India’s state run oil and gas explorer ONGC’s plan to merge its refining subsidiary Mangalore Refinery and Petrochemicals Ltd ( MRPL ) with Hindustan Petroleum Corp Ltd (HPCL) has got delayed, according to a report by IANS.
The process is now expected to be complete by 2024.
The merger was aimed at aligning ONGC’s upstream and downstream operations into two verticals. But ONGC has decided to consolidate its refining and petrochemicals business around MRPL first before going for the merger.
According to IANS, the process of merging the two oil refining subsidiaries would start only after the company completes merging ONGC Mangalore Petrochemical Ltd (OMPL) with MRPL.
Company sources said that the merger of HPCL and MRPL under conservative assumptions could happen by end of 2024 as the MRPL-OMPL merger has to happen first and that the business should continue for five years with late 2019 as the effective date of their merger at the least.
The merger could begin within next two years as OMPL is likely to get merged with MRPL by then.
Last October, MRPL board approved the acquisition of 49% stake in OMPL making OMPL a 100% subsidiary of MRPL.
OMPL is the largest single stream unit in Asia producing 914 KTPA Para-xylene and 283 KTPA Benzene. MRPL is a schedule ‘A’ Miniratna Central Public Sector Enterprise (CPSE), under the Ministry of Petroleum & Natural Gas.
As on December 31, ONGC held 71.63% and HPCL held 16.96% stake in MRPL.