Cabinet Allows Government’s Stake In Hindustan Petroleum To Be Sold To ONGC

Cabinet Allows Government’s Stake In Hindustan Petroleum To Be Sold To ONGC

The Union Cabinet on Wednesday approved the sale of the government’s 51.11% stake in Hindustan Petroleum Corporation Ltd in-principle to the Oil and Natural Gas Corporation, PTI reported. Oil Minister Dharmendra Pradhan made the announcement on Wednesday. The estimated Rs 30,000-crore deal is expected to be finalised by the end of 2017, The Economic Times reported.

ONGC and Oil India are state-owned oil and gas producing companies while HPCL and Bharat Petroleum Corporation Limited is a state-run refinery business.

The estimated Rs 30,000-crore sale will not lead to a merger with ONGC, which plans on maintaining it as a subsidiary. The HPCL board will remain intact. “ONGC has forwarded a proposal to acquire HPCL,” Pradhan said. The sale will add a yearly 23.8 million tonnes of oil refining capability to ONGC making it the third-largest refiner in the country.

Finance Minister Arun Jaitley had proposed to start an integrated public sector “oil major” to compete with global rivals, PTI reported.

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