The Hindu Business Line : IOC, OIL may have more say on overseas projects

THE Government is planning to give greater autonomy to the two public sector oil firms - Indian Oil Corporation (IOC) and Oil India Ltd (OIL) - by empowering the boards of the two firms to approve overseas projects jointly undertaken by them.

There would, however, be a ceiling on the investment amount up to which the two boards can give their nod, official source said.

The move is on the lines of the autonomy granted to the board of ONGC Videsh Ltd (OVL), which can approve overseas projects involving investments up to $70 million or Rs 300 crore, whichever is lower, without approaching the Union Cabinet for approval.

According to a Petroleum Ministry source, greater autonomy to the boards of IOC and OIL would strengthen competitiveness of the two firms for sourcing oil and gas from abroad. Consequently, the nodal ministry is understood to have circulated a Cabinet note towards this end.

The enhancement of powers is expected to enable the boards to take quicker decisions to acquire projects and ventures for increasing oil and gas production from overseas participation and to augment the energy security of the country, the official added.

For investment decisions above this limit in overseas projects, the companies would be required to secure Government approval through the Empowered Committee of Secretaries comprising the Ministries of Petroleum, Finance, External Affairs, Planning Commission, Department of Legal Affairs and Public Enterprises.

The public sector enterprises are governed by the general guidelines regarding autonomy laid down by the Department of Public Enterprises.

Under the existing guidelines, the `navratna' oil PSUs - ONGC, GAIL, IOC, HPCL, and BPCL - have been delegated powers to incur capital expenditure without any monetary ceiling for entering into technology joint ventures, strategic alliances, for organisational restructuring, to create and wind up board-level posts, and raise capital from domestic and international markets.

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