last year. While the Reserve Bank of India had cut the bank rate in March, the belief is that a further cut of 50 basis points is imminent. The bank rate the rate at which the central bank lends to commercial banks currently stands at seven per cent. Aiding the cause is the inflation data which shows the wholesale price index at a tame 5.84 per cent. With economists betting that oil prices will remain in the $24-28 a barrel range, inflation is not expected to exhibit the oil price-inspired gyrations of last year. A cut could coax the industry to step up activity, though admittedly, much would still depend on rural demand. Neighbours' envy And while many Asian countries watch with increasing nervousness the impact of an American downturn on their economies, India and China can afford to remain relatively placid about global developments. That's because they are less dependent on the US for their own economic health. That is expected to shield them somewhat from being blown off-course like some other Asian nations by the ill-wind of an American slump in demand. With exports making up less than 10 per cent of India's GDP, its economy is clearly not export-driven. In contrast, nearly 35 per cent of Indonesia's GDP comes from exports, 57 per cent for Thailand, and 50 per cent for the Philippines. Yet, despite claiming only a small percentage of GDP, India's exports remained a bright spot amid some gloomy economic data. Exports raced ahead 20 per cent to $44.1 billion in 2000-01. It was the second consecutive year of good exports growth. On the flip side, imports rose, too, during the same period to Rs $49.1 billion. But non-oil imports, however, declined 15 per cent to $34.2 billion. That helped narrow the trade gap to $5.74 billion from $12.79 billion the previous year. Still, India can ill-afford to ignore completely the risks of an American slump in demand. The US is India's largest trading partner and, in 2000-01, a quarter of its exports headed to that nation. Besides, by taking in nearly 70 per cent of India's software exports, it is also India's most important software exports destination. Booming software exports accompanied by remittances by Indians living overseas have been the primary factors exerting a calming influence on India's balance of payments of position, especially in times of economic turbulence. For example, last year, while a surging oil import bill threatened to rattle the nation's trade gap, inflows from invisibles(including income from software and Indians living abroad) came to the rescue helping India limit its overall current account deficit. It's a sobering realisation that has compelled the National Association of Software and Service Companies(NASSCOM) to lower its exports forecast to between $8.5 billion to $9 billion from its previous figure of $9.5 billion. Earlier, it had also revised estimates for 2000-01 lower to $6.2 billion from $6.3 billion. Still, observers say it isn't a cause for depression. "They are still talking about growth. It is a decline in the growth rate and not an actual downturn itself," points out John Band, chief executive officer, ASK-Raymond James and Associates. And remittances look set to maintain their pace as well. "Most remittances are still from Indians who live in the Middle East, and I don't see any slowdown from this segment," says CARE's Nagarajan. Remittances totalled $9.8 billion in the nine months to December 2000. Software exports brought in $4.6 billion during the same period. Foreign institutions support Another recent 'feel-good' sign has been evident in the stock markets too. Between January and April 2001, eigners poured in Rs 7,368 crore into India's equity markets - a phenomenal 15 per cent more than what they invested in the whole of calendar 2000. Yet, experts aren't reading too much into it. In the past few months, investors have been fleeing from a shower of profit warnings in the US and seeking cover in alternative investments. As they rejuggle their portfolios, some money will inevitably flow into India and other countries, experts say. Because it isn't affected so much by what's happening externally, they see India as some kind of a safe haven," says ASK's Band. Yet some hesitation Recently, gunning for more foreign direct investments (FDI), the government opened more sectors for foreign and private participation, including pharmaceuticals, hotels, banking and astonishingly, even defence. However, tempting FDI has always been a vexing issue for India. In 2000-01, FDI did improve slightly, moving 26 per cent higher than the previous year to $2.4 billion. Yet, China a market India is frequently compared with in terms of size and potential attracted 20 times more FDI in the same period. Economists now shrug off FDI as a tool to kick-start investment in the country. "It's a pittance and it probably will remain stagnant," says an economist at a foreign research house. The reasons are not hard to find. Foreigners seeking to invest in India have many fences to cross. Frequent changes in sector policies, chaotic infrastructure facilities and nightmarish bureaucratic redtape have often left foreigners tired and wary of doing business