IOC plans 33% rise in annual capex.

Indian Oil Corporation (IOC) said it would increase its yearly investment from the current Rs 14,000-15,000 crore to about Rs 20,000 crore over the next five to seven years.

This would cover new projects and expansion of existing ones. It also confirmed participation in two projects, an Rs 80,000-crore mega refinery in Maharashtra and revival of three fertiliser units, with other state enteprises, at a cost of Rs 15,000 crore.Director (Finance) A K Sharma said over the next five to seven years, the company would invest around Rs 1.2 lakh crore, of which Rs 30,000-35,000 crore would be in petrochemicals. The latter now contributes nearly 30 per cent of their Ebitda (earnings before interest, taxes, depreciation and amortisation), he said.

It was one of the areas IOC is betting on to address cyclical risks.

The other area, on which it is also betting highly, is liquefied natural gas (LNG). IOC’s new Rs 5,000-crore LNG terminal at Ennore, near here, would go on stream by 2018 and the company is still looking for a strategic partner, said Sharma.

He was optimistic on performance during the coming quarters. Inventory loss was Rs 15,000 crore in 2014-15 and Rs 9,000 crore in 2015-16. In the current quarter, the company is not expecting any loss. IOC and other oil public sector units are looking at setting up a mega refinery with 60 million tonnes per annum capacity.

Sharma said the Maharastra Government had offered land and IOC was evaluating it. The refinery would require around 5,000 acres and the state has offered the land on the Konkan coast. The project will be implemented as a joint venture and a broad understanding on ownership has been put in place among the companies. IOC will have a major chunk. The initial capacity would be 40 mtpa and cost Rs 70,000-80,000 crore.

BS