IOC may set up IOC Videsh for overseas investment

Nov 14, 2003 01:00 AM

The country's largest refiner Indian Oil Corp is mulling setting up a wholly-owned overseas investment vehicle if government rejected the plan to create a second incarnation of hugely successful ONGC Videsh Ltd (OVL), with participation of all state-owned oil firms.
"We are keen on diversifying into oil exploration and production by acquiring oil fields abroad. We cannot for ever be dependant purely on imports for crude oil," senior company officials said.

IOC along with state-owned majors Hindustan Petroleum Corp, GAIL India and Oil India has petitioned the government for being allowed to set up a new joint venture company to pursue exploration and production project overseas.
Tentatively named OVL-II, the joint venture would be the combined overseas arm of the four state majors, with the original OVL running the show and holding a controlling stake.

It is proposed to have the same empowerment and fast-track project approval as presently enjoyed by OVL, the overseas arm of state-run upstream giant Oil and Natural Gas Corp (ONGC).
"If they (petroleum ministry) do not give permission for OVL-II, than we plan to go ahead with our own IOC Videsh (Videsh being Hindi for 'overseas')," sources said.

The four majors were initially demanding equity stakes in OVL itself and thereby in all of its overseas E&P projects, including Sakhalin-1 in Russia and the Greater Nile Petroleum Operating Company in Sudan.
The government, however, rejected this demand, suggesting instead that they could join hands with OVL in all future overseas projects under a new joint collaborative "arrangement".

Source: The Economic Times
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