Government invites Aramco, NIOC alliance with HPCL, BPCL
29 January 2005
New Delhi: The government has invited Saudi Aramco and National Iranian Oil Company (NIOC) to form strategic alliances with either HPCL or BPCL through secondary market acquisitionS of 10 per cent to 15 per cent stake in these refineries.
A petroleum ministry official said informal offers for a strategic alliance with HPCL or BPCL were made to the Saudi Aramco president and CEO, Abdallah S.Jumah, and senior NIOC officials when they visited New Delhi earlier this month.
"We have told them that they could acquire the foreign institutional investor (FII) holding in either of the two companies from the open market and enter into a strategic alliance with them. We will induct one of their representatives on the board of the respective companies," the official said.
The ministry wants Saudi Aramco and NIOC to acquire FII holding and other such holdings without triggering the take-over code of SEBI that makes an open offer mandatory for firms buying shares beyond a threshold limit of five per cent. "We want Saudi Aramco to come on the board of one of the firms and NIOC on the other," the official said, adding a strategic alliance with OPEC producers was part of the government's strategy to secure a steady source of crude oil.
"Forging such a strategic alliance would help the firms secure a steady and reliable source of crude oil," he said.
India buys a quarter of its over 90 million tonnes of crude oil requirement from Saudi Aramco while Iran supplies over 11 million tonnes of crude oil annually.
Though, both Saudi Aramco and NIOC were not keen on the open market acquisition route suggested by the government, they have asked for more time to study the offer and respond, the official added.