The Hindu Business Line : IOC hopeful of finalising Turkey project equity map

On the other hand, the deliberations on its case during the recent visit of the Turkish President, Mr Mahmoud Ahmadinejad, to Delhi seems to have bolstered IndianOil’s dream to foray into the refining cross-country pipeline sector in the Eurasian country.

Though maintaining that the IOC-Calik joint venture led consortium is yet to receive final clearance for setting up the $4.9-billion, 15-million-tonne refinery at the port city of Ceyhan in Southern Turkey, IOC sources are hopeful that the consortium partners will reach an understanding regarding the equity structure and project funding options within a month.

“We are expecting a meeting to take place between the partners to reach an understanding underlining the shareholding structure and funding options for the refinery project this month,” an IOC source told Business Line.

Initial proposal

ENI of Italy and KazMunayGas (KMG) of Kazakhstan have previously expressed their intention to participate in the consortium. According to the initial proposal forwarded by the joint venture to other prospective partners, all four proposed stakeholders — IOC, Calik, ENI and KMG — were offered equal stake in the project, with IOC-Calik joint venture controlling the management.

However, the shareholding structure could not be finalised due to a late attempt to rope-in more partners — especially state oil company of Azerbaijan, SOCAR, which had also bid for the refinery project at Ceyhan — in the consortium.

Holding the key

The expected meeting of the consortium ‘partners’ may, therefore, hold the key to IOC’s participation — in terms of offering management control to the Indian oil major-led joint venture — in the proposed venture.

IOC sources felt that the prevailing cash crunch would not affect the project as investments are expected to begin after approximately two years. “Once the consortium reaches an understanding, it would launch the detailed feasibility report for the project based on which Turkish authorities are slated to grant the final license. Naturally, we do not foresee any major investment during the next two years,” they said.

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