HPCL in pact with China firm

Cos to jointly work for exploration & production projects in India, China, other countries.

Hindustan Petroleum Corporation (HPCL) has signed a memorandum of understanding (MoU) with China Petroleum and Chemical Corporation (Sinopec) for exploration and production.

The companies will jointly identify projects in China and India as part of the venture. According to the MoU, both will work for energy security of the representing nations.

HPCL and Sinopec will also together work for projects in other countries. The pact also includes collaboration in the areas of refineries and petrochemicals, engineering and technical services, consultancy services, and research and development.

In December, China and India made attempts to make joint bids for energy assets in third countries. However, none has resulted in substantial business opportunities so far.

China National Petroleum Corporation, another oil major in China, is jointly operating with Indian oil giant Oil and Natural Gas Corporation in Sudan. Petronas Carigali Overseas and Sudan National Oil Company are the other partners in the exploration venture.

Oil marketing company HPCL recently entered into the exploration and production business. The company signed an agreement with Gas Authority of India (GAIL) for oil and gas exploration and production opportunities in India and abroad.

The two state-run companies have signed three pacts, one of which is an MoU for jointly participating in exploration activities in India; west, central, south and south-east Asia; Africa; Australia and Russia.

Last month, GAIL and HPCL had, along with Gujarat State Petroleum Corporation and Oilex NL of Australia, bid for two blocks in Australia.

Sinopec is the largest producer and marketer of refined oil products in Asia. The state-owned company is also the largest producer and distributor of petrochemicals and second-largest oil and gas explorer and producer in China.

With core business of petroleum and petrochemicals, Sinopec is a publicly listed company with integrated upstream and downstream operations and a complete marketing network. Sinopec's crude oil production is over 40 million tonne and gas almost 7 billion cubic metres.

The HPCL stock today closed at Rs 319.65 on the Bombay Stock Exchange, 0.76 per cent down from the previous closing at Rs 322.10.