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Our Bureau

New Delhi , Dec. 8

IOC has inked a 10-year agreement with oil exploration firm Oil India Ltd (OIL) for foraying into upstream business of oil as well as other related prospects in the hydrocarbon chain.

Besides working on oil and gas exploration in India, the two companies will bid together for acquiring oil and gas properties abroad, IOC said in a statement on Wednesday.

IOC is the country's largest refining and marketing company but does not have a presence in upstream oil and gas exploration and properties (E&P), whereas Oil India, a smaller E&P company, lacks the financial muscle to acquire oil and gas properties abroad.

The agreement was signed by the Chairman of IOC, Mr M.S. Ramachandran, and the Chairman and Managing Director of Oil India, Mr R.K. Dutta, here on Wednesday.

"Indian Oil has identified vertical integration along the entire hydrocarbon value chain as a key strategy for assured growth in the future," Mr Ramachandran said on the occasion.

As per the MoU, which will be effective for a period of 10 years, both the companies will have equal participating interests in overseas opportunities.

OIL will be the operator for all upstream projects wherever the combine acquires operational rights overseas.

Currently, ONGC Videsh Ltd (OVL), the overseas arm of ONGC, is the only company bidding for oil and gas properties abroad.

The IOC-OIL joint venture will concentrate on acquiring small and medium sized oil and gas properties, while OVL's role would be re-drafted into a company that will focus primarily on taking over big investment properties.

More Stories on : Alliances & Joint Ventures | Petroleum

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