NEW DELHI: State-owned Indian Oil Company (IOC) apparently selling sticks in one or two of the country ‘s major network of crude oil and petrol production pipelines under the monetization plan, but they will not provide control, said its director (finance) Sandeep Kumar Gupta Tuesday.
“InvIT could be one model we could look at but we won’t sell 100 percent. We will stay as an operator,” he said in a conference call with analysts and investors.
Finance Minister Nirmala Sitharaman announced in her Budget for a fiscal year beginning on April 1, monetization of IOC oil and gas pipeline fund, GAIL (India) Gas facility Limited and Hindustan Petroleum Corporation Ltd (HPCL).
Gupta said IOC pipeline funds offer great potential for value redemption and many investors are looking at investing in such assets. He did not sign the investors, however.
IOC operates a network of more than 14,600-km of pipelines used to transport crude oil to refineries and fuel to consumption points.
Gupta said the company cannot control the pipes because they are critical to the company ‘s operation.
Only a minority of the pipes will be sold.
The result of such monetization would go towards an increase in capital expenditure of projects such as one for hydrogen fuel, renewable energy ones or petrochemical plants, he said.
The government, which owns 51.50 per cent of the IOC, can tap into the fund by seeking a special allowance.
“We may sell a portion in a pipe or two first,” he said.
GAIL also plans to launch InvIT of its two gas pipelines between Dahej and Bengaluru.
The country’s leading gas marketing and transportation company plans to make money on the Dahej-Uran-Panvel-Dabhol pipeline and the Dabhol-Bengaluru pipeline by establishing an Infrastructure Investment Trust (InvIT).
Invitations are similar to mutual funds, which allow direct investment of small sums of money from individual / institutional investors who may have the infrastructure to earn a small portion of the income in return.
GAIL also plans to keep a majority stake in the pipelines running from Dahej in Gujarat to Dabhol in Maharashtra and from there to Bengaluru in Karnataka.
GAIL has a natural gas pipeline network and operates 12,502 kilometers, mainly in the west, south and north of the country. They are building more pipes in the east of the country.
Asked if IOC could also look at dragging retail outlets into a separate sub-group to unravel value, Gupta said, such a capability cannot be denied but such is not the case. movement on the radar.
Gupta expects crude oil prices to fall after March.
The normal hardening was due to cuts by Opec plus but foundations are still weak, which puts pressure on prices, he said current levels will not stand.
The rise in international oil prices has pushed sales fuel levels to their lows.
The IOC has five pipelines for transporting crude oil from coastal ports to their fines. The longest of these is the 2,646-km Salaya-Mathura pipeline from Gujarat to Uttar Pradesh.
In addition, it has 22 petrol product pipelines that carry fuels such as petrol, diesel and ATF.
The IOC also has two natural gas pipelines – the 132-km Dadri-Panipat and 1,421 km Ennore-Tuticorin line, and two LPG lines – 280-km Panipat-Jalandhar and 873-km Paradip-Haldia-Durgapur.