IOC - Kuwait Petro refinery talks in decisive stage
Indian Oil Corporation (IOC) and Kuwait Petroleum Corporation (KPC) have entered the final leg of discussions over the former's participation in IOC's 9 m tpa East Coast refinery project in Orissa.
IOC is India's largest company in terms of sales. The company has a crude refining capacity of 31.7 m tpa. The company also operates seven pipelines (6,268 km) out of the total 10 in India. The company is currently executing projects worth over Rs 100 bn. The investments are being made in stepping up crude refining capacity, pipelines, LPG bottling plants, lube blending plants, a jetty and other related expenditures. IOC has tie-ups with Premier Oil Pacific Limited (UK) and Petronas Carigali (Malaysia) to participate in the NELP (new oil exploration policy) bids invited by the government.
KPC has shown renewed interest in the proposed Rs 80 bn refinery. Earlier KPC seemed to have reservations about participating in this project. It had sought guaranteed profits and a 15-year sales tax exemption, both of which were turned down.
If Kuwait Petroleum does decide to participate in the aforesaid project, it will benefit both parties. Not only will KPC bring in its technical expertise to the project, but would also share capital expenditure with IOC. This will help both the parties spread their risks. For KPC it will also mean an entry in oil exploration in the Indian subcontinent.
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