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| Edited By: Anurag Shah |Source: Zee Business |Updated: Aug 30, 2019, 06:30 AM IST
Indian Oil has a planned capital expenditure of around Rs 25,000 crore for this year and the company is confident of meeting the targets, says Sanjiv Singh, Chairman, Indian Oil Corp. In a chat with Anurag Shah, Singh said, "Work on the west coast refinery project is facing two major issues and they are land acquisition and finalisation of design and configuration of the refinery". Edited Excerpts:
Indian Oil used to invest about Rs 22,000-23,000 crore annually. This year our target is around Rs 25,000 crore and we are confident that we will be able to achieve the goal of achieving it. This capex will be made for modernisation of our refinery, infrastructure and pipeline projects as it will consolidate things and improve efficiency. As far as crude prices are concerned, whenever prices fall, there is a definite inventory loss, but it also has some plus points. Crude refining is an energy-intensive process and the falling price of the crude reduces the internal energy cost of a refinery, which uses almost 9% of the crude to meet its own internal energy needs.
Three oil marketing companies IOC, BPCL and HPCL together with Saudi Aramco and Abu Dhabi National Oil Co are associated with the project. However, there are two issues related to the project and they are land acquisition and finalisation of the design and configuration of the refinery. As far as the design work is concerned, then we have surveyed the market and completed our study on the kind of petrochemicals that should be manufactured and its quantity. The refinery configuration has been done in an association of an Indian consultant and now an international consultant will be engaged to fine-tune the project. Interestingly, these activities are running simultaneously and do not have any direct connection with land acquisition or site conditions. So, all the back-end work for this project is running at full speed. The second location that has been suggested by the Maharashtra government has been found to be perfect for setting up the refinery. The process of land acquisition has been started by the state government. So both the activities are running simultaneously.
No country in the world has been able to move from Euro IV to Euro VI or BS-IV equivalent to BS-VI in a short span of just three years. So, it was a big challenge for the refineries, and it is being done by them. Similarly, it is also a big challenge for the auto companies who are supposed to jump from BS-IV to BS-VI, which is a vantage of the vehicle. It is a challenging task for us and if we are supposed to deliver the fuel in the entire market from April 1, 2020, then we will have to start producing it at least two to two-and-a-half months earlier from the D-day. Therefore, every refinery will start providing the BS-VI fuel at least two months before the day starts. It is a very big integrated marketing network and channel because we are supposed to provide BS-VI fuel to every petrol pump and its nozzles by April 1, 2020. Thus, this exercise of flushing and switching over to the new fuel is a two-month exercise and we will try to provide the same quite before the day, but today it is hard to make any commitment on it.
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