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The Financial Express (India): Shell beats IOC to bag Tupras

The Financial Express (India): Shell beats IOC to bag Tupras

“Indian Oil Corporation (IOC) on Monday lost the race to acquire 51% in Tupras (Turkish Petroleum Refineries Corp) to a consortium of Shell and Turkish company Koch Holdings. The Shell-Koch Holdings consortium won the auction for $4.14 billion.”

Tuesday, September 13, 2005

ENERGY BUREAU
Posted online: Tuesday, September 13, 2005 at 0033 hours IST

NEW DELHI, SEPT 12: Indian Oil Corporation (IOC) on Monday lost the race to acquire 51% in Tupras (Turkish Petroleum Refineries Corp) to a consortium of Shell and Turkish company Koch Holdings. The Shell-Koch Holdings consortium won the auction for $4.14 billion.

This is India’s second major failure to acquire a global oil and gas property in less than a month. The ONGC-Mittal combine had recently lost in the bid to acquire Canada-based Petro-Kazakhstan to China’s CNPC.

Tupras was of major geo-political importance to India since Turkey is the gateway to Europe and could have meant access to Caspian crude. A listed, profit-making firm, it has a market capitalisation of about $3.5 billion.

Chairman and managing director, IOC, Sarthak Behuria told FE from Turkey, “IOC bid up to $4.12 billion when Shell-Koch consortia increased the bid by another $20 million. As we had exceeded our limit, we did not want to continue in the never ending process. We finally decided to opt out.” IOC was advised by Ernst & Young in this transaction.

Mr Behuria said, “I don’t call it a failure as it was an auction and we knew our limits.” He said the auction started with a bid of $3.36 billion with participation from nine companies like Repsol, Shell, ENI, IOC, OMV and others.

All the companies withdrew from the auction, leaving IOC (along with its local

Turkish partner, Caliak Energy) and Shell-Koch Holdings combine which continued till the end.

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