Himalayan News Service

London, January 24:

Indian Oil Corp (IOC) is in talks to buy French oil firm Maurel et Prom, according to India’s petroleum minister Mani Shankar Aiyar.

The minister said New Delhi plans to combine its state-owned oil companies into a single force with power to secure reliable overseas supplies needed by its growing economy. The new company, dubbed PetroIndia, would be the seventh-highest ranked oil and gas company in the Fortune 500, Aiyar said in an interview with The Business newspaper. At present, the external arm of state-run Oil and Natural Gas Corp (ONGC) leads India’s overseas hunt for oil. It has lost out to aggressive bids from China, he said.

Aiyar said, “Whatever funds the external arm get are really an interest-free loan from ONGC and the scale of that cannot be anything to match what Chinese oil giant Sinopec is doing.” A combined company could “collect huge sums of money from the market to deploy on the external stage”.

India’s state oil sector is dominated by ONGC, IOC and petrol refiners and retailers Hindustan Petroleum and Bharat Petroleum. Aiyar plans to ask an advisory committee on synergy to come up with a structure that would allow state companies to link up abroad without destroying competition at home.