The Hindu Business Line : GAIL, HPCL seek level-playing field

With petroleum sector companies increasingly feeling the need to acquire oil and gas assets abroad, both GAIL (India) Ltd and Hindustan Petroleum Corporation Ltd (HPCL) are pursuing the Government for a level playing field with other oil companies for equity investments overseas.

Speaking to Business Line, Mr Proshanto Banerjee, CMD, GAIL said that his company has been seeking from the Government a special mechanism for overseas investments beyond Rs 300 crore.

Currently, ONGC Videsh Ltd (OVL) and the Indian Oil Corporation-Oil India combine enjoy the special mechanism for overseas participation through an Empowered Group of Secretaries (EGS), which ensures single point approval for these companies on overseas investments beyond Rs 300 crore.

GAIL, which has been actively pursing exploration and production (E&P) assets overseas and signed a memorandum of understanding with HPCL in November last year for the purpose, has stepped up its demand for being given the same dispensation as available to the OVL and Indian Oil-Oil India combine. Recognising the potential of adding value to their businesses by a co-operative approach based on their complementary skills and strengths to jointly exploit E&P opportunities, GAIL and HPCL joined forces.

GAIL holds a participating interest in 15 exploration blocks. The various consortium partners of the company in the 15 blocks are ONGC, GSPC, Gazprom, OIL, Indian Oil Hardy Exploration & Production, Enpro Finance Private Ltd., ENI India Limited, Jubilant, GGR Canada, Daewoo, OVL and Korea Gas.

Exploration blocks

GAIL's participating interests in these blocks varies between 10-80 per cent. The Government had in December allowed IndianOil-OIL to go through the ECS to secure approval for their bids for overseas acquisition of oil and gas blocks. This mechanism helps in speedy clearance of proposals. Further, the Government had also allowed Oil India to float project specific special purpose vehicles with IndianOil. However, in properties where Indian Oil was not interested, the Government allowed Oil India to partner with other downstream navratna companies. GAIL has also urged that OIL should have the freedom to choose partner companies for floating special purpose vehicles for the purpose.

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