India's bid for acquiring overseas energy assets received another blow when Indian Oil Corporation [Get Quote] lost out in the race for Turkey's state-owned Tupras.

The deal was bagged by a combine comprising Shell and Turkish conglomerate KOC Holdings. This comes close on the heels of Oil and Natural Gas Corporation losing Petrokazakh to China National Petroleum Corporation.

The Shell-KOCH consortium bid $4.14 billion for the Turkish government's 51 per cent stake in Tupras, while IndianOil and its local partner, the Calik Enerji group, withdrew from the race after having bid $4.12 billion.

IndianOil executives told Business Standard that the companies were asked to match the price in a range of $20 million plus. "Tupras had a market capitalisation of $4.14 billion and we were bidding for 51 per cent stake. It was already overvalued," said an executive.

Apart from a presence in Turkey, the acquisition would have helped IndianOil enter the European market and gain access to Caspian Sea crude.

After submitting an expression of interest on June 14, 2005, the IndianOil-Calik Enerji consortium was shortlisted along with six other companies. The Shell and IndianOil consortia had made to the final round of bidding.

For the final bid submitted by IndianOil to the privatisation administration of Turkey on September 2, Ernst & Young was the sole adviser.

Tupras, in which the Turkish government held 66 per cent stake, owns four refineries - Izmit, Izmir, Kirikkale and Batman - with a combined capacity of 27.6 million tonnes per annum of oil amounting to about 86 per cent of the country's total refinery capacity. It also has a petrochemical production capacity of 153,000 tonnes per annum.