NEW DELHI, Aug 27: India plans to invest a hefty amount of Rs350 billion for setting up new refineries to become an oil product export hub besides eyeing at opportunities to build refineries in Africa and Latin America.
Addressing the Parliamentary Consultative Committee meeting, Petroleum Minister Mani Shankar Aiyar said oil product exports, which stood at Rs283.72 billion in 2004-05, are expected to overtake gems and jewellery exports soon.
India, which presently has a refining capacity of 127.37 million tons per annum, hopes to add 26.33 million tons capacity by 2007 through expansion of HPCL’s Mumbai refinery by 2.4 million tons, HPCL’s Vizag refinery by 0.83 million tons, BPCL’s Mumbai refinery by 5.1 million tons and IOC’s Panipat refinery by 6 million tons.
Besides, Essar Oil is setting up a new 12 million tons refinery at Jamnagar in Gujarat. Further, capacity additions are envisaged in XI Plan through setting up of new refineries at Paradip (9 million tons), Bhatinda (9 million tons) and Bina (6 million tons) and expansion of Reliance Industries’ Jamnagar refinery by 27 million tons, IOC’s Panipat refinery by further 3 million tons and Kochi refinery by 2 million tons.
Aiyar said estimated consumption of petroleum products in 2006-07 is about 120.4 million tons as against refining capacity of 153.7 million tons. By the end of XI plan, refinery capacity would rise to 210 million tons and demand of oil products would reach at least 144 million tons and the surplus capacity would be used for export purposes.
Besides Rs350 billion investment in new refineries by public sector oil firms, Rs107.63 billion would be spent in expansions and modernization, Aiyar said. A massive Rs144 billion would be spent in fuel quality upgrading and another Rs110.46 billion in petrochemical units by 2010.
Additionally, Rs26 billion would be spent on crude handling and new product facilities. Already, refiners have spent Rs100 billion in producing Euro-I grade petrol and diesel and Rs250 billion in making Euro-II/III grade fuels.
On top of this Rs144 billion investments would have to be made in producing Euro-III/IV fuels. Aiyar said India would be developed as export hub by attracting foreign investment in the refinery sector.
Further, emerging Asian and Europeans markets would be targeted for exports by benchmarking Indian refineries to world class levels, he added.
Meanwhile, India’s state-run Oil and Natural Gas Corp (ONGC) is in talks to acquire two Cuban oilfields, the Indian foreign ministry said.
The issue is on the agenda of India’s junior foreign minister, Rao Inderjit Singh, who will travel to Cuba and Venezuela next week along with a business delegation, according to a foreign ministry statement.
Officials of ONGC Videsh Ltd. (OVL), the overseas subsidiary of the state-run exploration firm, will accompany the minister, it said.
“ONGC Videsh Ltd. is negotiating with the Cuban government for the acquisition of two oilfields. OVL is also acquiring a 30 per cent share in 10 oilfields being explored by the Spanish company Repsol,” it said.
“The Venezuelan government has already offered an oilfield to OVL.”
ONGC officials were not immediately available for comment.
The Indian government is encouraging ONGC to bid for foreign petroleum assets as domestic output has declined and energy demand from Asia’s third-largest economy is expected to grow rapidly.
ONGC is under pressure to bid aggressively for foreign oil projects after China’s CNPC outbid its Indian rival in the race to acquire Petrokazakhstan, a Canadian-listed company that operates in Central Asia.
