ExxonMobil Corp. has reached an agreement to buy Indian Oil Corp.s 50-percent stake in Indo Mobil Pvt. Ltd. This isthe latestbreak-up of a lubricants joint venture between an international oil major and a publicly owned Indian petroleum company, and comes as India prepares to deregulate its entire oil sector in March.
Indo Mobil was formed in 1997, a year before Mobils merger with Exxon, which has a history of preferring to do business on its own.
India is a promising market and we take a long view of our presence there, an ExxonMobil spokeswoman said. Were committed to staying in the market and growing.
The companies did not disclose the price of the transaction, which must be approved by Indian regulatory agencies.
Indo Mobil was one of four lubricant joint ventures in India between international majors and public oil companies,and it is the third to dissolve. Exxon and Caltex previously exited alliances with Hindustan Petroleum and Indo-Burma Petroleum, respectively. Bharat Shell Ltd., an alliance of Royal Dutch/Shell and Bharat Petreolum, remains the only such alliance on the subcontinent.
As reported in LubesnGreases magazine earlier this year, critics predicted the joint ventures would not last because their products competed with the Indian partners own brands. The magazine also reported that Indo Mobil had a 1.5 percent share of India’s 1.1 million metric ton lube market.
Most majors originally formed these joint ventures to establish visibility and a branded presence in lubricants, which were deregulated in 1992. When the entire oil industry is deregulated in March 2002, the government-owned corporations are expected to be privatized.
