Indian Oil to raise $370-m loan to fund oil imports

NEW DELHI: Oil major Indian Oil (IOC) has signed agreements for raising foreign currency loan of $370m to meet its oil import requirements. The loan amount would facilitate Indian Oil in importing about 40m tonne of crude oil in ’06-07. The crude import to feed its seven refineries and subsidiaries.

According to a company official, Indian Oil will borrow $200m from BNP Paribas, Singapore and $170m from Bank of America, Taiwan, at highly competitive rates. “The two agreements were signed on August 4, ’06,” he said.

The maturity of the loan from BNP Paribas is one year. However, the loan facility from Bank of America is revolving in nature within the availability period of one year. The revolving facility would enable Indian Oil to manage its cash flows more efficiently.Indian Oil also has the flexibility to avail of these facilities in Japanese Yen equivalent, he added.

IOC would explore Saudi Arabia, Nigeria, Malaysia and Kuwait for the purchase of crude oil. The company had imported about 38 mt of crude oil and 4mt of petroleum products (liquefied petroleum gas, naphtha, fuel oil, high-speed diesel, motor spirit and kerosene) last year.More than 70% of India’s crude oil requirement is met through import. IOC is one of the largest importers of crude. India’s crude oil import bill has touched Rs 1,71,702 crore in ’05-06, a significant jump from Rs 83,528 crore in ’03-04.