The Hindu Business Line : ONGC keen on setting up Kakinada refinery

Rajahmundry June 17 ONGC is keen on setting up the refinery at Kakinada and is making earnest attempts in that direction and "is hopeful of a positive outcome", according to Mr R.S Sharma, Chairman and Managing Director.

At a press conference here on Sunday, after reviewing the performance of the ONGC Rajahmundry asset, the CMD said that earlier a 7.5-million-tonne (mt) refinery had been contemplated as part of the proposed special economic zone, but as it was found to be commercially unviable, the refinery capacity had to be doubled to achieve viability for the project.

Denying that there was any political pressure on ONGC, Mr Sharma said, "Commercial decisions cannot be taken on political considerations. From the beginning, ONGC had always insisted on the economic viability of the project. Even in the MoU signed with the State Government it is specifically stated."

`True Indian MNC'

However, he said, discussions were going on with the other partners, such as the Kakinada Seaports Ltd, to explore ways and means to achieve economic viability and make the project a reality. He said there would be a meeting later this month to discuss some of the issues.

Describing ONGC as a true Indian MNC, he said that since 2001 the company had taken up as many as 26 projects in 15 countries. "We are pushing forward in that direction. We have made our presence felt," he said.

Referring to the performance of the Rajahmundry asset comprising the Krishna-Godavari basin, he said that tenders had been called for increasing the capacity of the Tatipaka mini refinery in the basin. Its current capacity of 66,000 tonnes would be doubled, he added.

Rajahmundry asset

He said the Rajahmundry asset had produced 2,51,321 tonnes of crude and 1,525 MMSCM of natural gas during 2006-07.

"Our gas production has suffered as an Australian company, Cluff, had backed out of a venture in the region. But we are exploring ways and means to address the problem."

Referring to demands made by local representatives urging ONGC to take up several community development projects, he said area development was not the mandate of ONGC and the State Government should take it up out of the royalties paid to it.

"We are paying more than Rs 200 crore as royalties to the State Government every year. However, as a socially responsible corporate, the company will give as much as help as is possible for area development. But it should be clearly understood it is not in our mandate," he explained.

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ONGC keen on setting up Kakinada refinery