The Indian government has set up a panel of experts to assess plans to merge state-run oil firms and create companies that can compete globally, petroleum minister Mani Shankar Aiyar said.

Aiyar said he had discussed the proposed mergers with officials, analysts and journalists and would take a decision after the panel submits its report in two months.
“I think the time is now right to place different options for evaluation before a group of eminent persons,” he said.
The panel, comprising former bureaucrats and retired chiefs of oil firms, is headed by V Krishnamurthy, who is chairman of the National Manufacturing Competitiveness Council and has held top positions in the government and state-run firms.
Aiyar said state oil firms were competing aggressively instead of teaming up to buy overseas assets to enhance energy security for India, which imports 70 per cent of its crude oil.
“I have been concerned about the fact that there is a great deal of destructive, internecine competition among our public-sector units,” he said.
He said Indian firms were financially strong in the domestic market, but in the global context they needed more muscle.
India’s 12 state-run oil firms posted a combined net profit of $5.3 billion in the 2003/04 financial year. PetroChina, the flagship of China National Petroleum Corp, alone earned $5.47 billion in the first six months of 2004.
Analysts say mergers would bolster the companies against rising competition at home from private firms like Reliance Industries and Anglo-Dutch oil giant Royal Dutch/Shell , but the left-leaning government would need to trim their workforce to make the restructuring effective.