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Govt goes in for buyback in six PSUs; divestment panel chief moots tie-ups among oil firms

The Union Cabinet today decided to buyback shares of six public sector companies during the current financial year.

These companies include Indian Oil Corporation, Oil and Natural Gas Corporation and NALCO.

On Tuesday, in New Delhi, chairman of the Disinvestment Commission
G V Ramakrishna said the Indian oil companies should go in for strategic alliances with the domestic players to achieve the status of an integrated oil company.

Delivering the valedictory address at the Petrotech-99, Ramakrishna said though there are a number of oil companies, none of them has the status of a fully integrated company. He said globally takeovers and acquisitions were aimed at achieving the integrated company status to become cost-effective and competitive.

He said mere cross holding among the Indian companies will not serve the purpose.

The prevailing low price of crude oil globally will act as a retardant in bringing fresh investments either from the domestic or from the foreign investors. He said even in mid-eighties when the oil prices fell very low he suggested at an international forum that the oil prices will go up and it is the right time for fresh investment in the oil sector. The situation is almost similar now, he added.

He hoped that in the new petroleum policy the government would take care of certain issues so that the petroleum and the hydrocarbon sector could achieve a healthy growth.

Ramakrishna suggested that proper incentives be offered to management experts towards bringing new talents.

He said not much effort has so far been made for the proper exploitation of hydrates and coal bed methane reserves. These are vast sources of energy and something should be done to tap these.

He said the government should also allow the private sector's participation, foreign or domestic, on equal terms with that of the Indian companies. Currently the private sector is allowed to do business only in the lubricants sector; they should also be allowed to enter the other sectors of the oil industry for a healthy competition.

Dr Hari Narain, member, Advisory Council of the Directorate General of Hydrocarbons, said the government has now begun to move towards market pricing for diesel. A quick and clear move towards market determined prices for all products. Specific subsidies must be only for kerosene for the poorer sections of society along with the movement of oil public sector undertakings out of the public sector.

He suggested that the largest oil companies in the psu should go out of government control.These oil companies have very good professional managers but their board need to be broad based and given full autonomy to function as board managed companies.

They need not go into private control but remain as professionally managed companies with broad-based Indian institutional and residual shareholding and with the residual shares held by an independent shareholding trust.

He hoped that the special group constituted by the prime minister for working out Indian hydrocarbon vision 2002 will take these suggestions into account and report within six weeks and government will take decisions within one or two months thereafter.

UNI

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