In order to pick up stake in foreign oil and gas assets, pubic sector energy explorer Oil India (OIL) plans to set up an overseas subsidiary.
At a meeting on April 10, the board of OIL cleared the decision to set up a subsidiary, which will have a separate board and managing director akin to the corporate structure of ONGC Videsh.
It is learnt that the company wants to set up a subsidiary in order to give a focused attention to its overseas acquisitions.
Industry watchers feel that OIL’s move to set up a subsidiary could spark off a competition with flagship explorer ONGC’s overseas investment arm — ONGC Videsh.
Directors on the board of OIL would be special invitees on the subsidiaries board. According to agency reports, the parent company will be diluted from liability of overseas assets. OIL would be the third state-run oil company to float an overseas subsidiary after ONGC and Bharat Petroleum Corporation which has acquired a stake in a huge Mozambique gas field through Bharat Petro Resources.
OIL has been under pressure from the oil ministry from some time to a make a big-ticket overseas acquisition.
Leave a Reply
You must be logged in to post a comment.