No proposal to merge CPCL with IOC, says B Ashok

Says IOC will infuse Rs 1,000 cr into CPCL by the end of September

Indian Oil Corporation (IOC's) Chairman B Ashok has said that there is no plan to merge Chennai Petroleum Corporation (CPCL), a group company of IOC. Speaking to reporters on the sidelines of CPCL's 49th annual general meeting at Chennai on Monday, he said "There is another partner (Iranian company, which holds around 15 per cent stake) that needs to settle those issue. No clarity at this time. No proposal as of now."

He added that IOC would infuse Rs 1,000 crore into CPCL by the end of September to strengthen CPCL's net worth. CPCL was intimated to Board for Industrial and Financial Reconstruction after 50 per cent of erosion in its net worth.

The fund infusion would ease reporting requirement and will help the company to borrow to support upcoming projects.

CPCL is expecting its Rs 3,110-crore upgradation project to go on stream by July 2016. Ashok said the project at Manali Refinery is to maximise production of high-value distillates and to increase the percentage of high-sulphur crude processing.

As part of this, construction of major units like delayed coker unit and Sulphur Recovery Unit is in progress as planned.

"Work on other utilities and off-site packages have also been initiated. The projected is scheduled to be mechanically completed by July 2016," said Ashok.

Gautam Roy, managing director, CPCL said that the project will help the company to improve Gross Refinery Margin (GRM) by atleast $2 a bbl.

CPCL is also implementing a Rs 257.80 crore new crude oil pipeline at Chennai port is scheduled to be mechanically completed by November 2016.

Ashok said the company has developed an action plan to produce BS-IV transportation fuels by April 2017, as per the Auto Fuel Vision & Policy 2025 of the Government of India.

The company is plans to revamp and raise the capacity of the existing DHDS unit from 1.8 MMT per annum to 2.34 MMTPA to ensure product of 100 per cent BS-IV HSD with less than 100 ppm Sulphur content.

"A feasibility report is under preparation in this regard and the project is expected to be commissioned by March 2017," said Ashok, adding in case of gasonline or petrol, the existing facilities will be able to fully meet the BS-IV quality specifications.

Ashok said that due to good physical performance first quarter numbers of CPCL was good. PAT was improved to Rs 923.51 crore during the first quarter of the current year as compared to RS 510.11 crore

CPCL has achieved the highest ever crude oil throughput of 1.782 MMT during the year as compared to 10.624 MMT a year ago. The company achieved the highest-ever production of distillates at 72.1 per cent as against 71.4 per cent in 2013-14 and yields were also good. All these factors have also helped the company and improved the performance.