IOC may buy 26% OIL pie for Rs 2,000cr

Indian Oil Corporation (IOC) may buy 26% stake in oil and gas exploration firm Oil India (OIL) for about Rs 2,000 crore.

"We are keen to have an oil and gas exploration unit to complement our dominant position in oil refining and marketing. OIL will give us the presence we had long desired in the upstream business," an IOC official said.

The government had offered IOC 47% stake in OIL but since the offer was sans management control, IOC was keen only on 26% equity.

"A 47% stake does not make sense because OIL would not have come under IOC fold. We can achieve what is being offered at 47% with a minimum 26 % also," the official said.

He said IOC wanted OIL to merge with it to have a greater say in operations. "If the objective is to synergise operations of a pure oil and gas exploration firm with the dominant downstream oil refining and marketing company, a 26% stake would do."

Petroleum minister Mani Shankar Aiyar said his ministry has sought the opinion of the Assam government on the issue of dilution of government holding in OIL. "The issue has political ramifications and we have to
keep the sensitivities of the North East in mind before arriving at any decision," he said.