Merger & ACquisition
ONGC acquires 51.11% stake of President of India in
Hindustan Petroleum Corporation Limited
Oil and Natural Gas Corporation Ltd (ONGC) has entered into
a share purchase agreement with the President for acquiring
the 778,845,375 equity shares of HPCL (representing 51.11%
of HPCL) for creating an ‘oil major’ which will be able to match
the performance of international and domestic private sector
oil and gas companies
As the Government of India (GOI) through President of
India, being the promoter of ONGC (holding 67.72%) and
HPCL (holding 51.11%) is the seller, the transaction is a
related party transaction between the Government and a
government company.
The acquisition has been undertaken in furtherance of the
Government’s objective to combine the various central
public sector enterprises to give them capacity to bear
higher risks, avail economies of scale, take higher investment
decisions and create more value for the stakeholders
and create an ‘oil major’ which will be able to match the
performance of international and domestic private sector
oil and gas companies. ONGC expects that as an integrated
oil conglomerate, its performance will be less affected by
the volatility of crude prices due to diversification of its
cash flows to midstream and downstream presence through
HPCL, lower earnings volatility, diversified cash flows and
lower business risk resulting in better valuation and higher
shareholder value. HPCL and ONGC have a complimentary
asset portfolio and through this acquisition, ONGC is gaining
a midstream and downstream presence and access to a
marketing network. ONGC will also gain access to marketing
network of HPCL which could be synergistically utilised for
projects such as MRPL, OPaL.
About ONGC
ONGC is the largest producer of crude oil and natural gas
in India, contributing around 70 per cent of
Indian domestic production. ONGC’s market
capitalization as on 19th January, 2018, was
INR 248451 Crore. During the financial year
ended 31st March 2017, ONGC Group had
produced 61.60 million tonne of oil and oil equivalent
gas (mmtoe); the Consolidated Gross Turnover was INR
142149 Crores, Consolidated Net Profit was INR 20498
Crore for the year 2016-17 and total oil and gas reserves
were 2,142 mmtoe as on 31st March 2017.
www.ongcindia.com
About HPCL
Standard Refining Company of India Limited was
incorporated in 1952, and its name was
changed to ESSO Standard Refining Company of
India Limited (ESSO) in 1962. HPCL was formed
in 1974 pursuant to the acquisition of shares in
ESSO by Government of India and subsequent
merger of ESSO and Lube India Limited. Thereafter,
Government of India acquired shares of Caltex Oil Refining
(India) Limited in 1976 and merged it with HPCL in 1978.
Kosana’s Company was merged with HPCL in 1979. HPCL
is currently a Central Public Sector Enterprise (CPSE) with
majority shareholding (51.11%) by President of India The
equity shares of HPCL are listed on the Bombay Stock
Exchange and the National Stock Exchange.
www.hindustanpetroleum.com
ExxonMobil completes LNG Acquisition in
Mozambique Area4
ExxonMobil announced the completion
of a transaction by ExxonMobil
Development Africa B.V. to acquire
a 25 percent indirect interest in
Mozambique’s gas-rich Area 4 block
from Eni and assume responsibility for
midstream operations.
ExxonMobil will lead the construction
and operation of all future natural
gas liquefaction and related facilities,
while Eni will continue to lead the Coral
floating LNG project and all upstream
operations. The operating model will
enable the use of best practices and
skills with each company focusing on
distinct and clearly defined scopes
while preserving the benefits of an
integrated project.
Natural gas is projected to be the
world’s fastest-growing major fuel
source, and Mozambique is well-
positioned to supply LNG customers
around the world. The deepwater Area
4 block contains an estimated 85 trillion
cubic feet of natural gas in place.
ExxonMobil now owns a 35.7 percent
interest in Eni East Africa S.p.A. (to be
renamed Mozambique Rovuma Venture
S.p.A.), which holds a 70 percent
interest in Area 4, and is co-owned
with Eni (35.7 percent) and CNPC (28.6
percent). The remaining interests in
Area 4 are held by Empresa Nacional
de Hidrocarbonetos E.P. (10 percent),
Kogas (10 percent) and Galp Energia (10
percent).
About ExxonMobil
ExxonMobil,
the
largest
publicly
traded international energy company,
uses technology and innovation to
help meet the world’s growing energy
needs. ExxonMobil holds an industry-
leading inventory of resources, is one
of the largest refiners and marketers of
petroleum products, and its chemical
company is one of the largest in the
world.
www.exxonmobil.com
may 2018 Global MDA Journal
11