HPCL merger will be closed by March 2018: ONGC CMD Shanker

New Delhi [India] Nov. 2 (ANI) Shashi Shanker, Chairman and Managing Director (CMD) of the Oil and Natural Gas Corporation (ONGC), on Thursday said the Hindustan Petroleum Corporation Limited (HPCL) merger will be closed by March 2018.

On July 19, the Union Cabinet approved a plan to sell the government's 51 per cent stake in state-refiner HPCL to state-run explorer ONGC.

Talking exclusively to ANI, Shanker said, "Department of Investment and Public Asset Management (DIPAM) and the Ministry of Oil and Natural Gas have engaged their consultants. The DIPAM has been appointed transactional advisor and our ministry valuation advisor. The ONGC has also engaged the Citi group and SBI Capital as advisors and some legal consultants who are going to advise us on this deal. Yesterday, we received information of the memorandum from Dipam and we will study it. On that basis, we'll do due diligence and asses our valuation, and we intend to close the deal by March 2018."

The HPCL-ONGC merger is a major step towards India's efforts to build a mega company that can compete with global majors.

The newly appointed ONGC CMD also talked about his priorities and challenges.

He said that the company's first priority is to meet the import decrease goal set by Prime Minister Narendra Modi.

Shanker said Prime Minister Modi has exhorted the ONGC to decrease imports by 10 percent by 2022 and a roadmap is ready to meet this goal.

"The domestic production has been stagnant for quite a while. And, it was primarily because of the reasons that our major production comes from mature field. And, whatever discoveries we have made are relatively smaller in size. We have clustered all these discoveries and we have a common infrastructure through which we will be making productions. Now, the production has started showing an increase," the ONGC CMD said.

Talking about the roadmap, Shanker said, "The oil production will be increased up to 27 million tonnes from current 22 million tonnes by 2022. And, gas production will touch 42 billion cubic meter in 2022, which was 22 billion cubic meter in 2016."

He also said that another priority area is project delivery.

"So, first priority will be to increase our domestic production. And, to make this happen, the ONGC has invested Rs 92000 crore and the projects are at different stages of implementation. So, project delivery on time will be another priority area. We have to monitor these projects so that they are delivered on time," Shanker said.

He also said the other challenge before the corporation is superannuation of staff.

"Ours is a knowledge based industry and all our experienced employees are superannuating, especially at the senior level. A vacuum is being created in this regard and the challenge will be to groom the young workforce and make them ready to take up higher responsibilities," Shanker said.

The top ONGC boss spoke about India's improved ranking in the World Bank report on ease of doing business.

India is one of the top improvers in the World Bank's 'Doing Business 2018' report and it ranks among the top 30 countries in three indicators.

"India's ranking in World Bank report is not only good for our company but for whole country. For, these factors mean a lot for foreign companies that come to India for investment. Now, good companies will be interested not only in oil and gas sector but also in other sectors," Shanker said.

Replying another question about the government's plan to give some of the ONGC fields to some private players, Shanker said, "I have learnt this only from the media and as of now there is no formal communication. But, yes some talks are going on to engage some service providers, who can invest and provide some technology in order to boost production. This is a good step but what modalities would be there and how we are going to take their services that we have to decide."

On October 28, 2017, ONGC presented the quarterly results for the second quarter ended September 30, 2017 and recorded impressive production performance.

Its gross revenue was Rs. 18,966 Crore, up 3 percent Q-o-Q (Quarter-over-Quarter). It posted net profit of Rs. 5,131 Crore, up 3 percent Q-o-Q. The state-run-explorer also recorded 8 percent increase in natural gas production; 1 percent increase in crude oil production and 10 percent increase in VAP (Value Added Production) production Q-o-Q; notified 9 discoveries so far in FY'18. The ONGC Board has also approved an interim dividend of 60 percent. (ANI)

This story has not been edited. It has been published as provided by ANI