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Oil majors to fuel maiden offers

New Delhi, Jan. 13: The government plans to ignite the moribund primary market with a wagon load of public issues by state-owned oil and gas companies over the next two months.

The gravy train comprises oil exploration giant ONGC and Gail India Ltd (Gail), which will be selling 10 per cent of their equity. It also plans to sell its 26 per cent residual stake in IBP, the oil retailer. Also in the pipeline is an initial public offering (IPO) by Petronet LNG Ltd — the country’s first liquefied natural gas importer — which is planning to come out with a Rs 400-crore issue next month.

Petroleum minister Ram Naik said today that the government expects to raise around Rs 15,000 crore ($3.2 billion) from the sale of shares in these companies. The minister was addressing the fifth oil and gas conference organised by TERI.

Naik said that offloading the shares of these premium companies in the field of oil exploration, gas transportation and downstream marketing would give investors the opportunity to have a stake in these blue-chip companies. The sale of these stocks will also improve their liquidity in the market, he added.

The minister said that the nation’s hydrocarbon sector was on the high growth path and now there were numerous opportunities available to investors to invest in the entire chain ranging from exploration, refineries, pipelines, natural gas and retail marketing segment.

He disclosed that the grant of marketing rights for transport fuels to Reliance Industries (5,849 retail outlets), Shell (2,000), Essar Oil (1,700), ONGC (1,100) and Numaligarh Refinery (510) amounted to an addition of 55 per cent of the existing 20,000 retail outlets.

The minister stated that a review of the progress made by these companies in setting up their retail chains revealed that around 500 outlets would be established by April 2004.

Petronet LNG is the first to go off the blocks and was slated to file its prospectus for an issue of 261 million shares representing 35 per cent of equity to raise around Rs 400 crore.

“Our people are in Mumbai today to file the prospectus for the IPO, which will hit the market in the second week of February,” Petronet LNG CEO and MD Suresh Mathur told reporters.

Petronet LNG has indicated a price band of Rs 16-18 for the IPO, which will be done through the book-building route.

Mathur said the IPO will help the company tie up its entire equity before it commences commercial sale of LNG imported from Qatar in April.

IOC, ONGC, Gail and BPCL hold 12.5 per cent stake each in Petronet LNG, while project consultant Gaz de France holds 10 per cent. The remaining 5 per cent equity will be picked up by the Asian Development Bank.

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