Top sources told The Financial Express that the oil public-sector unit (PSU) has prepared on its own a comprehensive business plan outlining its list of priorities. These become especially relevant considering that the first phase of deregulation has kicked off, and the oil sector will be completely free in 2002.

The consultant finalised by the board will be asked to recommend structural changes, which could include getting out of some businesses, or paying more attention to others. For instance, refining is a new area for IBP, and the company will pick up a 19 per cent stake in the three-million-tonne Numaligarh project being commissioned by the year-end.

There is noindication which consultant will be eventually chosen. "Each presentation had its pluses, and the board will come to a decision in a couple of months," sources said. However, the mandate to the company selected for the task will depend on the findings of the Nitish Sengupta committee, scheduled to submit its structuring proposal for IBP by December 31 this year.

The committee was constituted early this month, and will study a proposal involving IBP's strategic alliance with Madras Refineries (MRL), Cochin Refineries (CRL) and Bongaigaon Refinery & Petrochemicals (BRPL). The idea was mooted by the IBP top brass who felt that it made sense for a stand-alone marketing company to tie up with its counterparts in refining who have no marketing rights.

This proposal, in turn, was prompted by the recommendations of the disinvestment commission, which called for selling 33 per cent of the government stake in IBP (now 59 per cent) to a strategic partner. Reports indicated that this resulted in the big three oilPSUs -- Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation (BPCL) -- throwing their hats into the ring along with some private oil players both from here and abroad.

Whether the Sengupta committee's proposal will go in line with the IBP plan remains to be seen, for sources indicate that the more probable suggestion will be a strategic alliance of IBP with BPCL, CRL, Numaligarh Refinery and BRPL. Another panel under the chairmanship of J Jayaraman, former chief of CRL, had suggested that MRL enter into a tie-up with IOC and CRL with BPCL.

"We will have to see what the Sengupta committee suggests before going ahead with appointing a consultant for our own recast plan," IBP sources said. If the committee's recommendations are not found acceptable, the ministry of petroleum and natural gas is likely to take a decision on IBP only after 2002 when the oil sector is completely deregulated.

Restructuring of operations has become top priority for oil PSUs what with ONGC,HPCL and BPCL going full steam ahead with their new agenda suggested by their consultants. BPCL hired Arthur D Little and ICICI, while HPCL settled for Arthur Andersen. Both PSUs are in the process of implementing their recommendations, which involve slotting key operations as strategic business units. ONGC has roped in McKinsey for an unique exercise, which has envisaged spinning off some of its activities as separate profit centres.