Top sources in New Delhi said that the disinvestment target of Rs 10,000 crore for 1999-2000 has factored in the sale of Government equity in EIL as a major component of the revenue process. This would be in addition to selling its stakes in Madras Refineries, Cochin Refineries, IBP, Indian Petrochemicals Corporation and Lubrizol India to other strategic partners.

"It is all too clear that a large chunk of the divestment proceeds will be from the oil sector. This is deliberately being done keeping an eye on the fact that the industry will be completely deregulated in 2002 which means weaker companies will need to be protected," sources said.

IOC has already expressed its intention of picking up 26 per cent of the Centre's stake in EIL to the ministry of petroleum and natural gas. The current thinking in Government circles is that L&T could also be given an identical stake so that there would be a synergy of sorts in operations. The belief is that L&T could help bring in a spirit of good corporate governance apart from being able to bid for projects in tandem with EIL.

Interestingly, even while this alliance is being contemplated in Delhi circles, a two-member team comprising one senior executive each from L&T and EIL has been formed to explore areas of synergistic cooperation for joint bidding of onshore projects. This would include process sectors like refineries expansion projects as in IOC's at Digboi and Barauni as also petrochemical plans coming up in the next two years.

Similarly, L&T and EIL have jointly bid to the Oil and Natural Gas Corporation for a clamp-on related modifications and submarine pipelines project. This consists of installation of 33 km of water injection submarine pipelines besides associated topside modification on 26 well/process platforms in Bombay High and Heera fields.

The scope includes survey of platforms and pipelines, design and detailed engineering, procurement, transportation, laying, modification, hook-up, testing and pre-commissioning. The $50-million project is scheduled for completion by end-April/mid-May 2000.

More recently, the ONGC has awarded a contract to the EIL-L&T combine for a pipelines and platform modification project for $41.85 million. The plan envisages laying approximately 42 km of submarine pipelines with 17 risers and topsides modification on 18 well/process platforms in Bombay High and Neelam fields. The scope includes pre-engineering surveys, detailed engineering, project management, procurement, fabrication and commissioning on turnkey basis. These facilities are to be completed by May 15, 2000, and will enhance ONGC's oil production.

"It is amply clear that it makes enormous sense for EIL to team up with L&T in the future. IOC should not be denied a stake either as it is the perfect foil to EIL also," experts say. The idea is still in its infancy stage but the Government is reportedly quite keen on pursuing it to its logical end. Sometime back, it was also examining a proposal involving a three-way arrangement of EIL, Oil India and Hindustan Petroleum Corporation to create synergies of sorts in the north-east. This has now been shelved, sources say.

The latest report of the petroleum ministry states that EIL has been serving the process industry, including petroleum refineries, petrochemicals, oil & gas processing projects, pipelines, offshore platforms, fertilisers and the metallurgical industry, since the mid-sixties. EIL provides a complete range of project services in these fields including process design, engineering, procurement, construction management and commissioning & plant start up and has played a significant role in setting up a large number of process plants in India and abroad.

In addition to design and engineering, EIL helps the client in conceptualising the project, selecting environment-friendly technologies, carrying out feasibility studies and in obtaining project clearance with high-quality environment impact assessment studies. There are around 3,800 employees in the company.