The Indian Oil Corporation on Tuesday said it was in talks to acquire a stake in Canada's Niko Resources and France's Maurel & Prom.
Indian Oil chairman Sarthak Behuria said IOC was awaiting Maurel's and Prom's response to the offer made by his company. "Their board is still evaluating our proposal. We are waiting for their response," he told reporters on the sidelines of a news conference.
He said Indian Oil would sell part of its oil bonds to repay its debts and settle taxes. This follows the announcement made by the government to issue the first tranche of bonds worth Rs 5,750 crore (Rs 57.5 billion) on Wednesday and an equal amount by March 15.
Behuria said of the total Rs 11,500 crore (Rs 115 billion) of bonds, Indian Oil would get Rs 6,300 crore (Rs 63 billion) and IBP would get Rs 400 crore (Rs 4 billion) worth of bonds. The remaining Rs 4,800 crore (Rs 48 billion) would be appropriated by the other state-owned oil marketing companies.
"We will sell some of our bonds to repay our debts and settle taxes like the corporate tax. We have some old bonds with coupon rates of 6.9 per cent and we will get new bonds with average coupon rate of 7.3 per cent before March 15," he said.
On the impact of bonds, Behuria said they would add to the income of the company that was expected to incur a loss of nearly Rs 8,500 crore (Rs 85 billion) on account of selling cooking gas, kerosene, petrol and diesel below the cost prices.
On its investment plans, he said the company's capital expenditure for 2006-07 was pegged at over Rs 7,000 crore (Rs 70 billion), which would be spent on setting up a naptha cracker plant, refinery expansion and upgrade. The company board would also take up the issue of approval for the proposed Paradip refinery in Orissa.
The company is expected to invest Rs 22,000-Rs 25,000 crore (Rs 220-250 billion) on the refinery with a capacity to produce 15 million tonnes of products and petrochemicals over the next four years.
"Earlier, Paradip was scheduled for 6 million tonnes, but we are now increasing it to 15 million tonnes and we expect a detailed feasibility report on this soon," Behuria said.
The company would also set up a petro-chemical complex at the refinery site. The Panipat refinery units were at a pre-commissioning stage and the company was expecting to commission all units by June.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group
