State-run Indian Oil Corporation reported a net profit of Rs 21,836 crore for the fiscal ended March 31, which is the highest annual profit ever reported by the oil refining and marketing company. While interacting with the media after the result announcement, chairman SM Vaidya said that IOCL has “a firm plan in place to diversify the crude basket so that we are able to get crude from all the geographies of the world”. Excerpts from the interaction:
On auto fuel demand:
In April, 2020, the refinery run rate was 49%, May, 2020 was 67% and in June it had recovered to 90%. FY21 saw refinery runs of 89.5%. In April, we had a refinery run rate of 96.1%, and till May 17, the refinery runs are at 84%. So that is how the refinery runs have been reacting this year. So, the demand destruction is not to the extent as it was seen last year. When demand will return to normalcy is a very difficult question to answer. We have lost about 15-20% of the fuel demand, especially in petrol, diesel. Aviation turbine fuel is still a long way from recovery.
On asset monetisation plans:
For IOCL, we have narrowed down to the hydrogen generating units at Gujarat refinery. Eventually, whatever the targets that the government has set for us in the first phase, we will be monetising all the hydrogen units across all the refineries. To begin with, it is the Gujarat refinery hydrogen units, each with a capacity of 70,000 tonne per annum.
On upcoming greenfield Nagapattinam refinery:
We are on the lookout for a strategic partner for the upcoming Nagapattinam refinery in Tamil Nadu, and the process is still on, and we have not narrowed down to anybody as yet. (IOCL’s board has approved the setting up a 9 MT per annum capacity refinery at Nagapattinam. The project, with an estimated gross value of `31,500 crore will be built jointly with IOCL subsidiary Chennai Petroleum Corporation, with both the entities investing in 25% stake each in the upcoming refinery. The company is looking for a strategic partner to invest in the remaining stake.)
On refinery expansion:
We have upcoming 9 MTPA greenfield refinery at CPCL (Nagapattinam), Panipat refinery expansion from 15 MTPA to 25 MTPA, Gujarat refinery expansion from 13.7 MTPA to 18 MTPA and on Wednesday the board approved the Guwahati refinery expansion from 1 MTPA to 1.2 MTPA. Baruani expansion from 6 MTPA to 9 MTPA is already underway. The Bongaigaon refinery will expand to 2.7 MTPA to 3 MTPA. And there are newly approved projects of `1 lakh crore in next 4-5 years.