New Delhi, May 4 :     International oil major Shell is unlikely to make an entry into India's lucrative petroleum retail market in the immediate future. Though the government is prepared to dilute the Cabinet-approved entry criteria, Shell may still find the going difficult. Shell is not prepared to invest the mandatory Rs 2,000 crore in a refinery. Nor is it ready to invest in the upstream sector to produce the mandatory 3 million tonnes of crude per annum. Without fulfilling these two criteria, Shell cannot be permitted to enter the domestic retail market. Shell, however, has been pleading that investment in petroleum-related infrastructure to the extent of Rs 2000 crore be considered as a qualifying criteria. The government has begun to see merit in this argument. Accordingly, the committee headed by Naresh Narad, additional secretary in the ministry of petroleum and natural gas, may recommend such a modification to the already approved policy. Shell has not made any significant investment in infrastructure so far except an LPG storage facility on the west coast. Being a foreign company, it may not be involved in building strategic tanks required to maintain petroleum stocks for a minimum of 30 days. The only significant investment could be made in LNG terminals or port development. Shell has already been selected by the Gujarat government to develop the Hazira port for bringing liquefied natural gas. Investment either in port or LNG terminals takes at least four years to fructify. Till then, Shell cannot hope to enter the domestic retail market. Naresh Narad is an extremely cautious bureaucrat, who shies away from controversial issues. He would not like to create an impression that this dilution has been made to accommodate Shell. Any deliberate move to bring in a multinational without regard to the additonality concept laid down by the Cabinet can trigger a controversy. Be it Shell or any other foreign company, it should invest in creating fresh capacity in petroleum-related areas. Shell's move to take over one of the junior marketing companies, such as BPCL or HPCL, will meet with stiff resistance from domestic players, such as Indian Oil Corporation (IOC) and Reliance whose combined lobbying power is unmatched. Their argument is that the takeover of an existing marketing company is only a trading activity without any additionality, either in terms of investment or capacity creation. Even the high-level committee's report, Hydrocarbon Vision-2025, has endorsed this argument. Both BPCL and HPCL will be short of refining capacity in a deregulated market. MRPL, the joint venture between HPCL and the Aditya Birla group, wants to enter marketing directly. Therefore, anyone who takes over either of the PSUs will have to import products to sustain their marketing network. This is an irresistibly attractive opportunity for a trading company like Shell. Shell had Saudi Aramco as a partner in its attempt to takeover either of the PSUs. The first offer came about two years ago. Aramco later withdrew from the race when the oil prices began to slide. It is now cash-rich and is expected to re-join Shell in the renewed effort.