Rupee debt on defence imports reduces to $ 1.694 billion

The external Rupee debt on account of past military purchases from Russia (USSR) has reduced to USD 1.694 billion as per Indian finance ministry quarterly report released for September 2006. The quarterly estimate for the total Rupee debt for the same period is USD 1.921 billion.

In the 1950s, Soviet credits to India were designated in Rubles, repayable in goods exported by India, and trade was designated in Rupees. Those times all exchange rates were based on the gold standard. When gold exchange standard was abandoned in 1971, India depreciated the Rupee against other currencies without formally depreciating against gold. Moscow was disadvantaged. India agreed to a new deal linking the Ruble to a basket of western currencies. In 1991 Ruble collapsed along with the Soviet Union collapsed, and so did the Ruble. The Rupee-Ruble agreement became unfair to India. If the Rupee depreciated, Russians gained and when the Ruble depreciated, India gained nothing. An agreement was reached in 1993, under which ruble credit was denominated in Rupees and a repayment schedule was drawn up. The agreement provided for an annual repayment of about US $1 billion equivalent in Rupee to Russia over a period of 12 years starting from 1994, with smaller amounts for a further period of 33 years. The Rupee debt funds were to be used by the Russian side to import goods and trade related services from India. Since the official trade between both countries have fallen compared to pre-1991 era, the utilization remained less. Now, the Russians are trying to invest it back in India with a 5 year lock in period.This could include setting up of Indian service centers for the defence products already sold to India.

Posted in Indian Military External Affairs | No Comments »

India briefs defence attaches on Military World Games 2007

Defence Attaches of 30 countries including the United States, Brazil, Greece, the Czech Republic and Saudi Arabia were briefed yesterday on various arrangements relating to the conduct of Military World Games 2007 at Hyderabad and Mumbai. The Games are scheduled to be held from 14 to 21 October, 2007. These Defence Officials were told that preparations for the MWG were going on in full swing and India is fully prepared to host the Games in a befitting manner. DAs of prominent member countries from Asia, Europe, Americas and Africa were thoroughly briefed about all the aspects about the conduct of the games e.g., arrival formalities, reception of their contingents, location of stay, movement in the city and security arrangements. Defence officials of these countries were briefed by senior members of the Military World Games Organising Committee.

Defence Attaches were impressed with the meticulous planning of Organising Committee and reposed full faith in the abilities in the Indian Armed Forces to host the Games.

94 countries have already confirmed their participation for the Games and it is excepted that this figure could cross the 100 mark. More than 5000 sports persons are going to compete in the 13 events in the eight day event. The Games are slated to be biggest ever congregation of countries for any sporting event in India.

Besides sportspersons, several countries have intimated that their Defence Ministers, Chiefs of Armed Forces and top Defence officialswill be coming over to Hyderabad to attend the 4th MWG. Armed Forces are gearing up to host these dignitaries in a befitting manner. A high level protocol committee has been created to look after the complex task of handling so many defence ministers , heads of armed forces besides the Indian VIPS which include President of India and Chiefs of Indian Armed Forces . Defence Ministers of the countries which have already confirmed their participation include Italy, Burundy, Latvia and Slovakia . This is for the first time the Defence Ministers of so many countries are arriving for attend the single event at the same time in India. Ministry of Defence is going to utilise the opportunity to build bonds between Armed Forces of India and these countries.

Posted in General Indian Armed Forces News | No Comments »

ONGC Videsh wins 3 blocks in Colombia

ONGC Videsh Limited, the wholly-owned subsidiary of Oil and Natural Gas Corporation Ltd. (ONGC) has been declared winner in 3 offshore exploration blocks in Colombia ? 2 blocks in collaboration with Ecopetrol (the National Oil Company of Colombia) and one block in collaboration with Ecopetrol and Petrobras in a bidding round christened the ‘Caribbean Round 2007’ in Columbia. The Agency National of Hydrocarbons of Colombia had offered a total of 13 exploratory blocks - 2 in shallow offshore, 4 in deep water and 7 in transition areas.

The announcement was made in Bogota on 18th September, 2007 in the presence of Minister of Mines Government of Colombia, senior authorities of Colombian energy sector and representatives of various companies.

A total of 11 companies qualified the pre-qualification bid round and 5 companies were declared winners. Some of the international companies that were declared winners are British Petroleum and Amerada Hess Corp besides ONGC Videsh and Petrobras.

ONGC Videsh’s Participating Interest in Block RC ? 9 and RC ? 10 will be 50% with Ecopetrol, holding another 50%. This is OVL’s first tie up with Ecopetrol in deepwater in Columbia. In block RC -8, OVL‘s participation shall be 40% with Ecopetrol holding 40% and Petrobras, National Oil Company of Brazil holding another 20% Participating Interest. OVL shall be the Operator in Blocks RC- 8 and RC-10.

Speaking on the occasion, Mr. R.S. Sharma, Chairman ONGC said, “Participation in these 3 new blocks in partnership with Ecopetrol and Petrobras is part of our strategy to expand our investment in prospective E&P assets in Latin America”.

Mr. R.S. Butola, Managing Director, OVL added that the award of the blocks fits into OVL’s strategy of developing a balanced portfolio with an appropriate mix of producing, discovered and exploration assets.

It may be recalled that in September 2006, OVL acquired 50% Shares of Omimex de Colombia Ltd. from Texas based Omimex Resources, Inc. along with Sinopec, the company from China as remaining 50% Shareholder. The venture jointly operated by OVL and SINOPEC is currrently producing over 22000 bbls/day with a significant potential to further enhance the production.

Posted in Commodity And Energy Security | No Comments »