Indian Oil to Raise INR 100 Billion Through Monetization of its Hydrogen Units

The largest public sector refiner Indian Oil Corporation (IOC) is planning to carve out some of its Hydrogen producing and sulphur recovery services at its refineries to a discrete unit and then sell its shares to the private sector to bring in near INR 100 billion.

The decision was taken in response to the government’s push to raise money by selling shares of gas and oil pipelines, as it wants the PSUs to recognise their non- core possessions that could be auctioned for selling to invite further investments.

The government is expecting from IOC, GAIL, and HPCL to raise at least INR 170 billion by the sale of shares in their oil and gas pipelines via infrastructure investment trust (INVIT) route. However, sources said that IOC wants to maintain a hold over its pipeline operations and has proposed to directly monetise its Hydrogen units instead.

The government has shown interest in the stake sale of IOC’s assets to the private companies, that are looking forward to venture into Hydrogen production, realising its vast potential as a green fuel. Indian Oil is one of the major producers of hydrogen in India. The company’s proposal is being examined and will soon arrive at a final decision.

Since the roll out of Union Budget 2021, many Indian players are brainstorming to capitalise on the fuel for future. India needs to uniquely position itself by increasing its investment in R&D, capacity expansion, devise favourable policies, and strategize demand generation among its vast population. Many global players are also joining hands with Indian players seeking the huge government impetus. Recently, an important official from Biden Administration revealed that the US is forming a coalition of several countries to bring India closer to its ambitious target of generating about 450 gigawatts of renewable power by 2030.

As per ChemAnalyst, “The idea of Hydrogen Economy has gained huge popularity across the globe with several economies now shifting their focus to the green hydrogen. However, it is important to consider that the key challenge for India is not the production of “Hydrogen” but the production of “Green Hydrogen” as the associated technology is at the nascent stage.

Looking at growing involvement of the global energy giants towards tapping India’s potential for Hydrogen Fuel, it seems quiet achievable if India considers the footsteps of global leaders in the industry like Australia, Canada, Germany and Norway in its policy framework.”