State-run Hindustan Petroleum Corporation (HPCL) will retain its cultural uniqueness and brand identity even after the strategic sale of 51.11 per cent government equity in the company to the Oil and Natural Gas Corporation (ONGC), Petroleum Minister Dharmendra Pradhan informed the Lok Sabha on Monday.
The Cabinet Committee on Economic Affairs had given its in-principle approval for the sale of government equity in HPCL, along with the transfer of management control to ONGC, on July 19 this year.
"The proposed acquisition in the oil sector will create a vertically integrated public sector oil-major company, having a presence across the entire value chain," the minister said.
He added that the move to make HPCL its subsidiary will help ONGC in achieving an enhanced capacity to bear higher risks, take higher investment decisions, and to neutralise the impact of global crude oil price volatility.
"The acquisition of HPCL by ONGC will result in significant synergies, in terms of optimisation of logistic costs, research and development activities, economies of scale of purchase of crude oil, and optimisation in refinery operations," Pradhan added.
The Cabinet has assigned a team headed by Finance Minister Arun Jaitley with the responsibility of overseeing the transaction. The team will decide the time, price, and terms and conditions related to the transaction.