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Govt panel deciding valuation for ONGC's HPCL acquisition: M K Surana

HPCL, France's Total SA recently discussed setting up an underground LPG storage facility at Mangalore terminal

Aditi Divekar  |  Mumbai 

ONGC to takeover HPCL

Even as state-owned oil marketer Hindustan Petroleum Corporation Ltd (HPCL) gears up for a merger with upstream Oil and Natural Gas Corporation (ONGC), the company recently discussed setting up LPG storage facility with France's Total SA. LPG is liquefied petroleum gas.

"Total SA was here two weeks ago and we just met to review if we could have an underground storage facility for LPG at the Mangaluru terminal," chairman and managing director said on the sidelines of the annual general meeting held in Mumbai on Friday. "Nothing has been decided; we just met to discuss," he added, without divulging further details.

On buying 51 per cent government stake in HPCL, Surana said the government has formed an advisory panel to decide valuation for acquisition.

Union Finance Minister is heading the three-member ministerial panel to oversee and speed up the sale of the government stake.

On taking over Mangalore Refinery and Petrochemicals Limited (MRPL) after acquisition by ONGC, Surana said a discussion on the issue has not taken place but "it is a reasonable possibility that MRPL will go along with HPCL".

Currently, owns 71.63 per cent of MRPL, which it had acquired from Aditya Birla Group in March 2013.

"The merger will bring a downstream and an upstream business together, which will only help insulate the business from the vagaries of crude oil prices," explained Surana.

has also drawn up investment plans of Rs 7,110 crore for business growth in the current financial year.

The company, which is being merged with exploration giant ONGC, has also a planned capital expenditure (capex) of Rs 61,000 crore for capacity expansion over the next five years.

"We are adapting to this changing energy mix and are well-positioned to create value for all the stakeholders in the future, with a capex of over Rs 61,000 crore over the next five years," he added.

After merger, will remain a public sector unit with a separate board and brand identity.
also plans to set up a nine-million-tonne-annual unit in Rajasthan as well as plans to expand its Visakhapatnam refinery. This will take the company to 50-million-tonne-plus category.

Surana said the company has signed a revised memorandum of understanding and a joint-venture agreement with Rajasthan for setting up 9 million-tonne refinery-cum-petrochemical complex at Barner at a cost of Rs 43,129 crore. will hold 74 per cent stake, while the Rajasthan government will hold the balance.

owns and operates two major refineries producing a wide variety of petroleum fuels and specialities — a 7.5 million-tonne facility in Mumbai (West Coast) and another in Visakhapatnam (East Coast) with a capacity of 8.3 million tonne.

First Published: Mon, September 18 2017. 10:56 IST