New Delhi: Within a week of acquiring 51.11 percent stake in Hindustan Petroleum Corporation Ltd (HPCL), Oil and Natural Gas Corporation (ONGC) is keen to acquire a stake in the gas utility GAIL India.
If the deal comes through, it will enable ONGC to emerge as one of the largest integrated public sector oil and gas company.
According to sources ONGC will soon indicate its interest in acquiring the pipeline business of GAIL by filing a formal proposal with the Petroleum Ministry. ONGC is likely to submit the proposal after it has taken care of all formalities related to the HPCL deal.
ONGC's interest in taking over GAIL’s pipeline business is to aid in gas transportation. Besides ONGC, two other companies, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL), have also indicated their interest in taking a stake in GAIL.
Currently, the government holds 54.8 percent stake in GAIL.
For the moment ONGC is funding the Rs 36,915 crore acquisition of government's 51.11 percent stake in oil refining and marketing firm Hindustan Petroleum Corp Ltd (HPCL) from the about Rs 12,000 crore cash it has and short- term borrowing.
ONGC is a zero-debt company and reportedly wants to retain that status. The short-term loan it is availing have provision to pre-pay without any penalty.
It plans to pre-pay the one-year tenure loan it is taking for HPCL buy by selling IOC and GAIL shares in due course.