New Delhi: In an attempt to leverage their competencies across the energy spectrum and thwart competition from Chinese players, Indian public sector units (PSUs) are evolving a joint mechanism to get overseas projects or contracts.
This approach is being attempted after the formation of a working group on energy security by the ministry of external affairs, or MEA. It has representation from Oil and Natural Gas Corp., ONGC Videsh Ltd, Gail (India) Ltd, Indian Oil Corp., Hindustan Petroleum Corp. Ltd, Bharat Petroleum Corp Ltd, Bharat Heavy Electricals Ltd, NTPC Ltd and Water and Power Consultancy Services.
“We cannot compete with (the) Chinese on their terms,” said a senior government official who did not wish to be named. “However, our PSUs have got great expertise in their individual areas...it makes much more sense to partner with one another to get contracts. Say, if OVL wants to get a hydrocarbon block in an African country, which also has electricity requirement. It can sweeten the deal by taking NTPC along, which could set up power project there, which would tremendously improve OVL’s chances of getting the block.”
New Delhi sees energy security as key to sustaining economic growth. India procures 78% of its fuel supply from abroad.
India has lost many projects to China in Kazakhstan, Nigeria, Angola and Myanmar.
The government has already created an energy cell in MEA to support state-owned energy firms’ expansion and also help private firms tap energy resources overseas, as reported by Mint on 23 May and 28 September, respectively.
A senior MEA official declined to comment on the development.
PSUs are eyeing global opportunities in coal mining, power projects, refining, downstream facilities, equity stakes in hydrocarbon blocks, and infrastructure. MEA will play its part in the Indian energy security programme by promoting enhanced diplomatic relationships with other countries, particularly to resolve sticky issues driven, at times, by geopolitics.
The PSU chiefs are expected to attend the next meeting of the working group to finalize firm strategies; it is expected to be held shortly.
“This approach, coupled with sustained diplomatic support, will help in energy tie-ups overseas,” the government official mentioned in the first instance added.
Radhe Shyam Sharma, chairman and managing director, ONGC, said: “We have participated in these meetings. This is a great idea and this synergy in energy will certainly help us in getting projects.”
Similarly, GAIL chairman and managing director U.D. Choubey echoed him: “This is a very good strategy of leveraging the PSUs’ expertise. We are very keen to participate in this joint initiative.”
Ram Sharan Sharma, chairman and managing director, NTPC, added: “It is always good to present a united front and leveraging each other strengths will be beneficial for the country... It is strategically a very good move. Individually, how the PSUs work out their own interests is to be taken care of later.”