Abu Dhabi - Investments In India.

Abu Dhabi's business links with India picked up after 1991 when New Delhi began economic reforms. By 1993, the UAE had become the fifth largest investor in India, with Abu Dhabi and Dubai accounting for most of the placements. These investments mostly involve real estate and stocks in some of India's biggest companies. India is one of ADNOC's biggest markets for crude oil and petroleum products. Abu Dhabi's LPG sales to India began in 1996, for the first time, and are expected to increase rapidly in the coming years. Moving Into S. Korea: Under a deal to be finalised in early 1999, IPIC last October signed an MoU to buy a 50% stake for a mere $500m in South Korea's third largest oil refining and retail company with a market share of 21%. It would thus get 50% of a 665,000 b/d oil refining capacity, 2,350 petrol stations and a 1,500 MW power plant. Under a merger sanctioned by Seoul, Hyundai Oil acquired from heavily indebted Hanwha Energy a 275,000 b/d refinery at Inchon, its petrol stations and its power plant. Hyundai already owned a 390,000 b/d refinery and many petrol stations. The biggest refiners in South Korea are LG-Caltex and Ssangyong Oil. Ssangyong is 35% owned by Saudi Aramco whose equity is to be raised to 49% or more. The IPIC money will be paid to buy new shares in the enlarged Hyundai Oil which also acquired a debt worth about $2.5 bn. Hyundai Oil has said it will use the money to lower its debt-to-equity ratio to 1.8:1 by early 1999, and to 1.1 by end-1999. IPIC was encouraged by the drop in the value of Korean oil assets to what ADIA experts called a bottom line, and by Seoul's abolition of a ceiling on foreign ownership of refining, retail assets and power assets. Construction of new refineries is not allowed if additional capacity exceeds domestic demand by 20%. But the existing refineries still have to maintain a minimum storage capacity for 90 days. Under the IPIC deal, Hyundai Oil will control the management of the refineries, petrol stations and power plant. Hyundai Oil's 50% equity will be held by the parent Hyundai group and a number of South Korean investors.