Mumbai: India’s oil refiners and its state-run shipping utility are committing significant equity stakes to a dedicated maritime freighting joint venture to cut overseas reliance on transporting both crude oil and refined fuels, progressively reducing a part of the ₹6 lakh crore annual bill India foots to charter foreign vessels for inbound and outbound logistics.
Indian Oil Corp (IOCL), Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Cor (HPCL) would together own 35 per cent in the proposed joint venture with the Shipping Corporation of India (SCI), the latter’s Chairman BK Tyagi told ET.
“We are still working on the technical specifications and tender terms of the JV,” Tyagi said. “Our partners IOCL, BPCL, and HPCL will together hold 35 per cent stake in the company. We will hold a 50 per cent stake.”
Besides the above stakeholders, the Maritime Development Fund (MDF) would own the remaining 15 per cent.
The joint venture is aimed at progressively onshoring the chartering business through SCI, both helping the state-run shipping utility and conserving forex for the oil marketing companies (OMC).
“By being part of this joint venture, OMCs aim to reduce the dependence on foreign vessels, thereby cutting the outgo of foreign exchange in hiring foreign-flagged ships and enhancing India’s energy security,” said a senior OMC official, on the condition of anonymity.
Industry estimates suggest India’s inbound and outbound cargo logistics would cost around ₹6 lakh crore.
The MDF is a government initiative designed to provide financial assistance to India’s maritime sector. It is a blended finance model to attract private investment and has a corpus of ₹25,000 crore to provide long-term financing for the maritime sector.
IOCL, BPCL, and HPCL did not respond to an emailed query.
The joint venture will facilitate the buying of 59 ships – very large crude carriers, very large gas carriers, offshore vessels, etc. – through a combination of second-hand purchases from the market and newly built vessels from Indian yards. This may entail an investment of around ₹15,000-17000 crore.
The SCI, Tyagi said, would provide technical, operational, and regulatory expertise while IOCL, BPCL, and HPCL will enable cargo commitment through long-term charter contracts. The ships acquired through the JV will be managed by SCI for a certain management fee to be paid by the JV company.
