Mega merger: How an Indian oil behemoth compares with global cos
If the government were to merge the six major Indian upstream and downstream oil companies, as is being speculated by some reports, how would the behemoth compare to global peers in terms of market value? Respectable but not spectacular.
The Indian government is considering merging all its major upstream and downstream companies, including Indian Oil, HPCL, BPCL, ONGC, Oil India and GAIL to create a behemoth that would rival its global peers in size and scale.
After all, most major economies of the world are home to at least one oil giants that produce millions of barrels of oil per day and are integrated vertically till the level of retailing: US has ExxonMobil and Chevron, UK has BP and Shell, Russia has Gazprom and Rosneft, Brazil has Petrobras while China has PetroChina and China Petroleum (parent of Sinopec).
A mega major of major Indian firms will have several benefits. Not only there would be synergies as well as a natural hedge against commodity swings (a weak oil market benefits refiners and retailers while high prices are good for producers), its sheer size would allow it to hunt for expansionary global projects their constituents may not be able to undertake alone. (Some analysts have also said such an oil giant may become unwieldy to manage.)
However, when it comes to market capitalization, an oil behemoth comprising the six Indian majors along with Madras Refinery and Chennai Petroleum would compare respectably to some its global peers but it would still be behind several others.
Below is the chart of the world's major oil & gas giants and their respective market capitalizations (Source: Google Finance, Yahoo Finance) in billion USD dollars.
While the Indian companies' combined marketcap moves the needle at about USD 81 billion, the world's largest listed oil firm ExxonMobil of the US is valued at a steep USD 384 billion.
Note that this list does not include unlisted oil majors in the Gulf region such as Saudi Aramco, Kuwait Petroleum or National Iranian Oil Company, which may each be more valued than Exxon.
For instance, recently there were reports that Aramco may be listed and the reported valuation being considered was more than USD 2 trillion, or more than five times the current size of Exxon.
Within Indian companies, the USD 81 billion m-cap is contributed majorly by ONGC and Indian Oil, followed by the others (See infographic below. Data source: Capitaline)
If the government were to merge the six major Indian upstream and downstream oil companies, as is being speculated by some reports, how would the behemoth compare to global peers in terms of market value? Respectable but not spectacular.
The Indian government is considering merging all its major upstream and downstream companies, including Indian Oil, HPCL, BPCL, ONGC, Oil India and GAIL to create a behemoth that would rival its global peers in size and scale.
After all, most major economies of the world are home to at least one oil giants that produce millions of barrels of oil per day and are integrated vertically till the level of retailing: US has ExxonMobil and Chevron, UK has BP and Shell, Russia has Gazprom and Rosneft, Brazil has Petrobras while China has PetroChina and China Petroleum (parent of Sinopec).
A mega major of major Indian firms will have several benefits. Not only there would be synergies as well as a natural hedge against commodity swings (a weak oil market benefits refiners and retailers while high prices are good for producers), its sheer size would allow it to hunt for expansionary global projects their constituents may not be able to undertake alone. (Some analysts have also said such an oil giant may become unwieldy to manage.)
However, when it comes to market capitalization, an oil behemoth comprising the six Indian majors along with Madras Refinery and Chennai Petroleum would compare respectably to some its global peers but it would still be behind several others.
Below is the chart of the world's major oil & gas giants and their respective market capitalizations (Source: Google Finance, Yahoo Finance) in billion USD dollars.
While the Indian companies' combined marketcap moves the needle at about USD 81 billion, the world's largest listed oil firm ExxonMobil of the US is valued at a steep USD 384 billion.
Note that this list does not include unlisted oil majors in the Gulf region such as Saudi Aramco, Kuwait Petroleum or National Iranian Oil Company, which may each be more valued than Exxon.
For instance, recently there were reports that Aramco may be listed and the reported valuation being considered was more than USD 2 trillion, or more than five times the current size of Exxon.
Within Indian companies, the USD 81 billion m-cap is contributed majorly by ONGC and Indian Oil, followed by the others (See infographic below. Data source: Capitaline)
Happy investing
Source:Moneycontrol.com
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