HOUSTON: Indian government favours creation of integrated companies in the public sector but would ensure that it does not result in monopoly, the visiting Union Minister Dharmendra Pradhan said.
“The kind of robust market that is emerging in India… We have segmented companies. Now we want to create integrated companies. Certainly, I can assure one thing that there will be multi entity. We will have mixed basket,” Pradhan told reporters yesterday at a news conference here on the sidelines of the CERAWeek conference.
The week-long conference is being attended by top world leaders from the oil and natural gasBSE 0.46 % industry and minister from major oil producing and consuming countries.
Pradhan was responding to questions on reports about merger of major state-owned companies like ONGCBSE 0.46 %, IOCBSE -0.38 % and GAILBSE 0.63 %, following Union Government’s announcement in the budget about merger of companies and creation of one single entities.
Pradhan, however, did not respond directly on the merger of these major state-owner oil PSUs in India.
“I want to assure you that we want to create an integrated company E&P to downstream,” he said, adding there will be some mid-level company and there will be some big companies.
Government wants to create a few verticals to have more integration into the emerging energy market, Pradhan, the Minister of State, Petroleum and Natural Gas, said.
“There will be vertical merger with some of our entities. It is in preliminary stage. They are talking to each other. They are exploring the possibility as to who will merge with whom and what kind of organisation would be in the future,” he said.
“We want to realign the companies,” Pradhan said in response to a question, adding that “all this will depend on market conditions too.”
“The Government has just given the guidelines. It is now up to these companies to decide their way forward, he said.
“There will be integration. Government will micromanage as to who will merge with whom, who will integrate with whom. The government has given broad outline in this direction,” he said, noting that there is positive vibe in the market.
India has 13 major State-owner public sector undertakings like ONGC, IOC, GAIL, BPCLBSE 1.18 %, HPCLBSE 0.55 % and EIL. Top eight listed state-owned oil and gas companies have a combined market capitalization of about USD 80 billion, making it ninth largest globally.