India’s state-owned Oil and Natural Gas Corp (ONGC) will consider merging its refining subsidiaries Mangalore Refinery, and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL) after June 2021, ONGC chairman Shashi Shanker said on Friday. ONGC has two refining units after it acquired HPCL in 2018. According to Shanker, MRPL focused only on refining business, while HPCL sells fuels more than it produces.
Hence, merging the two companies will result in a lot of synergies, including eliminating the need to purchase fuel for other companies to be sold, optimising refinery set-up, and adjusting crude oil procurement. MRPL was under HPCL-Birla Group joint venture before ONGC acquired Birla Group’s stake in 2003.
However, ONGC will prioritise finalising the merger between ONGC Mangalore Petrochemicals Ltd (OMPL) and MRPL first, Shanker said. MRPL is set to acquire ONGC’s 48.9% share in OMPL that has been approved by India’s Petroleum Ministry. Shanker said the deal is expected to complete in June 2021. ONGC owns a 51.11% stake in HPCL and a 71.63% stake in MRPL. Meanwhile, HPCL has a 16.96% stake in MRPL. OMPL and MRPL will merge first followed by HPCL, Shanker reiterated.
