Govt not to hive-off OVL from ONGC

The government on Wednesday denied any move to hive-off ONGC Videsh Ltd from its parent Oil and Natural Gas Corporation, saying the present arrangement of letting the subsidiary company scout for overseas oil and gas assets was working well.

"No, I don't think so," said Petroleum and Natural Gas Minister Murli Deora when quizzed about a reported move to separate OVL from ONGC.

Petroleum Secretary M S Srinivasan said, "Nothing (to this effect) is under consideration. Existing arrangement is working very well and we have no division of opinion on this."

Finance Minister P Chidambaram is reported to have suggested OVL raising its own resources for acquisition of oil and gas assets abroad, instead of the present practice of borrowing money from its parent ONGC.

To this, the Petroleum Ministry has stated that OVL derives a lot of strength from being part of India's most valuable firm and the country's second highest profit making entity.

"The matter was closed after this clarification," a source privy to the discussion said. Deora's predecessor Mani Shankar Aiyar had mulled the takeover of ONGC's international arm, OVL, and converting it into a national exploration and production flagship for investments overseas.

OVL, which has committed over $4.5 billion (about Rs 19,800 crore) in 14 countries on the strength of its parent firm, is fully owned by ONGC.  Aiyar's idea was shot down by his bureaucrats, the source said.