New Delhi: Government has set up a six-member committee for restructuring public sector oil companies with a view to end the "destructive" competition among them, Petroleum Minister Mani Shankar Aiyar said.

The Advisory Committee on Synergy in Energy will be headed by National Advisory Council member V Krishnamurthy and would look at options of merging two or more companies to create oil behemoths that have financial capabilities to match the Chinese firms in the international arena.

"I have been concerned over the fact that there is a great deal of destructive competition among our public sector companies. There is too much recourse to the Ministry for arbitrating disputes between the CEOs. There is little coordination and virtually no pooling of the collective strength for securing energy security," Aiyar told in New Delhi.

Aiyar, who has held about 20 internal sessions with bureaucrats, industry officials, oil experts and editors, said the committee will give its recommendations in two months.

"While our oil Navratnas and Mini-Ratnas are strong financial entities in India, their individual strengths in global financial market is somewhat limited even in comparison to developing countries like China," he said.

The panel includes Rajiv Gandhi loyalist G K Arora, former disinvestment commission chairman G V Ramakrishna, former advisor to Finance Minister Vijay Kelkar, former ONGC chairman B C Bora and former BPCL chairman U Sunderajan.

"With a view to attain the twin objective of a strong and efficient public sector as well as energy security for the nation, I have been talking to all the stakeholders and other interested parties trying to establish the best way for security and synergy in energy," Aiyar said.