The corridors of the Ministry of Petroleum and Natural Gas were abuzz on Monday with talks of India’s third biggest fuel retailer Hindustan Petroleum Corporation Ltd (HPCL) being acquired by the Oil and Natural Gas Corporation (ONGC) in a Rs 44,000 crore deal.
However, when Express contacted senior officials in the petroleum ministry, which holds a majority stake in both the oil majors, they denied having received any specific proposal on the deal from either of the two firms.
While they sought to play it down, they also pointed out to the fact that the government had already announced the creation of an integrated oil company.
The government currently owns 68.93 per cent in ONGC, and 51.11 percent stake in HPCL. Finance Minister Arun Jaitely in his Budget 2017-18 speech had announced the setting up of an integrated oil company after about 12 years of a similar proposal suggested by the then oil minister Mani Shankar Aiyer.
“We will explore all possibilities to create an integrated oil company. All options will be explored. But, no final decision has been taken,” a top official in the ministry told Express.
If ONGC were to gobble up HPCL, the options before it would be to buy the government’s entire 51.11 per cent stake in HPCL and follow it up with an open offer to acquire an additional 26 per cent from the other shareholders of HPCL.
The other option before the government is to merge refiners HPCL and BPCL with ONGC and merge IOC and OIL. There are only six major companies in the sector – ONGC and Oil India Ltd being the oil producers, Indian Oil Corp (IOC), HPCL and Bharat Petroleum Corp Ltd (BPCL) in refinery business and GAIL in the midstream gas transportation business.
ONGC Videsh, Chennai Petroleum Corporation (CPCL), Numaligarh Refinery and Mangalore Refinery (MRPL) are already subsidiaries of one of these six public-sector units. Yet another option before the government is to merge HPCL with ONGC while keeping BPCL as a separate entity.