Lok Sabha Question No. 4171 (UNSTARRED), answered on 2019-01-07
Subject: Merger of Oil Companies
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Shrirang Appa Barne, PRITAM GOPINATH MUNDE, SHIVAJI ADHALRAO PATIL, ANANDRAO  ADSUL, DHARMENDRA YADAV

## MINISTRY OF PETROLEUM AND NATURAL GAS LOK SABHA

## UNSTARRED QUESTION No. 4171 TO BE ANSWERED ON 7 th  January, 2019

Merger of Oil Companies

## 4171.    SHRI SHRIRANG APPA BARNE:

DR. PRITAM GOPINATH MUNDE:

SHRI ADHALRAO PATIL SHIVAJIRAO:

SHRI ANANDRAO ADSUL:

SHRI DHARMENDRA YADAV:

Will the Minister of PETROLEUM AND NATURAL GAS

पेट्रोल ियम और प्राक ृ तिक गैस मंत्री

be pleased to state:

- (a)  whether  the  State-run  oil  and  gas  entities  have  not  been  able  to  compete  with international and domestic private oil and gas majors;
- (b)      if  so,  the  details  thereof  and  the  reasons  therefor  along  with  response  of  the Government thereon;
- (c)   whether the Government plans to merge State-run oil and gas entities to create an integrated firm having the strength to compete with international and domestic private oil and gas majors and if so, the details and facts thereof;
- (d)  whether some State-run oil and gas entities prefer to remain separate even in case of  merger  and  if  so,  the  details  of  such  companies  along  with  the  reaction  of  the Government thereto; and
- (e)   whether GAIL had said that their business model is distinct from others and it may remain a separate vertical even in case of a merger and if so, the details thereof?

## ANSWER

पेट्रोल ियम और प्राक ृ तिक गैस मंत्री (श्री धमेन्द्र प्रधान)

## MINISTER OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

- (a) & (b): Six Oil and gas Public Sector Undertakings under Ministry of Petroleum and Natural  Gas  feature  in  the  S  &  P  Global  Platts:  Top  250  Global  Energy  Company Rankings  -  2018,  out  of  which  four  are  in  top  100,  namely,  Indian  Oil  Corporation Limited, Oil & Natural Gas Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.

(c) & (d): In the Budget Speech of 2017-18 on February 1, 2017, Finance Minister had inter alia stated that 'we see opportunities to strengthen  our  CPSEs  through consolidation,  mergers  and  acquisitions.    By  these  methods,  the  CPSE  can  be integrated  across  the  value  chain  of  an  industry.    It  will  give  them  capacity  to  bear higher  risks,  avail  economies  of  scale,  take  higher  investment  decisions  and  create more value for the stakeholders.  Possibilities of such restructuring are visible in the Oil and Gas sector. We propose to create an integrated public sector 'Oil Major' which will be able to match the performance of international and domestic private sector oil and gas companies'.

Consequent to this, Government of India's existing 51.11% shareholding in HPCL was sold  to  ONGC  for  a  total  consideration  of  Rs.  36,915  crore  and  the  transaction  for strategic acquisition of 51.11% paid-up capital in HPCL from Government of India was effected on 31 st January, 2018.

(e): GAIL  was  carved  out  of  ONGC  to  develop  Indian  gas  sector  through  creating necessary  infrastructure  for  transportation,  processing  and  distribution  of  gas.  GAIL continues to operate as an exclusive entity in midstream sector of natural gas.

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