The government is considering the possibility of setting up a company similar to ONGC Videsh Ltd, with the Oil and Natural Gas Corporation, the Indian Oil Corporation, Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd and GAIL as promoters, for participating in exploration projects abroad.

This was decided at a meeting convened by petroleum secretary B K Chaturvedi to discuss the possibility of downstream oil marketing and refining companies participating in oil and gas exploration and production projects abroad.

The petroleum ministry did not approve of the idea to split ONGC Videsh's equity among ONGC, IOC, HPCL, BPCL and Gail. "OVL will continue to be a 100 per cent subsidiary of ONGC with the present portfolio of assets," a ministry official said after the meeting.

The meeting discussed a paper enlisting four options that would enable downstream oil companies to take part in future exploration activities abroad.

The options include allowing all public sector oil companies to float global subsidiaries like ONGC Videsh, retaining ONGC Videsh as the nodal entity and the government co-ordinating participation of PSUs in future exploration projects, making other PSUs stakeholders in the company, and maintaining status quo.

While most of the downstream marketing companies have been pitching for diversification opportunities in international markets, they feel hamstrung since owners of exploration properties abroad look for companies with proven competence in the business, and government backing.

The marketing companies fail on both counts. While they have no experience in exploration, the government is not willing to extend support to all companies wanting to go abroad.

While ruling out splitting ONGC Videsh, Chaturvedi said another meeting would be convened to address the ambitions of state-owned downstream oil companies.

The options

• All PSUs may be allowed to float global subsidiaries like ONGC Videsh.
• ONGC Videsh may be retained as the nodal entity with the government co-ordinating participation of PSUs in future exploration projects.
• Making other PSUs stakeholders in ONGC Videsh.
• Maintaining status quo.