The Hindu Business Line : IOC's refining margins dip on softening global prices

Report card
It expects to import 40 million tonnes of crude oil in 2007-2008.
In 2006-07, the company is looking at an import of 37.51 mt.
Between April-October this year, it had imported 24.7 mt.

New Delhi , Dec. 6

Indian Oil Corporation Ltd on Wednesday said that its gross refining margins have fallen to $4.2 per barrel as compared with $6 per barrel a year earlier due to softening of global crude prices. Gross refining margins (GRM) refer to the difference between the price at which the company sells its products and the price at which it buys crude oil.

Import front

On the import front, the IndianOil Chairman and Managing Director, Mr Sarthak Behuria, said that the company expects to import 40 million tonnes (mt) of crude oil in 2007-08.

In 2006-07, the company is looking at an import of 37.51 mt. Between April and October, the company had imported 24.7 mt of crude.

Buying from Cairn

As regards reports that the company is likely to buy the Cairn Energy Plc's Rajasthan crude oil, he confirmed that the company was looking at the possibility.

"We are willing to buy crude from Cairn provided it is at the right price. We have several months back discussed the issue and still maintain the stand that unless they give us good discount we cannot buy it," a senior company official said.

Exploration

On the exploration and production front, IndianOil is looking at jointly bidding with Oil India Ltd for a new exploration block in Papua New Guinea.

IndianOil also announced today the deployment of indigenous FCC (fluidised catalytic cracking) technology at its upcoming 15 mt integrated Paradip refinery-cum-petrochemicals complex.

New technology

In-house technology IndMax will help increase LPG production by 35-40 per cent from its refineries.

The company has applied for patents for the IndMax (Indane maximisation) technology in the US, EU, China and India.

To begin with, IndianOil would use this technology at its refineries in Haldia, Panipat and Barauni, the officials said.

The cracker unit being built for the refinery in Paradip will have an annual capacity of 3.9 mt and will cost Rs 1,200 crore.

Elaborating on the company's investment plans, the IndianOil Director (Refineries), Mr B.N. Bankapur, said: "We have plans to invest around Rs 55,000 crore on expansion and new projects by 2011."

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