The Hindu Business Line : Turkey foray: IOC may have to rework strategies

Rough patch
IOC in joint venture with Calik Holding received the provisional approval to build the refinery at Ceyhan.
Trends suggest that the Turkey may allow only one party to set up the refinery.

Pratim Ranjan Bose

Kolkata, Nov. 7 IndianOil’s years-long chase to set up shop in Turkey may face another hurdle by the end of this month. As things stand now, the company may have to rework its strategies on equity partnership and forge new alliances to get the final approval for setting up the proposed 15-million-tonne refinery at the port city of Ceyhan in this Eurasian country.

The emerging situation may also put India’s oil diplomacy to test once again. The key to success may depend on IOC’s ability to get the state oil companies of both Azerbaijan and Kazakhstan as consortium partners.

Consortium partners

IOC, in joint venture with the local partner Calik Holding, received the provisional approval in May this year to build the refinery at Ceyhan. ENI of Italy and KazMunayGas (KMG), the state oil company of Kazakhstan, have already expressed interest to join the consortium.

The IOC-Calik joint venture apart, the Turkish authority had also offered provisional approval to two other joint ventures: A collaboration between Azeri state oil company SOCAR and Turkish Turcas and joint venture of Turkish company Petrol office and Austrian OMV.

According to sources, the recent trends suggest that the Turkish authorities may finally allow only one party to set up the refinery at Ceyhan and the frontrunners in this race are IOC-Calik and SOCAR-Turcas.

The bilateral relationship between Turkey and Azerbaijan coupled with the huge oil and gas resources available with SOCAR makes the Azeri state oil company a strong contender for setting up the refinery. The company has already left IOC behind in the race for stake in Turkish state refinery Petkim.

“The emerging situation may lead all the parties interested in setting up the refinery to form one consortium,” said a source in IOC. The proposal is reportedly also supported by Kazakhstan.

While a decision in this regard is awaited by November-end, IOC has to make sure that it gets a fair deal even if SOCAR agrees to form a single consortium.

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