The Petroleum Ministry will approach the Cabinet Committee on Economic Affairs (CCEA) on the proposal by Indian Oil Corporation (IOC) to acquire exploration and production (E&P) assets abroad after the submission of recommendations of the Empowered Committee of Secretaries (ECoS).
Giving this information here, Petroleum Secretary Vivek Rae said that being a ‘maharatna’ company, IOC had to approach the Cabinet for making investments beyond Rs.5,000 crore. The investments involved were big and that was the reason the ECoS had been set up under me. “We have constituted an ECoS which will meet here soon and submit its report on the issue within this month so that necessary action could be taken at the shortest possible time,” Mr. Rae added. The ECoS includes Secretaries of Finance, Ministry of External Affairs, Law and Justice, Planning Commission and Department of Public Enterprises.
IOC has been looking to spreading its wings abroad including buying a stake in the shale gas assets and drilling programme in the U.S. For its upcoming $864 million LNG project at Ennore in Tamil Nadu, the company is looking for potential strategic partners for participation in the project based on mutually beneficial business terms. The company had sometime back earmarked more than $1 billion for acquisition of E&P assets abroad. In fact, it is understood that IOC will join hands with Oil India Limited (OIL) for overseas acquisitions.
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Although IOC has been getting feelers from various sources to become partners of the LNG project, it wants someone who could bring synergy into the project and not just finance either by sourcing LNG or by putting up an anchor load power plant.
Similarly, IOC is in talks to buy Malaysian state oil company Petronas’ 10 per cent stake in a Canadian shale gas asset. Petronas is seeking between $1.1 billion and $1.5 billion for its 10 per cent stake in Canada’s Progress Energy Resources Corp. It is understood that government will soon convey its approval for the deal after the ECoS goes through it.