HPCL to make Prize Petroleum its 100% subsidiary

State-run Hindustan Petroleum Corporation Ltd (HPCL) today said its Board has approved the proposal to make Prize Petroleum as its 100% subsidiary.

HPCL, which holds 50% equity in Prize, said in a regulatory filing that its Board has approved the acquisition of balance 50 per cent shares held by other joint venture partners in the targeted firm.

Aiming to produce oil and gas in the country and abroad, HPCL had created Prize Petroleum as its external exploration arm in 1998.

The other JV partners in the firm include ICICI Bank with a stake of 35%, while ICICI Ventures holds 10% and HDFC Bank has 5% equity in the company.

This move has been in the making for a while as the Prize Petroleum had invited bids in November, 2010, for the stakes held by the financial institutions, who wanted to exit the firm as part of the exercise to limit their exposure to the high-risk oil exploration business.

Following this, the HPCL was looking for a suitable partner, having a proven track-record in the global oil exploration and production business and which could bring technical expertise and money for the Prize Petroleum.

HPCL, in consortium with other partners, currently has 19 oil exploration blocks in India, one block in Australia and two blocks in Egypt, while Prize Petroleum currently has only one service contract from ONGC in the Cambay Basin.