Chairman of Indian Oil Corporation, M S Ramachandran, said on Wednesday that the possibility of merging its subsidiary IBP & Co Ltd with the parent company cannot be ruled out.
"IOC-IBP merger options are open," but the parent company does not have any such plan at the moment, he told reporters.
Ramachandran said the government has notified to IOC that it would exercise put option at the end of first year of divestment following which the residual 26 per cent stake will be offloaded.
He said the government has specified that the stake would not be sold to IOC, which already holds 53 per cent in IBP, but would be offloaded to the public.
As both IOC and IBP are in the oil marketing business, he said efforts were being made to rationalise the facilities of both the companies to avoid duplication.
He said all investment planning will be done in consultation with the managements of the two companies, as well as pooling of human resource talent.
IBP has a significant presence in retailing of petroleum products, he said.
Ramachandran said IBP will submit expression of interest for entering the Sri Lankan oil industry, where IOC had already made inroads at the invitation of the country's government.
He said as the Sri Lankan oil industry was in a restructuring mode at present, and a number of Indian oil companies have evinced interest in entering the Lankan market as a third player after Ceylon Petroluem and IOC.
Ramachandran, also the chairman of IBP, said LNG has emerged as a big business opportunity for the subsidiary for which it has entered into an agreement with Chart Industries of US.
As IBP was a market leader in manufacturing cryogenic containers, IOC would help the company in transporting LNG in liquid form from the Dahej terminal of Petronet LNG for transportation to places where there was no pipeline infrastructure, Ramachandran said.
The IBP chairman said the company could tap customers in transport corporations, power units and housing colonies for its LNG business.
Ramachandran said the Dahej terminal will commence operations from January next year and sell LNG from March 2004. For this purpose, GAIL has already completed the pipeline.
