The government plans to merge state oil companies to create an integrated oil major that could top $100 billion in market value and compete with global oil biggies.
“We see opportunities to strengthen our central public sector enterprises through consolidation, mergers and acquisitions. It will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders,” said finance minister Arun Jaitley.
“We propose to create an integrated public sector oil major which will be able to match the performance of international and domestic private sector oil and gas companies,” he said. ET had reported in July 2016 that the government planned such a merger.
The top eight listed state oil firms have a market value of $108 billion, which dwarfs the $50 billion of Reliance Industries, $70 billion of Russia’s Rosneft — which is buying Essar’s refinery — and is closer to BP’s $115 billion.
Full Content: Financial Times
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