Hindustan Petroleum Corporation Ltd will continue to function as a Central Public Sector Enterprise even after the government sells its stake to ONGC, Minister of State for Petroleum and Natural Gas, Dharmendra Pradhan informed the Lok Sabha on Monday.
“Post acquisition by ONGC, HPCL will continue to be a Central Government Public Sector Enterprises (PSE), having become a subsidiary of ONGC,” he said adding that HPCL will maintain its cultural uniqueness and brand identity, distinct from ONGC.
Pradhan said that the Cabinet Committee on Economic Affairs has approved setting up of an Alternative Mechanism, headed by the Finance Minister. This committee will help in taking quick decisions with regard to the timing, price, terms and conditions and other related issues to the transaction.
The CCEA had given ‘in-principle’ approval for strategic sale of the government’s existing 51.11 per cent of total paid up equity shareholding in HPCL to ONGC along with transfer of management control.
Pradhan also said that the proposed acquisition in the oil sector will create a vertically integrated public sector ‘Oil Major’ having presence across the entire value chain.
He said, “This will give ONGC an enhanced capacity to bear higher risks, take higher investment decisions and to neutralise the impact of global crude oil price volatility. The acquisition of HPCL by ONGC will result in significant synergies in terms of optimisation of logistics cost, R&D activities, economies of scale of purchase of crude oil and optimization in refinery operations.”