‘Deal to help HPCL add more refining capacity’

State-run Hindustan Petroleum Corporation (HPCL) is set to go into a new era with Oil and Natural Gas Corporation grabbing a majority stake in the company by January end. On the backdrop of that, HPCL Chairman and Managing Director M K SURANA talks to Shine Jacob about the deal and likely MRPL acquisition. Edited excerpts

What does this mean to HPCL?

The first thing is that HPCL has a big marketing set up in place. However, we are short of refining capacity. The deal will bring to the table of HPCL further refining capacity. ONGC subsidiary Mangalore Refineries and Petrochemicals (MRPL) is into refining, but has no substantial marketing presence. Hence, the deal will be a winwin situation for both the companies. Moreover, the deal will be an advantage in terms of crude procurement and marketing supply for both the companies.

I believe that this will be vital for India’s energy sector, as having a presence in upstream and downstream will help us to deal with the volatility in crude oil prices in a better way. According to my knowledge, the deal is likely to take place by the end of this month only.

Will your focus on the petrochemical sector be getting a boost?

We are now not into petrochemicals. Recently only, we have set up a new department for petrochemicals. The deal will be a substantial gain for both the companies in petrochemical portfolio as further consolidation can happen.

What is your take on the pricing of the deal?

Pricing has to be discussed between the buyer and the seller. They must have done their due diligence before the deal. It’s is not fair from my side to comment on that. We may not require any approval now and it is upon ONGC to take shareholder approval if required.

M K SURANA

Chairman and MD, HPCL

WE MAY NOT REQUIRE ANY APPROVAL NOW AND IT IS UPON ONGC TO TAKE SHAREHOLDER APPROVAL IF REQUIRED