Top Indian honchos today — Mr Lakshmi Niwas Mittal, Mr Mukesh D. Ambani, and Mr Anil Agarwal — are all vying for the biggest slice of India's energy pie. So, when steel magnate, Mr Mittal, dived into oil refining, all eyes turned to the refinery project in Punjab, implemented by HPCL-Mittal Energy Ltd (HMEL), a joint venture between Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Investment Pte Ltd, Singapore — a Lakshmi N. Mittal Group Company.
In a rare chat with the media, Mr Mittal speaks about his experience in India's energy space. Excerpts:
Indeed. Apart from being the first example, the HPCL-Mittal Energy partnership is also an excellent example of a successful PPP in the oil and gas sector. Our journey to build the 9-mtpa refinery in Bhatinda has been smooth, mutually respectful and result-oriented. Both partners have emerged positively energised from the experience and are receptive to collaborating again, should a suitable opportunity arise.
When the project got Cabinet nod in 2007, it was a one-off case, as only up to 26 per cent FDI was allowed in public sector units. Did approvals prove to be a bottleneck?
Not at all. The Government was convinced about the need to strengthen India's energy security and saw merit in enabling an equal public-private partnership in the sector.
Besides catering to the domestic market, will the refinery also look at exports?
Absolutely. The refinery was built to help fulfil India's energy security needs. Given the strategic location of Bhatinda, the refinery will first serve the northern States of Punjab, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Uttar Pradesh, National Capital Region, Haryana and Rajasthan. Once the petroleum product deficit in North India is met, we will look at exports.
What kind of incentives, apart from fiscal, can forge more such partnerships?
In addition to fiscal benefits, which are vital to any investor, I believe offering appealing terms to investors should be seen as part of a country's overall industrial policy and should be available to strategic and mega projects.
Incentives should, following the same logic, focus on activities that create the strongest potential for spillovers, including linkages between foreign-owned and domestic firms, education, training, research and development.
Finally, raised levels of accountability and transparency must be coupled with comprehensive reform in policy-making, including regulatory reform, privatisation, and liberalisation of trade policies (external as well as internal).
There was a time when the Mittals were planning to invest in a refinery-cum-petrochem project at Visakhapatnam, but pulled out while keeping the option of re-entry open. Will you be going ahead with another project?
We remain open to exploring options, as and when they may arise.
Do you think the prevailing green energy policies — in Europe and India — create sustainable balance to do business, particularly in steel?
Green energy policies vary across countries and are defined primarily by a nation's energy deficit. India is one of the world's fastest growing energy markets, thanks to rapid economic development. Therefore, it is obvious that the country will have ambitious plans to expand its renewable industries to meet burgeoning demand and limited domestic fossil fuel reserves.