A giant is being born. A team of powerful bureaucrats spread across ministries is giving final shape to the blueprint for creating an energy supermajor by merging Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) and Gas Authority of India (GAIL).
Says an ONGC director: "The idea is to have an integrated oil and gas company with a strong presence—both in Indian and international markets—in upstream, downstream and midstream sectors. The scenario in the country will undergo a drastic change after the administered price mechanism (APM) is dismantled next year, with Indian companies having to become competitive enough to match international giants." The director, who spoke on condition of anonymity, further said that the decision will be formally announced early next year and that the behemoth has been tentatively named PetroIndia. The new company would have a market capitalisation of more than $22 billion (Rs 103,400 crore) and annual sales exceeding $32 billion (Rs 150,400 crore) in its first year. Hypothetically speaking, this would place PetroIndia 118th on the 2001 Fortune Global 500 list, 13th among all petroleum companies, and fifth among energy companies (4th, if you take the bankrupt Enron out).