27 Sep : Oil-rich Kuwait is keen on buying a stake in Indian Oil Corp (IOC) if the government decides to sell its shareholding through a strategic divestment, Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said on Monday.
“If government divests some stake through strategic sale, we are very interested in such proposal,” he told reporters after a luncheon meeting with the IOC management in New Delhi.
The government plans to sell its 10 percent stake in IOC this fiscal through a public offering, a route that is of little interest to Kuwait.
“It has to be strategic sale,” he said when asked if Kuwait Petroleum Corp (KPC), of which he is the Chairman, or Kuwait Investment Authority would been keen on buying IOC shares in the public offering.
KPC was one of the seven suitors for fuel retailing firm IBP Co Ltd, in which the government sold its shareholding through a strategic sale in 2002.
IOC outbid KPC, Royal Dutch Shell and Reliance Industries to buy IBP.
Al-Sabah said he had heard of government plans to sell its 10 percent stake in IOC through a public offering in the fourth quarter of current fiscal to raise Rs 7,000 crore.
While IBP’s 2,524 petrol pumps offered a company access to the fastest growing fuel market in Asia, a stake in IOC would give the company a foothold in the nation’s largest refining and marketing company.
IOC owns half of the India’s 20 refineries and 52 percent of the over 38,000 petrol pumps in the country.
The visiting Kuwaiti Minister, who called on Vice- President Hamid Ansari on Monday afternoon, and will do so on Prime Minister Manmohan Singh tomorrow, discussed KPC’s participation in IOC’s upcoming Rs 29,777 crore refinery and petrochemical complex at Paradip, in Orissa.
Al-Sabah, however, did not look very keen on the proposal, as KPC had “requests (for participation) lot of refinery projects… It (KPC’s participation) will depend on economics (of the project).”
Besides discussing long-term contracts for supply of Kuwaiti crude oil to India, he also deliberated on the OPEC nation using strategic crude oil storages being built in Mangalore and Vizag for storage of Kuwaiti crude.
This, along with downstream investment opportunities in petrochemical projects, such as the olefin project of ONGC Petro Additions Ltd (OPAL), the aromatics project of ONGC Mangalore Petrochemicals Ltd (OMPL) and IOC’s Paradip petrochemicals project, would be discussed threadbare when he meets Oil Minister Murli Deora on Tuesday afternoon.
Also, the interest of Indian companies to acquire a fertiliser plant in Kuwait run by Petrochemicals Industries Company (PIC) and KPC, as well as the possibility of investing jointly in fertiliser production inside and outside Kuwait and negotiation of a long-term urea offtake agreement from Kuwait by India, would figure in Tuesday’s talks.