GAIL determined to be an upstream exploration major

Vol 8, PW 13 (22 Sep 04) People & Policy
     

Dont laugh because its true: GAIL is serious about becoming a global upstream major.

In a direct challenge to his ministry bosses, GAIL chairman Proshanto Banerjee called a press conference on 9th September to highlight GAILs growing E&P business. Vocal ministry opposition led by oil secretary Sushil Tripathi to efforts by state-owned oil companies to stray from their core competence clearly hasnt deterred GAIL.

In his presentation Banerjee reeled off several upstream success stories where GAIL has a stake, and predicted more to come. We want to source our own gas so that we can play the market, said Banerjee.

These discoveries will strengthen the supply side of our business. Today our supply side is entirely dependent on ONGC and other producers.

Banerjee later told this report he wants to transform GAIL into an integrated gas major so it can capitalise on upstream opportunities and break away from the image of a boring gas transmission and marketing company. Egypt, Turkey and the Philippines, said Banerjee, are new target countries for GAIL, for upstream opportunities and transmission and distribution.

Iran, he said, has already promised GAIL acreage. Banerjee stressed that ONGC Videsh, the countrys official ambassador, should not feel threatened.

We dont want to compete with OVL abroad, he said. We want to work with OVL.

He said both companies would benefit if they worked together, particularly on overseas gas-prone acreage. All we are asking for is a small stake so that if gas is discovered we can leverage our expertise as a pipeline and marketing company as we do in Egypt.

Banerjee hinted that the new MD at OVL, RS Butola, is more receptive to overseas alliances with GAIL than his predecessor, Atul Chandra.