Societatea Nationala a Petrolului (National Oil Company) - Petrom has strategically teamed up with Essar Oil to submit a bid for 33.58% in IBP Ltd., the Indian state-owned oil marketing company. The Indian Government holds 59.58% in IBP.
IBP holds nine percent of the Indian retail oil market and 1,514 outlets. The rest of the market is split up among Indian Oil Corporation, British Petroleum CL and HPCL-27%. Indian authorities say IBP's market value ranges between 350-400 million dollars.
"Petrom-Essar Consortium submitted the letter of intent to HSBC Securities and Capital Markets, the bank appointed to handle IBP Ltd.'s privatisation," SNP Petrom sources told Ziarul Financiar.
The company management, however, declined any comments, arguing it was nothing certain for the time being and everything had not gone beyond the letter of intent stage.
SNP representatives said that such an investment would only consolidate Petrom's position on the oil market and implicitly for privatisation, though.
The bid was submitted on February 28, 2001, the last day for submitting such documents.
Essar Oil is one of the leading petroleum companies in India, owner of several refineries and oil fields.
According to "The Times of India," the India-based Reliance Petroleum Ltd. Refinery, global oil giant Shell, HPCL, BPCL and IOC have also submitted bids for the Government's stake in IBP.
Following the completion of this operation, the Indian government's stake in IBP Ltd will decrease to 26%, while a strategic partner will hold 33.58%. The remaining stock will go to various financial institutions and other investors.
For Petrom, the bid will be the second alliance in India, after having purchased stock in Saurashtra Offshore block from Essar Oil. The final equity of joint venture between Essar and Petrom's will be decided after the preliminary due diligence, according to industry sources.
SNP Petrom this year is planning to invest 10,500bn lei (more than $300 million) in Romania and in the countries where it already does business or has oil fields. The value of the investments Petrom has made abroad so far amounts to more than $50 million.
Petrom in this respect will complete construction works for a 12 million tonne refinery in India. Also in India, SNP Petrom will start operating an oil field and a natural gas field.
A new oil block has already been purchased in Kazakhstan, along with those in Jusaly and Tasbulat.
At the same time, the company is planning to expand to neighbouring countries, having already scheduled to open a gas station in Belgrade, some time soon.
