Pradhan: More ONGC-HPCL type mergers are on cards

New Delhi: After HPCL and ONGC merger the Minister for Petroleum and Natural Gas Dharmendra Pradhan avouched for more corporate and economic integration. "There may be more possibility of more mergers in the oil and gas sectors. India needs more corporate and economic integration. The Government of India formed many companies for different purposes and it should be fulfilled," the minister mentioned.

While talking about the ONGC-HPCL deal Pradhan also asserted, "Eyeing the price volatility in the market, the government has transferred its stake to another government company and gained the revenue."

"The economic model and economic governance changes with time and the government found this way as best to off floor HPCL as it had commitment when the company was being officiated through a parliament panel and the Nationalization Act," he added further.

The minister also said that in the last budget indicating the petroleum companies, the government talked about vertical integration. "Since then we worked on that process and ONGC acquired the 51.11 per cent government stake of HPCL. This is the result of decisive governance of PM Modi.

For the first time the government of India has completed an innovative vertical integration like this merger," Pradhan mentioned.

Many countries across the world are working in that way. The increasing amount of energy consumption in India is also denoting for a captive integrated model. Therefore, the government has come up with the merger of both the oil companies after having extensive discussion with both.

Even the further road map will also be decided by both of the oil company boards. HPCL will continue as central public sector independent company under corporate model. The oil minister feels that this move would also give a larger expose in the oil refinery industry and will create an integrated group.

He further added that to generate more job opportunities and fulfill other commitments the government has stressed on the petrochemical industry. In the west-coast refineries, petro chemical is one of the main features. Even in the new Barmer refinery plant of HPCL, petrochemical is also an important component.

"We need to integrate the gas infrastructure more," Pradhan said. Therefore he also opted for a joint project of GAIL and ONGC in Kakinada of Andhra Pradesh.