Taking charge

New Delhi, Aug. 16: The ministry of petroleum and natural gas has asked Oil India Ltd (OIL) to consider taking over some ONGC oilfields in the Northeast and to expand its operations, both within the country and abroad. The two upstream oil companies are expected to hold talks on the issue soon.

The petroleum ministry feels that OIL is capable of playing a much bigger role in the country's hydrocarbon sector. Sources said the ministry is of the view that although OIL is a company with 50 years of experience in oil exploration and enjoys the Burmah Shell heritage, it is not performing up to its true potential.

Crude oil output of the company has been stagnating at around 3 million tonnes in recent years. Although it produces around six million standard cubic metres of gas per day, there is scope for doing much better.

The ministry feels that ONGC has spread itself out too much in the Northeast, and if it transfers some of its assets to OIL, it can concentrate more on its deep-sea exploration and other land blocks in the country.

In fact, ONGC had handed over some of its marginal fields in the Northeast to private companies over which the company's workers had raised a strong protest. The oil giant will now get a chance to take advantage of the synergy with OIL.

Sources say that during a presentation made by OIL chairman and managing director R. K. Dutta last week, petroleum ministry officials noticed that the company did not have a proper “vision for growth”. It has confined its operations essentially to some areas in the Northeast despite possessing the requisite technical expertise.

The petroleum ministry is reported to have asked OIL to pull up its socks and expand its horizons both within the country and abroad. The ministry is keen that OIL look eastward towards hydrocarbon-rich Myanmar which is virtually in its backyard. Other companies such as Gail and ONGC-Videsh have ventured into Myanmar while OIL has not made any such move despite the proximity and its knowledge of the neighbouring country.

Industry officials also point out that there is no dearth of technical expertise in OIL. In fact, several officers who started their careers with OIL later switched over to ONGC and went on to hold top management slots. B. C. Bora who preceded Subir Raha as CMD of ONGC is a case in point. Similarly, Avinash Chandra, another OIL executive, rose to the rank of the country's director-general of hydrocarbons.

OIL has also been asked to consider joining hands with BPCL for investing in Myanmar. OIL has been eyeing Numaligarh Refinery, a subsidiary of BPCL. Although OIL has a stake in NRL, it now wants to take over the company. However, NRL is dependent on BPCL’s marketing network.