Escalating oil prices have triggered mounting under-recoveries for India's oil major Indian Oil Corporation (IOC). This will in turn affect profitability of the PSU and has once again grounded IOC's plan to enter into petrochemicals sector.
IOC seems to have arrived at a decision to call off its planned investment of Rs 6,300 crore in a naphtha cracker facility at its existing refinery complex at Panipat in Haryana. The naphtha cracker project was scheduled for commencement latest by 2008. It was part of an ongoing Rs 11,800-crore investment plan for doubling the refining capacity, creation of supply logistics and setting up a petrochem facility. This decision has been preceded by the company's announcement to delay the proposed Rs 15,000-crore integrated refinery and petrochem complex at Paradip in Orissa, the first phase of which is scheduled for completion in 2009.
IOC has been targeting an entry into petrochem through the organic and the inorganic route for many years. IOC was outbid by Reliance in the acquisition of IPCL, and its efforts to acquire a minority stake in Haldia Petrochemicals Ltd are still to fructify.
16-Aug-05 
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