India woos ME firms

NEW DELHI: India is courting Middle East oil producers for a possible deal in which foreign companies can invest in state-run refineries in return for a secure long-term oil supply, a top government official said on Friday.

“Companies like Saudi Aramco and National Iranian Oil Co. (NIOC) can pick up stakes in Hindustan Petroleum Corp Ltd. and Bharat Petroleum Corp Ltd.,” said the official, who did not want to be named.

He said investments by top oil producers would help local firms as India’s crude oil imports, currently 70 percent of its requirements, are set to grow in step with its expanding economy. “We have held preliminary talks. They can buy shares from the existing shareholders like the foreign institutional investors or small investors,” he said, though he added that the government would retain majority control over the state-run firms.

He said discussions were held earlier this month when ministers and officials from the Middle East were in New Delhi for a meeting with Asia’s biggest oil buyers.

“Their response is very positive,” he said. The proposal, still at an early stage, would not violate policy forbidding privatisation of profitable state firms such as HPCL and BPCL since that allows for changes in equity structure as long as the government retains a majority holding, he said.

Earlier, Aramco chief Abdallah Jumah had said in New Delhi his company was keen to enter India’s refining sector. —Reuters

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