NEW DELHI, Feb 23: The Oil and Natural Gas Corporation (ONGC) board will shortly consider incorporating a new subsidiary for taking on contract jobs at home and abroad. "We will set up an independent company, with a separate balance sheet for taking on services outside ONGC, both in India and overseas," ONGC chairman and managing director Bikash Chandra Bora told The Financial Express.ONGC at present has one wholly-owned subsidiary called ONGC-Videsh, that scouts for equity oil abroad. The second subsidiary will vend services to other oil exploration and production (E&P) companies. It will initially take rigs from ONGC on lease, for contract jobs at home and abroad. On whether the subsidiary would be dependent on the parent for equipment, Bora said, "We don't want to dump (the new company) with assets." The idea obviously, is to segregate support services from ONGC's core business of producing oil and to make money out of accumulated assets in the process. The proposal will require the approval ofthe reconstituted `navratna' board, now empowered to take decisions on joint ventures and investments. By the time the blueprint for the new company got its finishing touches, the now elusive `navratna' package would be fully enforced, Bora said.
Hiving off services into a separate venture is part of the corporation's business reorganisation process. At present nearly 68 per cent of ONGC's Rs 13,335-crore revenue comes from oil production and the rest comes out of producing natural gas and liquefied petroleum gas (LPG). The public-sector enterprise, however, also takes on non-core activities like providing logistics, support systems and maintenance.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
