IOC in talks with Reliance to sell NG in cities & towns; Behuria

Mumbai, Sep 22 (UNI) The state owned Indian Oil Corporation Ltd (IOC) has opened discussion with Reliance Industries Ltd (RIL) to form a joint venture (JV) to sell natural gas in cities and towns, IOC Chairman Sarthak Behuria today said.

''We are looking at city gas distribution and since they have the Krishna Godavari basin gas, we are talking to them,'' he said, referring to RIL's gas find off India's east coast. The company is also talking to other firms for setting up natural gas distribution joint ventures, Mr Behuria told reporters at the sidelines of the company's annual general meeting here.

''We have already formed one such JV with GAIL to start city gas projects,'' he said adding, ''You have to approach owners of the gas and that's what we have done (with Reliance).'' Responding to a query, Mr Behuria said IOC would spend Rs 8,000 crore on capital expenditure during the current fiscal, mainly for refinery upgradation and new petrochemical projects.

It will also strive to wipe out its losses through diversification and mergers in the coming days, said he explaining: ''Currently, the Corporation is incurring a loss of Rs 2,000 crore every month. To overcome this negativity, exisitng subsidy measures has to be re-examined along with grants, he added.

He said that IOC will invite open tenders for the sale of Ethanol and procedures for the same are at its final stages. In addition the Corporation will sell Ethanol from all its centres nationwide, he added.

Even though the government formulated a loss sharing mechanism through discounts from upstream oil companies and refiners. The substanial rise in the burden strained the budgetry resources of the public sector oil marketing companies (OCMs), including the Indian Oil Corporation.

Accordingly, a provision was made in the Union Budget 2005-06 for additional support to OMCs by way of ''Oil Bonds'' over and above the amount allowed as subsidy. The issuance of these bonds helped the OMCs tide over the financial crunch to some extent.

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