The Hindu Business Line : ONGC against hiving off OVL

The Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar, with the CMD of ONGC, Mr Subir Raha, at a meeting in the Capital on Thursday. — Ramesh Sharma

New Delhi , Oct 6

ONGC today said that it was not in favour of the Government's plan to hive off its overseas arm, ONGC Videsh Ltd (OVL), into a separate corporate entity.

Speaking to newspersons on the sidelines of an Assocham conference, the ONGC Chairman, Mr Subir Raha, said: "I have no information on what has been planned, but OVL is a wholly owned subsidiary and for the last four years has been showing success. This does not mean taking it out of the parent company."

Voicing concern on any such move, Mr Raha said that the current thinking was to create strength by synergy and not by disintegration.

Elaborating on OVL's success, Mr Raha said that in the last couple of months the overseas arm has successful secured stakes in exploration activities in Oman, Qatar, Yemen, Nigeria, Cuba, and Vietnam, among others.

The Government is reportedly considering hiving off OVL into a separate entity to be owned jointly by public sector oil firms.

On ONGC's plans to rope in private sector and overseas investors for developing its fields within the country, Mr Raha said that the company was planning to seek such participation in some of its fields.

"We have over 170 exploration blocks, of which around 100 are nomination blocks; the remaining have been acquired through the NELP rounds. Of these blocks, the Government does not allow farming-in of nomination blocks."

Of the total exploration blocks with ONGC, around 90 are marginal fields, in which ONGC is seeking investment and technology partners to develop and produce oil and gas.

So far, ONGC through two rounds of bidding has offered about 13 blocks for farming-in arrangement, of which only three have received offers from global energy major, British Gas. Negotiations are on for production sharing contract with British Gas, Mr Raha said.

"We are planning a third round of bidding for offering both onshore and offshore fields for service contracts," he added.

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