Big plans are afoot for India’s sprawling hydrocarbons industry. Finance minister Arun Jaitley says the government aims to create an “integrated public sector oil major” to match the might of the international oil and gas giants. The big question is how that plan will unfold. Details are beginning to emerge. The government owns majority stakes in eight major listed oil and gas firms. Combining some or all would create a bigger corporation with clout to negotiate better deals, for instance, on crude oil purchases. The combined market value of eight state-owned companies is almost $109 billion. If folded into one company, that would rank seventh globally among oil and gas majors. So far, the road map appears to entail Oil & Natural Gas Corp. purchasing the government’s stake in either Hindustan Petroleum Corp., worth $4 billion, or Bharat Petroleum Corp., worth $7.7 billion. The newly proposed mergers deals would also need to surmount the enormous challenge of absorbing refiners with networks across 29 states, thousands of employees and unique work cultures.

(Live Mint)