ONGC Petro-additions Ltd (OPaL) has once again started its hunt for a suitable partner.

This time, it is in talks with Saudi Aramco.

Sudhir Vasudeva, Chairman and Managing Director, ONGC, and Chairman, OPaL, told Business Line the company had held the first round of introductory and exploratory discussions with Aramco. But Saudi Aramco, one of the world’s biggest oil firms, is yet to start due diligence.

“No timeline has been fixed as yet,” said a source. ONGC is the principal promoter of OPaL, the other partners being GAIL (India) and Gujarat State Petroleum Corporation (GSPC).

ONGC holds a 26 per cent stake in the venture, formed to set up a petrochemical complex at the Dahej special economic zone in Gujarat. GSPC holds a 5 per cent stake while GAIL holds 15.5 per cent.

The promoters have to tie up equity for the remaining 53.5 per cent. A foreign firm may be given 20-25 per cent.

Pricing differences

In 2010, OPaL had attracted the interest of Kuwait's Petrochemical Industries Company (PIC) with a suitable premium on valuation. However, the talks fell through due to differences over the price.

Players such PIC and Saudi Aramco had earlier declined offers for stakes in Indian refinery-cum-petrochemical projects.

This was because they wanted auto fuel distribution rights as well, which was not possible, as only public sector entities are eligible for Government subsidies. Whether this has changed now remains to be seen, industry observers said.

GAIL had originally decided to pick up 19 per cent in the project but after the project cost was revised to Rs 19,535 crore, it decided to restrict participation to 17 per cent.

Subsequently, it restricted its holding at 15.5 per cent.

richa.mishra@thehindu.co.in

Published on August 27, 2013