Industry sources say that a host of investment bankers including Lazard Credit Capital and KPMG were in the race for the prestigious mandate, which finally went to Goldman Sachs. Shell, which was in the news recently when it acquired Nocil's polymers business, already has three established entities in the country. The companies under its umbrella are Bharat Shell Ltd (a 51:49 joint venture between Shell & Bharat Petroleum Corporation for LPG marketing and lubricants manufacturing and marketing company), Shell India Production Development BV (for oil exploration) andShell India Private Ltd (a chemicals marketing firm). The company was at one point planning to set up a 7.5 million tonne refinery in Uttar Pradesh along with BPCL but has since withdrawn.

The appointment of Goldman Sachs comes even as speculation is rife that Shell & Aramco's earlier proposal to takeover an oil PSU's retail outlets could be revived. The ministry had earlier rejected the proposed buy-out following protests from the big three oil companies - IOC, BPCL and HPCL. Shell is also among the six global oil giants in the fray keen to partner the Oil and Natural Gas Corporation (ONGC) in four deepwater blocks in the south and west of India, subject to certain conditions largely related to benefits accruing under the new exploration licencing policy (NELP).

Industry observers believe that the LNG business is at a nascent stage in India and an early entry will help sew up the transportation requirements of natural gas. Besides, long term agreements with prospective clients would also be facilitated.This is precisely the reason why Petronet LNG was formed as a consortium of IOC, BPCL, ONGC and GAIL. Significantly, in a June 15 presentation made by Shell to its investors, the management said that they had access to bulk of the natural gas resources in the world and were seeking to market it through LNG. As per the details laid out, Shell has access to natural gas resources of 22.4 per cent in Australia, 50 per cent in Brunei, 50 per cent in Malaysia, 34 per cent in Oman and 30 per cent in Nigeria. Consequently, the Dutch giant plans to develop markets in the Asia Pacific, including the Indian operations. As per the presentation, in the near future, Shell is looking at Indian sales of 2.2 Bcm/a or three million TPA of LNG. Under the current position, supplies would come from Oman.

Globally, the Shell Gas & Power companies sells over 80 billion cubic meters of gas per year and has interests in over 20 countries and three of the world's major LNG plants (in Brunei, Malaysia, and Australia) with more underconstruction in Nigeria and Oman). Some of the world's major gas markets rely heavily on imported supplies, transported either as LNG or long distance pipelines. Shell already has interests in major pipeline transmissions companies in Europe & the US among others.