India’s finance minister has suggested consolidation of some or all of the oil and gas companies controlled by the central government.
Arun Jaitley, union minister for finance and corporate affairs, introduced the idea while presenting the 2017-18 budget to the parliament.
Most oil and gas companies active in India are “public sector undertakings” (PSUs), in which the government owns varying majority interests.
The largest are Oil & Natural Gas Corp. Ltd. and Oil India Ltd., which are mainly producers; Indian Oil Corp. Ltd., Hindustan Petroleum Corp. Ltd., and Bharat Petroleum Corp. Ltd., which are mostly refiners; and GAIL (India) Ltd., a natural gas and pipeline company.
Among Indian companies not owned by the government are integrated Reliance Industries Ltd. and Essar Oil and independent producer Cairn India Ltd.
In his budget presentation, Jaitley listed among “key initiatives” the “creation of an integrated public-sector ‘oil major’ to integrate the oil sector PSUs across the value chain and to enhance capacity of oil PSUs to bear higher risks, avail economies of scale, take higher investment decisions, and crate more value for the stakeholders.”
