The Hindu Business Line : IOC awaits Turkish response to project proposals

Kolkata, Sept. 26 It has been two years since it had proposed the multi-billion dollar investment in refining and cross-country oil pipeline sector in Turkey, and IndianOil Corp is clueless about the fate of its proposals.

Contrary to the company’s expectation, even the visit of the Turkish President, Mr Mahmoud Ahmadinejad, to Delhi, earlier this year, failed to bring about any change in the ground realities.

“IOC is still awaiting response from the Turkish authorities in regard to its investment proposals in refining and pipeline sector in Turkey,” Mr B.M. Bansal, Director (business development), told Business Line. He, however, added that the company was still hopeful about the projects.

Refinery application

In September 2006, India’s largest refiner has applied to Energy Market Regulatory Authority of Turkey for setting up a 15-million-tonne, $6-billion grassroot refinery at the Mediterranean port city of Ceyhan in joint venture with the Calik Group of Turkey. The project was focused on exports to Europe.

In a parallel move the company entered into an agreement for picking up 12.5 per cent participatory interest in the Trans Anatolian Pipeline Project promoted by ENI of Italy and Calik.

The $1.5-billion oil pipeline would ensure smooth transportation of 1.5 million barrels of crude a day (mainly from Kazakhstan) from Northern Black Sea city Samsun to Ceyhan.

Political developments

The following days witnessed high voltage international politics. While ENI and KazMunayGas (KMG) of Kazakhstan expressed their intention to participate in the IOC-Calik led consortium for setting up the refinery, resistance was faced from a rival consortium led by state oil company of Azerbaijan, SOCAR.

While efforts were on to rope in SOCAR in the consortium, problem seems to have cropped up about the ‘role definition’ players within the consortium.

While IOC authorities maintain a silence on the issue, industry sources say that IOC’s claim for managing the project did not find much favour leading to a deadlock over the shareholding structure and funding options for the project.

Industry sources say that the uncertainty about the refinery project has in turn affected IOC’s plan to pick up participatory stake in the Trans Anatolian Pipeline. According to the agreement, the Indian company was slated to submit a throughput commitment justifying its stake in the pipeline, which was not available till date.

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