Intel’s Craig Barrett
The Indian government is set to announce the opening of the sixth round of bidding for onshore and offshore exploration blocks in January 2006. Nearly 30 exploration blocks will be open for bidding. The fifth round, which was held in mid-2005, saw more than 60 bids being made for 24 blocks. Following the sixth round the government intends to follow an open acreage policy where blocks will be available throughout the year and potential bidders can visit a data room, complete the due diligence and make a bid.
The billions of dollars in private investments flowing into India’s energy sector has set off a clamor for an independent energy and petroleum sector regulator to manage the process of opening up the sector. India’s liberalization model is based on putting into place strong, independent regulators for critical industries that have been opened to private Indian and foreign investment. Regulators have already been established in sectors such as insurance, telecom and power. A much-anticipated bill has just been introduced in the Indian parliament for approval that will create the framework for regulating the energy sector and all its constituents, including the newest addition, the gas pipeline operators.
Another industry that is blossoming with help from foreign investors is chip manufacturing. Intel’s chairman Craig Barrett was in New Delhi recently to announce that Intel will invest $1 billion in India in R&D capability and on marketing initiatives. In addition Intel will also establish a $250 million venture capital fund called the Intel Capital India Technology Fund for investing in technology companies. The company is also considering setting up a manufacturing unit in India and is in talks with the government. Intel’s announcement comes hot on the heels of rival chipmaker AMD’s announcement of a $900 million investment in a chip-making plant in India. The total cost of that project is $3 billion, with the bulk of the investments being made by a group of non-resident Indians and venture capital firms, as well as a 26% equity contribution from the Indian government.