State-owned oil and gas majors, Oil India Limited (OIL) and Indian Oil Corporation (IOC), are tying up to float a new joint venture company for investing in exploration and production projects abroad. The company will be registered in Mauritius and will have equal stakes of 50% each by OIL and IOC.
The OIL board has already approved formation of this JV. OIL is the second largest exploration firm in the country after ONGC while IOC is the leading domestic oil refining and marketing company.
To avail maximum tax benefits, OIL is in discussions with experts for floating another company as a 100%-owned subsidiary. According to sources, this subsidiary will invest in the Mauritius-based JV with IOC.
All overseas properties acquired by OIL in association with IOC will subsequently be transferred to the Mauritius-based JV, sources said. OIL has already acquired oil and gas blocks in six countries. It is partnering Reliance Industries in East Timor and has stakes along with OVL and IOC in the Farsi oil block in Iran, exploration blocks in Libya, Block Shakthi in Gabon, OPL-205 in Nigeria and Blocks 82 and 83 in Yemen.
On the domestic E&P front, OIL has roped in British Gas to jointly bid for oil and gas blocks being offered under the latest auction of acreage under new exploration licensing policy (Nelp-VII), where the government has offered 57 oil and gas blocks for bidding.
As apart of the strategy worked out by the two companies for Nelp-VII, while BG will bid as an operator in most of the offshore (deepwater) blocks, OIL will bid as an operator for onland blocks.
OIL is also in talks with other companies like Reliance Industries Ltd (RIL), GAIL India Ltd and Suntera to bid for the blocks on offer in Nelp-VII.
While E&P would continue to remain the main focus area for Oil India, the company, as part of its diversification strategy, has already signed an MoU with HPCL, Mittals, Total and GAIL to jointly set up a integrated refinery cum petrochemicals complex at the SEZ in Vizag. OIL has also signed MoUs with HPCL and GAIL to venture into CNG and city gas distribution.
