Reliance Petro seeks nod for JV with IOC

New Delhi, Oct 14: Reliance Petroleum Ltd (RPL) has requested the Centre to approve immediately a joint venture with Indian Oil Corporation to market petroleum products from its Jamnagar refinery in the deregulated oil market from April 1, 2002.

Apart from marketing of about nine million tonnes through the proposed JV, awaiting the Government nod for well over a year, Reliance Petroleum has also asked for approval of a marketing agreement for sale of products worth about seven million tonnes directly by IOC, sources said.

RPL, which boasts the world’s largest refinery of 27 million tonnes, wrote to the petroleum ministry on October 11 for a quick government decision in view of the impending opening up of the marketing to private sector from April 1, 2002 along with dismantling of administered pricing mechanism. RPL’s request to Government comes in tandem with its plans for opening up of 3,000 retail outlets in the country next fiscal when the petroleum sector opens up.
Reliance spokesperson from Mumbai declined to comment.

When contacted, IOC chief MA Pathan told that his corporation has also approached the Government for approval of the JV and said that marketing arrangements with RPL would be implemented in the post APM period.

After the commissioning of Reliance Refinery in December 1999, the Government had approved sale of 50 per cent marketable products through IOC and remaining through Hindustan Petroleum and Bharat Petroleum due to restrictions on entry of private players in the petro-marketing arena.

While entering in to the agreement for sale of RPL products, IOC had signed a memorandum of understanding for the JV to sell 50 per cent of marketable products from the refinery in the post APM period. At the same time IOC had signed a marketing agreement for directly lifting the products for sale through its own network of 7,549 retail outlets and 3,436 gas agencies, under a ‘take-or-pay’ contract for a 10-year period till 2008.

IOC sources said that the corporation has now asked for the Government’s approval for the composite marketing agreement with RPL including the JV for sale of five products — petrol, diesel, LPG, kerosene and aviation turbine fuel.

In a bid to fulfill the condition of a minimum investment of
Rs 2,000 crore in the oil sector for a company to enter marketing arena, IOC and RPL have also jointly bid for the Central India Pipeline Project on a BOOT basis.

— PTI