Shell returns to India after three decades

By siliconindia   |   Tuesday, 13 May 2003, 19:30 IST
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NEW DELHI: Minister of Petroleum and Natural Gas Ram Naik on Monday said the government has approved a proposal to allow the Indian subsidiary of Shell group of companies to market transportation fuels in the country. With this the multinational, which was nationalised in India in 1972 and became Bharat Petroleum, makes a comeback after more than 30 years. The authorisation to 'Shell of India Pvt Ltd' is subject to the company furnishing a Rs 500 crore bank guarantee to the government towards fulfilling the commitment to invest Rs 2000 crore to the building of infrastructure in the hydrocarbon sector. The company would be required to set up 11 per cent retail outlets in far-flung areas and will have to sign an agreement with the government indicating year-wise targeted completion schedule. "Our market is ever growing and offers opportunities for even big players like Shell," Naik said. "The decision goes a long way toward fulfilling the government's goal of bringing in more players in the marketing of transportation fuel so that the consumers have a wider choice of quality products and services," he said. In addition to the present strength of about 20,000 retail outlets run by the public secor, the government has already granted marketing rights to Reliance group (5849 outlets), Essar Oil (1700) ONGC (600) and Numaligarh Refinery (510) also on the condition that they create more infrastructure in the hydrocarbon sector. Shell India has plans to set up around 2000 retail outlets spread across the country and their preferred source of supplies will be domestic refineries. They would also prefer to make use of the installation and depots of public sector oil companies spread across the country which will help improve the utilisation of domestic refining capacity and 'tankage' infrastructure. Naik said Shell had set a proviso seeking the return of the bank guarantee in case the project cannot be completed and they have been told that it will depend upon the genuineness of their claim.