The government has proposed to merge state oil companies to create a behemoth that could top $100 billion in valuation and match global companies in financial heft.
The government is considering restructuring central public sector enterprises, hoping a consolidation among them will give these firms the capacity to avail the economies of scale and the ability to create more value, Finance Minister Arun Jaitley has said in his budget speech. “Possibilities of such restructuring are visible in the oil and gas sector,” Jaitley said.
The government has also proposed to build two more strategic petroleum reserves besides the three that have already been completed. One reserve is fully filled while the second is half-filled with crude oil.
ET had reported in July 2016 that the government was considering merging all state oil companies, corporations, and institutions into one institution. There are 13 oil companies controlled by the central government, with ONGCBSE -0.82 % being the biggest among them. Other companies include Indian Oil Corp, the nation’s largest refiner and fuel retailer, Bharat Petroleum Corp, Hindustan PetroleumBSE 2.58 %, GAILBSE 3.24 %, Mangalore Refinery and Petrochemicals (MRPL), Chennai Petroleum, Numaligarh Refinery and Oil India.