in India. The stress of investing in India is most clearly visible in the recurring concerns that have stubbornly dogged US energy giant Enron's 2,148 MW power project in Dabhol in Maharashtra. After being forced to renegotiate a power supply deal in 1995 after concluding it in 1992, Enron has hit the headlines once again. This time, an almost bankrupt state electricity board (SEB) refuses to pay its dues for power received and the state government refuses to honour its commitment to pay in case the SEB defaults.It's led to intense speculation that, after suffering repeated snags for nearly a decade, Enron might simply pull out of the project altogether. A disturbing turn of events, since, till recently, Enron Corp was the biggest foreign investor in India. It will not be the first time that exasperation will have egged on a foreign investor to pull out of a project. Earlier, US-based Cogentrix Energy had also walked out of its $1.5 billion 1,000 MW Mangalore power project citing endless bureaucratic hurdles. And there has also been some disappointment over India's much-hyped 300 million middle class which was supposed to be growing rapidly. Many international firms, inspired by this figure, had scrambled to set up operations to conquer a huge chunk of this market. Now many are struggling to break even and still learning to adapt to local tastes a key ingredient for success. That's why despite all its attempts to open up various sectors, India still remains a tough sell. Outlook With a little help from the rains, India could notch up a growth rate of six per cent. Many economists have also pointed out that a reforms-studded budget could also inject some enthusiasm in the patient that is the economy. Strong measures include plans to reform labour laws and government employment. These are expected to boost the economy's development, though in the long run. The recent opening up of various sectors could also revive sentiment, although whether this will translate into FDI flows is arguable. Still, every bit helps. The fact remains that it will have to persist in trying to accelerate the pace of growth if its ambitions of turning into an economic powerhouse are to be realised. After all, for the second most populous nation in the world with one of the biggest markets, its economic power is still nowhere near the figure its size suggests. Acegas shares, potential for growth (Acegas, le potenzialita di crescita del titolo) 05/14/2001 La Repubblica 41 Copyright (C) 2001 Abstracted from La Repubblica in Italian; Source: World Reporter (TM) Italian brokers Rasfin SIM have indicated the potential for growth in the shares of Acegas, the former municipal utility of the Italian city of Trieste. Acegas closed the first quarter of this year with turnover of L137bn (+45 per cent). Results attributed in part to the start of production of Estenergy, a consortium of the utilities of Udine, Trieste, Gorizia and Enron of the US, which supplies energy and services to parts of Friuli. Also significant, according to Rasfin, were investments over the period, which totalled L43bn. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. A Section IN THE LOOP Al Kamen Roundabout to the Oval Office Al Kamen 05/14/2001 The Washington Post FINAL A19 Copyright 2001, The Washington Post Co. All Rights Reserved Sometimes even Cabinet officers can lose their way in the White House. So there was Health and Human Services Secretary Tommy G. Thompson, clearly lost Friday at a fork in a corridor near White House spokesman Ari Fleischer's office. "How do you get to the Oval Office?" he asked a group of reporters and was directed to the right door, according to a wire report. Fleischer, though, told reporters that was the wrong answer. "How do you get to the Oval Office? First you win the Iowa caucus, then you lose the New Hampshire primary, then you make a comeback in South Carolina," he quipped as he recalled President Bush's early primary campaign last year. Passport, Please Meanwhile, folks at Thompson's HHS may be taking to calling him "Tightwad Tommy." Seems a memo went out March 15 undermining Alaska and Hawaii's claims to be part of the United States. Employees "must clear . . . international travel" with the office of the deputy chief of staff for operations, said the memo from the deputy chief, Ed Sontag. To clarify, "HHS employees seeking to travel outside the continental U.S." for meetings and conferences, must get permission and then file trip reports within two weeks. This sent officials calling around, asking whether trips to those states were to go through the international travel approval system just as if they were going to Russia or the Congo. Apparently so. The edict would appear to include even the nearby Virgin Islands and practically next-door Puerto Rico as well. Loop Fans can only hope this outrage doesn't spread to other agencies. It would make for some cold winters. Chewing Out on the Bush Beat Speaking of Fleischer, the usually affable spokesman is not reluctant to get tough with reporters when he believes they've stepped out of line. Sheriff Fleischer was on duty Thursday and upset with Houston Chronicle reporter Bennett