IOC earmarks USD one bn for overseas acquisitions

"We are looking for good-quality assets abroad. We have reserved USD one billion for acquisition of producing or developing E&P assets overseas," IOC Chairman, B M Bansal, told reporters on the sidelines of its annual general meeting here today.

The company which has a 35 per cent stake in Venezuelan E&P assets worth USD 700 million, will have another state-run company, Oil India Ltd, as its JV partner for any overseas acquisitions for five years, he said.

IOC will look at shale options in the US as well, Bansal said.

"The Oil Ministry has sent a delegation to the US to assess opportunities there and we are in constant touch with the Ministry," he said in response to a query.

In India, IOC has expressed its interest in shale, but no player here has technical expertise in shale exploration.

"The Director General of Hydrocarbons is trying to assess shale assets in India and we will bid for the blocks when the time comes," Bansal said.

IOC has made two to three discoveries in India and expects to add more in the next couple of years, Bansal said, adding that production from the discovered fields will start within the next three years.

The company has a capex of Rs 47,000 crore for its Paradip refinery, pipeline infrastructure, renewable energy projects and E&P. The funding will be from external borrowings, a proposed FPO and cash-flows, he said.

The decision on the renewal of the petrochemical refinery in Paradip may come in the next six months, he said.

IOC is getting interest from various power companies and infrastructure companies to become partners of the LNG project but the company is looking for somebody who can bring synergy into the project and not just finance, either by sourcing LNG or by putting up an anchor load power plant, he said.

A decision on this is expected in November, he said.

While answering a question regarding under-recoveries, Bansal said that the total under-recovery in the first two quarters of the fiscal, after adjustments in the upstream sharing, is Rs 11,000 crore which will be paid by the Government in the next 15-20 days.

In diesel, the company is facing an under-recovery of Rs 1.75 per litre and if there is any under-recovery in petrol, it will be taken care of in the next revision after 15-20-days, he said.

The proposed diesel de-regulation may help the company to bring more value to its Follow-on Public offer expected in the last quarter of this fiscal, he said.

The company will start ethanol blending in the next three weeks, Bansal said.