Mauritius invites ONGC to set up a joint venture refinery
New Delhi 02-Jul-2010
Mauritius has invited India's state-owned Oil and Natural Gas Corp. Ltd (ONGC) to set up a refinery there in a joint venture with Mauritius' State Trading Corporation (STC).
Mauritius does not have a refining capacity of its own and procures petroleum products from ONGC's subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL).
Mauritius commerce and industries minister Showkuttaly Soodhun extended the invitation at the signing of a three- year $2 billion (Rs 9,340 crore) petroleum product sourcing agreement between MRPL and STC.
"We want the setting up of a refining hub in Mauritius... An equal participation joint venture can initiate the process. STC on the Mauritius side and ONGC on the Indian side," Soodhun told reporters in New Delhi on Thursday. "STC Mauritius can also be used to access the other African countries with which we have a great relationship."
"If it is a commercial proposition, why not?" said R.S. Sharma, chairman and managing director, ONGC.
Petroleum ministry officials, however, say that given the size of the Mauritius market, it makes more sense to have a refinery in Africa to cater to the requirements of the region.
State-owned IndianOil (IOC), which already has a retail presence in Mauritius with 17 outlets, also plans to expand its operations there. Apart from Sri Lanka, Mauritius is the only foreign country in which IOC has a retail presence, through - Indian Oil Mauritius Ltd, and has invested around Rs70 crore in the island nation.
"We are interested in expanding our operations there. We are also looking at pipeline infrastructure and product storage capacity," said B.M. Bansal, chairman and managing director, IOC. "The total investment is expected to be around Rs150 crore."
In an unrelated development, MRPL plans to expand its retail operations in India after the government deregulated the price of petrol last week. MRPL has a licence to operate 500 outlets, but runs only three.
"We will definitely expand our operations. This is the right time," said Sharma.
"The focus will be on Tamil Nadu, Goa, Karnataka and Kerala," said U.K. Basu, managing director, MRPL.
MRPL, which has a refining capacity of 160,000 barrels of oil per day, has a 25-day shut- down planned during August- September.
The Congress party-led United Progressive Alliance government decided to decontrol fuel prices, which resulted in petrol prices going up by Rs 3.50 per litre and diesel prices by Rs 2 per litre. The prices of liquefied petroleum gas (LPG) and kerosene were raised by Rs 35 per cylinder and Rs 3 per litre, respectively.
The government also left further price changes, in line with movements in the international price of crude oil, to the oil firms.
The price increase will lower the subsidy burden by Rs19,000 crore to Rs53,000 crore during 2010-11, according to estimates by the petroleum ministry.
State-run oil marketing companies Hindustan Petroleum Corp. Ltd, IOC and Bharat Petroleum Corp. Ltd control around 80% of the fuel retail market, and the balance is controlled by private oil marketing firms such as Reliance Industries Ltd and Essar Oil Ltd.
