The Indian government expects domestic oil companies now working to combine their exploration and refining operations to show progress by the end of 2017, the country's oil minister said on Monday. India has about a dozen state-run oil and gas firms, including Oil India Ltd, Indian Oil Corp Ltd, Oil and Natural Gas Corporation Ltd and Hindustan Petroleum Corp Ltd.
Alone they do not have the financial muscle to rival global oil majors in bids for foreign oil assets, but the combined market cap of India's key players is around $106 billion.
"India is a big market... We want to create an integrated model. We want to create integrated companies from production to distribution," Oil Minister Dharmendra Pradhan told Reuters at the CERAWeek energy conference in Houston.
Companies have been doing their own due diligence to build new business models, and the ministry is offering them guidance, he said.
"The (integration) process should be over by this calendar year, maximum in the 2017-2018 fiscal year," he added.
Names of specific companies that are to be combined have not yet been revealed. Some analysts worry about that the process could prove lengthy and problematic.
"There is a lot of volatility in oil prices. Sometimes an exploration and production company takes a big hit, sometimes a marketing company takes a big hit. They can complement each other instead," Pradhan said.
He also said a final deal with Iran to develop the Farzad B gas field, with estimated in-place reserves of 18.75 trillion cubic feet, is currently "in Iran's course."
"We have given it our proposal; now it's time to react. They have to answer," he said.
A consortium headed by ONGC Videsh, the overseas investment arm of ONGC, discovered the field in the Farsi offshore block in 2008. But it has not been developed due to sanctions to Iran.
India is expecting to cut crude imports by 10 percent in the coming years, the minister said, while trying to boost its domestic production, which is around 730,000 barrels per day. "We want to double (our production) in the next 5 years. By that time, our requirement will also increase, but we are hopeful that we'll balance our requirements from importing and producing".
Asked about which global suppliers could suffer cuts from reduced Indian crude imports, Pradhan said India has diversified its oil sources.
Comments
Comments are closed.