Subir Raha, director (personnel), IOC, is tipped to be the nominee on the ONGC board while in the case of ONGC (for IOC), this could be RC Gourh, director (technical). Neither could be contacted for confirmation but industry sources said that they would fit the bill ideally given their experience.

The move to nominate them is consequent to the recent ten per cent crossholding deal between IOC and ONGC which yielded around Rs 4,000 crore to the Centre and helped part-finance its disinvestment target for 1998-99. IOC and ONGC also picked up five per cent apiece of the government's equity in the Gas Authority of India which, in turn, took 2.5 per cent in ONGC. However,there is no move as yet to have either ONGC or IOC nominees on the GAIL board.

Sources have also indicated that there is no way further crossholding will be contemplated by the two oil companies as it had attracted a fair deal of flak from investors. There is every possibility of an encore in the current financial if the government believes it is the best route to meet the divestment target of Rs 10,000 crore for the current financial.

The IOC and ONGC boards have already given the go-ahead to form a strategic alliance in some key petro-related activities. The immediate projects identified include two petrochemical plants at Hazira and Panipat, two refineries being planned in Paradip, Orissa, and Nagapattinam, Tamil Nadu, and three power projects in Sawli (Gujarat), Panipat and Hazira.The boards have also approved of a proposal for the two navratnas to bid jointly for blocks under the New Exploration Licencing Policy (NELP). Similarly, both IOC and ONGC have also agreed to join hands in explorationactivities abroad which would involve working on exploration blocks in Russia, Iran and Iraq.

Task forces from IOC and ONGC will work on examining the pluses of participating in key proposals involving exploration, refining, marketing etc. If ONGC were to decide that a particular IOC-promoted project does not look very promising, it has the freedom to withdraw. The same would apply to IOC if its own task force is of the opinion that an exploration foray looks too risky and that it makes more sense to drop out.

IOC and ONGC have also finalised plans to set up two holding companies - one to oversee joint operations in India and the other in regions overseas. The white paper outlining details of the proposal has been drafted by a task force and submitted to the government.

The holding companies will oversee vital petro-related activities to be carried out in India and other countries. These will include refining & marketing, exploration & production, petrochemicals, power as also research and otherconsultancy services. It is but obvious that IOC's interests would lie in exploration & production while ONGC will concentrate on the three key downstream areas.