Two of the leading companies in the Indian oil industry, the Reliance Industries (RIL) and Essar Oil have recently showed their interests in the Rs 26,500-crore refinery, proposed by the Oil and Natural Gas Corporation (ONGC), at Kakinada. The sources said that the UK-based industrial giant, Hinduja Group did show their interest in the refinery in the past. They added that the RIL and Essar has shown their interests in spite of ONGC maintaining its stand that the refinery is not financially feasible, till the Andhra Pradesh government gives it more incentives. According to the sources, the refinery is having a capacity of producing 15 million tonne per annum and this is going to be implemented by Kakinada Refinery and Petrochemicals (KRPL).
The sources related to the development have stated that one of the subsidiary companies of ONGC, the Mangalore Refinery and Petrochemicals (MRPL) is holding a 26 per cent stake in KRPL at the moment. The sources added that the IL&FS is holding a 51 per cent and the remaining stake is being owned by the state government of Andhra Pradesh. Confirming the news, one of the top officials of ONGC said, "Essar Oil, RIL and Hindujas have been in discussions with the Andhra Pradesh government for a stake in the Kakinada refinery".
The industry sources have informed that both the companies of RIL and Essar Oil are operating their respective mega refineries in Gujarat at the moment and the executives of the two companies also said that they are evaluating stake purchase in the Kakinada refinery. The sources added that the ONGC has proposed to set up the refinery in a special economic zone (SEZ), that its developing in Kakinada and it has already acquired the required land for the SEZ. In the words of an analysts from an advisory company, "The fact that the refinery will come up in an SEZ is attracting interest from various companies since it will get various tax incentives". According to the top officials of the companies intending to buy a stake in the refinery, the refinery is having feasibility as the companies can export the products to Southeast Asian countries through the port, located in Kakinada.
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Posted On : 09 May 08
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