EXXON-MOBIL:INDIA OVERLAP?

Vol 2, PW 23 (09 Dec 98) Midstream & Downstream
     

The merger between Exxon and Mobil is unlikely to have much of an impact on India.

Mobil and Exxon both have operations in India, and when the dust settles after shareholder approval next year, Exxon-Mobil managers will begin looking at ways to streamline the two operations. Luckily, they wont have much to do.

Because in India - with the possible exception of lubricants - there is no overlap. Exxon has no upstream experience of India, while for its part Mobil is actively pursuing a deepwater joint venture with the Oil & Natural Gas Corporation (ONGC).

Mobil is also familiar enough with NELP to know it wont be bidding for deepwater blocks auctioned by the DGH (Mobil reckons it has identified, "the king (ONGC) with the crown jewels"). It is the same story with LNG.

Mobil/RasGas has clinched a lucrative 7.5m t/y deal with Petronet-LNG. By contrast, Exxons LNG experience in India is zero.

In refining and LPG, however, Exxon has an edge. Esso Mauritius Overseas Limited, an Exxon subsidiary, is negotiating for an equity stake in a greenfield 9m t/y refinery promoted by Hindustan Petroleum Corporation (HPCL) at Bhatinda in the northern Indian state of Punjab (see below).

Mobils only attempt at refining in India was a bizarre effort to import a de-commissioned refinery from Germany. With lubes, there is also little to worry about.

Mobil has a successful joint venture with Indian Oil Corporation (Indo-Mobil), while Essos lube agreement, again with HPCL, lapsed earlier this year and was not renewed. In India at least, Exxons merger with Mobil should be bloodless.