Union Minister Pradhan for merger of CPCL with IOC

Union Minister of State (independent charge) for Petroleum and Natural Gas Dharmendra Pradhan on Saturday indicated that he was in favour of the merger of Chennai Petroleum Corporation Ltd (CPCL) with Indian Oil Corporation Ltd (IOCL).

“When the next expansion happens, CPCL should be within in the umbrella of IOCL. E & P (exploration and production) firms and marketing companies should come under one umbrella and we should create a mega project. I am for CPCL’s merger with IOCL,” he said after the launch of CPCL’s mounded bullet storage project during the Golden Jubilee celebrations of the company at Manali near Chennai.

He stated that there were technical issues due to stake holding of National Iranian Oil Company (NIOL) and the Union Ministry discussed expansion of CPCL with shareholders in Iran and US. CPCL was formed as a joint venture (Madras Refineries Ltd) of Government of India, Amoco India Inc, US and NIOL in 1965. But Amoco disinvested its equity in favour of GOI in 1985 and GOI transferred its equity share of 51.81 per cent to IOCL in 2001. Indian government has been attempting to buy the stake of NIOL in order to merge CPCL with IOCL.

Petrochemical hub

Pradhan pointed out that CPCL’s Manali refinery had huge potential to serve the energy needs of Tamil Nadu and south India and the Centre was keen to grow the company into a greater level.

He stated that the CPCL expansion would also aim at recreating a petrochemical hub in the Manali complex to cater to petrochemical requirements in the region.

“Because in the early days, we couldn’t focus on petrochemical feedstock as our requirement was transportation fuel and LPG. Now, our petrochemical per capita consumption is lower compared to the world average and I see petrochemicals as one of the sunrise sectors of the Indian economy. It can create new entrepreneurship, employments and lot of revenues to government,” he added.

Growing energy demand

Quoting IEA (International Energy Agency) estimates, he said India would have to add at least 300 MMTPA (million metric tonnes per annum) over the next 25 years in order to meet the domestic energy demand, which is forecast to grow to 600 MMTPA by 2040 from about 200 MMTPA this year. Present refining capacity in India is 230 MMTPA.

“Over the next 25 years, our transportations needs will be dependent on hydrocarbon fuels such as petrol and diesel, our domestic cooking fuel will be LPG and substantial portion electric energy will be from gas-based energy sectors,” he observed.

Lauding Tamil Nadu’s progress in industrial sector, Pradhan indicated that the state had huge potential to handle all forms of energy and co-operation from the Tamil Nadu government would augur well for the progress of the industry and state. After Gujarat, only Manali complex in Chennai had the right ecosystem for expansion of crude oil refinery and petrochemical complex, he added.

Tamil Nadu has huge potential

Pradhan also pointed out that both agriculture and industry could sail together. “We have to convince the society and Government of India is open and ready to co-operate with local community for laying of pipelines,” he said in an apparent reference to projects struck in the state.

“State and central governments have to come together and work in tandem. Prime Minister Modi is a great believer of co-operative federalism. If Tamil Nadu moves one step, Centre will move two steps. We expect more co-operation from the state government,” he said.

Earlier, B Ashok, Chairman, IOCL said that CPCL's refining capacity had grown from 2.5 MMTPA to 11.5 MMTPA in the past 50 years and employee strength increased from 350 to 1650 during this period.

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