Business   

ONGC exits Kakinada Refinery

NEW DELHI: Ending months of speculation, Oil and Natural Gas Corporation (ONGC) on Monday decided to exit from the proposed Rs. 25,000-crore refinery and petrochemical complex at Kakinada in Andhra Pradesh, terming it as an unviable venture. Leading infrastructure and power giant GMR is likely to pick up the 51-per cent stake in the refinery.

The decision is learnt to have been taken at the meeting of the board of Kakinada Refinery and Petrochemicals Limited (KRPL) held on Monday. The board met twice on Monday. First when ONGC Chairman and Managing Director R. S. Sharma announced the decision to exit and the second meeting where GMR was inducted as the new partner with 51 per cent stake. ONGC also made an official announcement about its exit from the project.

One of the major reason’s being cited for ONGC’s exist is that it had sought from the Andhra Pradesh Government tax incentives worth Rs. 16,000 crore over eight years to make the project viable. The State Government had declined the request.

ONGC had signed an agreement with the Andhra Pradesh Government in September 2006 to set up the refinery. However, there was no official word on the deal from both sides. The present ONGC Chairman was also not keen on the project that had been conceived by his predecessor Subir Raha.

The refinery was originally planned with 7.5 million tonne capacity but was enhanced to 15 million tonnes after the smaller refinery was found to be financially unviable. “Refineries are not our business. We will continue to concentrate on exploration and production,” a senior ONGC official remarked.

ONGC has a 46-per cent stake at present in the refinery and petrochemical project through its subsidiary Mangalore Refinery and Petrochemicals (MRPL). IL&FS has 51 per cent stake and the Andhra Pradesh Government 3 per cent stake through Kakinada Seaports.

Sources said GMR was keen on the project as it felt that it would be set up in a special economic zone and that Kakinada has a seaport.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

‘Inflation will be brought in alignment with policy’
Saint-Gobain to set up second unit at Bhiwadi
ONGC exits Kakinada Refinery
Tata Power net up 25 %
‘Make compliance audit mandatory’
Vodafone tax case begins in Mumbai
Suashish Diamonds to set up unit in SEEPZ
Sensex drops further
Exchange Rates
Bullion Rates
Cambridge Tech acquires U.S. firm
Software for construction industry
Oracle introduces Retail Release 13
Tech Mahindra pact with Telecom New Zealand
Seaways acquires two vessels
SPEL Semiconductor to drop SEZ project
Dextrasys to create employment opportunities
ArcelorMittal to acquire U.S. coal firm
Citi to lay off 6,500 jobs
Nokia buys social networking site Plazes
Motorola, Kodak join hands
Rio Tinto seeks mining lease in India
vTrendy from Tata Teleservices

Copyright © 2008, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu