The ministry of petroleum and natural gas has made informal offers to world's largest oil firm Saudi Aramco to become a strategic partner in either HPCL or BPCL through an acquisition of a 10-15 per cent stake from the secondary market.
"We have told them they should acquire the foreign institutional investor holding in either of the two companies from the open market and enter into a strategic alliance with them. We will induct one of their representatives on the company board," a top official in the ministry said.
The ministry wants Saudi Aramco to acquire FII holding and other such holdings to the extent that it does not trigger SEBI's take-over code that makes an open offer mandatory for firms taking interest beyond a threshold limit.
"Forging such a strategic alliance would help the firms secure a steady and reliable source of crude oil," he said.
India, which is 70 per cent import-dependent, buys one-fourth of its over 90 million tonnes of crude oil requirement from Saudi Aramco while Iran is a source of over 11 million tonnes of crude oil annually.
New Delhi is looking for a long-term alliance with major oil producers as an insurance against disruption and price volatilities.
The official said offers for a strategic alliance with HPCL or BPCL were made to Saudi Aramco president and chief executive officer Abdallah S. Jum'ah and senior NIOC officials when they visited New Delhi earlier this month.
Jum'ah is believed to have shown interest in entering the $15 billion a year oil retail market in India but was not very keen on the open market acquisition route.
Saudi Aramco was one of the bidders in the HPCL privatisation process that was aborted following a Supreme Court order.
"NIOC already has a minority stake in Chennai Petroleum Corp and has expressed openness to similar arrangements with either HPCL or BPCL but they too are not
very enthusiastic about the open market acquisition route," the official said adding both Saudi Aramco and NIOC have asked for some time to study the offer and respond.
