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Prize Petroleum, HPCL's new venture, to have Rs 200m equity

Prize Petroleum Company Limited, a new company promoted by petroleum refining and marketing major Hindustan Petroleum Corporation Limited for oil and gas exploration and production activities in India and abroad, has been incorporated.

The company will have 50 per cent equity participation from HPCL with leading financial institutes like ICICI, HDFC and TDICII being the other partners, an HPCL release stated here today.

The company was incorporated at New Delhi, will have an initial equity capital of Rs 200 million (HPCL 50 per cent, FIs 50 per cent) as per Union government's approval. However, the equity capital would be raised to meet business development objectives in future.

The initial equity will be raised within a year to Rs 1.20 billion to be contributed equally by HPCL, and FIs and others.

The final equity participation within ten to 15 years would reach to Rs 10 billion (HPCL 26 per cent and others 74 per cent), the release stated.

The shareholders and board of directors of HPCL have already approved the enhancement of equity capital to Rs 1.2 billion and necessary Union government approval for the enhancement is being obtained.

An independent board of directors will manage the company. The chairman of the board will be H L Zutsi, the chairman and managing director of HPCL, while the managing director will be an E&P professional. A selection committee with representatives from ministry of petroleum and natural gas, HPCL and external experts has already shortlisted a candidate who is likely to join the company shortly.

The objective of Prize Petroleum will be to carry on oil and gas exploration business internationally by forming a consortium of more than one company for each E&P project in the form of unincorporated joint ventures. The management of such unincorporated joint ventures will be through management committees and joint operating committees as per international practice, the release added.

UNI

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