Roth. Bush that morning urged parents to talk more to their kids about the dangers of drugs. Roth, at Fleischer's daily briefing, asked: "Ari, the president talked about parental involvement today. How much has he talked to his own daughters about both drugs and drinking? And given the fact that his own daughter was cited for underage drinking, isn't that a sign that there's only so much effect that a parent can have on their children's behavior?" Fleischer responded brusquely: "No, I think, frankly, there are some issues where I think it's very important for you all in the press corps to recognize that he is the president of the United States; he's also a father. And the press corps has been very respectful in the past of treating family matters with privacy, and I'm certain that you're going to do so again. I hope so." Fleischer later called Roth to chastise him, telling him his question had been "noted in the building." Competing to Oversee the Corps Former Mississippi representative Mike Parker, a Democrat-turned-Republican who lost a gubernatorial bid a couple of years back, had been seen as the pick to be assistant secretary of the Army for civil works, overseeing the Army Corps of Engineers. Parker, a former undertaker, had support from the barge industry, the various corps constituencies and fellow Mississippian Trent Lott, the majority leader of the Senate. But the Pentagon's choice was Lawrence Izzo, recently retired president of Enron Engineering and Construction Co. who has been in the mix for several jobs. Izzo, a West Point grad, had 23 years at the Corps before going to Enron, former home of Army secretary-designate Thomas White. The majority leader was said to be most unhappy. The latest word is Parker's getting the job. Ex-Reporters Move On Kenneth J. Klein, a former reporter who has worked for 17 years for Florida Sen. Bob Graham (D), most recently as chief of staff, is joining the Outdoor Advertising Association of America as executive vice president for government relations. Former Washington Post colleague Thomas W. Lippman, a 33-year national, foreign and financial reporter and author who became vice president of communications at the World Wildlife Fund in 1999, is moving next month to be managing director at communications consulting firm Chlopak, Leonard, Schechter & Associates. Confirmation Countdown Staff writer Michael Grunwald contributed to this report. http://www.washingtonpost.com Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. Largest LNG 13 Conference Opens Today 05/14/2001 Korea Times Copyright (C) 2001 Korea Times; Source: World Reporter (TM) The largest-ever International Conference and Exhibition on liquefied natural gas (LNG 13) opens today for a four-day run at the Convention and Exhibition Center (COEX) in southern Seoul. A total of 125 companies and organizations represented by 2,500 delegates and exhibitors from 50-odd countries, including Japan, the United States, Britain and Australia, are participating in the international event, co- organized by the Korea Gas Union and the Korea Gas Corp. (KOGAS). Commerce, Industry and Energy Minister Chang Che-shik will be delivering congratulatory remarks on behalf of Prime Minister Lee Han-dong who is currently on an official trip to the Middle East. There will be a visual presentation from Lee during the opening ceremony. ``We have spent more than a year preparing for this international event which is the largest in terms of the number of participants and exhibitors,'' said Lee Seung-hwan, chairman of the Korean National Organizing Committee. LNG 13 is 15 percent larger than the conference and exhibition held in Australia back in 1998 which reflects the growth of the industry, Lee explained, adding that the demand for LNG has been increasing rapidly here in Korea. A wide range of topics will be presented during the four days of conferences and exhibitions, helping to showcase the importance of the LNG industry. Among the numerous papers to be presented at the triennial event are ``Old World, New World, Tomorrow's World: How LNG Has Changed Since LNG 12'' and ``The Next Generation of LNG Plants.'' ``Hosting this meaningful event in Korea will help elevate Korea's image in the international market, particularly with the sheer scale and size of LNG 13,'' said Kim Myung-kyu, president and CEO of KOGAS and chairman of the Korea gas Union. The conference will include paper sessions, workshops, poster sessions and film presentations while exhibitors will demonstrate their exclusive technologies for the exploration and production of LNG as well as plant construction. The official sponsors of LNG 13 are the International Gas Union, the Gas Technology Institute and the International institute of Refrigeration while the major sponsors are Shell Gas and Power, KOGAS, LG-Caltex, SK-Enron, the Qatari Group, TotalFinaElf, British Petroleum and Exxon Mobile. In addition to the conference and exhibition, there will be a technical visit to the Inchon LNG Receiving Terminal in Inchon, about 50 kilometers west of Seoul, on Friday. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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