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IOC seeks `fast track' clearance from Govt for global buy-outs

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Mr M.S. Ramachandran, Chairman and Managing Director, Indian Oil Corporation, at a press conference in Banglaore on Friday. — G.R.N. Somashekar

Bangalore , June 11

INDIAN Oil Corporation, which plans to buy a "mid-sized" exploration and production company and lined up a war chest of $2 billion for the purpose, has sought fast-track clearance from the Government in line with ONGC Videsh to pursue such deal quickly, the Chairman and Managing Director, Mr M.S. Ramachandran, has said.

"We have sought the clearance two weeks ago", he added. He declined to reveal details about the buy-out.

Mr Ramachandran said, "It depends on how fast we get the approval". Then the company plans to mandate investment bankers and financial planners to seek out buy-out targets.

The company has signed a pact with Iran on the Farsi project to import liquefied natural gas (LNG), even as it has formed a consortium for exploration block with Oil and Natural Gas Corporation and Gail (India). The company has also obtained a development contract of a refinery at 60,000 barrels per day. IOC and ONGC Videsh have 40 per cent interest each in that block.

IOC has also been invited to take up equity in Bandar Assalnyeh olefin project 12. The equity stake was offered in return for the prospect of importing finished petroleum from Iran. "We have not yet sunk in money, we need to get the final estimate", he said.

"We are also in talks with Kuwait Petroleum on research and development," Mr Ramachandran said.

The company is also in the process of bidding with British firm BP and Occidental for acquiring Northern Kuwait oil fields. It has also bid for developing an existing crude oil refinery to increase capacity to 9,000 barrels per day from the current level of 6,000 barrels per day.

IOC has managed to hike its refinery margin to $6 per barrel from $2 a barrel two years ago, despite hardening crude price. The company imports 64 per cent of its crude on a term basis and buys the remaining 36 per cent in the spot market.

It has also deferred its Sri Lankan subsidiary's plan for initial share sale tracking political instability in the island nation. However, Mr Ramachandran said that it was likely to push through the IPO plan in the current fiscal itself.

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