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ONGC may buy out partners in OPaL
FINANCE & INVESTMENT
INDIA’S state-run Oil and Natural Gas Corp. (ONGC) may buy out its partners in polymer manufacturer ONGC Petro Additions Ltd (OPaL) in order to list the company.
ONGC’s director of finance, Subhash Kumar, told Reuters last week that his company was look- ing at various options for OPaL, in which it owns a 49.36% stake. OPaL operates India’s biggest petro- chemical plant in the western state of Gujarat. State- run GAIL (India) owns 49.21% in the project, with local government-owned Gujarat State Petroleum Corp. (GSPC) holding the remainder.
“Our first preference is to convert OPaL into a subsidiary by converting share warrants and debenture into equity if we don’t get a strate- gic partner,” Kumar said. “Another option is to merge OPaL with ONGC.”
Should ONGC convert OPaL into a subsidi- ary – a decision the major intends to take before April 2020 – Kumar said it would take two years to list the company.
Reuters quoted the executive as saying ONGC could raise its stake in OPaL to 70% via the conversion of INR26bn ($363.9mn) worth of share warrants into equity and to 93% if it also converted INR77.78bn ($1.09bn) of debentures into shares.
While ONGC has been looking to bring a strategic partner into OPaL for a number of years, Kumar said talks with prospective partners had failed to progress because they wanted to sell pet- rochemical products under their own brand.
The executive did not say with whom ONGC had entered talks, but the newswire has previously cited unnamed sources as saying Saudi Aramco, Saudi Basic Industries Corp. (SABIC) and Kuwait Petroleum Corp. have shown their interest.
Bloomberg reported last week that OPaL intended to exit a programme mandating that it export products from a unit in a special eco- nomic zone (SEZ). The company wants to capi- talise on growing domestic demand for plastics and plans to sell its products locally after paying the applicable taxes.™
Costs rise at Aramco & ADNOC’s Indian super-refinery confirmed
PROJECTS & COMPANIES
INDIA’S oil minister said this week that costs had risen for the refinery project proposed by Saudi Aramco and Abu Dhabi National Oil Co. (ADNOC) in partnership with several local firms.
Speaking at the World Energy Congress in Abu Dhabi, Dharmendra Pradhan said: “The primary plan was around $45bn; it will be more than that.” He did not say what the new figure would be, but Downstream MEA (DMEA) reported earlier this year that delays and significant cost increases had come about because of a site change for the facility. Local opposition to the originally planned site at Ratnagiri in the western state of Maharashtra saw the location shift to Roha, in Raigad district, south of Mumbai.
Aramco committed to acquiring a 50% stake alongside New Delhi-owned Indian Oil Corp. (IOC), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL), later agreeing to sell down part of the holding to GCC peer ADNOC.
The plant would have refining and petro- chemicals capacity of 1.2mn barrels per day (bpd) and 18mn tonnes per year (tpy) respec- tively. However, while reports in December last year suggested the scheme would be delayed by two years, Pradhan said it would be completed by 2025.
Indian oil consumption is projected to roughly double over the next two decades, from 5mn barrels of oil equivalent per day (boepd) in 2020 to 9.9mn boepd by 2040, according to OPEC’s latest World Oil Outlook.
In August, Aramco agreed a provisional deal to acquire a 20% stake in Indian firm Reliance Industries Ltd’s (RIL) oil-to-chemicals division, which includes the world’s largest refinery at Jamnagar.™
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w w w . N E W S B A S E . c o m Week 37 18•September•2019