Kuwait eyes strategic stake in IndianOil
Hyderabad   28-Sep-2010

The Kuwait government is keen to pick up a strategic stake in the state owned refiner IndianOil (IOC).

“If the government divests some stake through a strategic sale, we would be very interested in such a proposal,” the Kuwaiti oil minister, Mr Sheikh Ahmad al-Abdullah al-Sabah, said on Monday.

The Indian government is looking to disinvest 10 per cent stake in IOC in the last quarter of this fiscal.

However, the Kuwaiti minister said that his government would be interested in being brought in as a strategic partner.

A government official said that selling strategic stake in the largest state-owned oil company to a foreign government or its company is a decision, which could be taken only at the highest level in government, which will include the Prime Minister.

IOC owns 10 out of India’s 20 refineries and runs the largest number of petrol pumps.

While Kuwait is looking to pick up a stake in the oil company, the fact remains that governments in the oil rich middle east are reluctant to allow foreign participation in their state-owned oil companies.

Meanwhile, the visiting minister also discussed with the IOC management the possibility of their state-owned company participating in IOC’s upcoming refinery at Paradip, in Orissa and whether upcoming strategic crude oil storages in Mangalore and Visakhapatnam could be used to store Kuwaiti oil.

“Kuwait Petroleum Corporation’s (KPC) participation (in IOC’s project) will depend on the economics of the project,” said Mr Al-Sabah.

KPC was one of the seven suitors for fuel retailing firm IBP Co Ltd, in which the government sold its shareholding through a strategic sale in 2002. IOC outbid KPC, Royal Dutch Shell and Reliance Industries to buy IBP.

The IOC chairman, Mr B.M. Bansal, said that the company discussed the long-term requirement of crude oil of the company as it will be commissioning the Paradip refinery and will require crude. Kuwait is the third largest crude oil supplier to India, which exports around 11 million tonnes of oil annually.