Mumbai: Ahead of its public issue that opens tomorrow, Oil India Ltd has pressed for extension of its expired Petroleum Exploration Licences (PEL) for 15 blocks, without which it cannot hunt for hydrocarbons.
The country’s second-largest PSU explorer is engaged in exploration and development activities in 16 independently held blocks, covering an area of 5,367 sq km.
However, its PELs for 15 of those blocks (covering about 4,997 sq km) have expired, forbidding it from commencing or conducting further exploration activities.
“Our PELs in respect of 15 of the 16 independently held blocks have expired; there can be no assurances that we will be granted extensions of these PELs and, consequently, that we will not lose our nomination for these blocks,” OIL said in its red herring prospectus.
“Although we have applied for extensions of the PELs, we are currently awaiting approval from the Government of India for such extensions. If we fail to obtain extensions of the expired PELs, our business could be adversely affected,” the company said.
OIL, which produces 3.5 million tonnes of oil annually, will tomorrow hit the capital market with an Initial Public Offer (IPO) that closes 10 September.
The explorer seeks to raise around Rs4,500 crore through the issue and plans to utilise the funds for capital expenditure over the next two years.
The Mini-Ratna will offload 11% stake to the public, while the government will divest 10% of its stake in the company to state refiners.