Calcutta, Sept. 15: Oil and Natural Gas Corporation (ONGC) has started fresh negotiations to buy out Hindustan Petroleum Corporation’s (HPCL) stake in Mangalore Refineries and Petrochemicals Limited (MRPL).
Confirming the move, ONGC chairman Subir Raha said talks have centred on three broad areas — long term-crude sale to HPCL, product supply to ONGC and joint retailing. “We are interested in picking up the entire HPCL stake because it will provide us several benefits. We are in talks for something mutually beneficial.”
If the deal is sealed, HPCL’s refineries will be folded into ONGC. “The merger will give us tax benefits of over Rs 800 crore. MRPL’s losses will be set off against our profits, sparing us a huge tax burden,” he added.
ONGC holds around 51 per cent in MRPL, of which 37.5 per cent was bought from the A. V. Birla group recently. The rest came from a debt restructuring of the loss-laden refiner. If a merger does take place, ONGC might sell HPCL’s products — oil and lubricants— through its planned retail outlets. The upstream major, keen to get a foothold in all links of the petroleum value-chain, is expected to set up gas stations this fiscal. The outlets are planned in Goa, Karnataka and Kerala — all places close to the Manglaore-based refiner. Product-sharing deals with other oil PSUs are also on the cards.
Meanwhile, ONGC intends to appoint a consultant who will map out its foray into oil retailing. “We will recruit skilled people and re-deploy our own staff to the retail venture as and when it is required,” said Raha, who told Bengal chief minister Buddhadeb Bhattacharjee about his company’s oil-hunt initiatives in the state. Drilling in Contai will start in March, while a survey of the Sunderbans is under way.
“We will survey about 1400 sq kms in Sunderbans, of which we have already done our study on about 385 sq. kms. By 2003-04, we should be ready with our drilling activities in onshore and offshore blocks there,” he added.
The ONGC chief sought Bhattacharjee’s intervention in the plan to lay a pipeline that will bring gas from Tripura to Bengal, via Bangladesh.