Government Wants To List ONGC Videsh
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The government wants to list ONGC Videsh, the overseas arm of top oil explorer Oil and Natural Gas Corp, a company executive said.
"We have received a letter from the ministry on listing of ONGC Videsh," the executive said, adding the divestment department of the finance ministry was pushing for a sale. The executive did not wish to be named as the matter is not public.
He added that ONGC executives would favour delaying a listing, given current low oil prices.
ONGC said on Thursday it expects current-quarter profit to be boosted by an interim rule change on discounts offered by upstream oil companies to state retailers.
ONGC, majority-owned by the government, reported net profit down nearly a fifth from a year earlier to 39.35 billion rupees ($616 million) in its fiscal fourth quarter to March 31, missing analysts' estimates averaging 54.91 billion.
India keeps a lid on retail prices of liquefied petroleum gas and kerosene to tame inflation, with upstream companies such as ONGC and Oil India offering discounts on crude sales to help cut the losses of state refiners.
For the June quarter, the oil ministry has set interim rules to exempt upstream state firms from giving any discounts on crude and refined fuels if global oil prices average up to $60 a barrel this quarter.
Asked if that would help his company post a higher profit for the quarter, ONGC Chairman D.K. Sarraf said: "Definitely yes, because I am assuming a price of at least $60 internationally which is very good."
Brent crude oil prices are currently hovering around $61 a barrel.
For prices above $60 a barrel the companies will have to give a discount of 85 percent of the incremental oil price increase and the discount will rise to 90 percent for prices beyond $100 a barrel.
ONGC did not have to pay any discount in the March quarter as crude prices fell sharply and the government was working on new subsidy rules as part of broader reforms in the sector. Still, its net profit was lower than a year earlier due to higher costs and tax outgoings.