IOC plans 2,000 retail outlets

Indian Oil Corporation will be importing 8.4 million tonnes crude oil on a term contract basis from Iraq, which is higher than what it planned to get from Saudi Arabia during 2004-05.

The Saudi term contract so far negotiated is only for 4.5 million tonnes and that, too, only as a rollover from the previous year's commitment.

The firming of the contract with Iraq assumes importance since supplies from that country had dwindled because of the war. The company will import 24.8 million tonnes crude on term contracts during the current year which will be about 3.8 mt higher than 2004-05.

Besides Saudi and Iraqi crude, the company has firmed up supply of 1.94 million tonnes from the United Arab Emirates. The remaining 9.96 mt was being negotiated with Kuwait, Malaysia, Iran and Nigeria.

IOC will also be investing over Rs 5,800 crore (Rs 58 billion) in new projects and plans to set up 2,000 retail outlets in 2005-06.

Addressing his first news conference after taking charge of IOC, chairman and managing director Sarthak Behuria on Monday said the company would invest Rs 1,530.14 crore (Rs 15.30 billion) in refinery business, Rs 2,022.99 crore (Rs 20.22 billion) in petro-chemical projects and Rs 953.78 crore (Rs 9.53 billion) in pipelines.

"We added 1,096 petrol pumps last year and have been able to retain our market share," he said adding that this was the first year of competition from private sector players Reliance and Essar and public sector Oil and Natural Gas Corporation.

The three are new entrants in the marketing of petroleum products. While Reliance has its own refinery, Essar buys from other oil companies. ONGC which has upstream as its main stay has recently launched its first retail outlet in Mangalore.

Stating that the company's gross refining margin rose by almost $1 per barrel during 2004-05, Behuria said it was expected to be the highest at $6.25 a barrel for the year as against $5.30 a barrel in 2003-04.

In the petrochemical sector, the company was exploring export opportunities from Panipat.

Sale of about 60 per cent from the PX-PTA plant at the Panipat refinery, which would be completed by August 2005, has been tied up. The plant would have a capacity of 5.50 lakh tonne per annum.

Within seven months of commencement of sale of IOCLAB from the Koyali refinery, IOC gained a market share of 28 per cent.

Work was also in progress for the mega Naphtha cracker plant due for commissioning at Panipat from 2007. He said the year also marked IOC's first year of operation in the gas business. IOC sold its share of 2.54 million standard cubic metre a day (mmscmd) of regassified LNG from Petronet LNG's Dahej terminal.

Behuria said the company would grow from a $35-billion  company to a $60 billion company by 2011 with nearly a quarter of the revenue coming from new businesses.

Meanwhile in a bid to boost bilateral trade, India and Saudi arabia have agreed to enhance cooperation in the fields of oil and gas, infrastructure, IT and telecom.

The whole gamut of bilateral trade came for a review during the Indo-Saudi joint commission meeting, co-chaired by Union Finance Minister P Chidambaram and Saudi minister for planning and economy Khaled Al-Gosaibi in Riyadh.

The two sides signed a memorandum of understanding for setting up a saudi-indian joint business council and specialised sub-committees to identify the areas of cooperation in it and other key sectors.