The Hindu Business Line : IOC-OIL arm to scout for oil assets in CIS, African countries

New Delhi, Oct. 4 Ind-Oil Overseas Ltd, the Mauritius-based special entity jointly floated by Indian Oil Corporation (IOC) and Oil India Ltd (OIL) for acquiring oil and gas acreages overseas, may look at prospects in CIS and African countries.

Oil India has appointed global consultant and advisory firm Deloitte to work out the suitable fiscal mechanism for the target countries, sources told Business Line.

“We are awaiting the report of the consultant who has been asked to examine the tax benefits which we can enjoy in the countries where IOC-OIL already have exploration and production blocks as well as new target areas like Australia, Africa and CIS countries,” sources said.

The 50:50 SPV was set up early this year. The decision to set up the SPV in Mauritius was prompted by the tax benefits the country offered. The capital base in the SPV is minimal at present and would be increased according to requirements. However, the SPV does not restrict the two entities from adopting a consortium approach when required, sources said adding that both IOC and OIL prefer to adopt a two-model approach to acquire oil and gas assets.

While under the SPV route the burden would not be on the parent companies’ balance sheet, the advantage of a consortium approach would be that the companies would enjoy tax benefits extended to exploration activities, industry experts said.

By keeping the consortium option open, OIL can also consider roping in other partners in assets that do not interest IOC, sources explained. The two together have assets in six countries – nine blocks in Libya, two in Yemen, and one each in Iran, Nigeria, East Timor and Gabon (West Africa).

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