Mobil Gets Fipb Clearance For 100% Holding Company

The Foreign Investment Promotion Board (FIPB) has approved US-based oil giant Mobil Corporation's proposal to set up a 100 per cent holding company in the country, paving the way for the multinational to become one of the first oil majors to set up its own Indian subsidiary for pursuing investment activities.

Mobil plans to bring in $5 million as initial equity capital to establish Mobil Asia Pacific Private Ltd. The company will utilise its subsidiary to transfer its proprietary technology to various projects in the country and explore investment opportunities in the high-cost power, liquefied natural gas (LNG), petrochemicals and oil-related sectors in the country.

 

Mobil has already made a bid for a $10 billion contract to set up an LNG import facility, which has been proposed by a consortium of public sector companies including Indian Oil Corporation (IOC), Gas Authority of India Ltd, Oil and Natural Gas Corporation and Bharat Petroleum Corporation Ltd.

A spokesperson said the company will route the investment for this project through the new subsidiary in case it wins the contract. Investment in other new ventures will be similarly routed through the subsidiary.

Mobil currently operates in India through a joint venture with IOC for blending, packaging and marketing Mobil-branded lubricants and greases in the country, as well as for marketing these products in Nepal and Bhutan.

Both the partners hold 50 per cent of the equity in the joint venture company, Indo Mobil Ltd, which was incorporated in 1994. Indo Mobil plans to set up a blending plant in the country to blend various Mobil brands as well as IOC's leading brand Servo.

Mobil also has a 43 per cent equity stake in an LPG bottling joint venture with the Chennai-based Pee Vees group, which holds the remaining 57 per cent.

The multinational is set to increase its stake in the Beypore (Kerala)-based joint venture, Mobil Peevees, to 70 per cent. Mobil has already received the necessary clearances for this purpose from the government.