Rajasthan CM Gehlot asks HPCL to complete refinery in 4 years
Chief minister Ashok Gehlot held a meeting with the officials of HPCL and various government departments and instructed them to complete the refinery construction within four years and make it operational, setting an example in the country. Gehlot said the refinery at Pachpadra, being built with an investment of Rs Rs 43,129 crore, is a significant industrial project in the state and it will be a model refinery in the country. He was having a review meeting of the refinery with the short-term and long-term activities that are expected to be undertaken. He said the youths of the state has high hopes on the refinery for job and business opportunities. Keeping this mind, the government is planning to set up skills development centre and an ITI that would impart training on petro-chemical related subjects. The government is also keen to develop an industrial corridor to sell and transport petro-chemical products which can also create lot of job opportunities. In the meeting, he also drew attention to the large number of people who would be working in the project and they would require housing, medical and education facilities. He briefed the officials to create these infrastructure while providing employment to the local people. He said due to the refinery, traffic will increase on the National Highway-6. He proposed to convert the existing road into six-lane, while facilitating development of hotels, restaurants and parking spaces along the highway. He also told the officials to plan for the extension of rail route up to Balotra and Pachapadra. HPCL CMD M K Surana, who was present in the meeting, said that the project will create 40,000 jobs directly and 60,000 jobs indirectly. “We are trying to complete the project by October 2022,” said Surana.
Govt recognises ONGC as HPCL’s promoter
Hindustan Petroleum Corp Ltd (HPCL) has for the last 15 months refused to recognise its majority shareholder ONGC as its promoter but the government has now for all practical purposes started giving the company its due recognition. Government headhunter Public Enterprises Selection Board (PESB) on June 17 called ONGC Chairman and Managing Director Shashi Shanker to assist in selecting the new Director (Finance) of HPCL, a move seen as a stamp of approval for ONGC being the parent of HPCL, sources in know of the development said. Oil and Natural Gas Corp (ONGC) in January last year bought the government’s entire 51.11 per cent stake in HPCL for Rs 36,915 crore. HPCL thereafter became its subsidiary but HPCL management has continuously refused to recognise ONGC as its promoter. In regulatory filings for five consecutive quarters, HPCL listed “President of India” as its promoter with “zero” per cent shareholding. ONGC was listed as “public shareholder”, owning “77.88 crores” shares or “51.11 per cent” shareholding of the company. Sources said the chairman of ONGC, as a result of it being the holding company of HPCL, by rule was invited to be on the interview panel to select the director and that would in a way end all the wrangling over the promoter issue. HPCL Director (Finance) J Ramaswamy retired on February 28 and interviews for the post held by PESB on June 17 selected R Kesavan, who currently is an executive director in HPCL, according to a notice put out by the government headhunter. For selecting the director of a company where the government or its controlled company has more than 50 per cent stake, a PESB panel interviews shortlisted candidates. The panel is assisted by the Secretary of the administrative ministry and the chairman of the company concerned. The Department of Personnel guidelines state that “in the case of subsidiaries, the full-time Chairman of the holding Company is invited to assist the Board.” Sources said going by these guidelines, ONGC Chairman and Managing Director was invited to sit on the interview panel to select HPCL Director (Finance). HPCL Chairman and Managing Director M K Surana, who till now used to sit on the interview panels to select directors of the company, was not called. They said Coal India Ltd’s governance structure, which the HPCL management has so often cited, clearly provides for the holding company chairman to sit on the panel for selecting directors of subsidiary companies. Coal India Ltd is a holding company and has seven subsidiaries. The board of each of the subsidiaries is headed by a chairman and Coal India too has a chairman and managing director to head the board. But on PESB interview panels to select a director or chairman of subsidiary companies, Coal India CMD is invited. Sources said the government had earlier this year asked HPCL to add ONGC as its co-promoter but the oil refining company sought to delay it by seeking further clarifications. While the promoter tag does not bring any specific privileges to ONGC, a lack of it keeps it out of insider trading regulations as it get full agenda of every board meeting of HPCL and can be aware of price sensitive information. ONGC, which had to borrow Rs 24,876 crore for the acquisition that helped the government meet its disinvestment target for the 2017-18 fiscal, first raised the issue of being formally recognised as a promoter of HPCL in August last year. When the issue first arose in August 2018, Oil Minister Dharmendra Pradhan had clearly stated that ONGC is the new promoter of HPCL. ONGC, he had said, had invested in acquiring a majority stake in the company and so it is the promoter. “ONGC is the promoter of HPCL,” he had said. According to the Securities and Exchange Board of India’s rules, the entity that owns the controlling stake should be listed as promoter even if it was not the original promoter of the company. When Indian Oil Corporation (IOC) had bought the government’s stake in fuel retailer IBP Co Ltd, it was listed as the latter’s promoter in every instance after the deal. The same was the case when IOC acquired a majority stake in Chennai Petroleum Corp Ltd (CPCL). HPCL Chairman and Managing Director M K Surana has retained the title of CMD despite corporate governance structure require a group having just one chairman and subsidiaries being run by managing directors and CEOs. ONGC’s overseas subsidiary, ONGC Videsh Ltd, is headed by a Managing Director and CEO. Its refinery subsidiary Mangalore Refinery and Petrochemicals Ltd (MRPL), which is listed on BSE, too is led by a Managing Director and CEO. ONGC Chairman is the head of boards of both the companies. Since acquiring a majority stake in HPCL, ONGC has only been able to appoint one director to that firm’s board.
