An man buys petrol for his car at an Indian Oil Corporation petrol station. (Photographer: Amit Bhargava/Bloomberg News)

Indian Oil Earmarks Rs 22,000-Crore Capex For FY19

Indian Oil Corporation Ltd. has lined up a Rs 22,000-crore capital expenditure plan for the current fiscal year and will commission the Ennore-Manali LNG pipeline by the end of the year.

The board approved a capex plan in which around Rs 6,000 crore will be deployed towards upgrading refineries to meet Bharat Stage-VI emission norms, Chairman Sanjiv Singh said today after the company’s annual general meeting. He added that the company is confident of commissioning the over Rs 4,000-crore pipeline linking its Ennore LNG terminal near Chennai to Manali in Himachal Pradesh in 2018. The LNG terminal will be commissioned by October as planned.

“More than 50 percent work on the pipeline is already completed and we have tied up with all our target customers in Manali and most of them in Chennai region as well,” Singh said.

Commenting on the crude imports from Iran, Singh said that there is no clarity on how the sanctions will pan out from Nov. 4 and accordingly they have tied up many national oil marketing companies to ensure that supplies are not disrupted.

“We don’t procure crude from private suppliers. We have sounded out enough national oil companies for supplies to source oil depending on the impact of the US sanctions on Tehran,” Singh said.

Also read: IOC Working To Steady Indian Oil Imports As U.S. Exits Iran Deal  

He also denied that IOC has reduced its intake from Iran as there has been no cut down on a net-net basis. “There could have been some fluctuations in some months but overall we are procuring as per our contracts.”

Giving a break-up of the capex plan, finance director AK Sharma told PTI that around Rs 6,000 crore will go into refinery upgrades to meet the BS-VI emission norms, Rs 4,000 crore into marketing of which half will be used to procure new LPG cylinders, and around Rs 3,000 crore into new businesses like biofuels, and Rs 1,000 crore into Paradeep petrochemicals expansion among others.

Sharma also said the company does not need any funds now, but they will hit international bond markets and domestic debt market towards the end of the fiscal year, as the firm has not tapped it for a while.

According to the annual report presented to the shareholders today, the company sought shareholders’ approval for raising around Rs 20,000 crore through an non-convertible debenture issue this year. The company has around Rs 53,000 crore of debt as of June, of which 70 percent are forex loans.

Also read: Indian Oil's Quarterly Profit Jumps as Refining Margin Doubles