Govt mulls merger of IOC arms

State owned refiner Indian Oil Corporation has proposed merger of its subsidiaries Indian Oil Blending Ltd, IBP Co Ltd, Bongaigaon Refinery and Petrochemicals Ltd and Chennai Petroleum Corp Ltd with itself, Petroleum Minister Mani Shankar Aiyar said on Thursday.

While government has already approved merger of IOBL with IOC, the proposal for merging petro retailer IBP with IOC was under examination of the government, he said.

"The boards of IOC and BRPL have given 'in-principle' approval for the proposed merger of BRPL with IOC. These companies are in the process of appointment of various agencies with a view to working out a fair swap ratio for equity shares and also for developing a scheme of amalgamation," he said.

On merger of CPCL with IOC, the petroleum minister said about 15 per cent of equity in CPCL is held by National Iranian Oil Co and its prior consent was essential before any process of merger was initiated as "it is essential that NIOC holding in CPCL is first acquired by IOC before merger."

Aiyar said both IOC and CPCL were engaged in business of refining of petroleum products.

"CPCL as a standalone subsidiary company will find it difficult to face the uncertainties of the global oil scenario. Hence, to maximise the utilisation of the assets and facilities and also to optimise the national resources and to reduce overheads, it would be appropriate to merge CPCL with IOC thereby facilitating integrated, synergic and cost effective operations," he said.