New Delhi, Sept. 9: ONGIO, a joint venture company promoted by Indian Oil Corporation and ONGC in August 2001 to scout for overseas opportunities for both the oil majors, seems to have lost its relevance with the two oil majors branching out on their own.
Senior oil sector officials are of the view that since ONGC and IOC are entrusting their own teams with the task of looking for business opportunities there is little point in continuing with ONGIO.
This has been quite evident when the duo were engaged in bagging contracts in post-war Iraq.
The two companies have registered themselves separately with the US companies who will be offering subcontracts for projects in the oil and gas sector in Iraq.
While the Indian companies perceive the situation in Iraq as still too volatile to take up business opportunities, the fact is that ONGC and IOC teams have been in touch with the US authorities and the Iraqi oil ministry officials individually. ONGIO has been kept out of this.
Similarly ONGC has bagged an offer in Sudan to build a major product pipeline and expand the refinery located there. Both these ventures involve the downstream sector and are an area in which IOC specialises.
However, ONGC chairman Subir Raha wants to go it alone in this venture and is confident that the upstream oil major is capable of swinging the job.
With the winds of liberalisation sweeping through the Indian hydrocarbon sector, ONGC has for the first time made a foray into downstream oil refining business. It has cleared its plans for setting up a chain of retail filling stations as well. The two companies are therefore set to keenly compete with each other.
A major tussle has already broken out between IOC and ONGC over the Bombay High crude oil. Until now IOC and Bharat Petroleum were being supplied this high-quality crude oil. However, with ONGC acquiring Mangalore Refinery and Petrochemicals Ltd (MRPL) it wants to divert this crude to its own refinery.
ONGIO on its part has achieved little since its inception. It has seconded some technical experts in Oman and bagged contract for imparting training to the technical staff of the Abu Dhabi National Drilling Company. These achievements have fallen far short of expectations as ONGC and IOC teams look for their own business opportunities.