The country’s largest oil marketing company, IOC (Indian Oil Corporation) and BPCL (Bharat Petroleum Corporation Limited) have shown interest in buying GAIL India Limited. IOC and BPCL have given separate indications from the Petroleum Ministry regarding interest in GAIL. Official sources said that to become fully integrated energy company, BPCL and IOC are thinking to acquire it. GAIL has Natural Gas Transportation and Marketing Business, so it is believed that after this step, the two companies have expressed the intention to increase natural gas transportation and marketing.
Finance Minister Arun Jaitley had announced the government’s plan to create an integrated oil company in the public sector in the 2017-18 budget speech, which can match the functioning of international and domestic private oil and gas companies in the workplace. This step is part of the same link. ONGC, the country’s largest oil and gas producing company, has proposed the acquisition of the HPCL, the oil refinery and the fuel marketing company. This proposal has also got Cabinet approval.
IOC, largest oil refinery company, wants to acquire a gas company like a second refinery or GAIL, to increase its capacity. The company believes that it has gas business with LNG terminal under construction, city gas distribution projects and gas marketing. In this case, the acquisition of the gas transportation and marketing company will give it strength in this area.
However, the BPCL also has natural gas ambitions and has expressed interest in the acquisition of GAIL by writing to the Petroleum Ministry. The company has said that natural gas is their first interest, while OIL is a second option for them.
The government has 66.13 percent stake in OIL. At the current market price, its value is 18,000 crores. On the other hand, GAIL feels that merger with ONGC which will be more beneficial for them. Sources said that the government has not taken any decision about the proposals sent by the companies.