The Hindu Business Line : Oil Ministry lukewarm to PSUs diversification

EVEN as some of the public sector oil companies are seeking to `do an Exxon Mobil', the Petroleum Ministry top brass is nudging them to stick to their `core' businesses and provide rigorous justification for their ambitious diversification plans.

The chorus for being allowed to follow the footsteps of Exxon Mobil - the global leader in the oil industry — is being led by Oil and Natural Gas Corporation (ONGC).

Currently, ONGC is focussed in the exploration business while also operating a 9 million tonne refinery at Mangalore. Now it is seeking to replicate Exxon Mobil, a `vertically integrated' conglomerate, whose operations cover the entire value chain from oil production to dispensing of petro-products at the retail end.

ONGC too has drawn up plans to enter the retailing business, besides venturing into petrochemicals and power.

At a recent meeting taken by the Petroleum Secretary, Mr Tripathi, where the ONGC Chairman and Managing Director, Mr Subir Raha, spelt out his company's diversification plans, the latter was apparently asked to furnish data on ONGC's expenditure pattern over the last 10 years. Specific details were sought on the investments made by the company on the exploration front and the results obtained therein.

Ministry officials are said to have taken a dim view of ONGC's efforts over the last two years in its core business of discovering oil and gas in the country. The Ministry is not very bullish on ONGC's proposed diversification into power as well as the aggressive foray into the petrochemicals business. ONGC plans to set up a petrochemical cracker operating on LNG and also a Linear Alkyl Benzene (LAB) plant whose produce will be exported.

In the case of GAIL (India) Ltd, the natural gas transporter is already operating a petrochemical plant at Pata, Uttar Pradesh. It has also entered the overseas gas exploration business.

IOC is similarly planning to get into the petrochemicals and exploration business in an aggressive manner. BPCL is looking at foraying into the exploration business.

More Stories on : Diversification | Petroleum

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