ONGC announces plans to buy government stake in HPCL

New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) has announced its plans to likely acquire the central government`s majority stake in refiner Hindustan Petroleum Corp. Ltd (HPCL) by the end of this financial year.

The company initially had plans of merger of the two state-owned companies, however, it later settled with ONGC taking over HPCL so that the sale consideration flows to the exchequer in a year the Union budget has set a disinvestment target of Rs. 72,500 crore, reported the Bloomberg.

It further reported that the deal could be valued at USD 4.5 billion for 51.1 percent of government stake in HPCL.

Earlier on Thursday, Finance minister Arun Jaitley while speaking at the National Democratic Alliance (NDA) government`s three years in office, said that the proposal to integrate state-owned oil and gas companies, which was announced in the 2017-18 budget will be given its final shape by the oil ministry.

He proposed creation of an "oil major` that will have capacity to bear higher risks, avail of economies of scale, take higher investment decisions and create more value for the stakeholders.