TotalFina Opts Out Of HPCL Race

Mumbai, May 21: | Updated: May 22 2003, 05:30am hrs
While the Opposition continues to rock Parliament over the disinvestment of the oil public sector units (PSUs) and delay the process indefinitely, the interest of bidders seem to be on a slippery pitch.

The worlds fifth largest oil company, TotalFinaElf, which was reportedly in the race for buying the 34 per cent stake in Hindustan Petroleum Corporation Ltd (HPCL), is no longer interested in the divestment of the oil PSU.

TotalFinas decision to stay away from the disinvestment of HPCL appears to be in line with its earlier move, whereby it had pulled out its chief representative from India early last year, citing slow pace of reforms and unfair investment conditions laid down by the government.

Confirming the decision to stay away from the race for HPCL, Nicholas J Wellman, chairman & CEO of TotalFinaElf India and Total Petroleum India, told FE: A group of senior officials based in France, who deal with strategy and development, had done an evaluation of HPCL after meeting Indian policy-makers and those related to the disinvestment process.

After a thorough study, it was decided that neither the project nor the moment was right to enter that particular race.

Other international players like Chevron Texaco, Malaysia Petronas, Royal Dutch Shell, British Petroleum and Saudi Aramco are reported to have put in initial bids for HPCL alone with domestic oil companies Reliance and Essar Oil.

On the other hand, Total Gas and Power India, a subsidiary of TotalFina, is in a final stage of negotiations for its 50:50 joint venture with HPCL to construct a 60,000 plus tonne underground storage cover for LPG at Vizag. The project cost has been estimated at $55 million.

Mr Wellman assured that despite initial setbacks, Total has large plans for India and that it would be interested in large viable projects. Earlier, the company had to abandon its LNG project with the Tata Group and Gail.

The company had signed an in-principle agreement to set up an LNG terminal, at an estimated cost of $550 million, that would have fed an electricity generating plant for Tata Electric.

Though this project didnt come to fruition, we would be interested in other large projects. Total as a company tends to proceed consciously along solid steps and good foundations and we will follow the same strategy here.

The company had also bid aggressively for the Union governments stake in IBP Ltd, which was subsequently sold to Indian Oil Corporation - another government-owned company.