Aditya Birla Money : Newspaper Advt dated Nov 24, 2021 - after sending EGM Notice to be held on Dec 16, 2021 - English

MUMBAI | WEDNESDAY, 24 NOVEMBER 2021

TAKE TWO 7

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Oil & gas: What ails foreign investment

Thescenarioreflectsthelargeruncertaintiesinglobalfossilfuel

New Delhi's whimsical reform

equity funds expressed interest

cum-chemical venture - after

framework - the latest being the

buthavefailedtofindanoilcom-

announcing it with great fanfare.

investmentsandIndia'swhimsicalpolicyenvironment

repeal of farm laws within a year

pany to partner them.

Narendra

The 1.2 million b/d Ratnagiri

- is also of concern to investors.

Prime Minister

refinery-cum-petrochemicalven-

S DINAKAR

Therewere258dealsintheoiland

Modi's government lifted price

ture is yet to secure a location in

THE M&A BARREL

New Delhi, 23 November

gas sector spanning upstream,

controls on diesel in 2014, on

Maharashtra after a

slugfest

Keyforeigninvestmentsinoilandgas

downstream and midstream in

paper. LPG is also market priced,

between the Bharatiya Janata

hy does the world's

calendar 2020, valued at $218 bil-

again,onpaper. Butpricesofroad

Party and

the Shiv

Sena led

Project

Investor

Stake(pc)

Valuein $ bn

Year

fastest-growing major

lioncomparedto433dealsat$347

fuelsandcookinggascontinueto

to repeated delays. Saudi Aramco

Wconsumerofenergyfail

EssarOil

Rosneft

Near100

12.90

2017

billion in pre-pandemic 2019,

be managed by the government

and UAE's Adnoc had agreed to

to attract investments in oil and

CairnIndia

Vedanta

58

8.67

2011

according to a Deloitte report.

via state-oil companies, which

take a 50 per cent combined

gas? This is a question worth

India attracted only around

controlmuchofthe2millionbar-

stake in the venture in 2018.

RILKGBasin

BP

30

7.20

2011

pondering after private sector

$35 billion in a handful of oil and

rels per day (b/d) fuel market. For

In August 2019, RIL offered

conglomerateRelianceIndustries

RILEast

Brookfield

100

1.80

2019

gas deals in the past decade, and

instance, pump

prices freeze

Aramco a 20 per cent stake in its

Ltd (RIL) failed to close a $15-bil-

Westgaspipe

ifyouexcludeVedanta'spurchase

beforekeypolls,irre-

Whathasperhaps

oil-to-chemicals

lion downstream asset

deal

RILfuelretail

BP

49

1.00

2020

of Cairn's assets, you are down to

spective of interna-

business, its biggest

with Saudi Arabia's national oil

$26billionfromfourbonafidefor-

tionalcrudelevelsor

hurtforeigninvestor

cashgenerator,valu-

company, Aramco.

AdaniGas

Total

37

0.80

2019

eigninvestors(seetable:TheM&A

exchangeratevolatil-

sentimentthemost

ingitat $75billion. It

It's understandable if multi-

barrel).Comparethatwithasingle

ities. RILhadtoclose

isNewDelhi's

expected

to con-

billion dollar investments in oil

$2-billion deal in the US last year

allitspumpsin2008

inabilitytosee

cludetheagreement

andgasprojectsordealsinvolving

where Marathon Petroleum sold

when after a brief

throughIndia's

by March 2020, just

state companies that need to tra-

its Speedway retail business to 7-

honeymoon

with

biggestenergyproject

when

Covid-19

verse a complex bureaucracy at

Eleven in a pandemic.

decontrol of petrol

- a $55-billion

struck India. It later

state and federal levels and the

Barring Rosneft, the bulk of

prices the govern-

refinery-cum-

postponed the deal,

corridors of ministries unravel.

India's investments came in

ment went back to

chemicalventure

citingthepandemic.

However, Mukesh Ambani-run

exploration. The KG-D6 area off

fixing prices.

Aramco's

invest-

RIL,India'smostsuccessfulener-

theAndhracoastneverproduced

TheModigovernmentcontin-

ment covered the company's 1.36

gy company, is not typically

what it promised and was even-

ued with the previous adminis-

million b/d refinery in Jamnagar,

knowntofumbleonclosingdeals

tually mired in litigation, and UK

tration's retrospective tax legisla-

fuelretailoperationsandchemical

(Ambani closed deals

worth

Cairn's sale of its Indian arm led

tion,

sparking

a

lengthy

units. Aramco,inturn,plannedto

around ~2 trillion early last year

to a tax spat. Not a pleasant wel-

arbitrationwithCairn,andfinally

supply500,000b/dofcrudetothe

in telecom and retail with blue

oil and gas as well as renewables

the COP26 gathering in Glasgow.

come for investors bringing in

losing the case. New Delhi

Jamnagar plant, ensuring a cap-

chip investors).

andelectrificationwilllikelyplay

The role of fossil fuels in climate

billions of dollars.

then withdrew the law this year

tive buyer for its crude.

