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IOC eyes Thai assets of Kuwait Petroleum

Calcutta, June 27: Indian Oil Corporation (IOC) has decided to invest heavily in acquisitions it needs to get a foothold in Thailand. Sources say it is in talks to snap up Kuwait Petroleum’s marketing assets in the country — also on Hindustan Petroleum Corporation’s radar.

Kuwait Petroleum is reported to have offered its assets to Indian Oil, which is looking for small and mid-sized oil retailing firms in Thailand as part of a wider strategy to ramp up its presence in foreign countries.

IOC already has a considerably large network in Sri Lanka, and is close to setting up its first petrol pump in Mauritius. The network in Thailand will help strengthen the company’s retail muscle in Asia, sources said.

Kuwait Petroleum has little more than a 5 per cent share of Thailand’s oil-retailing market. The company, together with a firm called Jet, owns 90 petrol pumps. Jet, a subsidiary of Canoco Philips, has a share of 6 per cent.

With the acquisition of the properties of Kuwait Petroleum and Jet, IOC will grab 12 per cent, the largest share, of Thailand’s oil-retailing market, sources said.

The IOC board has taken an “in-principle” decision to look at the properties offered by Kuwait Petroleum. The sources said the company will start due-diligence soon.

IOC has set an ambitious target of crossing the $50 billion-mark in turnover over five years by acquiring an array of oil refining and marketing firms, besides buying upstream exploration-cum-production players abroad.

The Fortune 500 company has set a target of exporting petro-products worth more than Rs 10,000 crore by 2005-06. The spread of its marketing network in several countries other than Sri Lanka and Mauritius will go a long way in helping it achieve that goal.

According to a senior Indian Oil official, the company is gearing up to get a strong foothold in neighbouring countries — especially Bangladesh, Nepal and Bhutan. Initially, it will export oil and its derivatives, but will later look at the possibility of making investments in the retail sector of these countries.

IOC is set to export over four million tonnes of petro-products during the current fiscal and plans to cross five million tonnes in the next financial year, sources said.

It aims to set up at least 25 petrol pumps in Mauritius over the next 12-15 months, besides investing $0.5 million in a jet-fuel testing lab in the island nation.

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