HPCL Current Affairs
The Union Government and state-run oil explorer ONGC clinched deal for acquisition of government’s 51.11% stake in Hindustan Petroleum Corporation (HPCL) for a consideration of Rs. 36,915 crore. The deal will be closed by end of January 2018. Earlier empowered panel headed by finance minister Arun Jaitley had approved price bid for acquisition. The all-cash deal will help government boost its non-debt capital receipts and meet disinvestment target (Rs 72,500 crore).
Through this acquisition, ONGC is gaining midstream and downstream presence and access to marketing network. This acquisition will make ONGC India’s first vertically integrated oil major, having presence across value chain in sector. The integrated entity will have advantage of having enhanced capacity to bear higher risks, take higher investment decisions and neutralising impact of volatility of global crude prices. As for HPCL, deal will help it in further leveraging synergy at various levels of vertical value chains as part of integrated oil and gas group. It also will enable ONGC to mitigate risk of crude price volatility.
In 2017-18 Union Budget, Finance Minister Arun Jaitley had announced that state-run oil companies will be merged to create ‘oil major’. Following this Cabinet Committee on Economic Affairs (CCAE) in July 2017 had granted ‘in-principle’ approval to the strategic sale of HPCL to ONGC. This also included change in management control, but allowed HPCL to retain its brand as subsidiary of the national oil explorer.
During 2016-17, HPCL had turnover of Rs 2,13,489 crore and profit after tax of Rs 6,502 crore. It markets around 35.2 million tonne of petroleum products accounting for market share of about 21%and has around 15,000 fuel retail outlets. ONGC contributes around 70% of Indian domestic production of crude oil and natural gas.
Prime Minister Narendra Modi inaugurated HPCL Rajasthan Refinery Ltd (HRRL) project commencement of oil refinery in Rajasthan’s Barmer district. It is first oil refinery to be set up in Rajasthan.
The project is undertaken as joint venture between Hindustan Petroleum Corporation Limited (HPCL) and the Rajasthan government. HPCL owns 74% stake in the project, while the state government owns 26%.
The project includes refinery and petroleum complex of 9 MMTPA capacity. It is expected to be operational in 4 years (2022-23) at a cost of Rs 43000 crores. It is largest investment in the state till date. It is expected to give major impetus to state’s economy and will bring to the state an additional income of Rs 34000 crores.
It is also expected to generate thousands of direct and indirect employment opportunities. Further, it is expected to bring an unprecedented surge in ancillary units, infrastructure development, improvement of healthcare services and establishment of education institutions in Western Rajasthan,