Following the US decision to reimpose sanctions on Iran, Indian Oil Corporation is evaluating the impact if Iran was to further invest in its subsidiary’s expansion projects.
National Iranian Oil Co (NIOC), which holds 15.4 per cent stake in its subsidiary Chennai Petroleum Corp Ltd (CPCL), has invested in CPCL years ago which will not draw any impact of US sanctions. “But we need to study the impact of US sanctions if NIOC brings in fresh investments as its share of equity portion of the expansion project, said IOC chairman Sanjiv Singh, adding NIOC is keen to partake in its expansion project.
IOC holds 51.89 per cent stake in CPCL. The expansion was to originally cost to `27,460 crore but is now estimated to cost `35,698 crore. Officials said the project is yet to be announced by the board while CPCL plans to achieve financial closure of the refinery expansion in 2019.
Formerly known as Madras Refineries Ltd, CPCL was formed as a joint venture in 1965 between the Government of India, AMOCO and NIOC having a shareholding in the ratio of 74 per cent, 13 per cent and 13 per cent. Later, AMOCO and the government disinvested their respective shares and IOC acquired them. Currently, it holds 51.89 per cent stake in CPCL while NIOC has 15.40 per cent.
CPCL has two refineries with a combined refining capacity of 11.5 MT per annum. The Manali refinery has a capacity of 10.5 MT per annum and is one of the complex refineries in the country. The second refinery with a capacity of 1 MT per annum is located in Nagapattinam at Cauvery Basin which IOC plans to pull down and build a new nine million tonnes unit over the next five to six years.
