MUMBAI: State-run oil marketer HPCL said it chalked out an Rs 61,000 crore investment strategy to facilitate capacity expansion over the next five years. Of this, Rs 7,100 crore will be spent during the current fiscal alone.“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,” said M K Surana, CMD, HPCL.Interacting with media after the company’s annual general meeting here on Friday, Surana said, there was a huge potential for growth amid rising energy demand and considering the low per capita consumption base, the oil and gas sector was poised for an ‘exciting and challenging future.’
Currently, HPCL owns and operates two major refineries, one each in Mumbai of 7.5 million metric tonnes per annum (mmtpa) and one in Visakhapatnam with a capacity of 8.3 mmtpa. IT also has plans to set up another 9 mmtpa unit in Rajasthan, besides expanding its refinery in Visakhapatnam. All this will take the company’s production capacity to over 50 mmtpa over the next few years.
HPCL also owns and operates the largest lube refinery with a capacity of 428 TMT. The lube refinery accounts for over 40 per cent of the country’s total lube base oil production.
Meanwhile, on the proposed merger, Surana said the government formed an Advisory panel to decide on the valuation for the acquisition. Going by the current prices, the government’s 51.11 per cent stake is valued roughly at Rs 28,800 crore.
Post-merger, all refining units of ONGC will be accumulate under HPCL, making it the third largest oil refiner after IOC and Reliance Industries. HPCL will become a subsidiary of ONGC, but will remain a listed company post the acquisition. It will likely continue with a separate board and brand identity. But regarding HPCL taking over Mangalore Refineries Ltd, Surana said a formal discussion was yet to take place. “It’s a reasonable possibility that MRPL will go along with HPCL,” he said.