India’s largest public sector oil marketer, Indian Oil Corp. Ltd (IOC), plans to spend Rs43,000 crore over the next five years to upgrade its existing refineries, with the bulk of the investments—some Rs30,000 crore—going towards Haldia in West Bengal and Koyali in Gujarat.
IOC has seven operating refineries and a new one being built at Paradip in Orissa.
Speaking after the company’s annual meeting, IOC chairman Sarthak
Behuria said: “We are implementing a master plan for investing Rs30,000 crore for integration into petrochemicals to take advantage of the hydrocarbon value chain.”
To finance some of these investments, IOC may also look at external borrowings or raise money from the primary market. “We may look at doing an IPO (initial public offer) or raising debt from the market if we can’t raise the money from our internal accruals,” said Behuria.
India is one of the fastest growing petrochemicals markets in the world with13-15% average annual growth.
IOC will invest Rs14,500 crore in a naphtha cracker plant at its flagship refinery at Panipat in Haryana and expand its annual capacity to 15 million tonnes by 2011-12.
IOC’s shares fell 0.49% on Monday to close at Rs404.30 a share on the Bombay Stock Exchange.
Behuria said the company was also looking at buying into oil producing blocks and has so far committed around Rs500 crore to exploration activities for blocks it has won in the new exploration and licensing policy rounds of government auctions so far.