The Hindu Business Line : IndianOil talks on Turkey refinery inconclusive

Kolkata, Nov 27 Caught unaware in the midst of aggressive oil diplomacy between Turkey and its neighbouring countries Azerbaijan and Kazakhstan, the fate of IndianOil’s plan to set up a 15-million-tonne refinery in Turkey is hanging in the balance.

The company’s recent effort to form a single consortium involving the national oil companies of Azerbaijan and Kazakhstan and Calik Holding and Turcas of Turkey has so far failed to reach any conclusion.

According to sources, all the companies had joined a meeting on November 23 to explore the possibilities to stop competing with each other (for setting up the refinery) and form a single consortium instead. The meeting ended inconclusively.

“There may be more meetings between the companies during the next month or so, following which it will be clear whether IndianOil is still in the race,” a source said.

It may be mentioned that in May this year, the Turkish authorities had granted provisional approvals to three joint ventures for building refinery at the port city of Ceyhan to refine the crude oil to be transported through the Trans Anatolian Pipeline across the Bosphorus straits.

Cross-country pipeline projects are opening up new opportunities for transportation of oil from the hydrocarbon rich land-locked CIS countries (such as Kazakhstan and Azerbaijan) to the Mediterranean.

The joint ventures which received the provisional approval are IOC and Calik; Azeri state oil company SOCAR and Turcas and, Turkish Petrol office and Austrian OMV.

Later, KazMunayGas (KMG) – the state oil company of Kazakhstan – and ENI of Italy expressed interest to join the IndianOil-led consortium.

Things, however, started taking a different turn in the last two months. An improvement in relationship between Azerbaijan and Turkey made the SOCAR-Turcas joint venture a clear frontrunner. To further strengthen its chance, SOCAR-Turcas joint venture has also invited KMG to join the consortium.

Thankfully, KMG has so far remained confident in IOC’s ability to execute the multi-billion dollar project and has proposed forming one consortium involving all. The next couple of weeks will prove whether the effort succeeds.

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