If one goes by the statement of oil minister Dharmendra Pradhan, it may seem that the government is in favor of creating large oil PSU entities. "The Budget has laid the policy. Integration is the need of the hour. Globally, M&A (mergers and acquisitions) is the trend in the oil industry. With the policy in place, companies will chalk out mergers and acquisitions in accordance with their strength and weaknesses. We will see M&A activities in the public sector oil industry in coming days," oil minister Dharmendra Pradhan told TOI. To begin with, it will be the smaller and standalone ventures that will be merged to fit the missing links in the hydrocarbons value chain of each brand. "The proposal will provide scale and muscle, which can be leveraged in the global market," GAIL chairman B C Tripathi said. ONGC chairman D K Sarraf said the new entity could have a market capitalization of about $80-90 billion and compete with global giants on its own. The merger route - whether by creating a holding company like in the case of Coal India Ltd or individual M&A - is yet unknown and will have to take into account the different culture, expertise, and compensation of each. There are 13 oil PSUs at present. The top eight listed PSUs have a combined market cap of $80 billion, and a merged entity would become the ninth largest globally. A merger plan involving the five biggies - IOC, ONGC, BPCL and HPCL and GAIL - was first mooted informally during the NDA-1 regime. Subsequently, Mani Shankar Aiyar revived the plan during the UPA-I regime. Since then, it has been in the cold storage. But in September 2015, a panel on the recast of PSU oil companies did not favor mergers, and instead suggested greater autonomy by transferring government shareholding to a professionally managed trust. The Advisory Committee on Synergy in Energy, headed by V Krishnamurthy, said M&A worldwide occurred during times of low oil prices and were instruments of eliminating excess workforce and duplicate facilities.