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IOC to invest around Rs 20,000 in 2017-18; plans expansion, acquisitions

Between 2012-17, IOC ended up investing Rs 75,000 cr against a target of Rs 56,200 cr

T E Narasimhan & Gireesh Babu  |  Chennai 


Continuing its capital expenditure plan, (IOCL) said it will invest around Rs 20,000 crore in 2017-18. The company is also looking for acquisitions and plans to expand overseas.

Chairman said the company always believed to be ahead of the demand. He said supply position has to be ahead of demand, for which plans for additional refineries, expanding capacities, building pipelines etc have been aggressive.

Last year too, IOC had invested close to Rs 20,000 crore, including around Rs 16,000 crore in various Indian projects and on acquisition for upstream in Russia.

"During the current year also we expect to spend around Rs 20,000 crore in terms of investment. We have not reduced our investments," said Ashok.

It is noteworthy, between 2012-17, ended up investing around Rs 75,000 crore against the targeted planned investment of around Rs 56,200 crore.

All investments have been in refinery expansion, upgradation of quality of refineries, building new pipelines, getting more aggressive in petrochemical projects, setting up new natural gas facilities etc

Ashok said proposed investments include upgrading some of the existing refineries, brownfield expansion, quality upgradation programmes in all refineries, about 6,000 km of pipelines which are being implemented, adding that petrochemical projects, natural gas projects, marketing and infrastructure projects are also being implemented. "We will also invest some amount of upstream if there is an opportunity," he says.

IOC is also looking at the overseas market. Recently it was decided to open an office in Bangladesh apart from talking to the Government of Bangladesh on many accounts, especially regarding LPG and natural gas where it is trying to take a linkage from going up from and West Bengal border before finally connecting to the Bangladesh network.

"They need natural gas badly. We have proposed to set up an import terminal in Bangladesh, primarily there is a need for use of LPG in Bangladesh itself and we also believe that it will enable us to move some product into our northeast areas, where we otherwise have some issues in moving the product around. It should be a good economic proposition for us," said Ashok.

For Nepal, IOC plans to build a pipeline between of IOCL, which is currently coming up, and their own facilities inside Nepal. The company already signed a memorandum of understanding (MoU) Bhutan and looking at newly opening markets such as Myanmar. We probably take a decision soon to set up an office in Myanmar.

"We are certainly keeping our eyes open for new acquisitions," says Ashok, adding, the overseas markets are also conducive because of not so high prices and unhappy producers. So it is a right time for us to look at acquisitions, he adds.

He said the company got good reserves and were able to generate funds through internal accruals. But on a project basis IOC will certainly go into the market — both India and Overseas, depending on which is cheaper — to borrow money, if needed.