New Delhi: India’s central government will transfer its stake in state-run refiner Hindustan Petroleum Corp. to the country’s biggest oil explorer as part of its plans to create an integrated oil company, The Economic Times newspaper reported, citing people it didn’t identify.
The government of Prime Minister Narendra Modi will issue a proposal for approval by the country’s cabinet to transfer its 51.11 percent of HPCL to state-run Oil & Natural Gas Corp., the newspaper reported. The stake is worth about $4.4 billion, according to data compiled by Bloomberg. ONGC Chairman D.K. Sarraf declined to comment Monday, adding that “all our investment plans are intact.”
The move is part of the country’s plans to merge state-run energy companies into larger entities to match the might of international companies. India is overtaking Japan as the world’s third-largest oil consumer and will be the center of global demand growth through 2040, according to the International Energy Agency.
HPCL spokesman S. Ramaswamy couldn’t immediately comment on the news. Rahul Gowlikar, assistant director at the government’s Press Information Bureau, who looks after media for the oil ministry, didn’t answer two calls to his office seeking comment.
HPCL would add 23.8 million tons of annual crude refining capacity to ONGC’s portfolio, making it the third-largest refiner in the country after Indian Oil Corp. and Reliance Industries Ltd. ONGC is majority owner of Mangalore Refineries & Petrochemicals Ltd., which operates a 15 million-ton-a-year refinery in southern India.
ONGC gained as much as 1 percent, while HPCL fell as much as 1.1 percent as of 9:40 a.m. in Mumbai. The benchmark S&P BSE Sensex added 0.1 percent.