The Hindu Business Line : No plans to make OVL independent: Ministry

The Petroleum Ministry has maintained that it has no plans to make the overseas arm of ONGC - ONGC Videsh Ltd (OVL) - an independent entity from the parent. The Petroleum Secretary, Mr M.S. Srinivasan, said on Wednesday that the existing arrangement between OVL and its parent was working well.

Speaking to newspersons at the sidelines of the fifth international symposium on fuels and lubricants here, he said the interest-free loan provided by ONGC to OVL for foreign acquisitions is cheaper than raising money from the market.

The Finance Ministry has suggested that OVL should be funding acquisition of oil and gas assets abroad through its own balance sheet, instead of taking aid from its parent. The proposal of Finance Ministry if accepted would have led to ONGC adopting an arm's length approach with OVL. Responding to this, the Petroleum Ministry said that OVL derives strength from being part of India's most valuable firm and the country's second highest profit making entity.

Indications are that the matter has been clarified with the Finance Ministry. ONGC has lent close to Rs 12,000 crore to OVL as interest-free loan.

As regards hiving off OVL from the parent, the Secretary said, "no such proposal is under consideration."

Earlier, speaking at the inauguration of the symposium, the Minister for Petroleum and Natural Gas, Mr Murli Deora, said that the subject of technological innovations and environmental concerns in the area of fuels and lubricants, which is the main theme of this conference is indeed an important one.

Energy security

Stating that the Government was committed to the goal of providing energy security, he said that Government policies would continue to support efficiency and responsiveness in the energy market.

In his address, the Minister of State for Petroleum and Natural Gas, Mr Dinsha Patel, said that making profit is not be the sole deciding factor for the stakeholders to decide on a company. The corporate sector is now expected to work on other areas such as human resources, corporate governance policies, and environmental policies as well.

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