IndianOil in gas JV talks with Reliance Industries

Indian Oil Corporation is in talks with Reliance Industries to form a natural gas joint venture. IOC Chairman Sarthak Behuria said the company was looking at city gas distribution and was talking to Reliance for supplies from its Krishna-Godavari (KG) basin.

Though the companies did not confirm it, Relaince is expected to have a majority stake in the venture. The collaboration, sources close to the development said, could also include laying communication cables along with the gas distribution network.

Speaking to reporters on the sidelines of the company's annual general meeting in Mumbai today, Behuria said IOC had already formed one such venture with GAIL to start city gas projects and was talking to other firms also for setting up natural gas distribution joint ventures.

Later, speaking to shareholders at the company's AGM, Behuria said IOC was on track to implement its multi-billion-rupee expansion plan. In this financial year, the company has earmarked Rs 8000 crore for capital expenditure, mainly for refinery upgrading and new petrochemical projects.

The recent decline in global crude oil prices had helped IOC to lower its revenue losses by about Rs 1000 crore, Behuria said. "If crude prices remain at these levels, we will reach a positive margin in petrol and mostly wipe out our negatives in diesel," Behuria said.

Behuria said IOC would receive the first tranche of oil bonds worth Rs 7000 crore by September-end from the government as compensation for its revenue losses on retail fuels during the April-June quarter. The government said in June it would compensate oil firms by issuing bonds worth Rs 28,300 crore.