B M Bansal
Chairman, Indian Oil Corporation Ltd.
State-run IndianOil will invest Rs 961 crore in India's first joint venture nuclear power plant for a 26 per cent stake, chairman BM Bansal said.
IOC is setting up a 1,400 mw nuclear power plant with Nuclear Power Corporation India (NPCIL) at a total investment of Rs 12,000 crore, Bansal told reporters on the sidelines of the company's annual general meeting here on Tuesday.
IOC will hold 26 per cent of the equity part where the total funding of the project is in the debt equity ratio of 70:30 and will invest Rs 961 crore, he said.
The project, to be set-up at Kota in Rajasthan will be completed in five years. IOC has an option to raise its stake from 26 per cent to 49 per cent, Bansal said.
Meanwhile, he said the company has ear marked $1 billion for the acquisition of good-quality producing or developing exploration and production (E&P) assets abroad.
"We are looking for good quality assets abroad. We have reserved $1 billion for acquisition of producing or developing E&P assets overseas," he said.
The company, which has a 35 per cent stake in Venezuelan E&P assets worth $700 million, will have another state-run company, Oil India, as its joint venture partner for any overseas acquisitions for five years, he said. IOC will look at shale gas options in the US as well, Bansal said.
"The oil ministry has sent a delegation to the US to assess opportunities the re and we are in constant touch with the ministry," he said.
In India, IOC has expressed interest in shale gas, but no player here has the technical expertise needed for shale gas exploration.
"The director general of Hydrocarbons is trying to assess shale assets in India and we will bid for the blocks when the time comes," Bansal said.
IOC has made two to three discoveries in India and expects to add more in the next couple of years, Bansal said, adding production from the discovered fields will start within the next three years.
The company has a capex of Rs 47,000 crore for its Paradip refinery, pipeline infrastructure, renewable energy projects and E&P. The funding will be from external borrowings, a proposed FPO and cash flows, he said.
The decision on the renewal of the petrochemical refinery in Paradip may come in the next six months, he said.
IOC is getting interest from various power companies and infrastructure companies to become partners of the LNG project, but the company is looking for somebody who can bring synergy into the project and not just finance, either by sourcing LNG or by putting up an anchor load power plant, he said.
A decision on this is expected in November, he said. While answering a question regarding under recoveries, Bansal said that the total under-recovery in the first two quarters of the fiscal, after adjustments in the upstream sharing, is Rs 11,000 crore, which will be paid by the government in the next 15-20 days.
In diesel, the company is facing an under-recovery of Rs 1.75 per litre and if there is any under-recovery in petrol, it will be taken care of in the next revision after 15-20 days, he said.
The proposed diesel deregulation may help the company to bring more value to its Follow on Public Offer expected in the last quarter of this fiscal year, he said. The company will start ethanol blending in the next three weeks, Bansal said.