Announcing its plan of investing Rs up to 1.80 trillion across verticals in next six years, state-run Indian Oil Corporation on Wednesday said it also is talks with foreign entities to co-invest in the investment that includes setting up a mega refinery in coastal Maharashtra.
"In next six years, we need to spend Rs 1.70-1.80 trillion on refinery expansions, new petrochemical projects which are coming up and expenditure being incurred on natural gas, besides some exploration blocks that we are actively looking at," IOC Chairman B Ashok told reporters here.
He further said about Rs 50,000 crore will be invested in setting up refining capacity where it plans to add at least 24 million tonnes per annum over the next five years, followed closely by marketing infrastructure including new plants, new terminals, LPG import infrastructure and pipelines. Besides this, it has also earmarked sums for investments in petrochemicals and natural gas, he said.
The state-run company will be investing Rs 15,000 crore in the current fiscal and will accelerate to over Rs 25,000 crore each over the next two fiscals, Ashok said, adding it has budgeted for a Rs 72,000 crore investment over the next three years. Meanwhile, Ashok said the ambitious project to set up the largest refinery project in the country in coastal Maharashtra is on and the state government has shown six potential sites where it can come up. IOC, which is taking leadership in the project that is estimated to cost Rs 1.76 trillion, will be holding a 50 per cent stake in the refinery while the remaining will be split evenly between its sister companies HPCL and BPCL.
The company is also in talks with international investors for participating in the ambitious project, Ashok said, adding that the three domestic partners will dilute their stake equally as and when such an investor comes in. Ashok declined to name the foreign investors with whom talks are on and also refrained from giving a time-line for the project, saying it should come to life as soon as possible given the demand projections on the back of economic growth.
It is looking for a 15,000-acre land parcel to set up the refinery, he said, adding that a third of it will be reserved for green zone. The technical specifics of the project, including the fuel to be refined and which products to be done has already been prepared in consultation with EIL (Engineers India).
Asked about getting required clearances, given the heightened ecological sensitivities, Ashok exuded confidence of getting all the nods. The IOC Chairman also said that all the units of the newly constructed Paradip refinery will start functioning next month. Ashok further said working of the entire modern refinery complex will help bolster its gross refining margins by up to $3 per barrel.
He said the company expects to hold on to the GRMs of the last fiscal, excluding the one-time benefits received from the inventory effect. The company also expects a benefit of up to 30 cents per barrel courtesy a new oil trading desk that it has started, which has downsised the time taken for tendering to two hours from the earlier 26 hours.