Petroleum Minister Pradhan supports merger of CPCL with IOC
New Delhi   25-Jul-2016

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 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). The Union Ministry has 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. The Centre has been attempting to buy the stake of NIOL in order to merge CPCL with IOCL.

Petrochem hub
Pradhan pointed out that CPCL’s Manali refinery had huge potential to serve the energy needs of Tamil Nadu and south India.

He stated that the CPCL expansion would also aim at recreating a petrochemical hub in the Manali complex, the industrial hub to the North Chennai, to cater 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.