"Webelievethatinthecurrent

a role in how oil and gas compa-

changefoundmentionforthefirst

Yet another irritant to down-

after

foreign

courts ordered

Aramco could possibly show

business environment, it would

niescanbuildresilientportfolios,

timeeverinthefinalCOP26agree-

streamoilandgasinvestorsisthe

seizures of Indian state assets.

someinterestinBPCLafterletting

havebeendifficulttoagreeonval-

Deloitte said.

ment,promptingoilandgascom-

lackoffuelpricereforms. Perhaps

Similarly, there have been several

go of the RIL deal, and after an

uation," said an HSBC Securities

Concernsoverclimateandthe

panies like BP, Shell or Exxon to

that partly explains why no oil

timelinesonintroductionofelec-

interminablewaitfortheRatnagiri

report. Oilandgascompaniesare

course that countries take is a key

focus on low-carbon investments

majorshoweduptobidforBPCL,

tric vehicles (EVs), keeping fuel

refinery project because the Gulf

facing

more scrutiny

from

factor that international oil and

or lucrative

upstream assets.

acornerstoneofIndia'sprivatisa-

retailers guessing.

state is keen on a fossil fuel pres-

investorsasenvironmental,social

gas companies, including some

Investmentindownstreamassets,

tion programme; after paying

Butwhathasperhapshurtfor-

ence in a country that the

and governance (ESG) investing

private equity funds, are consid-

suchasrefineriesandretailoutlets,

more than $6 billion for the gov-

eign investor sentiment the most

InternationalEnergyAgencysaid

grows and renewables expand.

ering when evaluating oil and gas

seem less of a priority, a category

ernment'sstake,youmaystillend

is New Delhi's inability to see

willexperiencethelargestincrease

And divesting high carbon assets

projects. These concerns have

into which RIL and state-owned

up looking at Delhi for price sig-

through India's biggest energy

in energy demand of any country

while

acquiring lower-carbon

magnifiedsincethepandemicand

BPCL fall.

nals. Vedanta and some private

project - a $55-billion refinery-

worldwide over the next 20 years.

India'sfirstIKEA

'mall'tocomeup inGurugram

REUTERS

Stockholm, 23 November

IKEA's malls business, one of the world's biggest, said on Tuesday it had bought a plot in Gurugram next to New Delhi for a shopping centre that will be its first to open in India.

Ingka Centres, which has 47 such malls across Europe,RussiaandChina,planstoenterNorthAmerica and India. The estimated investment for the project is around$450millionandthecompanysaidconstruction would start in early 2022.

ManagingDirectorCindyAndersentold Reuters the company expected to complete the centre, which will also house office space, in late 2025.

IngkaCentresinFebruaryannouncedithadbought a plot in Noida on the outskirts of Delhi and planned to invest nearly ~55 billion in its first shopping centre in India, but said on Tuesday the one in Gurugram would open before that.

The Noida store would hopefully open shortly after Gurugram, Andersen said in an interview.

Like furniture giant IKEA, Ingka Centres is scouting for locations in major cities across many mar- kets.InIndia,Andersensaid,IngkaCentreswould,how- ever, focus on the two Delhi projects for the time being.

IKEA opened its first store in India in 2018, in Hyderabad. Ingka Centres is owned by Ingka Group, which also owns most IKEA stores worldwide.

