India’s government has begun the process of evaluating the prospects of an ambitious plan that aims to merge 13 state oil firms to create a giant corporation that is expected to have a bigger market value than Russia’s state oil giant Rosneft and India’s Reliance Industries Ltd, according to The Economic Times.
According to NDTV Profit, upstream oil companies like ONGC and Oil India and downstream companies like HPCL, BPCL, Indian Oil, Mangalore Refinery and Petrochemicals (MRPL), Chennai Petro, and Numaligarh Refinery, are all targeted for the gigantic merger.
The oil ministry plans to consult all stakeholders including the state firms that may be combined to form the mega corporation and become the country’s leading corporation in terms of net profit, turnover, capital expenditure, and market capitalization.
Previously, a proposal of that sort was considered more than a decade ago, but all the merger talks have been buried in July 2005 as the government declared that after studying the matter, it has decided that the formation of the holding company “may not be advisable for the present.”
There are higher chances for a different outcome to occur this time as the Indian state oil firms have grown in both size and character over the last decade. Refiners like Indian Oil, HPCL, and BPCL have acquired several exploration and production assets in India and overseas, while ONGC has enhanced its presence in refinery and petrochemicals.