New Delhi: State-run Oil & Natural Gas Corporation (ONGC) seems set to take up the merger of Mangalore Refinery and Petrochemicals Ltd (MRPL) with Hindustan Petroleum Corporation Ltd (HPCL) in the next financial year since the board of MRPL has accorded its approval to the merger of the company with ONGC Mangalore Petrochemicals Limited (OMPL) recently. ONGC is looking to merge its refining businesses in line with the government's plan to reduce the number of PSUs in each sector and to keep the exploration and production (E&P) business distinct from the refinery business.
The news comes just days after the board of MRPL approved the acquisition of 49 percent stake in OMPL from ONGC on October 19. The MRPL-OMPL merger is expected to be completed by June 2021, after which ONGC will take up the merger of MRPL with HPCL.
At a press conference after ONGC's annual general meeting, Chairman Shashi Shanker had said, "There are a lot of synergies in the merger of MRPL with HPCL. For one, it will balance the fuel marketed by HPCL with the refining capacity, eliminating the need to buy fuel from other companies." Shanker had said that HPCL sells more fuel than it produces at its refineries, while MRPL is involved in oil refining only.
OMPL, a subsidiary of MRPL, is a joint venture between ONGC and MRPL, set up for value addition of excess naphtha and aromatic streams available from MRPL refinery. The complex is the largest single stream unit in Asia to produce 914 KTPA Para-xylene and 283 KTPA Benzene.
MRPL is a subsidiary of ONGC and schedule 'A' Miniratna, Central Public Sector Enterprise (CPSE) under the Ministry of Petroleum & Natural Gas. As of September 30, ONGC held 71.63 percent and HPCL held 16.96 percent stake in MRPL.
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