Date:27/08/2005 URL: http://www.thehindubusinessline.com/2005/08/27/stories/2005082702370200.htm

Back IOC may get equity oil in Nigeria

Pratim Ranjan Bose

Kolkata , Aug. 26

NIGERIA may offer equity oil stake to Indian Oil Corporation.

This is in return for the company's proposal to set up a greenfield refinery in Nigeria's Edo state. A decision on the issue is expected in a couple of weeks. The proposed refinery will be the first such investment on the part of IOC outside the country.

"There are positive developments in Nigeria. While discussion on the investment and other related issues are on, we are extremely hopeful of getting equity oil there. Hopefully, we can share the good news in the next few weeks," Mr Naresh K. Nayyar, Director (Business Development) of IOC, told Business Line.

Indian Oil was invited by the Edo State to set up a grassroots refinery in early 2004. In June of that year the IOC board agreed to enter into a memorandum of understanding with the Governor of Edo for the joint venture project, which was signed in September 2004. As an underlying condition, IOC had asked for a stake in an oil field. The company had also expressed an interest in entering the auto-fuel retailing business in the country.

According to company sources, IOC may be offered a stake in an oilfield in Edo. The State Government will also offer fiscal benefits to the project.

Oil-rich Nigeria currently has four refineries with a total capacity of 4,45,000 barrels per day (22.5 million tonnes). However, actual output of petroleum products is limited to 25 per cent of the capacity.