Dharmendra Pradhan, Minister of Petroleum & Natural Gas and Skill Development and Entrepreneurship, on Monday, briefed about the acquisition of Hindustan Petroleum Corp. Ltd (HPCL) by Oil and Natural Gas Corp. Ltd (ONGC).
Pradhan informed that “The Government of India entered into an agreement with ONGC on January 20, 2018, for sale of its 51.11% equity shareholding in HPCL at a consideration of Rs. 36,915 crore, He further added, “that this is in line with the Budget announcement 2017-18 to create oil majors in the country. This has completed the successful implementation of the Budget announcement in a time-bound manner.”
ONGC-HPCL integration is the first innovative vertical integration that will help to leverage the strength of both the companies, he said in the statement.
Pradhan said, “through this acquisition, ONGC will become India’s first vertically integrated ‘oil major’ company, having the presence across the entire value chain. The group company will have an advantage of having enhanced capacity to bear the higher risk, take higher investment decisions and improve business.”
Shri Pradhan said ONGC-HPCL integration offers huge potential to attain economies of scale at various levels of operations and consolidation in petrochemical and refining business. The group company will leverage the financial strength and diversify the business portfolio in upstream, midstream and downstream sectors.
HPCL will continue to be a Board-managed Central Sector Public Enterprise and will maintain its distinct identity and brand value, he added.