The probe has also stemmed from the fact that some ventures like Indo-Mobil set up for blending and marketing of the Mobil (now Exxon-Mobil) brand of lubes are on the verge of being referred to the Board for Industrial and Financial Reconstruction. As sources say, the basis for formation of the joint venture was faulty from the beginning, given that IOC already has its popular Servo lube brand which would have been in direct conflict with its Mobil counterpart.

Likewise, the progress of IndianOiltanking, the joint venture with Oiltanking GmbH of Germany and IBP will also come under the scrutiny of the ministry. There have been doubts expressed in some quarters that the company set up to oversee infrastructure development and terminalling services has not achieved much over the last two years though this has been vehemently denied by partner IBP.

IOC had recently formed a joint venture with TCG (the Chatterjee group) styled IndianOil TCG Petrochem largely to facilitate the bidding process for Indian Petrochemicals Corporation. The alliance was also meant to explore new opportunities in petroleum and petrochemicals though it has done nothing in this direction since the time of its inception a year ago.

People within IOC have expressed concern at the way the company has been signing the dotted line for every conceivable business deal. The doubts do not pertain only to the quantum of investment but to the logic of entering new areas of growth. The fact that the IOC scrip has lost interest of investors has also been a matter of concern and sources say this can be directly attributed to some ridiculous corporate decisions.

While some of these could be debatable, the ministry is apparently of the view that the corporation should take greater care in some investment deals pertaining to picking up stakes in second-hand refinery projects like Nagarjuna Oil or financially unviable ones like Essar Oil. "There is no point jumping for joy at every opportunity when there are grim realities to be reckoned with," sources say. The never-say-die attitude has apparently irked people within the PSU who have sought a review from the think-tank within the ministry.

Arguably, a strategic pact with the Oil and Natural Gas Corporation, which should have logically worked like magic, has failed to take off. The two companies had decided to team up in vital areas like exploration, refining, power, petrochemicals and consultancy services. ONGC was offered equity in IOC's power plants and its proposed refineries but backed out. Petrochemicals was found to be a non-starter and to date, only a joint venture has been announced for consultancy.

While sources in IOC and ONGC deny that any rift is on the cards, it is no secret that the two companies are finding it exceedingly difficult to understand each other's work style. ONGC has constantly maintained that greater transparency is required from IOC while the latter makes no bones about the fact that ONGC drags its feet on most proposals.

The reasons are of little relevance to analysts who reiterate that the pace of progress has more to do with myopic vision than anything else. In its turn, IOC has defended its moves to diversify stating that this is the only way it can survive in a deregulated environment.

In the midst of this is the petroleum ministry which has stuck to its cliched stance that all its oil companies should confine themselves to their core areas be it refining or exploration.