Dilip Shanghvi’s Sun Petro looks to enter power generation

Sun Petrochemicals, through its affiliate, is into oil and gas exploration, production

Kalpana Pathak
Updated9 Nov 2018
Photo: Mint
Photo: Mint

Mumbai: Billionaire Dilip Shanghvi’s Sun Petrochemicals Pvt. Ltd is planning to enter the power generation business, two company executives aware of the development said. 

Sun Petrochemicals through its affiliate Sun Oil and Natural Gas is already into oil and gas exploration and production activities in India. “While exploration and production is doing fine for us, development or generation of power is another segment we think we can have a significant presence in,” a Sun Petrochemicals executive, one of the two people cited above, said on the condition of anonymity. 

The company did not respond to an email sent on 6 November. 

Shanghvi, the controlling shareholder of India’s largest drug maker Sun Pharmaceutical Industries Ltd, through his family and associates owns a 19% stake in Suzlon Energy Ltd, a leading wind turbine maker. While Suzlon promoters own 20% of the company, 5% is with lenders and the rest with institutional and retail investors.

Sun Petrochemicals was founded in 1999 in a partnership with the erstwhile Indian Petrochemicals Corp. Ltd (IPCL), now part of Reliance Industries Ltd (RIL), to manufacture acetylene carbon black. Acetylene carbon black is used in batteries, semiconductive rubber and polymer compounds, conductive tapes, curing bladders for tyres and other conductive applications. 

Shanghvi entered the oil and gas segment in March 2015 when it acquired two oil and gas fields in Gujarat, Baola, and Modhera, from Interlink Petroleum. Both blocks were awarded in round one of bidding of the New Exploration Licensing Policy.

In its nearly four years of existence, Sun Oil and Natural Gas has bought stakes in five hydrocarbon blocks. This July, it acquired 70% and 30% stake, respectively, from Reliance Industries and BP India, in Gujarat’s Cambay Basin block for an undisclosed amount.  Reliance was the operator of the block and had won it in 2005 in an auction.

In August, Sun Oil and Natural Gas bid for the assets of debt-ridden Assam Co. India Ltd, the country’s oldest tea company, which also has a presence in infrastructure. 

In December 2016, Sun Oil bought a 33.3% stake in Hazira oil and gas field from Canada’s Niko Resources Ltd and was in talks to buy the rest from Gujarat State Petroleum Corp. Ltd. “Sun Oil and Natural Gas wants to be the operator in whichever block it is.  That is the reason the firm has been acquiring 100% stake in all the blocks.

It is aware of the multiple approvals a company has to take in case of partnerships and it wants to avoid that situation which leads to delay in work in most cases,” said the second executive, also requesting anonymity. 

That explains Sun Oil and Natural Gas’s invitation to prospective buyers to purchase crude oil from the Cambay basin block, that it acquired three months ago. 

“Field is under transfer to Sun Petro and production is likely to commence from April. Crude oil production to start with maybe around 1,000 barrels of oil per day (bpd) and peak production maybe 3,000bpd. Sun Petro is operator of field with 100% participating interest,” Sun Oil and Natural Gas says on its website. 

RIL held 100% participating interest in the Cambay basin block (CB-10) before farming out 30% to BP India in 2011. RIL had made its first oil find in the block in 2010. The block is spread across 635 sq. km. 

Sun Oil and Natural Gas has around 70 employees and plans to take the headcount to over 100, the first executive added.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeindustryenergyDilip Shanghvi’s Sun Petro looks to enter power generation

Most Active Stocks

Indus Towers

10:29 AM | 19 JUN 2024
-9.9 (-2.88%)

Bharat Electronics

10:26 AM | 19 JUN 2024
-8.95 (-2.81%)


10:24 AM | 19 JUN 2024
49.25 (3.06%)

Tata Steel

10:25 AM | 19 JUN 2024
-1.1 (-0.61%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Alok Industries

10:27 AM | 19 JUN 2024
2.15 (7.86%)

Jubilant Ingrevia

10:16 AM | 19 JUN 2024
39.85 (7.74%)

Triveni Engineering & Indus

10:29 AM | 19 JUN 2024
28.85 (7.5%)

Shree Renuka Sugars

10:29 AM | 19 JUN 2024
3.47 (7.27%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K

    Fuel Price

    • Petrol
    • Diesel
    New Delhi
    HomeMarketsloanPremiumGet App