OIL to offer 10% shares to public in October

Oil India Ltd (OIL), the country's second largest exploration and production company, is likely to offer 10 per cent of its share to the public in October this year, a few months later than planned.

Earlier this year, petroleum secretary M S Srinivasan had said that the public offer, awaiting Cabinet approval, was likely to be floated in May.

"We are hoping the government will clear our public issue in March. We will be ready to go to the market in six months after the proposal is cleared," OIL Director (finance) T K Ananthkumar said.

The company is hoping to raise Rs 1,500 crore through its maiden issue of shares. The funds will be utilised to push ahead the company's plans to enter the refining sector and acquire oil blocks overseas, Ananthkumar said.

The Cabinet had recently cleared the public offers of three power companies "� Rural Electrification Corporation, Power Grid and National Hydroelectric Power Corporation. In the public issue of these companies the government will piggyback on the companies' offer to rake in some revenue for itself.

Ananthkumar said it was not yet clear if the government would take a similar route for the OIL public issue.

OIL has registered a net profit in excess of Rs 1,600 crore during the last fiscal on a turnover of Rs 10,000 crore, with cash reserves of Rs 4,000 crore.

Analysts, however, say that a public offer by Oil India will not be very exciting. "It wouldn't excite me as much as the Cairn IPO did," an industry watcher said. Oil India is not a very aggressive company and it does not have huge hydrocarbon reserves, he said.

The company produced 3.23 million tonne of crude oil and 5 million standard cubic metres per day (scmd) of gas in FY06. It has interests in 14 fields in India of which seven are offshore. It has a paid up capital of Rs 214 crore

It owns oil and gas blocks in Libya, Gabon, Nigeria and Yemen. It is currently looking for assets in South America, Asia and West Asia. "We are in constantly looking to acquire oil assets overseas. Discussions are on with our government-nominated partner Indian Oil Corporation," Ananthkumar said.

The company was awarded six blocks in the recently concluded sixth round of auctions under the New Exploration and Licencing Policy.