India wants to merge OIL with IOC and HPCL with ONGC

Jan 23, 2003 01:00 AM

The Ministry of Petroleum and Natural Gas has proposed merging Oil India Ltd (OIL) with IOC, and Hindustan Petroleum Corporation Ltd (HPCL) with ONGC to create two vertically integrated and financially sound competitive companies against global oil majors.
The proposal was mooted during deliberations in response to the Ministry of Disinvestment suggestions that ONGC and IOC should be merged to make a vertically integrated company, HPCL should be divested in favour of a strategic partner and BPCL could be operated through an independent board.

The combination of mergers was made after thorough examination of all public sector companies' infrastructure and synergy in business as well as considering the importance of Petroleum sector, which is being considered “strategic” by the Petroleum Ministry.
Highly placed sources in the Petroleum Ministry said there exist strategic links between IOC and OIL as the entire production of exploration company is being bought by IOC, which has four refineries in the North East region. Similarly, both HPCL and BPCL refineries use ONGC's crude production in Mumbai High field.

The Petroleum Ministry, however, was of the view that GAIL should continue to be a gaseous fuel carrier as the 21st century fuel had a good potential in the coming years.

Source: Sify News
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