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Wednesday, Nov 13, 2002

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Rs 5,000-cr payout sought from ONGC

Our Bureau

NEW DELHI, Nov. 12

THE Finance Ministry has sought Rs 5,000 crore from ONGC in the form of special dividends.

"ONGC should give three times the dividend they paid us last year... we will discuss this later... ," a top Finance Ministry official had said at a high-power meeting with Petroleum Ministry officials on October 31 this year.

ONGC had paid a dividend of around Rs 1,700 crore during 2001-02.

The top official was reacting to the Petroleum Ministry's request to the Finance Ministry to provide a higher allocation for subsidy on kerosene and LPG since politically it was difficult to raise the prices given the ensuing State elections. The official's request was oral and has yet to be conveyed to the Petroleum Ministry as a formal proposal. During this meeting, the Finance Secretary was present for a short while.

Later, at a meeting with Financial Advisors of various Ministries, the Finance Secretary, Dr Narayan, hinted that the state-owned oil companies had the resources to make a greater payout to the exchequer, according to officials.

The Finance Ministry is emboldened by the fact that ONGC is set to post higher profits this year since it will shortly be remunerated international parity price for its crude production.

ONGC is meanwhile busy cobbling together arguments on why its reserves and surplus amounting to around Rs 28,296 crore should not be touched. Besides the Rs 3,000 crore oil equity investment in Sudan later this year, ONGC's investment programme in the domestic exploration business is fairly steep.

Further, exploration is an activity that is entirely funded by equity since debt is not available.

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