The idea at that time was that IOC and ONGC would hold 40 per cent each in the venture with the balance offered to a foreign player. Mauritius, Thailand and Malaysia were among the countries shortlisted for the plan but recent indications are that this may not be a feasible idea.

"At present, only Iraq and Russia offer a glimmer of hope but this is more in the area of exploration and production rather than the downstream segment," sources said. IOC will, therefore, partner ONGC on work in some fields before the duo consider diversifying into refining and marketing.

For the moment, operations will be confined to India and an expert team from the twooil PSUs is close to finalising the equity sharing arrangement for power projects in Panipat and Gujarat. Both are being promoted by IOC which will take a 26 per cent stake while offering up to 24 per cent to ONGC.

The ONGC board has already given the go-ahead to pick up 20 per cent in the 301 mw Panipat power plant and may follow suit for the 500 mw Sawli project in Gujarat.

Marubeni will, along with IOC, take a 26 per cent stake in Panipat while its Japanese counterpart, Mitsubishi, will account for an identical percentage in Sawli. There have been reports doing the rounds that Larsen & Toubro may also be offered equity in the project which could be in the range of 20 per cent.

ONGC is of the view that getting into power is more reliable and remunerative than petrochemicals. The navratna has kept its Hazira paraxylene plan in cold storage for over three years now thanks to an uncertain market and will be in no mood to make an investment in either Panipat or Nagapattinam where IOC has plannedpetrochemical complexes.

Similarly, a foray into refining (in this case, the Rs 8,000 crore east coast project being promoted by IOC and Kuwait Petroleum Corporation) would make sense to ONGC only if it is given marketing rights where the real money lies. The matter is now pending approval from the ministry of petroleum and natural gas.

The two mega oil companies have reiterated their commitment to work with each other and get set for the challenges of a deregulated oil sector in 2002. The partnership will ensure that India can hold its own versus huge global oil majors which have been very keen on getting a foothold here, especially in the more remunerative area of marketing petro-products.

IOC and ONGC have also finalised plans to set up two holding companies -- one to oversee joint operations in India and the other in regions overseas. The white paper outlining details of the proposal has been drafted by a task force and submitted to the government.

The holding companies will oversee vitalpetro-related activities to be carried out in India and other countries. These will include refining & marketing, exploration & production, petrochemicals, power as also research and other consultancy services. It is but obvious that IOC's interests would lie in exploration & production while ONGC will concentrate on the three key downstream areas.

What is of particular interest in the IOC, ONGC alliance is the understanding reached on the pattern of equity investment in joint projects both here and abroad. It has been decided that the lead company for the project, be it IOC or ONGC, will hold at least 26 per cent while offering up to 24 per cent to the other.

To elaborate, if IOC decides to get into a petrochemicals venture, it will take 26 per cent while offering ONGC up to 24 per cent. Similarly, where ONGC finalises an exploration venture, it will pick up 26 per cent while IOC will be allowed a maximum 24 per cent.

IOC may enter retail market in Nepal

Mumbai, Aug 12: Indian Oil Corporation(IOC) plans to enter the retail outlet market in Nepal. With this IOC will become the first Indian petroleum major to enter retail marketing abroad. The investment will comprise revamping of two outlets in the intial phases and two new outlets in the final phase, according to a press release issued by the company.

In the first phase of the retail development in Nepal, IOC will invest Rs 26 lakhs to upgrade an existing retail outlet in Naxal in Kathmandu. In the second phase IOC will upgrade a retail outlet in Bhdrakali, Kathmandu. Only in the third phase will IOC put up two new retail outlets. An MOU will shortly be signed with the Nepal Army Welfare Society and Nepal Police Welfare Society for the two new outlets.

The entry into the Nepalese market is an extension of the company's global marketing plans. IOC has already entered the lubricants and bitumen market in Nepal, with its flagship brand- Servo-making deep inroads into the automotive and industrial segments of the market. In 1998-99, total tonnagesold was 5000 tonnes of bitumen and 300 tonnes of lubricant. The target for lubricants is almost double this year.

IOC has also planned to open franchisee Servo shops in Nepal. In India Servo has a 42 per cent of the Indian lubricant market. It has also made a dent in markets in UAE, Kuwait and Kenya. The company is now targeting markets in Malaysia, Bangladesh and Mauritius.

IOC may enter retail market in Nepal

IOC plans to enter the retail outlet market in Nepal. With this IOC will become the first Indian petroleum major to enter retail marketing abroad. The investment will comprise revamping of two outlets in the initial phases and two new outlets in the final phase, according to a press release issued by the company. In the first phase of the retail development in Nepal, IOC will invest Rs 26 lakh to upgrade an existing retail outlet in Naxal in Kathmandu.

In the second phase IOC will upgrade a retail outlet in Bhdrakali, Kathmandu. Only in the third phase will IOC put up two new retailoutlets. An MoU will shortly be signed with the Nepal Army Welfare Society and Nepal Police Welfare Society for the two new outlets.

The entry into the Nepalese market is an extension of the company's global marketing plans. IOC has already entered the lubricants and bitumen market in Nepal, with its flagship brand- Servo-making deep inroads into the automotive and industrial segments of the market. In 1998-99, total tonnage sold was 5000 tonnes of bitumen and 300 tonnes of lubricant.

The target for lubricants is almost double this year. IOC has also planned to open franchisee Servo shops in Nepal. In India Servo has a 42 per cent of the Indian lubricant market. It has also made a dent in markets in UAE, Kuwait and Kenya. The company is now targeting markets in Malaysia, Bangladesh and Mauritius.