Indian Oil, BPCL keen to acquire GAIL India

Indian Oil, BPCL keen to acquire GAIL India

Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) are both keen to acquire gas utility GAIL India Ltd to become fully integrated energy companies.

IOC and BPCL have separately indicated to the petroleum ministry their interest in taking over GAIL to help add natural gas transportation and marketing business to their kitty, official sources said.

GAIL, on the other hand, feels a merger with oil and gas producer ONGC would be more appropriate.

The merger options were indicated following Finance Minister Arun Jaitley's announcement in the 2017-18 Budget speech on the government's plan to create integrated public sector oil majors that will be "able to match the performance of international and domestic private sector oil and gas companies".

ONGC, India's largest oil and gas producer, proposed to acquire oil refiner and fuel marketing company HPCL, which was approved by the Cabinet. Oil and Natural Gas Corp (ONGC) is currently in the process of acquiring the government's 51.11% stake in HPCL, which at current prices is worth over Rs 33,000 crore. Sources said IOC and BPCL gave separate options for the integration.

The government's 54.89% stake in GAIL is currently worth about Rs 46,700 crore.

Integration options suggested by other companies would be taken up only after ONGC-HPCL merger is complete, they said.

IOC, the largest oil refiner and fuel marketing company in the country, wanted to either acquire another refiner to add to its capacity or a gas company like GAIL.

The firm feels it already has a fledging gas business in under-construction LNG terminals, city gas distribution projects and gas marketing. GAIL, the nation's biggest gas transporter and marketing company, would complement that, it felt.

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