Visa'sAmazon blueswillshapethe digitalcashdebate

ANDY MUKHERJEE						currencies,orCBDCs.Youdecidetobuyabook
November 23						onKindle,usingyourbrand-newcreditcard.
								Beforeyou'vedrawndownyourcreditline,the
Afteralongtime,thebalanceofpowerinthe			lender'sbalancesheet-inthewordsof
worldofmoneyisshifting.Amazon.comInc's			StanfordUniversityeconomistMonika
decisiontostopacceptingpurchasesmade			Piazzesi-is"empty"andfree.(Ifyou'duseda
withVisaInc'sUK-issuedcreditcardsfrom			debitcard,thebankwouldhaverequireda
nextyearshowsthatBigTechisflexingits			depositfromyou,andaloanassetontheother
musclesagainstestablishedfinancial						sideofitsbalancesheetbeforeyouboughtthe
networks.Somepolicymakersmustalreadybe			book.Itwouldhaveentailedcosts.)Whenyou
thinking,"Thisiswhyweneedsovereign			paybycreditcard,thebankcreatesadeposit
digitalcash-tostopabunchofunregulated			liabilityinAmazon'sfavour,automatically
playersfromcallingtheshotsinpayments."			backedbyanasset:whatyouowethebank.Itis
Butisitreallythatsimple?						this"complementaritybetweendepositsand
Theimmediatefalloutofthefracasover			creditlines,"Piazzesisays,"thatmakesitcheap
Visa'shighfeesmaybetogiveaboosttorival			forbankstohandlethesepayments."
MastercardInc,andnotjustinAmazon'sUK				Thegamewillchangeifthecentralbank
business.Thelong-termeffects,however,may			signsupasaplayer.Yes,depositsheldby
runfardeeper.E-commerceplatformsare			citizensatthemonetaryauthority,accessible
gaininganupperhandinnegotiationswith			viadigitalwallets,maybejustasconvenientto
cardnetworks.						useinonlinepurchasesasabankdebitcard
Inthenot-so-distantfuture,								linkedtoaPayPalwallet.But
theycouldusethismarketpower									centralbankdigitalcurrencies
torestrictcustomerstoonly									won'tofferanalternativeto
usingtheirin-housepayment									creditcardpurchasesbecauseno
tokens,apossibilityraisedby									public-sectorauthoritywantsto
PrincetonUniversityeconomist									bealendertothepublic.As
MarkusBrunnermeierand		E-commerce and	consumers,weallbenefitfrom
others.Wewon'tbeabletosay		social media giants	paymentcoststhatarekeptlow
no,becausewesimplycan'tbear		could use this	bycreditcards.Upsettingthe
thethoughtofnotbeingableto		cash flowing into	equilibriummightleaveallofus
buysneakersonline,oratleast		their tokens to offer	worseoff.
anNFTversionofthemforour		credit to merchants,	Centralbanksaren'tsoldyet
digitalavatar.		with repayments	ontheneedforCBDCs,butfor
E-commerceandsocial		deducted on every	differentreasons.Theyworry
mediagiantscouldusethiscash		sale at zero			thatintheprocessofprovidinga
flowingintotheirtokenstooffer		collection cost	meansofpaymentthatcan
credittomerchants,with									competewithcryptocurrencies
repaymentsdeductedonevery								likeBitcoinandtheirless
saleatzerocollectioncost.Realisingthat				volatilecousins-suchasDiem,theupcoming
banks'conventionalbusinessmodelswon't				stablecoinbackedbyMetaPlatformsInc-
standachanceinthisconnectedworldof				theywouldend upsupplyingasafe-haven
payment,lendingandcommerce,some				assetsuperiortobankdeposits.
countriesmightaccelerateplanstoprovide					Butwhileaper-walletlimitonzero-interest
digitalcashasapublicutility,whichcouldbe				digitalcash(andnegativeremunerationon
madeillegalforanyplatformtorefuse.Butin				higherholdings)couldwardoffthethreatto
doingso,policymakersmayenduphurting				deposits,policymakershaveyettoassessthe
sellerstoprotectbuyers.						morepracticalaspectsofsovereignelectronic
Smallmerchantswantcreditatcheaper				money,suchasitsimpactonbanks'profitable
ratesthanbanksprovide,andit'sbeginningto				credit-cardfranchises.Similarly,there'sacase
lookliketheycangetitfromplatformsby				tobemadeagainstintroducingCBDCsas
committingthemselvestoacceptpaymentsin				mandatorylegaltenderiftheypreventtech
tokensissuedbyBigTech.However,ifcentral				platformsfromofferinginnovativeloansthat
bankspushtheirdigitalcurrenciesas						restrictconsumers'choiceofpayment
mandatorylegaltender,thenthetransactions				instruments.Shouldconsumerinternetfirms
wouldgodark:E-commercesiteswon'tbeable				beallowedtogothatfar?
toautomaticallycollectloanrepaymentsvia					Whiletheanswertothatquestionisstill
self-executingsoftwarecode,orsmart						unclear,what'sunmistakablytrueisthattheold
contracts,andsmallbusinessesmaybedenied				orderinfinanceisyieldingtothenew.Visa's
theirshotatreallyinexpensivecredit.						disputewithAmazongivesaglimpseofthat
Thisisjustonetradeoffamongseveral.				change.Authoritiesneedtoweightheprosand
Thinkofhowbanks'cardbusinessmightbe				consbeforetheywadeintotheshiftingsandsof
impactedbythearrivalofcentralbankdigital				powerbetweenbankingandtech.	BLOOMBERG