Chennai Petroleum Corporation Limited (CPCL) has written to the Petroleum and Natural Gas Ministry seeking allocation of entire KG-D6 crude oil production for the Cauvery Basin Refinery (CBR) at Nagapattinam in order to sustain CBR operations and achieve increased capacity utilisation.
In a letter to the Petroleum Ministry, CPCL has also sought assistance of the Ministry for resuming supply of PY-3 crude. The company has CBR at Nagapattinam with a crude thruput capacity of one million tonnes per annum. CBR is a simple topping refinery and, hence, has been operating at only about 60 per cent capacity due to non-availability of suitable ultra low sulphur crude. CBR has been processing Narimanam, PY-03, KG-D6 (RIL) and Rawa crude.
Due to berthing restrictions and tankage limitations, imported crude cannot be brought to CBR. Narimanam crude is normally available to the extent of 20 tonnes (max) a month and PY-03, 13 tonnes (max) a month. However, PY-03 production had been stopped since August 2011 due to certain statutory and licensing issues.
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The letter states that CPCL has been procuring KG-D6 crude from Reliance since 2009 and was able to achieve 700 tonnes of crude processing during 2010-11. However, in 2011-12, CBR could achieve only 580 tonnes of crude thruput due to reduced availability of KG-D6 crude on account of sharing of the same with Hindustan Petroleum Corporation Limited (HPCL). RIL has projected a production rate of 30-35 tonnes a month which is sufficient only to meet CBR requirement and, hence, the entire KG-D6 crude needed to be allocated to CPCL, it said.
It has also urged the Petroleum Ministry to hasten the process of appointment of independent directors which has been hanging fire for a long time.
As per Clause-49 of the Listing Agreement (SEBI guidelines) and guidelines issued by the Department of Public Enterprises, CPCL should have at least 50 per cent of its directors as independent directors.
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In line with the guidelines, CPCL should have 8 independent directors apart from other directors — managing director, 3 functional directors, 2 directors, representing NIOC and 2 directors, representing IOCL.
However, the present strength of independent directors is three.