Government is open to deliberating on the issue of mega merger of state-owned oil firms for creating a behemoth, Union Minister Dharmendra Pradhan said.
"The government plans to deliberate on the issue of merging the E&P companies and oil marketing firms in the public sector," the Minister for Petroleum and Natural Gas said. The state-owned oil companies are IOC, BPCL, HPCL, ONGC and OIL. He said with crude oil prices falling, the profits and margins of state-owned E&P (exploration and production) firms ONGC and Oil India were getting eroded.
"Both ONGC and OIL are taking a hit on profits. The issue had been recently flagged by a director of one of the PSUs that it was in interest of the E&P firms to get merged with the oil marketing companies. "There is nothing wrong in discussing the issue within the ministry," he said. Regarding the mega refinery on the west coast, he said the process of land acquisition is yet to begin.
The proposed west coast mega refinery would come up in Maharashtra with a capacity of 60 million tonnes (in two phases). Pradhan said an SPV involving IOC, BPCL and HPCL has been formed for the project.
"The exact equity pattern, quantum of land required and the total investment required is to be decided by the promoters," Pradhan said. To a query, the minister said he did not foresee any problem regarding land acquisition for the project. Asked about the government's response to private sector Reliance seeking subsidy for LPG distribution, Pradhan said, "We are giving subsidised LPG through PSUs only because they are assigned to do that. Subsidy is involved in the issue".
Pradhan said he would be going to the UK for a roadshow in September as the Indian PSUs had bid for small fields (oil and gas) in that country.