Page 10 - DMEA Week 46

DMEA refininG DMEA
India may reduce stake in largest refiner
middle east
tHE Indian government is reportedly consider- ing reducing its direct stake in the country’s larg- est refiner, Indian Oil Corp. (IOC), to below 51%.
New Delhi is reviewing the sale of some its 51.5% stake in the state-run refiner in a bid to boost government funding, Bloomberg reported on November 14 citing unnamed sources.
If the government does proceed with such a sale, it is not expected to sell more than a 26.4% stake in IOC for up to INR330bn ($4.6bn).
This will then allow the state to retain indirect control of the company, as state-run Life Insur- ance Corp. of India, Oil and Natural Gas Corp. (ONGC) and Oil India Ltd (OIL) own another 25.9%. IOC owns and operates 11 refineries, with a combined refining capacity of 80.7mn tonnes per year (tpy) (1.62mn barrels per day, (bpd)), as well as more than 27,700 fuel stations.
The newswire’s sources said the government would likely start selling IOC shares through an exchange-traded fund in January. They added that the ministers’ panel was also expected to proceed with the privatisation of Bharat Petro- leum Corporation Ltd (BPCL).
The government hopes to raise at least a third of its financial year 2019-2020 divestment target
of INR1.05tn ($14.64bn) through the sale of its 53.29% stake in BPCL. Some estimates have val- ued the stake at upwards of INR600bn ($8.34bn).
The refiner is considered an attractive invest- ment target, give that it controls 38.3mn tonnes (770,000 bpd) of refining capacity and owns more than 15,000 retail fuel stations.
The sale has reportedly drawn interest from international oil giants such as Saudi Aramco, Rosneft, Kuwait Petroleum and Abu Dhabi National Oil Co. (ADNOC), ExxonMobil, Royal Dutch Shell and total. Local newswire IANS reported this week, however, that Aramco was on the fence over the sale.
unnamed sources said that Aramco’s own ini- tial public offering (IPO) coupled with existing downstream commitments in India had dimin- ished the investment appetite of the world’s big- gest oil producer.
While IOC has not ruled out an investment in BPCL, any move by the government to reduce its stake in the former will likely derail a potential investment in the latter. Indian Finance Minis- ter Nirmala Sitharaman has suggested that the BPCL sale could be wrapped up before the end of the financial year.™
PiPelines
Morocco remains committed to proposed Atlantic gas pipeline
afriCa
AMINA Benkhadra, the head of Morocco’s national oil company (NOC), said last week that the Moroccan government remained commit- ted to the construction of the Atlantic pipeline, which will pump natural gas from Nigeria to the coast of the Mediterranean Sea.
Speaking at the second Nigeria-Morocco Business Forum last week, Benkhadra said her company, Office National des Hydrocarbures et des Mines (ONHyM), saw the project as a strategic priority. The Atlantic pipeline has the potential to foster regional integration in West Africa and increase African gas exports to Europe, she said. The scheme will also have a positive socio-economic impact on the region, she added. It will help Nigeria, Morocco and all of the transit countries involved by creating jobs and encouraging investment, she said. Addition- ally, it will facilitate the creation of a competitive regional electricity market, she commented.
Abuja and Rabat struck an agreement on the Atlantic pipeline project in late 2016, when Morocco’s King Mohammed VI was paying a state visit to the Nigerian capital. At that time, the two sides said that they wanted to build a
wide-ranging pipeline network capable of serv- ing 16 countries. The 5,700-km system would run parallel to Africa’s Atlantic Ocean shore from Nigeria to Morocco and would include links to onshore facilities in Nigeria, Côte d’Ivo- ire, Liberia, Sierra Leone, Guinea, Guinea-Bis- sau, Gambia, Senegal, Mauritania and Morocco, as well as a connection to the European gas grid.
the cost of this project is projected to hit $670bn. Nigerian and Moroccan officials have said that the pipeline network will have to be built in stages over a period of 25 years.
Benkhadra said last week that Morocco and Nigeria expected international oil companies (IOCs) to join the Atlantic pipeline scheme. So far, though, no major investors have committed to participation.
The parties have not said exactly when they hope to begin building the network and have not made a final investment decision (FID) yet. They did complete a feasibility study in January of this year, though. The Fitch ratings agency has criti- cised the conclusions of this study, saying that it underestimated the financial, political and secu- rity risks of the project.™
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w w w . N E W S B A S E . c o m Week 46 21•November•2019