CPCL logs Rs 511-cr profit; to pay Rs 12/ share
New Delhi   25-May-2011


Mr. K. Balachandran (right), Managing Director, CPCL and Mr. R.S. Butola, Chairman, IOC, at a press conference in Chennai on Tuesday.

Chennai Petroleum Corporation Ltd has reported a net profit of Rs 511.52 crore for 2010-11. The board of directors has recommended a dividend of Rs 12 a share (120 per cent).

The net profit for 2010-11 was lower than in 2009-10 (Rs 603.22 crore). The Director (Finance), Mr N.C. Sridharan, explained that in 2009-10, there had been a tax refund of about Rs 150 crore. The refund relates to tax rebates for an investment (in capacity expansion) made in the previous years. CPCL was entitled to the rebates in 2010-11 too but the refunds have not come in yet. Mr Sridharan said about Rs 300 crore could come this year and the next. On this count alone, the current year's profits will get a Rs 150-crore boost.

In 2010-11, CPCL processed a record 10.73 million tonnes of crude oil. This was possible because early in the year, the company completed a debottlenecking project that enhanced capacity by 1 million tonnes. (Today, CPCL's Manali refinery complex can process 10.5 million tonnes (mt) of crude oil, while the Cauvery-basin mini refinery can process another 1 mt.)

Projects

Mr. K. Balachandran, Managing Director, CPCL, told a press conference that the company's Rs 3,100-crore ‘resid upgradation' project — which will produce more high value distillates and enable the company to process more of the cheaper high-sulphurous crudes — is awaiting environment clearance. The project will take close to three years from start.

The project is significant to CPCL's profitability. The company can now process about 7 million tonnes of high sulphurous crudes. After the upgradation project is complete, CPCL will be able to process 1–1.5 million tonnes of high sulphurous crudes more. Today, high sulphur crudes are about $3 a barrel cheaper than low sulphur crudes.

Second, the project will produce 700,000 tonnes a refinery residue-pet coke. This product is in great demand by the cement industry and sells for about $50 a tonne. The other use is as feedstock to produce electricity. CPCL is talking to Neyveli Lignite Corporation for forming a joint venture and putting up a 500MW power project that would use pet coke as feedstock. However, supplying to the cement industry is more profitable. CPCL is evaluating if the demand from the cement industry would sustain, Mr. Balachandran told Business Line. If it doesn't, then the power project might be taken up.

Mr. Balachandran also said that the company is preparing the feasibility report for the proposed Rs. 14,000 crore, 9 million tonne, brownfield refinery. (Alongside, the ageing 2.8 million tonne refinery is to be scrapped — the net capacity addition will therefore be 6.2 million tonnes). The Rs. 2,615-crore project for bringing its products to Euro IV specifications is on track, he said.