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HPCL is keen to takeover MRPL before end of 2018-19: Chairman & MD Surana

HPCL is keen to takeover Mangalore Refinery and Petrochemicals Ltd (MRPL) before the end of 2018-19, as there are a lot of synergies.

Press Trust of India  |  Mumbai 


HPCL is keen to takeover before the end of 2018-19, as there are a lot of synergies, Chairman and Managing Director Mukesh Kumar Surana said on Wednesday.

Oil and Natural Gas Corp (ONGC), India’s biggest oil and gas producer, earlier this year completed the acquisition of HPCL for Rs 369.15 billion. After this, ONGC has two oil refining subsidiaries — HPCL and MRPL. A move is afoot to bring the two units under one umbrella. Surana said standalone refineries, like MRPL with no marketing infrastructure, do not make big business sense.

For one, HPCL sells more petroleum product than it produces and bringing MRPL’s 15 million tonne per annum refinery under the fold would help bridge the shortfall. It currently buys the shortfall in the product from other refineries, including MRPL.

“Having MRPL as part of HPCL will bring efficiencies,” he said. “In principle it makes sense but modalities have to be worked out.”

HPCL operates a 7.5 MTPA refinery at Mumbai and 8.3 MTPA unit at Visakh in Andhra Pradesh. Its subsidiary, HPCL-Mittal Energy Ltd operates 11.3 MTPA unit at Bhatinda in Punjab. MRPL would bring to it a 15 MTPA refinery, helping bridge the fuel shortfall it currently has. Also, there can be synergies in crude oil procurement as well as in optimising refinery set-up.

“Directionally it (merger) makes value and sense... we are trying if we can do it within this fiscal,” Surana said, adding the merger could be either through share swap or cash buyout or a combination of both.

HPCL Q4 profit dips 4%

HPCL reported 4 per cent drop in its March quarter net profit on lower refining margins and inventory gains. Net profit in the January-March quarter of the fiscal year 2017-18 at Rs 17.48 billion compared with a net profit of Rs 18.19 billion in the year-ago period, HPCL said. For the full fiscal 2017-18, the company posted its highest net profit of Rs 63.57 billion on a turnover of Rs 2.43 trillion. In 2016-17, the company had reported a net profit of Rs 62.09 billion on a turnover of Rs 2.13 trillion. Also, during 2017-18, HPCL achieved the highest sales volume of 36.87 million tonnes, including exports of 0.68 million tonnes, with a growth of 4.7 per cent.

First Published: Wed, May 23 2018. 22:10 IST