India Oil keen to acquire Turkish Petkim Petrokimya

28-Mar-07

Central and NorthAsia and the consumption centres in the West, state-run refiner-marketer Indian Oil Corporation plans to acquire a Turkish petrochem major. IOC has submitted an expression of interest to acquire the Turkish government-run petrochemicals maker Petkim Petrokimya and back it up with a US$6 billion refinery on the Mediterranean coast. The Turkish government is disinvesting 53-54% in Petkim, bids for which close on June 15. The proposed refinery will feed raw material to Petkim, the only petrochem maker in Turkey. The plan encompasses a 15 million tpa refinery at Ceyhan on the Mediterranean Sea, and is expected to be ready by 2012. IndianOil will hold 51% in the refinery and is looking at a partner which has access to oilfields in the Central Asian region or Russia to feed the refinery. Petkim and the refinery appears to be a growth strategy stemming from IndianOil's 12.5% stake in the Trans-Anatolian Pipeline Company (TAPCO) which is laying an oil pipeline from Turkey's Black Sea port of Samsun to Ceyhan. TAPCO is equally owned by Turkey's Calik Enerji and Italy's Eni which has an oilfield in Kazakhstan and is a partner in the Blue Stream pipeline project. The 550 km Samsun-Ceyhan pipeline will carry 1.5 million bpd (70 mln tpa), when completed by 2009-10. Ceyhan is emerging as a strategic oil export hub. It is seen as an upcoming energy supermarket with an annual capacity of 160 million tons. Three million barrels of oil is estimated to pass through the Turkish Straits by 2013. This will rise to four million barrels together with product export. The Samsun pipeline provides a way to transport Russian and Kazakh oil to the Black Sea and on tothe Mediterranean safely and economically. Currently, almost 75% of Turkey's petrochem demand is met by imports.