The Hindu Business Line : IndianOil puts retail plans in Indonesia on hold

A senior company official said, "After evaluating the business prospects in that country we have decided to put on hold our plans to foray into Indonesia's retail sector till there is more clarity on de-regulation plans there."

However, the company is likely to continue with its lubricant distribution business in Indonesia, he stated. IndianOil was looking at launching its retail outlets in Indonesia by floating a fully owned subsidiary. If the plans had materialised this would have been IndianOil's third retailing venture abroad. IndianOil entered the Sri Lankan market in 2002 through Lanka IOC Ltd. The Indian petroleum marketing major also has a presence in Mauritius through its subsidiary IndianOil Mauritius Ltd.

Opportunities

Currently, Indonesia — the leading petroleum market in the ASEAN region — is estimated to have 50 million tonne per annum of petroleum products. For tapping the opportunities in Indonesian petroleum retailing industry, IndianOil had also taken its board's approval to set up a fully owned subsidiary. Besides auto fuels, the Indonesian venture was to retail lubricants.

As regards foray into E&P activity, the company is looking for good opportunities to emerge in Indonesia. The company has been eyeing a stake in the petrochemical company PT Tuban Petrochem (Tuban Petro) but nothing has yet been finalised, sources added.

The Indonesian Government owns 70 per cent stake in the petrochemical company.

The other shareholders in Tuban include big names such as Pertamina, Tuban Petrochemicals Pte Ltd (which is Siam Cement PCL's, largest conglomerate of Thailand, subsidiary), Sojitz Corporation (earlier known as Nissho Iwai Corp), and Itochu Corporation. Aromatic products such as Toulene, Benzene, Poly-propylene and Xylene are imported in significant quantities in Indonesia.

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