Numaligarh Refinery acquisition a step towards creating a mega company, says OIL CMD

Sushil Chandra Mishra, Chairman and Managing Director (CMD) of Oil India Limited (OIL), said that acquisition of Numaligarh Refinery Limited (NRL) is a step towards creation of mega company.

Mishra, while addressing mediapersons on Tuesday, said, " It is our dream to create a mega company and acquiring NRL is a step in that direction. "

When asked if Oil is vying to acquire the assets of Assam asset of ONGC, Mishra said: " There are talks in ministry level. We are keen on expanding and acquiring Exploration and production companies in Northeast India. "

He said that by 2024 Oil plans increase its crude oil production from 3(million metric tonnes per annum)to 4 MMTPA. "For this we are targeting to increase production from five oil fields of which four are in Northeast India and one in Rajasthan. We are also targeting to increase gas production from 8 million metric standard cubic meters per day to 12 to 13. There is gas we need to increase the same. "

He said that 25th March, 2021 was a historic day for the stakeholders of NRL and OIL, and the employees and their families of these two great Organizations. On this day, Share Purchase Agreement (SPA) was signed between BPCL and consortium of OIL & EIL for sale of 43.05 crore shares in NRL to the consortium at a consideration of Rs.9,375.96 crore. EIL paid Rs.700 crore for 3.21 crore shares while OIL bought 39.84 crore shares for Rs. 8,675.96 crore. The remaining 2.29 crore equity shares held by BPCL have been purchased by Government of Assam for Rs. 500 crore. With these transactions, BPCL has transferred its entire 61.65% holding in NRL to the Consortium and Government of India.

MD NRL S K Barua said that Assam government will increase its stake from existing 15.47 percent to 26 percent. " After taking permission from Election commission Assam government paid Rs 500 crore as due to Assam election model code of conduct was in place. Soon Assam will pay the amount and increase the stake. To achieve this, government of Assam is likely to purchase remaining shares from OIL in due course of time at the same valuation at which OIL has purchased shares from BPCL".

Mishra said this new venture will led to great synergy. OIL is the primary source of crude oil for NRL. Annually, OIL supplies around 2,000 TMT of crude oil to Numaligarh Refinery, which is 67% of NRL’s requirement. Further, the amount of crude oil supplied by OIL is around 60% of indigenous crude produced by the Company in North East. Both the companies can benefit from optimisation/ further improvement of feedstock supply and crude processing at the refinery.

NRL has already ventured into upstream oil exploration partnering with OIL as operator in two oil blocks (Namrup and West Mechaki). NRL has earmarked investment of around Rs.90 crore.