IOC lines up Rs 43k-cr expansion

NEW DELHI: IOC has unveiled a major expansion plan in Turkey which includes setting up a $6-billion greenfield refinery, acquiring a majority stake in an existing petrochemical company and entering into fuel retailing. The overseas plan is part of the company’s five-year expansion strategy with an investment of around Rs 43,000 crore.

“IOC will hold 51% equity stake in the 15-million tonne refinery project,” IOC director-planning & business development BN Bansal said. The company may rope in Calik Energy as a partner for the project. It is also looking for more suitors with oilfields in Russia or the Central Asian region to become equity partners. The strategic alliance would ensure crude supply to the refinery.

The refinery is expected to be build by 2012 and it would also export products to the US and European markets. IOC also plans to market its products in the domestic market through its proposed retail outlets.

In order to consolidate itself in downstream segment, IOC also plans to acquire government-run chemicals company Petkim Petrokimya Holdings. “We have put in an expression of interest (EoI) for 53-54% stake in the company,” Mr Bansal said. The company plans to integrate the refinery with the petrochemical plant. Even in this project Turkey’s Calik group may join hands, he said. Turkey had recently invited bids for a majority stake in chemicals maker Petkim. Offers are due June 15.

Petkim is the only producer of raw material for a range of products from plastic bags and textiles to polyvinyl chloride (PVC) and detergents. About 25% of the products are also exported. Turkey ambition of IOC also includes picking up a 12.5% stake in Samsun-Ceyhan pipeline, which would transport oil from the Black Sea port of Samsun to Ceyhan on Mediterranean coast, Mr Bansal said.

Construction work on the project is expected to start from April-end. The 350-mile pipeline is being developed by a joint venture company between Italy’s Eni and Turkey’s Calik Energy, called Trans-Anadolu Pipeline (TAPPCO). IOC plans to carry out its expansion plans by 2012 in India and overseas. It is also looking for investment opportunities in Africa, Central Asian countries and the Middle East.