Shell presents list of "fair-play" demands to Naik

Vol 6, PW 24 (12 Feb 03) Midstream & Downstream

WITH HINDSIGHT THE concern was unjustified, but it was real enough for Jeroen van der Veer - Shell vice chairman and South Asia business chief - to mention it when he met oil minister Ram Naik in Shastri Bhawan on 24th January, just two days before the government's privatisation announcement on Hindustan and Bharat Petroleum.

Unknown to Van der Veer, the government would on 26th January ban ONGC and IOC from the impending sale of Hindustan Petroleum. Clearly unaware of the impending development, Van der Veer wanted to know from Naik "clearly" what would be the role of "PSUs (during privatisation) lest Shell be disappointed this time too!" Naik told Van der Veer that, left to himself, he favoured a "level playing field for everybody - both private and PSUs" and said Shell should bid "aggressively this time", referring to the IBP privatisation when IOC's winning bid was almost double that of second-place Shell.

Naik wanted to know if Shell would be interested in getting retail fuel marketing rights. Most certainly, replied Van der Veer, provided Shell could import petroleum products, as it was unsure if rival Indian refiners would sell to it.

Naik responded positively: "The government is actively considering the proposal to permit import of petroleum products by interested parties. This would be formulated while finalising the export-import policy." Van der Veer raised other issues too, such as customer resistance to LNG contracts and whether Shell would be allowed access to GAIL's gas pipelines on a par with Petronet LNG.

Naik replied that this was a matter of common concern to Shell and Petronet-LNG.