ONGC likely to take control of HPCL to create oil sector behemoth
India’s state-run Oil and Natural Gas Corp will take control of Hindustan Petroleum Corp as part of the government’s plan to create an integrated public sector oil entity, a newspaper reported on Monday citing top government officials.business Updated: Feb 27, 2017 12:42 IST
India’s state-run Oil and Natural Gas Corp (ONGC) will take control of Hindustan Petroleum Corporation Ltd (HPCL) as part of the government’s plan to create an integrated public sector oil entity, a newspaper reported on Monday citing top government officials.
India plans to create a giant oil company by combining state-owned firms, finance minister Arun Jaitley said in the budget speech on February 1, as the world’s third largest oil consumer looks to better compete with global majors in acquiring foreign assets.
A cabinet note will soon be moved. The government will transfer its 51.11% shareholding in HPCL to ONGC the paper wrote citing one of the officials.
With this merger ONGC’s exploration business will be integrated with HPCL’s refining and retailing capacities.
While ONGC is India’s largest oil and gas exploration company, HPCL owns two refineries and has the largest lubricants unit and second largest pipeline network of 3,015 km.
The government has been discussing the proposal to create an energy giant that will reduce the hydrocarbon-related risks in its operations. It will be more poised to buy overseas assets at a time when crude prices are sluggish, the government has said time and again.