The government plans to sell a 10 per cent stake in oil exploration and production company Oil India to government-owned refinery companies. The government is also planning a maiden share sale to the public.

The share sale, expected to be 10 per cent of an expanded share base of the company, would hit the market in February next, through which Rs 1,000 to Rs 1,500 crore (Rs 10 to Rs 15 billion) will be raised, a top petroleum ministry official said.

"We have sought the Cabinet nod for divestment of 10 per cent government stake along with the company's IPO," the official said. OIL, the country's second largest state-run oil explorer, plans to offer 10 per cent stake to the public and one per cent to its employees. The proceeds from the public offer will go to the company.

The government will piggy-back on the company's public offer and divest 10 per cent of its stake in the company in favour of government-owned refiners. IOC will pick up 5 per cent stake, while BP and Hindustan Petroleum will get 2.5 per cent stake each.

The government holds 98 per cent stake in the company and after the twin offers its share will drop to 77-78 per cent, according to the official.