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The Indian government is eyeing proceeds of more than US$2 billion from the sale of parts of its stakes in three of the biggest oil companies in the country: ONGC, Indian Oil Corp, and Oil India Ltd, the Economic Times reports, citing unnamed sources and noting that the stake sale is part of an ongoing divestment program.
New Delhi could sell 5 percent from its majority holding in ONGC, a 3-percent stake in Indian Oil Corp, and as much as 10 percent in Oil India Ltd. The offers could be announced as soon as next month, the sources told the Economic Times.
Earlier this month, unnamed source told the Economic Times that the government was mulling over the sale of almost 150 small oil and gas fields in the country to private local and international oil companies as part of efforts to spur local production and government revenues. This was the second attempt to auction off fields operated by local state companies to other players. The first, focusing on fields owned and operated by ONGC failed as the company strongly opposed the government’s plan.
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New Delhi has set itself a divestment target of US$13.93 billion (1 trillion rupee) for the current fiscal year that ends next March. This is a record amount and the oil industry is a natural target for the divestments. Earlier this year, the government asked ONGC to list its international arm, ONGC Videsh, which owns participating interests in 41 oil and gas assets in 20 countries.
In one of its latest overseas acquisitions, ONGC Videsh led an Indian consortium of ONGC Videsh, Indian Oil Corporation, and Bharat Petro Resources, which signed in February this year a deal to buy 10 percent in the Lower Zakum Concession offshore Abu Dhabi—the first time that Indian oil and gas firms have been given a stake in the development of Abu Dhabi’s oil and gas resources.
The company, however, opposed the move, saying that now was not the right time for going public. A much better time to list would be in 2022, when a couple of big gas fields in Iran and Mozambique begin production, the Economic Times quoted a company executive as saying in September.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.