By Lola Nayar, Indo-Asian News Service
New Delhi, Mar 7 (IANS) For the first time Indian Oil Corporation (IOC), the country's only Fortune 500 company, is trying to invest in oilfields in Kuwait, Iran and Sudan to beat domestic competition.
IOC, with two other state-owned firms as consortium partners, has submitted a bid for an offshore exploration block in Iran. It is also in talks with National Iranian Oil Company for cooperation in both Iran and India, including setting up a liquefied natural gas project in Iran.
In Kuwait, IOC is seeking to invest in the Raudhatain, Sabriyah, Ratqa and Abdali oilfields development project. The IOC-Oil and Natural Gas Corporation (ONGC) combine is among the international companies short-listed for stake.
This is the first time the IOC is venturing into exploration in the two countries. It has been in talks with Kuwait Petroleum Corporation for setting up a refinery at Paradip on the east coast of India.
"We are in the initial stage of acquiring a stake as non-operating partners in oilfields in Kuwait, Iran and in Sudan," M.A. Pathan, the state-owned company's chairman and managing director, told IANS here.
In Sudan, IOC, along with the ONGC's foreign investment arm, is looking to acquire Canadian oil and gas major Talisman Energy's 25 percent stake in the Greater Nile Oil Project. Talisman wants to offload its stake as the U.S. has branded Sudan a sponsor of terrorism.
Chinese National Petroleum Company (CNPC) holds the production licence of the project with 40 percent stake while Petronas of Malaysia holds 30 percent stake and Sudapet, Sudan's national oil company, five percent.
The Indian consortium has submitted a preliminary bid for 25 percent stake, IOC officials said.
In India, IOC is looking to acquire Indian Petroleum Corporation Ltd. (IPCL) and is in talks for a stake in Haldia Petrochemicals Ltd.
India's largest refining and marketing company with a 54 percent market share with its recent acquisition of IBP Co. Ltd., acknowledges that the days of a protective environment are over as India sets to lift curbs on petroleum marketing. This would allow private companies to enter the field from April 1.
"We are happy that Reliance Industries will soon be listed among Fortune 500 companies. But our competition will not come merely from Reliance but other multinational companies also," said Pathan.
Of India's 17 refineries with a total capacity of 112 million tonnes, the IOC currently owns and operates seven, with a total capacity of 38 million tonnes.
The company has many firsts to its name. The IOC's first refinery was also the country's first state-owned refinery set up at Guwahati, in the northeast state of Assam, in 1962. It also operates the country's oldest refinery at Digboi, also in Assam.
IOC also set up India's first product pipeline from Guwahati-Siliguri, a distance of 435 km. Today the company operates the country's largest network of 6,523 km of crude and product pipeline with a total capacity of 43.45 million metric tonnes per annum.
It also has a network of 20,000 retail outlets and the world's highest depot in Ladakh, Jammu and Kashmir, to meet the needs of the region that is cut off from the rest of the country for six months of the year.
With product sales of 47.80 million tonnes during 2000-01 fiscal, IOC's profit after tax stood at Rs.27.20 billion.
"We are currently supplying lubes to countries like Malaysia, United Arab Emirates, Kuwait, Bahrain, Sri Lanka, Nepal and Bangladesh. In Mauritius we are investing Rs.1 billion to set up a refuelling terminal and retail outlets," said finance director P. Sugavanam.
In the domestic market, IOC has been asked to stay out of the race for two public sector majors coming up for disinvestment -- Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd.
Though the IOC has registered a protest with the disinvestments ministry, it is not too worried by the prospect of its competitor Reliance snapping the two companies up.
Explained Pathan: "As we have lived with competition from these two state-owned companies, we do not see any additional competition if Reliance or any other private company gets them. The competition would come from new outlets which Reliance or the other entrants may set up."
Indo-Asian News Service