NEW DELHI, April 2 (UPI) -- State-run Oil India Ltd. and Indian Oil Corp. Ltd. plan to set up a new firm to acquire oil and gas assets abroad.
"The board of OIL has given permission to set up a new joint venture with IOC to bid for overseas assets," an OIL spokesman said.
The two companies, the spokesman said, will now approach prospective sellers as a single entity.
"The move is aimed at expediting the acquisition of oil and gas assets abroad," the spokesman said.
The company said OIL's board in its meeting Friday approved the proposal.
IOC's board is expected to take up the matter soon, an IOC official said.
Following approval from the boards, the two companies will chalk out other details with regard to registration, name and headquarters.
The IOC official said both companies would be equal partners in the new joint venture. India's Petroleum and Natural Gas Ministry said the OIL-IOC consortium has to set up a project-specific special-purpose vehicle before acquiring an asset, The Business Line newspaper reported Monday.
The ministry backs the joint venture to undertake overseas projects, including acquisition and exploration.
"Currently, the OIL-IOC combine as a consortium is allowed to invest only after seeking approvals of the competent authorities for acquiring assets," said Ajay Arora, partner, Oil & Gas Practice, Ernst & Young India. "This move will help the OIL-IOC combine to put in place a dedicated team required to focus on acquiring assets and competing in the global market."
