IOC to spend Rs. 32,500 crore on expansion.($5 billion)

Indian Oil Corporation, the nation's biggest refiner and fuel retailer, is planning to spend about $5 billion (nearly Rs 32,500 crore) to expand its exploration and production business, with half the amount slated to go into acquisition of new assets that are increasingly becoming available in the wake of a global crude oil crash. About 50% decline in crude oil prices in a year and the expectation that the prices may not go up in a hurry has shaken the faith at many oil firms, which have been redrawing plans, shelving projects and touching only those projects that are viable at current prices. But energy-starved economies like India have been encouraging their firms to go out and buy equity, mainly in producing fields with an aim to aid the country's energy security. State-run ONGC Videsh recently acquired 15% stake in a prolific Russian field. And now Indian Oil hopes to acquire some oil equity overseas. "Internationally, many assets are on sale. We will look at those," said AK Sharma, director (finance) at IOC. "We will participate in auctions overseas. We also intend to participate in the NELP (domestic auction of hydrocarbon blocks) when it happens." The company, which is in talks with potential strategic partners internationally, will prefer a producing or a near-producing asset since this eliminates much risk. IOC is a late entrant and still a peripheral player in the exploration and production business.