Hindustan Petroleum Corporation has earmarked capital expenditure of Rs 45,000 crore over the next six years.
Of this, Rs 32,000 crore will go towards setting up new refineries and expanding existing ones. The balance will be spent on exploration & production, gas distribution, tankages, pipelines and retail infrastructure.
Mr S. Roy Choudhury, Chairman and Managing Director, said that HPCL was targeting refining capacity of 42 million tonnes by 2016-17. This will mark a near three-fold jump from the present level of 14.8 mt from the Mumbai and Vizag refineries and ensure that supply is perfectly in sync with demand.
The additional capacity will come from the Bhatinda refinery (nine mt), scheduled for commissioning in the next few months, and expansion of the Vizag refinery to 15 mt. The Maharashtra Refinery, proposed at Ratnagari in the next 4-5 years, will contribute to another nine mt.
Company officials told Business Line that post-2017, HPCL would consider doubling capacity of the Bhatinda and Maharashtra refineries to 18 mt each which will put total capacity at 60 mt by 2020.
HPCL also has a 17 per cent stake in Mangalore Refinery & Petrochemicals where the Oil and Natural Gas Corporation is the majority shareholder with 71 per cent equity. HPCL was the original promoter of MRPL along with the Aditya Birla group but literally gifted it away to ONGC in a move that baffled industry circles.
“Had this not happened, there would have been no need for the Maharashtra Refinery as MRPL would have met the needs of a coastal project,” an oil sector veteran said.
Mr B Mukherjee, Director (Finance) said it was unlikely that crude would go below $100 per barrel. “We have to live with this reality though crude’s volatility, more than its price, is the real issue,” he added. HPCL’s losses on diesel, cooking gas and kerosene are projected at Rs 21,000 crore for the July-September quarter, a steep fall from over Rs 43,000 crore in Q1.
According to Mr Roy Choudhury, the company was equally upbeat on its upstream prospects following the move to make Prize Petroleum a wholly-owned arm. “We are now preparing ourselves for exploration & production efforts both in India and overseas,” he said.