February 19, 2002

    The Minister for Petroleum & Natural Gas, Shri Ram Naik, received here today a Draft of Rs. 1153.68 crore from Shri M.A. Pathan, Chairman Indian Oil towards sale of 33.58 per cent Government equity in IBP. With this, IOC – a Navaratna Oil PSU -- formally takes over the management control of IBP Company Limited, a standalone marketing PSU under the Ministry of Petroleum & Natural Gas. Shri Naik described this as a historic milestone in Indian Petroleum Sector and complemented the efficient and professional handling of disinvestment in IBP within the stipulated timeframe. "On the eve of the dismantling of Administered Price Mechanism (APM), this development in the process of divestment has been widely acclaimed as a win-win situation for all stakeholders", he added.

    The Minister further said that the acquisition of IBP IBP with a wealth of experience and proficiency in retail market of petroleum sector augurs well for Indian Oil which could now capitalise on IBP marketing expertise and leverage on its own strength in downstream petroleum business. This is also important for IOC for gearing up to face the impending competition in the post-APM period. The performance of IBP compares favourably with the best in the world. To get 1,500 retail outlets in prime locations all over India by paying Rs. 1,800 crore approximately (including 20% open offer for equity purchase from public) is being regarded as a prudent investment decision by those who know the potentiality of the oil industry. This has also helped to uncover the hidden value of Government assets in the oil sector. On the other hand, IBP would also benefit from the view point of security in product supplies, at the least possible transportation costs, through the nine refineries in Indian Oil fold and its extensive network of 186 bulk storage installation.

    Speaking on the occasion, Shri Santosh Gangwar, Minister of State for Petroleum & Natural Gas said that by this acquisition the two vibrant organisations of the Indian petroleum sector would be in a position to offer better customer service, provide innovative solutions and improve the value for stakeholders..

    IBP Company Limited has over 90 years of operating history in India. Indo-Burmah Petroleum, as then named, was first incorporated in Burma in 1909 and later in India in 1942. All association with Burma ceased in 1963. IBP became a subsidiary of Indian Oil Corporation Ltd., in 1970 when Indian Oil acquired a majority of the shares from Steel Brothers, U.K. The Government subsequently acquired the holding in 1972 from Indian Oil whereupon IBP was established as a separate public sector enterprise under the Ministry of Petroleum & Natural Gas and was classified as an independent oil marketing company in 1989. The principal business of IBP is the storage, marketing and distribution of petroleum products. The operations of IBP also include Engineering (manufacturing of Cryogenic containers) and chemicals (manufacture and marketing of explosive) activities.

    IBP has a nationwide network of 1553 Retail outlets, 376 SKO/LDO dealerships and 17 LPG dealerships. IBP’s storage and distribution network has been progressively expanded in recent years and it comprises 15 terminals in eight states with a total installed tankage capacity of 3.52,120 kilolitres.