Little response to India's New Exploration Licensing Policy

Aug 16, 1999 02:00 AM

The response from global oil companies to India's much vaunted New Exploration Licensing Policy has been lukewarm ' with only four multinationals having shown interest in the 48 blocks in the country's licensing process.
When bids are opened on 18 August, state-owned Oil and Natural Gas Corporation may come to the government's rescue and take up a number of blocks, either on its own, or in a joint venture with the Gas Authority of India and Indian Oil Corp.
Meanwhile, the Indian Oil Corporation has offered KPC, its partner in the core east coast refinery, the option of marketing products either through a new joint venture company or through IOC's existing infrastructure.
"KPC can choose between marketing 50 % of the refinery's products through the joint venture while the balance will be taken up by IOC's own retail chain. The other option is to market the entire output through the joint venture company where both IOC and KPC will share the equity equally," a source told India's Financial Express.
The IOC offer has been made keeping in mind that all multinational oil companies are keen on getting a foothold in marketing first before investing in refineries. This holds good for KPC, which is still to decide on teaming up with IOC in the 9-mm ton refinery scheduled to be commissioned in 2002.
The partners will hold 26 % each in the project but the IOC top brass categorically stated that the company will go it alone should KPC decide to back out.

Source: IINX via Iinoil
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