Oil companies are not too enthused about submitting expressions of interest called for by the government for disinvesting its 34.01 per cent stake in Hindustan Petroleum Corporation.

The preliminary information memorandum released by the Union divestment ministry fails to mention the clause prohibiting public sector oil companies Oil and Natural Gas Corporation and Gas Authority of India from bidding for the marketing behemoth.

In fact, oil companies are suspicious about the government's failure to document the clause as it leaves the door wide open for the government to bring in one of the two mega corporates at a later date.

However, an executive with a leading private sector oil company claims "there is no confusion as the government has directed ONGC and GAIL not to bid for HPCL."

But other oil industry executives said they have no assurance that the government will not go back on its word.

"The government should have included this clause at the very beginning of the divestment process or else the government may back track later," a top executive with an oil company said.

After the IBP divestment where Indian Oil Corporation outbid the nearest rival Royal Dutch Shell by over 50 per cent, a debate had followed on whether public sector units should be allowed to bid for other PSUs being divested.

IOC bought the government's 33.58 per cent equity in IBP at a consideration of Rs 1,153.68 crore (Rs 11.54 billion), while the bid price by other bidders was in the range of Rs 460 crore (Rs 4.6 billion) to Rs 595 crore (Rs 5.95 billion).

While the divestment ministry was in favour of disallowing PSUs from bidding for other sector counterparts, the ministry of petroleum and natural gas had certain reservations.

The debate lasted for more than six months and was finally resolved when the Cabinet Committee on Divestment backed the divestment ministry.

However, the HPCL's PIM fails to mention that ONGC and GAIL are out of the bidding race. The last date for submission of EoIs is March 17, 2003.

"We expect the government to come out with a notification banning PSUs from bidding in the divestment process. If the government fails to clarify by March 17 on this, it is unlikely to receive an overwhelming response to HPCL's bid," he added.