Lending its full support to IOC's offer of buying out HPCL, apex PSU association SCOPE on Wednesday asked government to consider a minority divestment in the consolidated oil entity for meeting its divestment target.
"How suddenly Supreme Court decision halting divestment in HPCL and BPCL is leading to hiving and divestment off IOC's marketing arm," wondered SCOPE director general S M Dewan.
Why cannot the government dilute equity in IOC from present 82 per cent to 51 per cent while keeping the company united and integrated as marketing and refinery operations in nation's sole Fortune 500 company were in synergy, he asked.
"By pulling out IOC's marketing business government will take away the only company from India in the Fortune 500 list," he said.
SCOPE also questioned the rationale of proposed divestment of marketing business when private sector refineries like Essar and Reliance were recently given marketing licensees.
Emphasising that world over countries were moving towards an integrated industry model brining all stages of business ranging from exploration to refining under one umbrella, Dewan questioned the logic behind the move.
On Tuesday, IOC expressed strong reservations against any move to split the Fortune 500 company and instead suggested offloading government equity in market to mobilise revenue for the government.
"the world over companies are not divided. . . the trend is of integration (along the hydrocarbon value chain). We wish government will support us for further integration and realising better value later," Chairman M S Ramachandran said.
IOC is believed to have suggested to the government to offload up to 20 per cent stake in the capital market for realising Rs 8,000 crore (Rs 80 billion) instead of splitting IOC into refining.
The controversy over sale of HPCL and BPCL had led the divestment ministry to suggest swapping IOC for the two marketing companies following the apex court's verdict asking government to seek parliamentary approval.
However, the CCD decision further complicated matters with oil ministry holding that no decision had been taken to spilt the company.
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