Pratim Ranjan Bose

`Discussions with Reliance in an advanced stage'

New Delhi , Jan. 16

Having already announced a 50:50 joint venture with Reliance Industries Ltd for city gas distribution, Indian Oil Corporation (IOC), is now negotiating with Gujarat State Petroleum Corporation for setting up a joint venture gas marketing company.

"We are in discussion with GSPC group for gas marketing joint venture," Mr B.M. Bansal, Director (planning and business development) of IOC, told Business Line, adding that the equity structure of the joint venture was yet to be decided.

Responses were not immediately available from GSPC group on the issue.

With Reliance, Mr Bansal said that discussions were in an advanced stage for the marketing joint venture and negotiations were also under way for stake in Reliance's East-West gas pipeline.

IBP merger

Anticipating a fast growth of the gas-marketing sector in view of recent discoveries, IOC is trying to ensure a sizable stake in the sector. "We have approached almost all the E&P companies, including ONGC with proposals for gas marketing ventures," Mr Bansal said.

Meanwhile, IOC expects the Ministry of Company Affairs to approve the merger of IBP as early as next month. "Two shareholders had objected to the merger. The Ministry is currently evaluating the issue. We are hopeful of a solution by next month," Mr V.C. Agarwal, Director (Human Resource) of IOC, told Business Line.

Mr B.N. Bankapur, Director Refineries, said that the IOC has so far recorded a refining margin of roughly $3.5 a barrel net of discounts for marketing losses in the first nine months of this fiscal. "From the movement of crude as well product prices (both in the international and the domestic market) we expect to close the year with a refining margin of $3.5 to 4 per barrel," he said.

The company has enhanced usage of cheaper high sulphur crude from 38 per cent in 2005-06 to roughly 45 per cent.

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