The merger of state-run energy companies will provide India the muscle to acquire assets abroad and negotiate better, but the business model of the new entity thus created will be key to its success, chairman of the country’s largest oil marketing firm said. Finance minister Arun Jaitley in the Union Budget last week announced a proposal to merge stateowned oil companies to create an integrated oil behemoth, which could potentially top $100 billion in market value and enter the league of global oil heavyweights.
“Energy is critical and strategic for the growth that India aspires for,” Indian Oil Corp chairman B Ashok told ET. “Consolidation would help us strengthen, leverage and enhance our position more strongly in the international market. This will not happen overnight and we will have to work on different models, but it is the way forward.” Indian Oil is the top-ranking Indian company on the ‘Fortune 500’ list for 2016 at 161, with the other two state-run oil marketing companies also making it to the list. Read More…
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