In an interview with ET Now, Shashi Shanker, CMD, ONGC, points out that ONGC is an upstream company whose top line and bottom line moves in tandem with crude oil price while reverse is the case for downstream companies like MRPL and HPCL. Together, this is going to provide a stable income and also higher risk appetite.
Edited excerpts:
Congratulations on finally closing the deal with HPCL. What are the synergies and benefits of the deal?
We have a lot of synergies. When you talk about our Group company MRPL, HPCL has a very well established marketing network. Last fiscal, they marketed more than 35 million tonnes of refined products and their total refining capacity is way below this number whereas in case of MRPL we do not have any marketing set up. Now, this existing marketing network of HPCL can also be used to market refined products from MRPL. So, this number one. Number two, both MRPL and HPCL procure crude oil from overseas. Together they can get a better price for the crude oil. Number three, ONGC is a primarily upstream company and our top line and bottom line moves in tandem with the crude oil price and reverse is the case in case of downstream companies like MRPL and HPCL.
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