Hindustan Petroleum Corporation Ltd has identified research and development (R&D) as a critical business vertical in the coming years and is going flat out to make this a reality.

By the end of 2012-13, the company will have in place its corporate R&D centre in Bangalore. “The first phase, which will focus on refining-related activities, will be commissioned at an investment of around Rs 300 crore,” Mr S. Roy Choudhury, Chairman and Managing Director, told Business Line .

Once the second phase is complete a couple of years thereafter, HPCL will have spent Rs 500 crore on this centre. Its counterparts in the refining space, IndianOil and Bharat Petroleum Corporation, already have a headstart in this activity. IOC, in particular, has been focusing on R&D for nearly four decades from its Faridabad centre. BPCL operates its corporate R&D outfit out of Greater Noida near New Delhi.

“Our R&D centre will keep in line with our need to sustain business especially in the context of crude oil volatility,” Mr Roy Choudhury said. Knowledge relating to the best yield for crude oil will be critical and the centre can help from the viewpoint of buying different crude oil types, catalysts and improving processes. In addition, there will be intensive research in areas such as lubes, bio-fuels, hydrogen and so on.

Joint research

HPCL is in talks with the University of Queensland in Australia to explore joint research on the different types of catalysts that can be produced out of bagasse (the fibre which remains after squeezing out the juice from sugarcane).

The trigger for this comes from HPCL's sugar business in Bihar which is expected to translate into a profitable business model. Bagasse has tremendous potential as a fuel source since it can produce heat energy to meet the needs of a sugar mill. It is also used as a local source to make ethanol.

“In this competitive world, we need to know more about additives, catalysts and the like for which we need a proper R&D centre. At present, HPCL does not have any R&D in its refineries though there is a lot of collaborative research happening with IITs,” Mr Choudhury said.

The need for an intensive focus on R&D stems from the imperative of using optional fuels with crude oil prices shooting through the roof. Experts believe that while the last two centuries belonged to coal and crude oil, the future will see a far bigger role for gas.

HPCL has begun recruiting scientists at senior management levels who will play a big role in the R&D centre. The company will also look at tie-ups with other corporate houses as part of a long-term plan to grow the business model. The R&D centre could eventually emerge an independent profit centre when other companies outsource its services.

Related Topics
comment COMMENT NOW