New Delhi:
State-owned Oil and Natural Gas Corp (ONGC) is likely to look at merging its two oil refining subsidiaries, Hindustan Petroleum Corp Ltd (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL), post-June 2021, its chairman Shashi Shanker said on Friday. ONGC, India’s biggest oil and gas producer, in 2018 completed the acquisition of HPCL for Rs 36,915 crore. After this takeover, it has two refining subsidiaries — HPCL and MRPL.
At a news conference post company’s annual general meeting, Shanker said HPCL sells more fuel than it actually produces at its refineries. On the other hand, MRPL is a pure oil refining company. “There are a lot of synergies in the merger of MRPL with HPCL. For one, it will balance the fuel marketed by HPCL with the refining capacity, eliminating the need to buy fuel from other companies,” he said.
But before this merger happens, ONGC is looking at merging ONGC Mangalore Petrochemicals Ltd (OMPL) with MRPL, he said. MRPL holds 51 percent stake in OMPL, while ONGC has 48.9 per cent. MRPL is to acquire ONGC’s shareholding in the company.
“We have received approval from the Petroleum Ministry for the merger and we hope to complete this by June 2021. Post that we will look at the merger of MRPL with HPCL,” he said. ONGC holds a 71.63 per cent stake in MRPL. It holds a 51.11 per cent stake in HPCL.
HPCL currently holds a 16.96 per cent stake in MRPL. “The first stage is the merger of OMPL with MRPL and the merger with HPCL will follow that,” he said.
HPCL Chairman and Managing Director Mukesh Kumar Surana have been since January 2018 talking of the synergy MRPL acquisition will bring to the company. For one, HPCL sells more petroleum products than it produces, and bringing MRPL’s 15 million tonnes a year refinery under the fold would help bridge the shortfall. Also, there can be synergies in crude oil procurement as well as in optimizing refinery set-up, he has been saying. MRPL is not a new company for HPCL. It was an HPCL company before ONGC in 2003 acquired joint venture partner A V Birla Group’s stake.
HPCL has 23.8 million tonnes of annual oil refining capacity. Together with 15 million tonnes refinery of MRPL, it will become India’s second-biggest state-owned oil refiner after Indian Oil Corp (IOC). Overall, it will become the third-biggest refiner behind IOC and Reliance Industries.
MRPL will be the third refinery of HPCL, which already has units at Mumbai and Visakhapatnam.
