IOC eyes stake buys in Africa

Indian Oil Corporation (IOC), the country's largest crude oil refiner and marketer of petroleum products, is in talks with various African countries for buying stake in discovered oil and gas blocks.

The Fortune 500 company is also keen on buying into existing refineries and helping in their upgradation and maintenance.

"We are in talks with Nigeria and some other African countries for exploration and production blocks," said IOC business development director, BM Bansal.

The company has also decided to increase its crude oil imports from Nigeria from 2 million tonnes per annum to 3 million tonnes.

He added that the company was not keen on exploration blocks, but rather wanted to buy stake in discovered fields, a strategy that is an accepted one around the world.

Global oil companies such as Brazil's Petrobras, Italian ENI and Norway-based NorskHydro have previously followed the same route to pick up stake in oil blocks operated by Oil and Natural Gas Corporation (ONGC) in India.

When asked if IOC was not willing to take the risk of investing in an exploration block, Bansal explained that the company was looking for oil and gas sources which will help feed its refineries in India.

Another government-owned oil refiner and marketer, Bharat Petroleum Corporation (BPCL) is also following a similar strategy. "We already have enough exploration blocks. Now we are interested in buying into discovered blocks," the company's Chairman and Managing Director Ashok Sinha said.

IOC is keen on buying stake in refineries in Africa. It will, however, pick up stake only if the refinery is bundled with an oil or gas block. "That way, the refinery can be fed with oil from our fields," Bansal said.

Separately, IOC has offered to invest in a gas-based petrochemicals plant and for setting up a liquefied natural gas facility in Mozambique.

This followed discussions with a delegate from the company at the India-Africa Hydrocarbon Summit. IOC has also agreed to help increase the liquefied petroleum gas storage capacity in Mauritius, Bansal said.

This proposal was discussed at a bilateral meeting between IOC officials and Rajeshwar Jeetah, minister for industry - SMEs, Mauritius.

IOC already retails petrol and diesel in Mauritius through its fully owned subsidiary Indian Oil (Mauritius). Mauritius' annual LPG consumption is currently 60,000 tonnes and is likely to rise to 100,000 tonnes.

The shares of IOC closed at Rs 503.80 on the National Stock Exchange on Wednesday, up 3.4 per cent from its previous close.