The government is considering an initiative to merge state owned oil companies in order to create one of the largest players on the world stage, whose revenue will dwarf global energy major Chevron which competes with US conglomerate General Electric.
Union Minister for Petroleum and Natural Gas Dharmendra Pradhan has said that the government is deliberating on the issue of merging of state-owned exploration and production (E&P) companies and oil marketing firms in the public sector to create a behemoth. He said with crude oil prices falling, the profits and margins of state-owned E&P firms ONGC and Oil India were getting eroded and directly hitting on profits.
India's top six public listed oil firms run by the government have a combined market value of $77 billion. In financial year 2015-2016, they reported Rs. 45,000 crore in profit and Rs. 9.32 lakh crore in revenue. If the idea materializes, this will be India's largest firm in terms of turnover, net profit, capital expenditure and market capitalization. Its market value can be bigger than India's Reliance Industries. Globally too, the merged entity's market value and financial powers would challenge that of Russia's Rosneft and Britain's BP Plc.