As per a proposal of the ministry of petroleum, the sale of 10 per cent government equity in IOC should be linked with the companys IPO of 7.8 crore shares. The proposal will be taken up by petroleum minister Ram Naik at the meeting of the Cabinet Committee on Disinvestment (CCD) on September 7. The CCD which was scheduled to meet on Thursday, was postponed because of opposition to disinvestment from defence minister George Fernandes.
Speaking to FE, the inistry of disinvestment officials said the proposal is meant to divert attention from the issue of oil sector privatisation. It is not much different from the tactics used by the petroleum ministry to delay, if not stop altogether, the privatisation of Bharat Petrole-um Corporation (BPCL) and Hindustan Petroleum Corpo-ration (HPCL), they added.
Such tactics, officials said, are going to tarnish the image of the country, as the international investing community judges Indias ability to carry through its announcements. The CCD in February this year decided to privatise BPCL and HPCL. In April, it advertised to appoint global advisers.
But the privatisation proposals are yet to be firmed up. There is even a debate within the government whether or not to sell the two oil majors. All this does not send good signals to the world, MoD officials said.
They rubbished the arguments of the petroleum ministry that the government should wait till the new refineries of BPCL and HPCL come up.
The Planning Commission has clearly pointed out that there is excess capacity in refining, which makes refineries unviable, MoD officials said.
The argument that public sector petroleum companies play a crucial role in maintaining strategic oil reserves during the war period is also untenable, they said. For requisitioning is a global norm. During the war period, the government can requisition any private facility in the national interest, officials said.
They expressed surprise that the petroleum ministry is so concerned about the strategic importance of the companies like BPCL and HPCL, but willingly lets foreign companies to explore seabeds for petroleum resources. Has it given any thought what impact it can have on submarine warfare, MoD officials asked.
Similarly, foreigners are allowed to map fossil resources and set up pipelines. Couldnt it have any strategic repercussions, officials asked.
The ministry of petroleum finds no strategic complications in investing $750 million in Sudan through Oil & Natural Gas Corporation. MoD officials wondered why Sudan was not seen as a strategic risk, for it is ruled by a theocratic regime fighting a grim civil war and once provided sanctuary to Osama bin Laden.