The Hindu Business Line : `Synergy in energy committee report to be ready in 4 weeks'

THE advisory committee on synergy in energy will be ready with its report in four weeks' time, according to Mr V. Krishnamurthy, Chairman of the committee.

Speaking to newspersons after the committee's meeting here, Mr Krishnamurthy said the committee would be meeting again next week, synthesise the various views which has been put forward before the committee.

When asked about whether the committee has identified the most appropriate structure of the oil PSUs to secure these ends, he said, "We will have to wait before the report is finalised."

The committee has been given a month's extension. According to official sources, the main concern before the committee was on how the oil companies can increase focus on exploration and production (E&P) and how to make the oil firms more focussed on development and absorption of technology.

Various views have been given on structure and the committee members are discussing it, official sources said, adding that the Ministry has not given its view. The highest priority is being given to E&P, research and development and absorption of technology by the oil firms.

Considering the high volatility in the oil sector, which is putting pressure on their profitability, most of the companies want to go abroad. In such situations there are two options available - either companies form a consortium or become one integrated company, sources said.

While favouring the merger proposal, exploration giant Oil and Natural Gas Corporation Ltd is believed to have suggested the creation of two integrated entities. Meanwhile, Indian Oil Corporation (IOC) has recommended that the restructuring should lead to creation of three entities led by IOC, BPCL and ONGC. All three entities would be integrated oil and gas companies, with a presence in refining and petrochemicals, marketing and crude oil production. Further, in its presentation, IOC is understood to have proposed that GAIL could be a stand-alone entity.

Feeling the need for oil public sector undertakings to leverage their strengths in their respective areas of core competence to optimally fulfil the key role envisaged for them in promoting the national objective of energy security, accelerated growth rate and sustained economic development, the Government had set up the committee.

The advisory committee is examining the core competence of PSUs in the petrol and natural gas sector of the country to assess their competitiveness in the evolving domestic and international scenario.

The committee was to also analyse the various options of leveraging their strengths to optimally fulfil their required contribution to the national objectives of energy security, accelerated growth, sustained development and social objectives of Government policy and identify the most appropriate structure of the oil firms to secure these ends.

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