State-owned Hindustan Petroleum Corporation (HPCL) is to soon create a subsidiary to hold its exploration and production (E&P) assets and those of Prize Petroleum, which the company recently took over.
This, the company says, is in line with what its counterparts — Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) — have done with regard to their E&P strategy.
“Despite being in existence for 13 years, Prize did not perform. HPCL now wants to have a good E&P arm in place. Creating an umbrella with all the assets of our E&P arm and that of Prize Petroleum’s is the only way to be successful. The subsidiary may have a new name and a new management in place soon,” said an HPCL executive.
Last month, HPCL made Prize Petroleum its wholly owned subsidiary by buying the shares in it of financial institutions ICICI Bank, ICICI Venture and HDFC. HPCL earlier held only 50 per cent stake in Prize.
HPCL, through HP E&P, forayed into the upstream sector to have access to oil to ensure energy security. In consortium with other E&P partner companies, it currently has 19 blocks in India, one block in Australia and two blocks in Egypt.
“We have seen how IOC and BPCL, despite late entrants in the E&P sector, are performing on this front. We, too, have decided to be aggressive on this front,” the executive added.
IOC’s domestic portfolio comprises 11 oil and gas blocks and two coal-bed methane blocks. The portfolio abroad has 11 blocks spanning Libya, Iran, Gabon, Nigeria, Timor-Leste, Yemen and Venezuela. IOC is associated with two successful discoveries in oil exploration blocks, one each in India and Iran. Commercial appraisal of these blocks is underway. It also farmed into an exploration block in Gabon along with Oil India Ltd (OIL) as the operator.
To boost E&P, IOC has incorporated Ind-OIL Overseas, a special purpose vehicle for acquisition of overseas E&P assets, in consortium with OIL.