Syria says sabotage damaged underwater oil pipelines
Five underwater pipelines have been damaged and put out of order after a sabotage attack off the coastal town of Banias, Syria’s oil ministry said Sunday. The damage was discovered after divers checked to see what was behind an oil leakage, the ministry said. The ministry gave no further details about the attack saying that the damage will be fixed within hours, by its experts. It said Oil Minister Ali Ghanem visited the area and met with engineers over the “terrorist attack.” Banias is home to one of Syria’s two oil refineries. The other is in the central city of Homs. Syria has been mostly relying on oil shipments through tankers to its Mediterranean coast. Syria suffered recently from fuel shortages that were largely the result of Western sanctions on Syria and renewed U.S. sanctions on its ally Iran. Syria produced 350,000 barrels per day before the country’s conflict began in 2011 and exported more than half of it. Now it is down to around 24,000 barrels a day, covering only a fraction of domestic needs.
Nostrum Oil & Gas considers sale of company
Nostrum Oil & Gas said on Monday it started a strategic review of the business, which could include a potential sale of the Kazakhstan-focussed oil firm. Nostrum, engaged in production, development and exploration of oil and gas in the pre-Caspian Basin, said it had not yet received any bids for the company.
India intensifies talks to check oil prices as US-Iran tensions rise
India has stepped up diplomatic initiatives with top oil producers as rising US-Iran tension has pushed up crude prices and may raise freight and insurance costs. While tension has been rising for a year since the US decided to re-impose sanctions on Iran, recent attacks on oil cargoes in the Gulf region and downing of a US drone by the Islamic Republic has magnified the anxiety. In just a fortnight, oil minister Dharmendra Pradhan has spoken to US energy secretary Rick Perry, Russia’s deputy prime minister Yury P Trutnev, UAE minister Sultan Ahmed Al Jaber, and Saudi energy minister Khalid Al-Falih to discuss the geopolitical situation and its effect on oil prices. He sought their help in keeping prices at a reasonable level. For India, which imports 84% of its oil needs, any supply disruption or a price flare can be damaging. Oil gained 5% in a week on US-Iran conflict. “We are closely watching the situation. As of now supply lines are ok,” said M Venkatesh, managing director of state-run Mangalore Refinery and Petrochemicals Ltd. He said, so far there was no impact on insurance and freight. “If the tension persists, freight and insurance would naturally go up. The risk has gone up, and shippers and insurers would start factoring in this soon,” said another industry executive, who didn’t want to be named. Indian Navy has deployed warship and aircraft to secure tankers headed to India from the Persian Gulf region. It would be hard for one or two warships to fully secure all oil cargoes meant for India but it can be a strong deterrent for anybody wanting to harm ships, the executive said. Executives said a US-Iran war was unlikely as neither side seems to want it. “But if there is a war, it would get over within days and is unlikely to affect supply lines for India,” the executive said. Any attempt by Iran to block the Strait of Hormuz, through which about a third of oil tankers pass, will not succeed since the US has a heavy military presence there, the executive said. Also, the world will turn against Iran if it were to attempt something like that, he said.
Oil cooperation more important now than ever: Russian energy minister
International cooperation on crude production has helped stabilise oil markets and is more important now than ever, Russian Energy Minister Alexander Novak said on Monday. The Organization of the Petroleum Exporting Countries and other leading oil producers had agreed to cut their combined oil output but that deal expires at the end of this month. Talks on whether to extend the deal are scheduled for July 1-2 in Vienna. “Today, more than ever, international cooperation is important,” Novak said in a speech at an energy forum in the Russian city of St Petersburg. “There is a good example of successful cooperation on balancing the oil market between the OPEC countries and non-OPEC. Thanks to joint efforts, we today see a stabilisation of world oil markets, an increase in the investment attractiveness of the sector, and the return of investment.” Novak also said rivalry on global markets was heating up. “At the same time, we are encountering wider use of non-economic methods in the battle for consumers,” he said. Russian officials have accused Washington of using tariffs and sanctions to try to carve out market share for its energy exports.