Petronet chief wants oil, gas firms to jointly acquire assets abroad

Indian oil companies must come together to form a consortium and jointly scout for acquisition of hydrocarbon assets abroad, apart from setting up liquefied natural gas (LNG) terminals, says Prabhat Singh, chief executive of Petronet LNG, the government-owned natural gas importer.

Apart from the latter, the consortium could comprise Oil and Natural Gas Corporation, Oil India, gas transmission utility GAIL and Engineers India, he said during a conference organised by the PHD Chamber of Commerce and Industry.

“The consortium has been conceived by Petronet LNG at a time the company expects the prevailing scenario of low oil and gas prices to stay for another five years. To thrive in such circumstances, the consortium approach of national oil companies would be an ideal situation to acquire oil and gas, including terminal acreages, and assets overseas, including India,” Singh said.

The new model can involve floating either a consortium or a Special Purpose Vehicle that will scout for opportunities abroad, including in Bangladesh and Sri Lanka. He said the proposal had already been sent to the petroleum ministry, which has agreed in principle.  

“The idea has been briefly floated and discussed and its conclusiveness should follow, as India would be bidding to acquire gas properties and to build LNG terminals in Bangladesh and Sri Lanka. For which, if India proceeds with collective approach, it would establish an edge over others,” Singh said. He added the approach could also be used to build domestic oil storages.

Petronet, he revealed, had also proposed to the Lt Governor of the Andaman and Nicobar Islands to convert the fossil fuel-led economy of the Union Territory into a natural gas-driven one. Singh gave no details.