Indian Oil to invest Rs 1.75 trillion in 7 years; eyes 100 mt tonnes refining output

State-run Indian Oil will more than treble its capex to Rs 1.75 trillion over the next seven years against what it spent in the past five years, with a view to expand refining output by 54 per cent to around 100 mt tonnes, investing Rs 50,000 crore in brownfield expansion alone.

For the current Plan period (12th Plan ending 2017), nation’s largest refiner Indian Oil Corporation (IOC) has set aside Rs 56,200 crore in capex, most of which went into the 15 million tonnes (mt) Rs 34,500-crore greenfield refinery in Paradeep that will go onstream from late next month or early November, chairman B Ashok said here today.

BPCL, country’s second largest oil marketer, had last week said it would invest Rs 1 trillion over the next 5 years to nearly double its refining capacity to 50 mt from 30 mt.

“We have a capex plan of Rs 1.75 trillion over the next seven years up from Rs 56,200 crore earmarked for the 12th Plan. Out of this, Rs 50,000 crore will be invested for brownfield expansion, and this does not include the proposed greenfield refinery on the West Coast,” Ashok told reporters at the post-AGM press meet, where the company got a shareholder approval to give Rs 6.50 per share as dividend.

Ashok said investment will increase its refining output to close to 100 million tonne per annum from the present 65 million tonnes, excluding the about-to-be commissioned 15-mt Paradeep Refinery in Odisha.

IOC said its Rs 1.75 trillion capex is excluding the proposed mega greenfield refinery it is planning on the West Coast, the company does not have refinery on the West Coast. Though the chairman refused to name the state where the refinery will come up, it is likely to come up on the Karnataka cost considering the popular opposition to large industrial projects in Kerala and Maharashtra.

Ashok also did not specify the investment for the proposed refinery, saying nothing has been finalised but the company is very keen on having one on the West Coast.

Giving details of the capex programme, Ashok said the state-run company will be investing Rs 35,000 crore into marketing, Rs 15,000 crore for pipelines, Rs 35,000 crore for exploration & production, Rs 30,000 crore into petrochemical projects, and Rs 7,000 crore into gas.

The exploration investment includes the 10 per cent stake in the British Columbia gas block in Western Canada. The company has to pay USD 4 billion for this, he said, adding it has already pumped in USD 1.2 billion into the JV.

Giving a break-up of the brownfield expansion of its give large refineries, director for refineries Sanjiv Singh said it will be increase its output to 20 mt from the present 13.7 mt at the Koyali refinery in Gujarat, to take the Mathura capacity to 11 mt in two phases (first to 9.2 mt from the present 8 mt), Panipat to 20 mt from 15 mt now, Barauni in two phases to 9 mt from 6 mt and the soon-to-be-commissioned Paradeep from 15 mt to 20 mt.