New Delhi, July 24: The sale of 51.11 per cent government stake in HPCL to ONGC will help to strengthen the state-owned explorer's financial position and enable it to put stronger bids for oil and gas assets globally.

Finance minister Arun Jaitley will head a three-member ministerial panel to oversee and expedite the stake sale in oil refiner HPCL to explorer ONGC, oil minister Dharmendra Pradhan said today.

Hindustan Petroleum (HPCL) will remain a public sector unit with a separate board and brand identity after the Oil and Natural Gas Corporation (ONGC) acquires the government's entire 51.11 per cent stake, which at current prices is valued at about Rs 28,800 crore.

"To oversee this transaction, the CCEA approved an alternative mechanism, headed by the finance minister, which will help in taking a quick decision on timing, price, terms and conditions and other related issues," he said.

Pradhan and Nitin Gadkari, minister for road transport and highways, will be part of the ministerial panel.

Stating that the merger will be completed within the current financial year, Pradhan said valuations and other modalities of the sale would be strictly driven by Sebi rules. Valuation and transaction advisers will be appointed soon, he said.

The department of investment and public asset management (DIPAM) has called for advisers to the strategic sale.

"The proposed acquisition in the oil sector will create a vertically integrated public sector oil major having a presence across the entire value chain. This will give ONGC an enhanced capacity to bear higher risks, take higher investment decisions and neutralise the impact of global crude oil price volatility," Pradhan said.

The takeover by ONGC, which has a market cap of Rs 2,01,866.79 crore, will make it one of Asia's largest oil and gas majors by market capitalisation and assets, besides adding to ONGC's (primarily an oil explorer) refining capacity.

Talking to reporters outside Parliament, he said the modalities of bringing the refining units of MRPL and HPCL under one umbrella would be decided by their respective boards.

"HPCL has 24.8 million tonnes per annum of refining capacity. MRPL - a subsidiary of ONGC - has 15.1mt. After this deal, the entire refining capacity of the ONGC group will come under HPCL. So, HPCL will have 40mt of refining capacity," he said.