The stage is being set for Andhra Pradesh government to enter into oil and gas exploration and production (E&P) business.
Clearing the decks for floating a new corporation on the lines of the Gujarat State Petroleum Corporation from its side, the AP Industrial Infrastructure Corporation on Tuesday formally decided to enter into a joint venture agreement with the AP Genco.
The APIIC board which met here approved the new initiative with equity sharing of 51and 49 per cent respectively between the two State-owned entities.
To be christened as ‘AP Gas Infrastructure Corporation’, the new corporation will be involved in E&P activities in oil and natural gas as a facilitator on behalf of the government.
The new entity’s main purpose would be to optimise the utilisation of oil and natural gas available in the KG Basin within the State and create employment opportunities in these areas to benefit youth.
The APIIC, which disclosed the decisions of the board in a press release, however, did not specify whether the new corporation would be entirely State-owned or would seek international collaboration for technical know-how required in oil exploration. Chief Minister Y.S. Rajasekhara Reddy recently approved the venture based on the recommendations of the Director-General of Hydrocarbons V.K. Sibal.
Mr. Sibal, who made a presentation on the various aspects and opportunities on August 11, favoured creation of an independent body, at an “arm’s length” to the government, and capable of taking financial/technical decisions.
The board also approved five per cent equity participation by APIIC in Bhagyanagar Gas Ltd, a joint venture of HPCL and GAIL involved in City Gas Distribution, as well as industrial gas supply in Hyderabad, Vijayawada and Kakinada. Participation of APIIC will facilitate allotment of land to Bhagyanagar Gas at strategic locations to expedite gas pipeline network, so as to ensure gas supply reaches homes at the earliest.