IOC, Oil India jointly eye domestic, overseas oilfields

Indian Oil Corporation (IOC), in association with Oil India Limited (OIL), is looking at acquiring oilfields both in India and overseas. The two oil majors are prepared to invest close to $2 billion, IOC chairman Sarthak Behuria said here on Friday.

Speaking to the media on the sidelines of the 14th International Aviation Conference, he said, "We are considering 2-3 companies for a possible acquisition of stake. It may not be a total buy out. IOC and OIL together would form a special purpose vehicle (SPV) for the acquisition. IOC's own equity investment in the new acquisition bid would be about $200 million."

Terming the ongoing initiatives in oil exploration and production as long-term strategy of the company, Behuria said the company also intended to enter the sixth round of bidding for oil exploration blocks under the New Exploration Licensing Policy (NELP). IOC was also bidding for an exploration block in Egypt. "Meanwhile, we would soon commence exploration operations in our two blocks in Libya," he said. At present, IOC has 11 blocks for exploration acquired through ONGC.

According to Behuria, besides lining up Rs 35,000 crore investment for the next five years, the company is investing close to Rs 7,000 crore this year alone in various activities, including adding refinery capacities and laying new trunk lines.

Terming the release of oil bonds by the government as a major relief to cope with the underrecovery of cost of petroleum products, he said that IOC as the market leader was all set to garner up to Rs 6,400 crore from the total Rs 11,500 crore oil bonds to be made available to the public sector oil companies. "With this, we hope to continue our profit margins at last year's level," he said.

Besides, the company is also planning to off-load its equity holdings in ONGC and GAIL. At present, IOC holds 9.61 per cent equity in ONGC and 4.83 per cent equity in GAIL. IOC aims to expand its operations into natural gas and overseas retailing among other things to ensure that at least 30 per cent of the total income is generated from new businesses.

Earlier, addressing the aviation conference, Behuria said as the largest marketer of aviation fuel in the country, IOC was gearing up to make use of the growth potential of aviation industry in the country.

"India today consumes nearly 3.5 million tonnes of aviation fuel annually. While the overall consumption of petroleum products is growing only between 2 per cent and 3 per cent annually, aviation fuel consumption has been registering consistent growth of around 15 per cent. Clearly, the Indian aviation sector is the most happening sector with a potential to power the Indian economy to greater levels in the future," he said.

Over 100 delegates from several countries representing the aviation business attended the two-day conference, which covered issues ranging from navigation technologies, infrastructure, aviation fuel supply, among others.