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Guatemala entices Indian oil PSUs

New Delhi, April 6: The government wants state-run oil companies Indian Oil, Hindustan Petroleum and Bharat Petroleum to participate in a refinery-cum-power project in Guatemala.

The proposed refinery in the central American nation is estimated to cost up to $7 billion and will have a capacity of processing 3.6 lakh barrels of crude per day. It will also have a $1-billion, 750-mw thermo-electric power project running on coke.

Mexican state-run oil firm Pemex is willing to guarantee a supply of 230,000 barrels of crude per day to the refinery on a long-term basis. Officials said the Mexican government has referred the refinery to the Indians.

The final bidding for the project will start in the third quarter of this calendar year.

Reliance Industries has also entered the fray and has cleared the pre-selection bidding.

The end of civil war, aid from the IMF and flow of foreign investments have led to a higher rate of growth in the central American country, which is trying to build its economic base. However, vast disparities in income persist and incidents of violence are common.

“These are factors that will have to be kept in mind while formulating a decision to invest in the country,” a senior Indian Oil official told The Telegraph.

ONGC Videsh (OVL) already has a presence in neighbouring Cuba as it has an agreement with Repsol-YPF of Spain to acquire a 30 per cent participating interest in seven deep-water blocks in the country.

The blocks are spread over nearly 12,000 sq. km in Cuba’s exclusive economic zone. The hydrocarbon resource potential in the blocks is estimated to be in excess of 4 billion barrels. An exploratory well drilled in one of the blocks has indicated the presence of hydrocarbons.

OVL is also interested oil exploration blocks in Ecuador, and the government of the Latin American nation is keen to have state-run companies in its hydrocarbon sector to beef up infrastructure.

Ecuador had launched a “focus Latin America” programme to increase awareness about the region among Indian companies. This had led to an over 130 per cent increase in trade with the region.

India and Chile have also signed an agreement on economic co-operation, which provides for limited preferential access in bilateral trade.

Meanwhile, OVL and partner IPR Red Sea have struck oil in the Gulf of Suez. The discovery was made at their first exploration well North Ramadan-1A in the North Ramadan concession situation in Gulf of Suez, Egypt.

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