India plans revamping govt oil behemoths

Agence France Presse

New Delhi, January 17:

Indian prime minister Manmohan Singh said on Sunday he backed ongoing moves to revamp and merge state-run energy companies in order to make them globally competitive.

“I urge our oil and gas companies to thing big, think creatively and boldly. They have to be more fleet-footed in making use of global opportunities,” Singh told an oil industry conference. “We can no longer be complacent and must learn to think strategically, to think ahead and to act swiftly and decisively,” he said, adding regional power China was ahead of India in planning for its energy security.

Singh said he endorsed moves by the petroleum ministry to restructure state-run oil companies and proposals to merge refining and exploration companies. “I am very happy that the prime minister has said he endorsed the efforts for public sector undertaking restructing,” Indian oil minister Mani Shankar Aiyar said.

India’s oil refining, marketing and exploration is dominated by state-run companies as private firms were allowed only in the last decade after the country embarked on the path of economic reforms.

Aiyar said earlier the government had also decided to set up an advisory panel to suggest ways of restructuring state-run oil firms so that they could match Chinese competitors.

Growing economic powers India and China have emerged among the top consumers of the global oil production and have often been competing with each other to clinch contracts and investment stakes with oil-producing nation.

India is able to meet only 30 percent of its oil needs through domestic resources and its appetite for the fuel is expected to keep growing in line with its economy. Meanwhile Saudi Arabian oil company Aramco, also participating in the Petrotech 2005 conference, said it was keen on forging joint ventures with major Indian firms.

“We are looking at a significant increase in oil exports to India, from 450,000 barrels per day,” Saudi Aramco president and chief executive Abdallah S Jum’ah said on the sidelines of the conference.

“We will be talking to state-run Indian Oil Corp. during the course of this visit to forge a joint venture to set up a refinery in Saudi Arabia with a capacity of 400,000 barrels per day. “We are also interested in India’s refining and marketing sector and are speaking to a lot of friends here,” he added.

He said Saudi Aramco was also “looking at a strategic stake in India’s state-run oil marketing company Hindustan Petroleum Corp Ltd.”