Petroleum ministry wants special fund for overseas acquisitions

To counter the energy asset acquisitions by foreign rivals, petroleum minister Murli Deora has asked the finance ministry to allocate a special fund to help public sector oil and energy companies  to enable them to match foreign bidders for overseas energy assets.

ONGC and its overseas arm ONGC Videsh have often had to bow out of bidding as they had been unable to match the biding power of sovereign-fund backed overseas rvals, notably China, in acquiring overseas energy assets.

The much needed fund is required to sidestep the multi-layers of approvals required for Indian oil and gas majors to make instant decisions in acquiring overseas oil and gas assets, where the companies find themselves being repeatedly sidelined by the time approvals come through.

Citing sources Business Line reported that a presentation on the petroleum sector had been made to Prime Minister Dr Manmohan Singh, where petroleum ministry officials had floated the idea of having a core team and strategy in place for acquiring oil assets overseas.

The paper said that the petroleum ministry has left it to the finance ministry to work out the details, including how the fund is likely to be created and the size of the corpus, among other things.

India has been facing immense competition from China in bidding for energy assets overseas and has found itself being checkmated in nearly all overseas bidding for hydrocarbon assets.(See: ONGC pitted against Chinese soverign funds in foreign acquisitions)