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HPCL prepares Rs 7110 cr biz growth investment plans in FY18

Press Trust of India  |  Mumbai 

State-owned marketer has drawn up investment plans of Rs 7110 crore for business growth in the current fiscal. The company, which is being merged with exploration giant ONGC, has also planned capex of Rs 61,000 crore for capacity expansion over the next five years. While the capex stood at Rs 5860 crore in the last fiscal, it is expected to be Rs 7110 crore this financial year. "With a huge potential of growth amidst rising energy demand and due to low per capita consumption base, the and gas sector is poised for an exciting and challenging future," chairman and managing director M K Surana told reporters here post the company's annual general meeting. "We are adapting to this changing energy mix and are well positioned to create value for all the stake-holders in the future with a capex of over Rs 61,000 crore over the next five years," he added. On acquiring HPCL, Surana said the has formed an advisory panel which would decide the valuation (share price) for acquisition. Union Finance Minister Arun Jaitley is heading the three-member ministerial panel to oversee and expedite the sale of the stake in refiner to explorer for around Rs 35,000 crore. On taking over MRPL post-acquisition by ONGC, Surana said a discussion on the issue has not taken place yet but "it is a reasonable possibility that MRPL will go along with HPCL". Earlier in the day, Surana informed investors that "the focus (of acquiring HPCL) is to introduce new technologies, create a vibrant and investor friendly upstream sector for production of and gas, transform country into a refining and petrochemical hub, create a national natural gas grid, move to a market driven pricing, leverage technology for reducing costs, introduce innovative payment solutions and transition the country to a low carbon economy". Hindustan Petroleum Corporation will remain a public sector unit with a separate board and brand identity post acquiring government's entire 51.11 per cent stake, which at current prices is valued at about Rs 28,800 crore. Post-merger, all refining units of will be accumulated under HPCL, making it the third largest refiner after Indian Corporation (IOC) and Reliance Industries, Pradhan had said while announcing the merger some months ago. owns 71.63 per cent of MRPL, a company it had acquired from AV Birla Group in March 2013. plans to set up a 9 million tonne unit in Rajasthan as well as expand its Vishakhapatnam refinery.

This will take the company to 50 million tonnes-plus category. The Cabinet on July 19 approved sale of government's stake in to the largest producer for Rs 30,000 crore. will become a subsidiary of and will remain a listed company post the acquisition and board of the refining and marketing company will continue to remain in place. The had recently approved sale of its 51.11 per cent stake in refiner to India's largest producer owns and operates two major refineries producing a wide variety of petroleum fuels and specialities, one in Mumbai (West Coast) of 7.5 million tonnes per annum (MMTPA) capacity and the other in Visakhapatnam (East Coast) with a capacity of 8.3 MMTPA. also owns and operates the largest lube refinery in the country producing lube base oils of international standards, with a capacity of 428 TMT. This Lube Refinery accounts for over 40 per cent of the India's total lube base production. Surana also said the company has signed a revised MoU and a joint venture agreement with Rajasthan for setting up 9 MMTPA refinery cum petrochemical complex at Barner at a cost of Rs 43,129 crore. will hold 74 per cent stake while the Rajasthan will hold the rest.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, September 15 2017. 23:48 IST