Finance ministry blocks ONGC bid to buy Mangalore Refineries

Vol 6, PW 18 (06 Nov 02) News in Brief

Hopes for a quick conclusion of ONGC's plans to buy the Aditya Birla Group's stake in Mangalore Refineries have hit a roadblock.

PETROWATCH learns the finance ministry has refused to approve the deal unless the Public Investment Board - a government agency that scrutinises major state sector contracts - approves it. ONGC argues it is well within its rights to make an investment of Rs66cr in Mangalore Refineries but its protests have been brushed aside.

Finance secretary and former oil secretary Dr Subbaram Narayan wants the PIB to clear the ONGC deal before he approves. Earlier this year, the Birla Group accepted ONGC's offer of Rs2 per share for its 37.5% stake and broke off talks with Reliance, which offered Rs2.20 per share, on condition that the refinery file for the Indian equivalent of Chapter 11 bankruptcy.