HPCL rules out partner for Punjab refinery, plans IT foray

"A confidentiality agreement has been signed with the French multinational in December to collaborate in respect of various down stream activities and discussions are in progress to finanlise the joint venture agreement," he said.

In a diversification, the corporation is planning to float a separate joint venture IT company to provide e-commerce and other IT related services. "We are planning to create a separate IT company and a decision on this is likely to be taken by the end of next month," Zhutsi said.

The corporation would have a 50 per cent stake in the company while the remaining equity would be held by the joint venture partner, he said adding that the company would also get into the lucrative telecom business.

HPCL is going in for internal restructuring to suit the changing environment and is planning to use its Optical Fibre Network for the telecom business, he said. Companies like Wipro and Satyam are in talks with HPCL for setting up the new joint venture company, company sources said.

"Any decision to select a joint venture partner would be done through International Competitive Bidding route only and the company is likely to be in place in the next three months," Executive Director IT A T Mehta said.

HPCL would upgrade its retail outlets and benchmark itself with international oil companies, she said adding that the new IT company would provide services like e-commerce, software solutions and body shopping facilities.

HPCL has already got clearance from ministry of environment for the crude oil pipeline for the nine million tonne refinery, he said adding that the project was targeted for completion by the end of the 10th five year plan.

The Bhatinda refinery of HPCL had run into rough weather when its first proposed joint venture partner from US Exxon had pulled out from the project saying that refinery margins would not be profitable in the project.

The company had also got approvals from the Rail, Road and river crossing for the 1006 km long crude oil pipeline from the state government and the company had already invested Rs 94 crore for various ground work of the project, Zhutsi said.

The detailed feasibility report for the project has been prepared by Lummus and the project would also have a Single Point Mooring and crude oil terminal at Mundra, he said and added that the crude oil pipeline would stretch from Mundra to Bhatinda.

The crude oil pipeline has been designed with a capacity of 18 million metric tonnes per annum that would be useful once the company decides to expand the refinery capacity in the later stages, he said.

"HPCL, which has market share of 20 per cent in the marketing segement, along with its joint ventures would be a fully integrated company in the hydrocarbon sector of Exploration and Production, refining and marketing, focus on enhancement of productivity, quality and profitability," Zhusti said.

During the Ninth Plan the corporation has planned a total investment of Rs 10,316 crore, out of which it had spent Rs 1,552 crore for the Diesel De-suplhurisation unit (DHDS) at its Visakh refinery and Rs 964 crore for the expansion of the refinery, he said. Asked about the company’s plan to enter into the exploration and production sector, Zhusti said the company was eyeing some stake in production fields of West Africa and Middle East.

HPCL through its subsidiary company Prize Petroleum Co Ltd is working on a business plan for farming in opportunities in Discovered Oil Fields to start with which would be later followed by exploration activities, he said.

While HPCL holds a 50 per cent stake in the company the remaining equity is held by the financial institutions, he said. The company would also undertake internal restructuring to suit changing environment and stress on consolidation and core competencies, he said, adding that HPCL would also focus on vertical integration through joint venture route besides expanding its business operations in SAARC countries.

"HPCL is also planning to diversify in power and liquefied natural gas (LNG) business and would stress on optimal operation with emphasis on efficiency, cost reduction and safety," Zhusti added.