Indian Oil Corporation is to revive the Rs 22,300 crore petrochemical project at Paradip after Kuwait Petroleum Corporation expressed an interest in picking up a stake. As the company's finances show better prospects, restart of the suspended petrochemical project is being considered. A final decision has not been taken on Kuwait Petroleum's stake.
Initially, the project was planned as a refinery-cum-petrochemical project at an investment of Rs 45,000 crore with participation from Kuwait Petroleum and Saudi Arabia's Saudi Aramco. However, Kuwait Petroleum and Saudi Aramco did not pick up a stake as they had no marketing rights. The petrochemical project was put on hold on the grounds of volatility in global crude prices, economic downturn and mounting revenue loss for selling fuels below costs. IOC divided the project into two phases. In the first phase, it decided to set up a 15 mln ton refinery to be commissioned in 2012.
IOC has so far invested Rs 6,000 crore in the project. While the entire project has been estimated at over Rs 50,000 crore, investment in the refinery will be Rs 29,777 crore. The project has been delayed by more than seven years, which has led to cost escalations. The cost was initially estimated at Rs 15,000 crore.