Venezuela seeks stake in IndianOil's Paradip refinery
New Delhi   03-Jul-2008
Venezuela's national oil company PDVSA is in talks with IndianOil for taking up to 49% stake in a 15 million tonne refinery the flagship Indian refiner-marketer is building in Orissa's Paradip at an investment of a little under Rs 30,000 crore. "We have received interest from PDVSA. We are evaluating the offer," a senior company executive, requesting anonymity, said on the sidelines of the 19th World Petroleum Congress here. "We want a partner not for money but for some value In this case, PdVSA has said it can supply Venezuelan crude to the refinery. IndianOil would look at getting at least half, or 7.5 million tonnes, of Paradip refinery's crude requirement from Venezuela." Oil minister Murli Deora opened the window for the talks between the two prospective partners when he visited Venezuela visit earlier this year. During his talks with his counterpart Rafael Ramirez and President Hugo Chavez, Deora stressed how India was in an advantageous position to help Venezuela achieve its strategy of adding value to its crude for higher returns and diversifying its oil economy. Those talks laid the broad contours, wherein PdVSA was to examine a partnership with an Indian refiner for setting up a unit in Venezuela, India or a third country. PdVSA has been talking to PetroVietnam and Malaysia's Petronas for setting up a refinery in Asia by 2012-13. IndianOil could now leverage the presence in Venezuela of ONGC Videsh, the overseas investment arm of flagship explorer Oil and Natural Gas Corporation, which has acquired 40 % stake in the Orinoco basin's San Cristobal field. Though it is early to talk any figures, there are other factors that could work for the PdVSA deal. Venezuelan crude is one of the toughest to process and needs refineries with high complexity ratings. IndianOil has designed the Paradip unit to accept the toughest, heaviest and the dirtiest crudes. "Our refinery will have a Nelson Complexity Index of 15," the IndianOil executive said. Reliance Petroleum's upcoming export refinery at Jamnagar, which is billed the most advanced, is rated at 14. Besides, India offers strategic location advantage from where exports can even happen to as far as the US. Venezuela is looking at setting up an integrated refining-and-petrochemicals complex in South Asia to process its heavy crude. It exports 2 million bpd (barrels per day) to the US. Another 300,000 bpd is exported to China, which President Chavez wants to raise to a million bpd.