ONGC deal will benefit in terms of crude procurement, says HPCL CMD

The state-run Hindustan Petroleum Corporation (HPCL) is set to usher in a new era with Oil and Natural Gas Corporation ready to grab 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.

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 help HPCL further its refining capacity. ONGC subsidiary Mangalore Refineries and Petrochemicals (MRPL) is into refining but has no substantial marketing presence. Hence, the deal will be a win-win 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 in India as having a presence in both upstream and downstream will help us to deal with the volatility in crude oil prices in a better way. 

Will your focus on petrochemical sector be getting a boost?

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

What is your take on the pricing of the deal?

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

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