IOC sees slight delay in Paradip refinery start up

The cyclone Phailin caused a labour shortage

Indian Oil Corp aims to start its 300,000-barrels-per-day Paradip refinery by April-May instead of March as cyclone Phailin that had hit India's east coast last month caused a labour shortage.

"There was a setback because of the recent cyclone because most of the contract labourers had to desert that place ... We lost almost one-and-a-half to two months because of this cyclone," said R K Ghosh, IOC's head of refineries.

There were 23,000-24,000 workers and hardly half of them have come back, said Chairman R S Butola.

Ghosh said Paradip refinery is equipped to process tough grades like that from Latin America but in the initial year of operation IOC will use only low sulphur oil from West Asia and West Africa.

He said the refinery is expected to operate at full capacity within six months of commissioning.

IOC, India's biggest refiner and fuel retailer, is expanding its crude slate and testing new grades including those from Latin America ahead of the start-up of the Paradip refinery.

It buys Mexico's Maya crude and in September bought trial cargo of Colombia's Castilla and Vasconia oil. It is also in talks with Colombia, Venezuela and Brazil for term deals.

Ghosh said IOC plans to buy a trial cargo of Brazil's Marlim grade in this fiscal year ending in March.

IOC, along with subsidiary Chennai Petroleum controls about 31 percent of India's oil refining capacity of 4.3 million bpd.