The State-run Hindustan Petroleum Corporation(HPCL) has sold 51.11% government equity in the company to the Oil and Natural Gas Corporation(ONGC). Despite selling the government equity HPCL will retain its cultural uniqueness and brand identity.
On July 19, the Cabinet Committee on Economic Affairs had given its in-principle approval for the sale of government equity in HPCL, along with the transfer of management control to ONGC.
The minister on the acquisition said,”The proposed acquisition in the oil sector will create a vertically integrated public sector oil-major company, having a presence across the entire value chain”.
With this acquisition, ONGC along with its subsidiary HPCL will together be liable to achieve the enhanced capacity to bear higher risks, take higher investment decisions, and to neutralize the impact of global crude oil price volatility.
Petroleum Minister Dharmendra Pradhan said, “The acquisition of HPCL by ONGC will result in significant synergies, in terms of optimization of logistic costs, research and development activities, economies of scale of purchase of crude oil, and optimization in refinery operations”.