Mumbai: Oil India Ltd's (OIL) divestment could happen shortly, said the company’s chairman and managing director Utpal Bora.
"We are ready and all approvals for the divestment are in place, but I think the government is waiting for the right market condition and the divestment could happen anytime now," said Bora on the sidelines of Petrotech 2019. The government plans to offload a 10% stake in Oil India.
To meet its divestment target, the government is said to be considering a plan to sell shares worth $2 billion in state-run Oil India, Oil and Natural Gas Corp and Indian Oil Corp. This is in addition to the proceeds the government can generate from an estimated ₹10,000-crore share buyback programme by these companies.
Post divestment, it is estimated that the government will earn approximately ₹10,000 crore from these companies.
Last November, Oil India had approved buyback of shares at an aggregate of no more than 10% of the fully paid-up equity share capital and free reserves of the company.
The company, which is facing threats of shutdown by its labour union over the production enhancement contracts (PECs) farmed out for the Jorajan and Tengakhat fields in Assam, is trying to find middle ground with the union on the issue. He added that the PECs proposed for Jorajan and Tengakhat fall under a “technical services" model where contractors will only be offered a fee for raising production.
"There have been some protests as there are a lot of misconceptions among the people that the fields are being privatized and that people will lose jobs. However, this is only a move towards induction of technology. The fields remain with India and the manpower will be intact. We hope they understand," added Bora.
A prior attempt to offer a stake in the fields was scrapped.