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ONGC hungry for more Acquisitions, eyeing GAIL’s Pipeline Business

Country’s largest and biggest state-owned oil and gas explorer ONGC is probably going to proceed its buying-spree post acquisition of government’s entire 51.11 per cent stake in HPCL.The upstream major has now demonstrated its enthusiasm for purchasing out pipeline business of gas transportation utility GAIL.


The obtaining of GAIL’s pipeline operations will finish ONGC’s essence in the whole esteem chain of oil and gas business, with coordinated operations ideal from investigation and creation, to refining, petrochemicals, retailing and gas transportation.

Sources said ONGC was examining the new prospect and a formal proposition demonstrating its enthusiasm for GAIL’s pipeline operations will be given to the oil service after the arrangement to obtain Refining and Retail Giant HPCL is finished.

State-owned oil and gas explorer organizations BPCL and IOC have additionally supposedly influenced their pitch to assume control government to stake in GAIL.

ONGC and GAIL couldn’t be gone after remarks yet sources affirmed the possibility of such a move. In any case, they concurred that a choice would rely upon government’s different arrangement to divide GAIL by turning from the advertising operations into a different organization.

This arrangement is being talked about in the petroleum ministry. Government at center is unhappy with the state-run player’s performance in building a pipeline network in addition to a possible conflict of interest in its role as an valuable infrastructure supplier and carrier. If this happens, then gas transmission operations including pipeline infrastructure and petrochemical units of GAIL would be sold off separately while the gas transportation entity would focus on marketing that provided 70 per cent of its revenue in FY17.

In spite of the fact that no investigation has been made about the estimation of government partakes in GAIL post its normal split, sources said a prior evaluation recommended that the arrangement could enable the administration to earn around Rs 35,000 crore by method for disinvestment receipts.

The government has a 53.95 per cent stake in GAIL. At yestertday market close of Rs 494.50 (up 2.04 per cent) on BSE, government shares are worth over Rs 44,000 crore.

The high cost of securing could be an obstacle for ONGC that is as of now contributing Rs 36,915 crore to get government’s 51.11 percent stake in HPCL. It is subsidizing this obtaining from the about Rs 12,000 crore money it has and here and now getting.

The organization has just secured block’s endorsement to obtain to Rs 35,000, a first for organization, remembering the procurement.

ONGC is a zero-obligation organization and apparently needs to hold that status. The fleeting credit it is benefiting has the arrangement to pre-pay with no punishment. It wants to pre-pay the one-year residency credit it is taking for HPCL purchase by offering IOC and GAIL partakes at the appropriate time.

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