The Hindu : ONGC, IFFCO evince interest

Online edition of India's National Newspaper
Tuesday, Dec 10, 2002

Business

Business

ONGC, IFFCO evince interest

NEW DELHI DEC. 9 . The Petroleum Ministry will make out a case for allowing state-run oil firms such as Oil and Natual Gas Corporation to bid for Government stake in Hindutan Petroleum Corporation Ltd. on the merit of application made by the public sector enterprise, the Petroleum Minister, Ram Naik, said today.

"If any application is made to the Petroleum Ministry, we will consider it and then take our opinion to the Cabinet Committee on Disinvestment (CCD),'' Mr. Naik said while stating that no application by any PSE had been made so far.

Mr. Naik's comments come close on the heels of the CCD reaching a compromise formula for breaking the deadlock over divestment in oil PSEs, HPCL and BPCL, reached at an informal meeting of senior Cabinet ministers called by the Prime Minister, Atal Behari Vajpayee, last Thursday, which chose to remain silent on participation of PSEs in the disinvestment process.

Mr. Naik is likely to make out a case before the CCD for allowing ONGC, gas firm Gas Authority of India Ltd. and Oil India Ltd to bid for acquiring HPCL, which as per the last week's compromise formula is to be sold to a strategic investor while an initial public offering of equity shares would be done in the case of BPCL.

The quantum of equity to be sold to the strategic partner in HPCL and offloaded to public in case of BPCL would be decided by CCD.

The fertilizer giant Indian Farmers Fertilisers Cooperative Ltd. (IFFCO) today said it would bid for oil refiner HPCL if the Government policy permits PSEs to bid.

"Yes, we will show our expression of interest (for acquiring Government stake and management control) in HPCL,'' the IFFCO Managing Director, U. S. Awasthi, told PTI here.

The Disinvestment Minister, Arun Shourie, today said in Parliament that HPCL would be sold to a strategic partner while Government shareholding in BPCL would be offloaded to the public. He, however, did not make clear if PSEs would be allowed to participate in the disinvestment of HPCL, which is likely to be hotly contested with companies like Royal Dutch Shell, BP Amoco, Kuwait Petroleum and domestic giant Reliance Industries bidding aggressively as the only opportunity left to enter the lucrative petrol retailing market.

IFFCO would put a joint bid with Krishak Bharati Cooperative Ltd (KRIBHCO) for the HPCL stake.

"We are planning to convert petrol pumps into `Kissan Bazar' for marketing rural produce in cities. This is where we see a lot of synergy. Besides acquisition of HPCL would be downstream integration (for a fertilizer firm),'' Mr. Awasthi said.

IFFCO-Kribhco had earlier tied up with Oman Oil Company to launch a strong bid for the two public sector refining and marketing companies, but preparatory work was halted after opposition from with the Government.

PTI

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