Merging ONGC's refining and petrochemicals units with HPCL was possible to consolidate such businesses under one roof but a call on this will have to be taken by the two companies, Oil Minister Dharmendra Pradhan has said.
Following the ONGC's agreement to acquire HPCL, the talks around regrouping of ONGC assets have become louder with executives of both companies seeing value in bringing all refining assets under HPCL.
ONGC owns 71.63%, and HPCL 16.96% in MRPL, which runs a 15 million tonne refinery and petrochemical unit in Karnataka. ONGC also owns another petrochemicals unit, OPAL, which can also possibly merge with HPCL, Pradhan said.
Folding all the refining and petrochemicals units of ONGC into HPCL, which already has its own plans for building petrochemicals facilities, can make it a big petrochemicals player in the country, Pradhan said. Of late, Indian refiners have been betting big on the petrochemicals business.
Pradhan also said that more vertical integrations in the oil sector such as that of ONGC and HPCL was possible but didn't provide the names of probable candidates or a timeline.
Shares in ONGC rose 3.28% and HPCL fell 3.55% on Monday, the first trading day after the announcement of the takeover deal. The benchmark sensex was up 0.81%.