A technician opens a pressure gas valve inside the Oil and Natural Gas Corp (ONGC) group gathering station on the outskirts of the western Indian city of Ahmedabad March 2, 2012.Reuters

Following a merger proposal of 25 state-run banks into half a dozen banking behemoths, now a high-level bureaucratic panel is reportedly considering the idea to create one major oil conglomerate merging 13 of India's state-owned oil and gas firms.

The Cabinet Secretariat has asked the oil ministry to consider the idea, which can create one huge Indian corporation whose revenue will make global oil giant Chevron appear small fry, and also compete with big U.S. conglomerate like General Electric.

The consultation process by the ministry has already begun with key stakeholders, the state firms, sources told the Economic Times.

Led by Oil and Natural Gas Corporation (ONGC), India's largest oil producer, others in the pack could include India's biggest refiner Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), GAIL, Mangalore Refinery and Petrochemicals (MRPL), Chennai Petroleum, Numaligarh Refinery and Oil India. The integration could also involve institutions related to safety, development and analysis in the oil and gas sector, the report said.

India's top six public listed oil firms run by the government have a combined market value of $77 billion. In financial year 2015-2016, they reported Rs. 45,000 crore in profit and Rs. 9.32 lakh crore in revenue. Their total capital expenditure planned for the following financial year is Rs. 87, 600 crore.

If the idea materializes, the oil monster will be India's largest firm in terms of turnover, net profit, capital expenditure and market capitalization. Its market value can be bigger than India's Reliance Industries. Globally too, the merged entity's market value and financial powers would challenge that of Russia's Rosneft and Britain's BP Plc. that currently have market capitalization of $55 billion and $112 billion, respectively.

At present, three Indian oil firms have formed a consortium to buy some stake in Rosneft. With a new merged entity in place, the stake could be further increased in the Russian firm, which produces more oil than Exxon.

Both the BJP and the Congress-led coalition governments earlier have tried to give efficiency push to these oil firms by proposing such a merger. In 2005, a government appointed panel had advised against the merger stating that one company monopoly might not be good for an energy deficit country like India. It noted that smaller firms could be more efficient and that mergers globally have added little shareholder value.

The other body corporates that could be brought into the fold include Oil Industry Development Board (OIDB), Petroleum Planning and Analysis Cell (PPAC) and Petroleum Conservation Research Association.