Gas exploration to continue despite tough pricing scenario: ONGC

Dinesh K Sarraf, Chairman of the Oil and Natural Gas Corporation (ONGC), said on Thursday that while the state-run firm would continue to invest in gas exploration, it was getting increasingly difficult owing to the "tough" pricing scenario.Speaking to CNBC-TV18. Sarraf said gas prices were displaying a downward trend and that he had asked the government to revise gas prices upwards.On the government's Budget proposal to merge all state-owned energy firms into a consolidated giant, Sarraf said the combine will have economies of scale.He said while there are a number of ways in which a merger can be undertaken, a vertical integration would be best as it would ensure that the companies perform better irrespective of pricing trends. A horizontal integration, on the other hand, would lead to monopolies, Sarraf said.Finance Minister Arun Jaitley in his Budget speech last week had announced a proposal to merge state-owned oil companies to create an integrated oil behemoth. The creation of an oil giant will also allow it to actively look at mergers and acquisitions in a proactive manner. Earlier, Indian Oil Corporation Chief B Ashok said the proposal of merging oil companies into one big public sector undertaking was a welcome move, but may not be an easy task. He said integration across the value chain will bring stability to the industry and mergers can lead to creation of a world-scale company.Watch video for more...