As per the revised pacts, likely to be signed next week, IOC will market 10.65 million tonnes of controlled petroleum products from Jamnagar refinery of Reliance and 5.25 million tonnes of Essar refinery, IOC sources said today. The six amendments in the IOC's marketing agreements were a result of recommendations by the Oil Coordination Committee (OCC) of the ministry.

The OCC had earlier assessed the capacity of Reliance at 21.3 million tonnes of controlled petroleum products annually while it put the figure at 10.5 million tonnes for Essar and recommended that half of the products be marketed by IOC and the other half be shared equally by Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL).

IOC had earlier sent its marketing pact, cleared by the oil giant's board,for government approval which envisaged marketing of 52 per cent by IOC and formation of separate joint ventures with Reliance and Essar for the remaining part. IOC has already talked to the two private refineries on the changes suggested by the ministry last week and formal agreements would be signed in a week or two, the sources said.

The first change in the original pact pertains to the newly-assessed capacities by OCC. The second change would be relating to sharing of products by IOC with the other two public sector oil firms, sources said adding that HPCL and BPCL would also go for identical agreements with the two private refineries.

The agreements would also specifically state the sharing during the APM era, which is scheduled to be dismantled by 2002. The next two amendments relate to marketing companies' charges for marketing terminals to be set up by refineries and stock losses.

Charges for terminals, which will be used by the marketing companies as loading points, would be determined by theOCC later as part of a uniform policy, sources said. In case of stock losses, the liability would rest with the marketing company after transfer of the products.

The government has also asked to put in a specific clause wherein there would be no debit to the oil pool account as a result of spillages or delays, the sources indicated. IOC is entering a 10-year agreement with the two firms from the date of delivery.

Reliance is likely to commence supply from May-June 1999 while in the case of Essar the product is likely to flow from the last quarter of the current fiscal year.

OCC will re-assess capacities of the two refineries which are reported to be in an expansionary phase. The expert body of the petroleum ministry is also understood to have provided for transfer of the petroleum products to IOC if HPCL and BPCL are unable to take their shares, the sources said.

As per the government's petroleum sector reforms and the phased dismantling of APM, any new refinery with a minimum investment of Rs 2000crore would be given marketing rights and IOC's tie-up with Reliance and Essar assumes significance in this light.

Since OCC formula stipulates a period up to the APM-regime IOC is also likely to make efforts for garnering a larger share from the two private refineries in the post-2002 period.

Presently, IOC has a market share of 55 per cent while its own refineries account for 40 per cent with the company acquiring the balance from stand alone refineries.

The pact is also likely to help IOC in case three state-owned refineries -- Madras Refinery, Cochin Refinery and the Bongaigaon Refinery -- are tagged with some other marketing company as part of government's restructuring measures. A high-powered committee headed by Nitish Sengupta is looking into various aspects of restructuring including clubbing of independent marketing companies like IBP with the stand-alone refineries.