In the next few months, state-run energy explorer Oil India (OIL) may set up a foreign arm for exploration and acquisition of hydrocarbon assets abroad, thereby becoming the third state-run oil company to have a dedicated subsidiary for foreign operations.

OIL now has presence in countries like Sudan, Libya, Venezuela, Egypt, Timor Leste, Yemen, Nigeria, Iran, the US and Gabon. In Gabon and Libya, it is the main operator of its blocks.

Through the proposed company, OIL may set up a separate fund for its overseas operations, reports suggest. The company, which has a subsidiary in the US and special purpose vehicles (SPVs) for foreign businesses, has lined up a $1-billion (around Rs 5,800-crore) capital expenditure plan for exploration purposes abroad.

Following is the brief of OIL's future venture in foreign countries.

The company would participate in the bidding of 13 blocks in the Cauvery and Mannar Basins of Sri Lanka's northwest coast.

Further, OIL's US subsidiary plans to explore shale gas in the country. Shale gas is natural gas found trapped within shale formations. Both OIL and IndianOil Corp (IOC) acquired a 30 per cent stake in a shale gas asset of Carrizo in the US last year. Both companies have an understanding for acquisitions abroad and had floated an SPV in 2005 for such buyouts.

The proposed new subsidiary will be an umbrella body for the US subsidiary and SPVs in various countries.