India's largest commercial enterprise Indian Oil Corporation will invest over Rs 43,500 crore over the next five years, for capacity expansion, de-bottlenecking and quality upgradation, reports the Business Standard. Of that amount Rs 30,000 crore will go into downstream integration as the company forays into the petrochemicals business it is also looking to acquire oil producing blocks, Chairman Sarthak Bahuria told journalists on the sidelines of the company's 48th annual general meeting in Mumbai today.
"We are planning an annual capex of Rs 7000-8000 crore in the next five years. A majority of the investment will be funded through internal accruals and borrowings as our financial health is quite good. If required, we may think of raising funds from the capital market, not in the next one or two years, but after that," Bahuria said.
The government-owned company controls 10 of India's 19 refineries and accounts for 40.4 per cent share of national refining capacity. It has 60.2 million metric tonnes per annum (mmtpa) refining capacity. Apart from its current Panipat and Koyali petrochemicals projects, IOC plans to develop world class petrochemicals production centres at Paradip, Haldia and Chennai. Open to partners.
The 15 million metric tonnes per annum (MMTPA) grassroots refinery coming up at Paradip will be integrated with petrochemicals units for paraxylene, propylene and styrene with an investment of over Rs 26,000 crore.
"IOC is actively pursuing upstream integration through exploration and production activities both within and outside the country," the chairman said.
Behuria said that the Rs 14,500 crore naptha cracker project in Panipat, Haryana, is scheduled to be commissioned in 2009. IOC would like to have partners in this project but has not been able to rope in any so far. "We are open to have a partner in the project, but we are not wasting time in finding out partners," he said, when asked whether the company was looking at a partnership with Mittals.
The company has already commissioned a 5,53,000-tonne Paraxylene/Purified Theraptic Acid plant at Panipat.
Other major projects are the residue upgradation plan at the Gujarat refinery (Rs 2,000 crore), a hydrocracker unit at Haldia (Rs 3,000 crore), modernisation and capacity addition of refineries at Haldia, Panipat, Mathura, Barauni, Guwahati and Digboi to comply with Euro III and IV norms (at a cost of Rs 4,500 crore).
The expansion of refineries will help IOC augment its refining capacity to 80 MMTPA from the current 60.2 MMTPA by 2011-12. IOC is gearing up its pipeline capacity, Bahuria said, with new projects worth Rs 2,300 crore (including LPG and R-LNG pipelines) under implementation to reach 10,000 km and 75 million tonnes per annum capacity in the next two years.
Bahuria said IOC is in the process of sourcing more LNG, building additional LNG infrastructure and expanding the customer base further. "An LNG import terminal is planned at Ennore, near Chennai," he said. Bahuria said that the company would also look at acquiring producing oil blocks in India and overseas.
"Prices are too high for acquisition now, but we are actively pursuing targets. I don't know when will it happen and where," the chairman said. IOC has participating interest in eight oil and gas exploration blocks and two coal bed methane blocks. It is also associated with two successful discoveries in Iran and India.
IOC spends about Rs 500 crore on exploration and production activities every year. The company and its consortium partners OIL India Ltd and Kuwait Energy have exploration oil blocks in Nigeria, Indonesia and Yemen. IOC has received the government's approval to acquire five per cent equity in Oil India Ltd, Bahuria said.
IOC is also planning to enter into the entire value chain of bio-fuels, mainly bio-diesel, starting from the plantation of Jatropha to sale of the end product. The company, which invested over Rs 1,000 crore for developing research and development infrastructure, is also planning to invest another Rs 500 crore in the next five years to maintain its leadership in downstream R&D activities in the hydrocarbon sector.
To promote hydrogen as an alternative fuel, IOC is in the process of setting up the country's first hydrogen CNG dispensing station in Delhi.
"We are planning an annual capex of Rs 7000-8000 crore in the next five years. A majority of the investment will be funded through internal accruals and borrowings as our financial health is quite good. If required, we may think of raising funds from the capital market, not in the next one or two years, but after that," Bahuria said.
The government-owned company controls 10 of India's 19 refineries and accounts for 40.4 per cent share of national refining capacity. It has 60.2 million metric tonnes per annum (mmtpa) refining capacity. Apart from its current Panipat and Koyali petrochemicals projects, IOC plans to develop world class petrochemicals production centres at Paradip, Haldia and Chennai. Open to partners.
The 15 million metric tonnes per annum (MMTPA) grassroots refinery coming up at Paradip will be integrated with petrochemicals units for paraxylene, propylene and styrene with an investment of over Rs 26,000 crore.
"IOC is actively pursuing upstream integration through exploration and production activities both within and outside the country," the chairman said.
Behuria said that the Rs 14,500 crore naptha cracker project in Panipat, Haryana, is scheduled to be commissioned in 2009. IOC would like to have partners in this project but has not been able to rope in any so far. "We are open to have a partner in the project, but we are not wasting time in finding out partners," he said, when asked whether the company was looking at a partnership with Mittals.
The company has already commissioned a 5,53,000-tonne Paraxylene/Purified Theraptic Acid plant at Panipat.
Other major projects are the residue upgradation plan at the Gujarat refinery (Rs 2,000 crore), a hydrocracker unit at Haldia (Rs 3,000 crore), modernisation and capacity addition of refineries at Haldia, Panipat, Mathura, Barauni, Guwahati and Digboi to comply with Euro III and IV norms (at a cost of Rs 4,500 crore).
The expansion of refineries will help IOC augment its refining capacity to 80 MMTPA from the current 60.2 MMTPA by 2011-12. IOC is gearing up its pipeline capacity, Bahuria said, with new projects worth Rs 2,300 crore (including LPG and R-LNG pipelines) under implementation to reach 10,000 km and 75 million tonnes per annum capacity in the next two years.
Bahuria said IOC is in the process of sourcing more LNG, building additional LNG infrastructure and expanding the customer base further. "An LNG import terminal is planned at Ennore, near Chennai," he said. Bahuria said that the company would also look at acquiring producing oil blocks in India and overseas.
"Prices are too high for acquisition now, but we are actively pursuing targets. I don't know when will it happen and where," the chairman said. IOC has participating interest in eight oil and gas exploration blocks and two coal bed methane blocks. It is also associated with two successful discoveries in Iran and India.
IOC spends about Rs 500 crore on exploration and production activities every year. The company and its consortium partners OIL India Ltd and Kuwait Energy have exploration oil blocks in Nigeria, Indonesia and Yemen. IOC has received the government's approval to acquire five per cent equity in Oil India Ltd, Bahuria said.
IOC is also planning to enter into the entire value chain of bio-fuels, mainly bio-diesel, starting from the plantation of Jatropha to sale of the end product. The company, which invested over Rs 1,000 crore for developing research and development infrastructure, is also planning to invest another Rs 500 crore in the next five years to maintain its leadership in downstream R&D activities in the hydrocarbon sector.
To promote hydrogen as an alternative fuel, IOC is in the process of setting up the country's first hydrogen CNG dispensing station in Delhi.
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