IOC puts Paradip project on hold

Indian Oil Corporation (IOC) plans to put on hold the petrochemical project, part of the planned refinery-cum-petrochemical complex, at Paradip, in eastern India, due to the rising costs of the project. The total cost of the refinery cum petchem complex has now increased to US$10.7 billion from an earlier estimate of about US$6.1 billion due to rising costs of equipment, land development, raw material, labor and other factors of production, reports say. IOC now plans to carry out the project in phases and the petrochemical complex will be built after the 15 million metric ton per year (mtpy) refinery is commissioned in 2012. The refinery is now expected to cost about US$7.1 billion. IOC had first announced plans for the refinery and petrochemicals complex at Paradip in March 2006. At that time, IOC estimated a start-up date in 2011 or 2012. IOC recently announced its annual results for the financial year ended March 31, 2008.The company reported an 8% decrease in profits to about US$1.65 billion, while sales was up by 12% to about US$59 billion. IOC is also developing a petrochemicals hub at Panipat, in northern India, which is expected to come onstream in November 2009. (May 30, 2008)