After making no major headway in the last few years on its ethanol plans in Brazil, the Indian oil industry is finally moving ahead. The industry is considering investments to the tune of $600 million with a capacity of around 500 million litres a year in ethanol acreages in the Latin American country.
- These investments, however, would be cleared subject to price negotiations by public sector oil marketing companies (BPCL, HPCL and IOC) as well as clearances relating to ownership or leasing of land acreages, setting up of production units and related infrastructure along with tie-ups with suitable partners having local operations in Brazil. Although the Indian industry is ready to make these investments to produce 500 million liters of ethanol, it will finally need the Brazil government`s nod to go ahead with its investment plans.
- It is pertinent to note that in a presentation, titled ``Finalization of Feasibility Study for Ethanol Investments in Brazil,`` in 2007, the petroleum ministry, after facing opposition from the domestic lobby, had directed the oil industry to look for prospects in ethanol acreages in Brazil, not with a view to import ethanol into India but for sale in Brazil itself and exports to other countries.
- Subsequently, the oil industry started hunting for suitable local partners in Brazil. Later, following discussions with top prospective partners, broad MoUs were signed subject to due diligence, valuation and definite agreements to be finalized later.
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