Union Cabinet on Wednesday gave its in-principle nod for the sale of the government’s 51.11 per cent stake in Hindustan Petroleum Corp Ltd (HPCL) to Oil and Natural Gas Corp (ONGC) for Rs. 30,000 crore, Press Trust of India reported. HPCL will however not be merged with ONGC. It will remain a separate entity and operate as ONGC’s subsidiary.
Oil Minister Dharmendra Pradhan earlier in the day said, “ONGC has forwarded a proposal to acquire HPCL. Process for in-principle approval for this proposal has been initiated.”
Finance Minister Arun Jaitley in this year’s Budget had proposed to create an integrated public sector “oil major” that can rival global giants.
Among the state-owned oil & gas companies, ONGC and Oil India are oil & gas producers, Indian Oil Corp (IOC), HPCL and BPCL are in refinery and fuel retailing business and GAIL in gas transportation business. Others companies such as ONGC Videsh, Chennai Petroleum Corp (CPCL), Numaligarh Refinery Ltd and MRPL, are subsidiaries of one of these six PSUs.
HPCL will add 23.8 million tonnes of annual oil refining capacity to ONGC’s portfolio, making it the third-largest refiner in the country.
