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IFFCO keen on HPCL pie
July 11, 2003 16:22 IST
Freed of government control, fertiliser cooperative giant IFFCO is eying a pie in India's second largest oil refiner Hindustan Petroleum Corporation Ltd, where the government is selling its 34 per cent equity.
IFFCO, that became a fully autonomous cooperative institution after the government equity was reduced to 41 per cent from July 1, is seeking an alliance with Royal/Dutch Shell and Kuwait Petroleum Corporation for putting in a joint bid for HPCL, its managing director U S Awasthi told PTI in New Delhi.
"We have asked our partner Oman Oil Company to talk to KPC and Shell for forging a consortium for HPCL," he said.
KPC and Shell are among the over half a dozen firms that put in initial expression of interest for acquisition of HPCL that will give the buyer a ready-made distribution network to tap into world's 7th largest retail oil market worth $15 billion a year in sales.
As part of bid condition, suitors are allowed to take partners till the stage of submitting financial bid.
IFFCO could not bid for HPCL as the government policy barred state-run firms from being part of the divestment process.
Awasthi said IFFCO was eligible for bidding for HPCL as repatriation of government equity reduced the state control in the cooperative giant from 69 per cent to 41 per cent thereby making it an autonomous body.
"There are a lot of similarities in fertiliser and oil refining and marketing. The fact that Nagurjana Oil had offered us stake in their upcoming refinery speaks for that," he said adding IFFCO would bid aggressively for acquiring government stake in Bharat Petroleum Corporation Ltd whose equity shares are to be offered via a public float.
Awasthi said IFFCO wanted to use the oil retail network for taking its products to the consumers.
"We want to diversify in areas synergetic to our core activity and HPCL offers one such opportunity," he said while stating that Oman Oil Company has not yet got back to it with the response of KPC and Shell on consortium bidding for HPCL.
Others in the race for the government's 34.01 per cent stake in HPCL include British Petroleum, Petronas of Malaysia, Saudi Aramco, Reliance Industries and Essar Oil.HPCL owns refineries at Mumbai and Vizag, with a total refining capacity of 13.5 million tonnes, besides a 20 per cent retail market share through a over 4700 strong petrol station chain.