Two officials familiar with the matter said state-run oil and gas companies are yet to finalize alternative asset monetization plans after putting their previous plans to monetize oil and gas pipelines on hold.
The people cited above on condition of anonymity said companies are now exploring other options, including monetizing receivables. The government, which had agreed to suspend pipeline plans, had asked companies to prepare new plans by the end of June.
Under the initial plan, oil and gas companies, Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), and GAIL (India) Limited, will transfer and sell some of their pipelines to Infrastructure Investment Trusts (InvITs). Bets in pipelines.
However, the government agreed to shelve the plan after companies told the Ministry of Petroleum and Natural Gas that monetizing pipelines through InvITs would be costly. The companies said that with higher credit ratings, they can raise capital easily and at a lower cost than what InvIT investors are offering.
One of the two executives mentioned above said, “This one size may not fit all. InvIT model, which is beneficial for firms that cannot get loans or get loans at higher rates , will not be beneficial for the oil marketing companies, the official said.
“In monetization, it is usually a potential resource that is monetised. CGD (city gas distribution) was a potential resource that we have done. They are monetizing blocks in E&P (exploration and production), which We also realized… the idea of asset monetization is that the idle assets of a company should get some value,” the official said.
The government’s ambitious asset monetization plan was announced in last year’s Union Budget to augment financial resources for the national infrastructure pipeline. The total notional value of the monetization pipeline for the core assets of the Central Government is estimated at: 6 trillion in FY22-25.
The oil and gas hub is a focus area for roads, railways as well as others under its national monetization pipeline. The total length of pipeline assets considered for monetization in FY 22-25 is 8,154 km, of which 7,928 km are from operating assets. Queries sent to the Ministry of Petroleum & Natural Gas, HPCL, GAIL and IOCL remained unanswered till press time.