IOC backs out from bid for Nigerian firms

State-owned refiner Indian Oil Corporation (IOC) has withdrawn from the race for acquisition of three Nigerian refineries but has submitted a bid for acquiring Turkey's national refiner Tupras, petroleum minister Mani Shankar Aiyar, said on Monday.

In November 2003, IOC submitted an expression of interest (EOI) for acquiring 51 per cent or more stake of Nigerian government in each of the three Nigerian refineries - Kaduna Refinery and Petrochemical Complex, Port Harcourt Refinery Complex and Warri Refinery and Petrochemical Complex.

"However, on a fresh assessment of the risks involved in the proposal, such as the uncertain pricing environment, the unclear regulatory framework and poor profitability of the downstream sector, IOC has decided that they should not pursue this investment opportunity," Aiyar said in a written reply to a question in Rajya Sabha.

Meanwhile, Aiyar said IOC submitted an EOI for acquisition of 51 per cent stake in Turkish Petroleum Refineries Corp (Tupras) on June 14, 2005. "The due diligence process is currently in progress. The binding bid will have to be submitted to privatisation administration of Turkey by September 2, 2005," he said. Tupras owns four refineries - Izmit, Izmir, Kirikkale and Batman - with a combined capacity of 27.6 million tonne per annum.

With the total processing capacity of all refineries in Turkey amounting to 32 million tonne a year, Tupras, on its own possesses some 86 per cent of the country's total refinery capacity. It also owns petrochemical production capacity of 1,53,000 tonne per annum.

The profit-making Tupras is a listed firm with 49 per cent of its share public traded on Turkish stock exchanges. It has a market capitalisation of about $3 billion.

IOC has also submitted EOIs for setting up a grassroot refinery in Algeria and modernisation of Aden refinery in Yemen, he said.