HPCL off to Africa for retail binge

Hindustan Petroleum Corporation (HPCL) is looking for retail opportunities in the African countries. It would also be setting up a liquefied petroleum gas and a lube-blending plants in Bangladesh shortly.

The company is in talks with a number of petroleum giants such as the US-based Chevron, Saudi Aramco, UK-based British Petroleum and France-based Total for forming joint ventures in the refining sector.

M B Lal, chairman and managing director, HPCL said the refining sector with import parity pricing and high margins is an attractive proposition for these companies. He said talks with these companies are on and it might take some months before things get finalised.

HPCL had earlier announced its intention to take foreign petroleum majors along for its Rs 17,000-crore refinery and petrochemicals complex at Bhatinda and another refinery in Vishakapatnam.

On the interest of these companies in marketing, he said they are keen on tie-ups for marketing, but right now the sector is not attractive enough. "It is not feasible to do marketing alone. Therefore, the companies were keen to have a supply source," he said adding that HPCL does not need partnership in marketing since it is already strong in this sector.

As far as looking for opportunities abroad is concerned, Lal said among the African countries HPCL is particularly keen to have ties with the west African countries that include Senegal and Kenya.

The company had conducted studies in 20 countries for opportunities in the petroleum sector, particularly for marketing.

"We are looking for remunerative opportunities," he said. adding that margins in these countries need to be attractive. He said some countries permit a company to set up retail outlets only if it owns a refinery.

Lal said they are on lookout for opportunities in the refining and exploration sector. In the case of upstream sector, HPCL is pursuing opportunities through its subsidiary Prize Petroleum, in which it plans to pump more funds. HPCL's other partners include ICICI Ltd, HDFC Ltd and ICICI Ventures.