IOC wants to go solo on exploration

Indian Oil Corporation (IOC) wants to break free of a collaborative approach in overseas exploration business and acquire a foreign exploration and production (E&P) company.

It has identified regions where the company and ONGC Videsh (OVL) can independently pursue upstream projects abroad without competing with each other.

The submissions have been made in a note to the Parliamentary committee on public undertakings. While IOC wants that it should be allowed to pursue business in south and south-east countries, Middle East and Africa, for OVL it has identified the Far East, Central and Latin America, Europe, Russia, CIS countries, Sudan and Angola.

The reason for this cited is that regions where IOC is better placed and would derive greater values from the upstream ventures should be allocated to it.

"The acquisition of an overseas E&P company, which will become the E&P arm of IOC, will not only deliver required skill set and expertise but also generate international acceptance for IOC's role of operatorship," IOC said in the note.

IOC has said its E&P aspirations had not been fully met through collaborative approach under which it had tied up with Oil and Natural Gas Corporation/OVL, Oil India and GAIL India among others.

IOC also sought greater powers to its board for approval of upstream projects or a fast track dispensation on the lines of what is available to OVL in the form of empowered committee of secretaries Oil India Ltd in its submission to the committee has expressed unhappiness at any merger proposal with ONGC since it feels that the company is identified with the people of the north-east and any straight forward merger will not be received well.

The committee in its recommendations had noted that the autonomy available to oil sector PSUs was inadequate. In its view, the government should consider granting autonomy to their board of directors "even to the extent of deciding a particular kind of business that they deem fit to undertake".

On the functioning of the directorate general of hydrocarbons, the committee recommended that the directorate should have an independent cadre.