• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Richa Mishra

New Delhi, Oct. 28 While ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, is seeking more powers for its board to take investment decisions and increasing the current investment limit of $75 million or Rs 300 crore (whichever is less), it may have to wait before the Petroleum Ministry can consider the request.

According to sources, OVL was looking for Government support for authorising its board to approve projects up to Rs 1,000 crore, at par with Navratna public sector undertakings initially. Subsequently, the company wanted the amount to be raised to Rs 2,000 crore according to recommendations of the Krishnamurthy Committee Report on Synergy in Energy. The company was also looking for authorising the Empowered Committee of Secretaries to approve projects up to Rs 2,000 crore in the first phase and later to $1 billion.

The Petroleum Secretary, Mr R.S. Pandey, told Business Line that “nothing is under consideration at present. There is no concrete proposal before us. Besides, ONGC is a Navratna company and has powers and capabilities to meet the investment requirements of OVL and whenever it exceeds the limit it can come to the Government for approval.”

There were two options, industry sources said. The first was to bring the investment limit in line with that prescribed for the public sector enterprises, i.e. an investment limit of up to Rs 1,000 crore. The second option was the recommendation by the high-level Krishnamurthy Committee on Synergy in Energy of raising the limit to Rs 2,000 crore. Since investments beyond the permissible limit need to be approved by the Cabinet Committee on Economic Affairs, the company often lost emerging investment opportunities, sources said.

In 2005, the Government had increased the investment limit of OVL from $50 million (or Rs 200 crore) to $75 million (or Rs 300 crore). However, the company was of the view that such low investment limits had little relevance in the high-value oil and gas sector. The current investment limit was sometimes not sufficient enough to meet exploratory projects, sources said.

The deal sizes, in which OVL would be interested, were above $500 million. In 70 per cent of the deals, the buyers do not want to wait, and as a company into the business of acquiring equity in oil and natural gas assets overseas, OVL cannot afford to close such windows of opportunity, the sources added.

More Stories on : Overseas Investments | Petroleum | Oil & Natural Gas Corporation Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line