OVL wants to exclude IOC and HPCL from deals

Vol 8, PW 6 (16 Jun 04) People & Policy

ONGC Videsh is determined to prevent Indian Oil and Hindustan Petroleum taking stakes in its equity abroad.

IOC and HPCL have been told several times that OVLs business is to look for upstream opportunities abroad and not accommodate others, OVL tells PETROWATCH. OVL is not interested in tutoring oil companies on how to work abroad by revealing its magic formula on how to acquire exploration and production acreage, he adds.

Does OVL interfere in their retail plans internationally barks our source. How can you stitch clothes when you are not a tailor We are not here to share our business model with novices.

Last month former oil secretary BK Chaturvedi held a meeting with Hindustan Petroleum and its exploration subsidiary Prize Petroleum and OVL officials including managing director Ranbir Singh Butola to discuss overseas upstream possibilities for the Mumbai-based refiner. The meeting started routinely with Prize managing director Dr Mithilesh Prasad making a presentation.

As it progressed HPCL suggested that companies like Prize should be given a chance to bid for smaller properties that have been either ignored or given up by OVL. This was the most ridiculous suggestions we have ever heard, OVL tells this report.

Negotiating with global oil majors is not like setting up a petrol pump. Indian Oil is likewise trying hard to include itself in OVLs latest deal with Shell for acquisition of the Anglo-Dutch majors 50% stake in Angolas Block 18.

The cabinet has approved our participation in the Angola deal, an IOC director tells us. We want to be present when OVL negotiates the deal with Shell.

Responds OVL: The cabinet has agreed to include IOC once the deal is done, not before. He adds tongue-in-cheek: IOC must be desperate to spend its $2bn war chest in advance without sealing a single deal.

On 28th April, IOCs board approved a proposal to set aside $2bn for overseas exploration ventures.