By Ammar Zaidi / PTI
Madrid: Oil and Natural Gas Corporation (ONGC) has ruled out listing of its highly successful overseas subsidiary ONGC Videsh Ltd (OVL) in the near future, saying the company did not need funds for its operations.
“Today in the prevailing situation, I see no reason why we should get OVL listed. Transparency is not an issue. We have an independent board for OVL, with two government directors and two independent directors. So the decisions of OVL are absolutely transparent,” said R S Sharma, CMD, ONGC and Chairman OVL.
OVL in 2007-08 recorded highest ever oil and gas production from its overseas assets. Crude oil production was up 18% to 6.811 million tonnes, while gas output was marginally lower at 1.962 billion cubic meters. It earned a net profit of Rs2,397 crore.
Currently, OVL has oil and gas production from six projects spread in Sudan, Russia, Vietnam, Syria and Colombia. At close of the financial year 2007-08, the proven reserves of OVL stood at 1.166 billion barrels, which next to ONGC, is the second largest holding of proven oil and gas reserves by any Indian company.
“Today when we feel that the parent company is having surplus liquid funds, it makes no sense for getting OVL listed,” Sharma said. “We will get it listed when there is a large acquisition (of $20 billion) and we feel the need to access the fund from outside,” he added.
OVL is a zero debt company and can leverage its net worth to raise loans. Sharma added that ONGC’s market capitalisation also reflected OVL’s asset base and there was no value remaining to be unlocked (through listing).