CHEVRON AND LUBRIZOL SET TO INCREASE STAKE

Vol 2, PW 26 (20 Jan 99) Midstream & Downstream
     

It has been a long wait, but the Indian oil ministry appears set to allow Chevron and Lubrizol to raise their respective stakes in Indian Additives and Lubrizol India.

So says V Swaminathan, Director, Indian Additives, and a consultant to Chevron Chemicals, in an interviewed with this report. Swaminathams optimism arises from the impending shift from the oil ministry of Nirmal Singh, Joint Secretary, Refineries, and the man held responsible for stalling Chevron and Lubrizols wish for a higher stake in their Indian subsidiaries.

Some mystery surrounds the governments refusal to accept Chevron and Lubrizols argument for an increased stake. More so, since the government has publicly announced its willingness to reduce its equity in state-owned companies to 26% in favour of "strategic partners", which both Chevron and Lubrizol clearly are.

For its part, Lubrizol India is a profitable joint venture between the US-based Lubrizol Corporation and the Government of India. It manufactures additives for automotive and industrial lubricants.

Lubrizol holds a 40% stake and has been trying unsuccessfully for the last five years to raise it to 50%. Lubrizol has even threatened not to renew the technology transfer agreement which expired last year.

The government is toying with the idea of transferring its stake to ONGC or IOC. Indian Additives is a joint venture of Chevron Chemicals (40%) and Madras Refineries (60%), set up to manufacture chemical additives.

Chevron has been trying to raise its stake in the Chennai-based company to 50%. Madras Refineries has agreed, but like Lubrizol, Chevron too is is facing government opposition.