ONGC's FPO not before 2011: Sharma
28 October 2010
State-owned Oil & Natural Gas Corp (ONGC), India's largest oil and gas exploration firm, will be ready for the stake sale by the government by the last quarter of current financial year, chairman and managing director R S Sharma told the economic editors' conference in New Delhi on Wednesday.
''We have appointed global consultants for the third-party certification of ONGC's reserves,'' he said. DeGolyer & MacNaughton (D&M) and Gaffney, Cline & Associates (GCA) are the two auditors appointed for the purpose.
The government plans to sell five per cent of its shares in the company in March 2011. ''We are ready for the follow-on public (FPO) offer but not before the first quarter of the 2011 calendar year,'' he said.
The company may ask the two reserve auditors to certify reserves in 15 key oil and gas fields out of about 150 discoveries it had made in the country. ''Certifying reserves for all the 150 fields will take six to eight months and we do not have that kind of time,'' Sharma said.
The company is going for a third party estimation of reserves about two years before it is due to arrive at correct valuation of the company before the follow-on public offer, he said. ONGC normally goes for such estimation once in five years.
Third-party reserve estimation is also a requirement before a public offer of any exploration and production (E&P) company . The government plans to sell 5 per cent of its stake through a follow-on public offer by 31 March 2011.