State-run Oil and Natural Gas Corporation approached the petroleum ministry on Thursday with an initial proposal for permission to bid for Hindustan Petroleum Corporation as and when the government decides to offer its stake in the public sector unit to a strategic buyer.
Confirming the receipt of the proposal, a top official in the ministry said it would be considered favourably.
The two-page communication, however, did not detail the bidding approach to be adopted by ONGC while indicating that a firm view would be taken when the government specifies in detail its programme like quantum of equity to be put on the block.
HPCL, according to ONGC, was essential for its forays into oil refining and retailing business towards becoming a fully integrated energy company.
ONGC, which produces close to 24 million tonnes of crude oil annually, has begun the process of vertical integration with the acquisition of Aditya Birla Group stake in the loss-making Mangalore Refinery & Petrochemicals Ltd.
With a nine million tonnes refinery already under its belt, ONGC has also received government authorisation for retailing petrol and diesel in four states.
Vertical integration is the growth mantra the world-over, the application says while stating that the corporate strategy of ONGC is to continue to focus on core business of exploration and production and at the same time go for vertical integration to secure sustained growth.