The Union Cabinet chaired by the Prime Minister has given in-principle approval for state-run upstream Oil and Natural Gas Corporation (ONGC) to acquire the government's 51.11% stake in downstream refiner Hindustan Petroleum Corporation (HPCL). A 51.11% stake in HPCL is worth around Rs 30,000 crore.
The recent flurry of activity to integrate government-owned Oil Marketing Companies (OMCs) with oil and gas exploration companies follows Finance Minister's announcement during the 2017-2018 budget speech on the government’s plan to create an integrated public sector ‘Oil Major’ rivalling international and domestic private sector oil and gas companies.
The 51.1 percent stake sale in HPCL will also help the government meet a bulk of its disinvestment target of Rs 72,500 crore for the financial year 2017-2018. The move is in line with the government’s disinvestment plan and its plan to create an Oil Major rivalling the likes of Exxon Mobil and BP.