India has two companies in oil exploration, one in gas and three in refining and distribution. Currently, only Oil & Natural Gas Corp’s (ONGC) ONGC Videsh Ltd (OVL) has the mandate to conduct operations internationally.
An advisory committee on synergy is tasked with coming up with a structure that would allow state companies to link up abroad without destroying domestic competition, Aiyar told The Business newspaper.
Options included: merging the state-owned firms into a single entity or multiple entities; earmarking areas of operation for them to avoid the overlapping of spheres; and allowing all the restructured entities to operate across the full value chain from exploration to retail marketing, according to The Financial Express.
Another option was to merge all state-owned oil firms into a single entity that would have the power to win reliable overseas supplies. Aiyar said such an entity would be called PetroIndia and would become the seventh-highest ranked oil and gas firm in the Fortune 500.
India was looking closely at models in other countries, Aiyar said.
“I have asked Russia’s Gazprom to tell us how the company will be managed after merger with Rosneft. We are also studying the Chinese model which has created two big groups concentrating on their core competencies and leaving allied business to subsidiaries,” he said.
