The Union Cabinet on Wednesday approved the sale of the government’s 51.11% stake in Hindustan Petroleum Corporation Ltd in-principle to the Oil and Natural Gas Corporation, PTI reported. Oil Minister Dharmendra Pradhan made the announcement on Wednesday. The estimated Rs 30,000-crore deal is expected to be finalised by the end of 2017, The Economic Times reported.

ONGC and Oil India are state-owned oil and gas producing companies while HPCL and Bharat Petroleum Corporation Limited is a state-run refinery business.

The estimated Rs 30,000-crore sale will not lead to a merger with ONGC, which plans on maintaining it as a subsidiary. The HPCL board will remain intact. “ONGC has forwarded a proposal to acquire HPCL,” Pradhan said. The sale will add a yearly 23.8 million tonnes of oil refining capability to ONGC making it the third-largest refiner in the country.

Finance Minister Arun Jaitley had proposed to start an integrated public sector “oil major” to compete with global rivals, PTI reported.