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After Indian Oil, state-run Oil and Natural Gas Corporation (ONGC) is planning a bid to take over petrol stations in Sri Lanka and begin retailing fuel imported from its subsidiary MRPL, in the island nation, according to a PTI report datelined New Delhi.

Sri Lanka had earlier this week invited expressions of interest (EOIs) from oil companies to sell state-run Ceylon Petroleum Corp's (Ceypetco) 100 petrol stations. "We are closely examining the offer and a decision would be taken after evaluating business prospects," a company source said.

Indian Oil, which earlier this year took over 100 petrol stations of Ceypetco, fuels the retail outlets through imports from Mangalore Refineries and Petrochemicals Ltd. ONGC has aspirations to enter downstream marketing of petrol and diesel in India and has secured licence to set up 1,100 petrol stations, the first of which is likely to come up by the year-end.

"It makes a lot of business sense. We are setting up petrol stations afresh in India and in Sri Lanka is an opportunity to acquire ready infrastructure," the source said. Another reason for ONGC looking at Sri Lanka, which imports all of its crude and petroleum requirements is the fact that India with a surplus in refining capacity and companies regularly looks at the export market to contain the glut that is also caused by low growth in petroleum demand.

For the same reason, Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL), which too have coastal refineries in the south, are also likely to examine the Sri Lanka opportunity.

Caltex Lubricants Lanka Ltd, a unit of ChevronTexaco, and Shell Gas Lanka Ltd, are reported to be interested in entering the retail fuel market in the island nation.

Applications from interested oil firms have been invited by August 5. ONGC is looking at Sri Lanka as the island offers a ready market for products of MRPL, which till last year was operating at less than 70 per cent of its installed capacity of 9.69 million tonne, sources said.

Similarly, BPCL is evaluating business prospects of supplying products from its subsidiary Kochi Refineries while HPCL is looking at exporting products from its Vizag refinery.

"Sri Lanka is within the supply zone of the refineries," they said. IOC, which is targeting doubling its petroleum product exports to three million tonne worth $800 million in 2003-04, will export 240,000 tonne of diesel and aviation turbine fuel (ATF) from MRPL to Sri Lanka in April-October.

Besides, it exports surplus products from its subsidiary Chennai Refinery to Sri Lanka where it is in the process of acquiring an additional 150 petrol stations. Sri Lanka needs 3.4 million tonne of petroleum products a year and has a refining capacity of about 2.2 million tonne. It imports about 1.2 million tonne of products annually.

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