Calcutta, June 7: Oil and Natural Gas Corporation (ONGC) has drawn up a detailed retail marketing plan for its subsidiary, Mangalore Refinery and Petrochemicals Ltd (MRPL) at an investment of over Rs 1000 crore. The investment will be made in the next two to three years.
A senior executive of the state-run company said the investment will be made to upgrade manufacturing facilities of MRPL as well as setting up retail outlets.
Mangalore Refinery has proposed to invest around Rs 600 crore to upgrade its manufacturing facilities to produce motor spirit and high-speed diesel conforming to Bharat III and Bharat IV standards.
The company has also proposed investment worth Rs 75 crore to manufacture Mix Xylenes in order to add value to its product-mix. Another Rs 75 crore investment has been planned to set up a standalone marketing terminal.
The official said this evacuation facility, combined with already established coastal pullout and road-loading facilities for black oil, naphtha and bitumen will make the refinery directly capable of servicing all oil companies and direct customers in the deregulated market.
The company, which was on the brink of getting referred to the Board for Industrial and Financial Reconstruction (BIFR) before ONGC had taken over it in March this year, is also planning to improve capacity utilisation and cut cost through de-bottlenecking exercise.
The template capacity of MRPL is 9.69 million tonnes, which it has never achieved due to financial and operational constraints.
ONGC has licences for setting up 600 retail outlets, much of which are expected to come up in the next two to three years.
The first outlet, according to ONGC chairman Subir Raha, is expected to come up in Bangalore by December this year. Earlier, in a interview with The Telegraph, Raha had said the company is in the process of putting up a marketing team in place for its proposed retail journey, an area where ONGC has no previous experience.
Raha said the commissioning of Mangalore-Hassan-Bangalore pipeline project will boost the retailing plan of ONGC as the transportation cost of MRPL products in the hinterland areas of the refinery will be substantially reduced. ONGC has a strategic share of 23 per cent in the pipeline project, which will ensure the transport of MRPL products to the retail zones without any hitch, the official said.
Raha is confident that MRPL, which has a huge accumulated loss, will be able to turn around shortly and all the stakeholders will start getting dividend.