GAIL, IndianOil, OVL mull tie up with Kuwait Petro
New Delhi   27-Dec-2007
IndianOil and gas majors GAIL, IndianOil are all set to do business with Kuwait Petroleum Corporation (KPC). According to sources close to the development, Kuwait Foreign Petroleum Exploration Company (KUFPEC), the foreign exploration and production wing and a subsidiary of KPC, expressed its interest to jointly participate with IndianOil in the forthcoming NELP VII. Similarly, GAIL and OVL (a wholly-owned subsidiary of ONGC), are also looking at options for a joint participation with KUFPEC in the upstream hydrocarbon sector in Kuwait, added sources. Kuwait is a major crude oil supplier to India. Kuwait currently supplies around 2,50,000 bbl per day of crude to India on annual term-contracts and is keen to increase it. According to an IndianOil official, “The Company will come out with its final plan for a JV partner in NELP VII only after January 8, 2008. However, IndianOil is looking for a JV partner in the upcoming NELP round.” IndianOil had co-partnered KUFPEC with Oil India Limited for joint bidding in NELP-VI. But lost the bid GAIL and OVL are in the preliminary stages of talks to invest into upstream segment with KUFPEC in Kuwait, said a GAIL official. According to sources, both the companies have shown interest to participate in the hydrocarbon sector in Kuwait when officials met last month. Earlier, IndianOil had shown its interest to rope in KPC in its grassroots integrated refinery-cum-petrochemicals complex at Paradip as well as in the naphtha cracker and downstream polymer complex at Panipat. However, no formal proposal has been provided by IndianOil to KPC in this regard till date. On the other hand, GAIL and OVL's interest for partnering KPC in upstream hydrocarbon projects is mainly due to the expectation that the Kuwaiti company's equity participation would minimize their risks. Above all, KUFPEC, as an international oil company engaged in the exploration, development and production of crude oil and natural gas outside Kuwait, is active in Africa, the Middle East, Asia, and Australia. Analysts feel that experience in handling such mega projects could be beneficial to companies like GAIL and OVL.