AS 2014 is all set to say good bye a new year is knocking the door. With a majority government at the helm, some key decisions may be easily taken and the Indian PSUs can...expect a lot in the new year. Here are five key things that are likely to give solid shape to the public sector undertakings:
Can OVL set its prints in Israel?
ONGC Videsh (OVL) is eyeing a stake in the prolific Leviathan gas project off Israel’s Mediterranean coast. This will mark the entry of the PSU into the West Asian nation.
Since India has been importing crude oil from West Asian countries such as Iran, Iraq, Kuwait and Saudi Arabia, opportunities in Israel were not pursued so far.
OVL, which has operations in 16 countries and invested over $22 billion till March 31, 2014, has sought guidance from the petroleum ministry to pursue exploration and production (E&P) investments in Israel.
Leviathan, discovered in 2010 off Israel’s Mediterranean coast, is poised to be the world’s largest gas find in recent times and production is slated to commence in 2017. In July, according to reports by consultant Netherland Sewall & Associates (NSAI), the reserve estimate was revised to 21.93 trillion cubic feet from 18.91 tcf earlier.
Will ONGC hit the jackpot?
The government plans to sell a five percent stake in Oil and Natural Gas Corporation (ONGC) in January.
Prime Minister Narendra Modi’s government has introduced long-awaited reforms in the oil sector, freeing diesel prices and raising natural gas prices — measures which should be positive for ONGC and other oil marketing companies.
Presentations to investors on the share sale, worth about $2.8 billion at current market prices, are likely to start from November 17 and will run for about a week, said the sources, declining to be named as the details were not yet public.
Can Syndicate Bank enter South Africa, UAE?
Public sector lender Syndicate Bank is hopeful of opening full-fledged overseas branches in Dubai and South Africa next year. So far, the bank has been managing its overseas business from its branch in London, which was set up in 1977.
“We have customers in the UAE, Australia, Singapore and the US,” Syndicate Bank executive director TK Srivastava told FE. The bank has already applied to the Reserve Bank of India (RBI) seeking permission to open branches in Hong Kong, South Africa, China and the UAE.
Srivastava said the bank is hopeful of getting the necessary approvals from RBI by March. “We target to open the overseas branches next year. It takes some time to get the regulatory approvals in the respective countries. Further, it takes 2-3 months to set up infrastructure for new international branches,” said.
Fate of 15 sick PSUs hanging in balance
Recently, the government decided to shut down six terminally sick PSUs. The list includes Hindustan Photo Films, HMT Bearings, HMT Chinar Watches, Tungbhadra Steel, Hindustan Cable and the iconic HMT Watches. In the second round, 15 more loss-making firms will be under consideration, including British India Corporation, IDPL and their subsidiaries.
Some other sick PSUs about which the government is yet to take a call include Hindustan Salts Ltd, Bridge & Roof Co. (India) Ltd, BBJ Construction Co. Ltd, Tyre Corporation of India Ltd, British India Corporation Ltd (under ministry of textiles), National Textiles Corporation Ltd, HMT Bearings Ltd (under department of heavy industries), Praga Tools Ltd (under department of heavy Industries), Braithwaite & Company Ltd (under railway ministry).
Time running out for oil PSUs?
The government has given stern directions to ONGC, IOC, GAIL (India), BPCL and HPCL, among others, to complete as many as 21 of their pending projects, entailing capital investments of R60,000 crore, latest by the end of the financial year. Can the PSUs sitting on huge cash reserve accomplish the tough task? Only time will tell.