Financial Daily from THE HINDU group of publications
Thursday, Sep 25, 2003
Mergers & Acquisitions
Shell offers 15% stake to GAIL in Egypt project
New Delhi , Sept. 24
ROYAL Dutch/Shell has offered GAIL (India) Ltd a 15-per cent stake in an offshore medium sized gas field in Egypt.
"Shell has offered us a minority stake in an exploration block in Egypt. We are evaluating the proposal," the GAIL India Chairman and Managing Director, Mr Proshanto Banerjee, told newspersons here today.
According to Mr Banerjee, the offer was part of a memorandum of cooperation that GAIL signed with Shell in January this year.
Currently, in the exploration business, GAIL has a 10 per cent stake in a gas field in Myanmar.
It is in talks with Shell to pick up equity stakes in two city gas distribution companies in Egypt.
"Shell has offered us 19 per cent equity in Fayum Gas Company and 10 per cent equity in Shell CNG Company (both in Egypt). Financial, legal and technical due diligence study for both have been completed and valuation and other terms and conditions for investment were under preparation," Mr Banerjee said.
Shell CNG retails compressed natural gas (CNG) to automobiles in Cairo while Fayum Gas Company supplies piped natural gas for domestic consumption.
Further, GAIL is also evaluating the feasibility of participation in Natgas, a gas distribution company in Egypt. According to Mr Banerjee, BG has offered GAIL equity participation in its gas distribution company in Brazil.
The domestic gas transportation major is looking at equity stakes in oil and gas exploration blocks in Argentina and Mozambique. Shell has offered a minority stake to GAIL in an exploration block in Argentina.
According to Mr Banerjee, GAIL is looking at CNG distribution projects in Manila. GAIL has prepared a detailed feasibility report for a city gas project in Dhaka and is in talks for similar projects in Cairo, Manila, Istanbul and the Iranian city of Isfahan, he added.
It has an agreement with Botas of Turkey for aiding it in setting up a city-based gas distribution system and CNG network for automobiles in Istanbul and Ankara. In the Philippines, the company has been offered gas pipeline projects BAT MAN I and II.
The 100-kilometre BAT MAN-I pipeline connects indigenous gas supply source to the market while the 140 km BAT MAN-II pipeline connects an upcoming LNG terminal.
GAIL estimates that foreign operations may account for 15 per cent of its turnover in the next 10 years.
By this time, the total revenues is expected to double to Rs 20,000 crore.
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