The Hindu Business Line : Indian Oil set to enhance refining capacity

Mumbai, Sept. 24 Indian Oil Corporation Ltd (IOC), the largest public sector petroleum company, plans to invest Rs 43,250 crore over the next five years. It is also set to enhance its refining capacity to 80 million tonnes per annum.

Mr Sarthak Behuria, Chairman of IOC, addressing shareholders at the AGM on Monday, said that the company’s pipelines network is also gearing up to strengthen the competitive advantage it provides to the marketing operations.

New projects of over Rs 2,300 crore, including LPG and R-LNG pipelines, are under implementation to reach 10,000 km and 75 million tonnes per annum capacity in the next two years, he said.

Petrochem plans

He said that India is one of the fastest growing petrochemicals markets in the world, with an average growth of 13-15 per cent in the last two decades.

Taking this into consideration, IOC is implementing a master plan envisaging investments of Rs 30,000 crore by 2011-12 for integration into petrochemicals.

“By using captive streams from operating refineries, the proposed world-scale petrochemical plants would ensure value-addition and better exploitation of the hydrocarbon value chain,” Mr Behuria said.

IOC achieved a gross turnover of Rs 2,20,779 crore in 2006-07, up by 20.5 per cent compared to the previous year.

It also earned a net profit of Rs 7,499 crore, up by 52.6 per cent, over the previous year. The profit for 2006-07 includes a profit of Rs 3,225 crore on sale of 20 per cent equity holding in ONGC and provision of Rs 1,319 crore for diminution in investments in IBP, while the profit for 2005-06 included a profit of Rs 438 crore on the sale of equity holding in GAIL (India) Ltd.

The net under-realisation on account of sale of the four products — petrol, diesel, PDS kerosene and domestic LPG — was Rs 2,190 crore, after considering the compensation received in the form of Government of India subsidy and oil bonds, besides subsidy sharing by upstream companies.

Mr Behuria said that for the first quarter of the current fiscal, IOC registered a net profit of Rs 1,468 crore, which includes the impact of exchange gain on loans as well as robust refining margins.