Indian Oil Corp is going to build a new refinery in Tamil Nadu for Rs 31,500 crore. The refinery will have the capacity of churning out 9 million tonnes of oil in a year. It will be set up on a 618-acre land which is owned by Chennai Petroleum Corp (CPCL) in Nagapattinam. The development will take place by a joint venture between Indian Oil and CPCL.  

“The refinery will be developed by a joint venture in which Indian Oil and CPCL will own 25 per cent equity each while the balance 50 per cent stake will be given away to strategic and financial investors,” said Sandeep Gupta, Indian Oil Finance Chief.   

The recent wave of climate change activism and the rise of renewables have shaken investors’ faith in the oil business globally and are increasingly curbing financing of fossil fuel projects. While many international oil majors aim to cut their current refining capacity, Indian firms are planning to add new refineries.  

“Oil demand will rise above the pre-covid level in the fourth quarter of the current fiscal year and cross FY20 demand levels in FY22,” Indian Oil Chairman S M Vaidya said. “The rollout of the Covid vaccine and increased economic activity will drive the oil demand,” he added. Indian Oil’s refineries are operating at full capacity currently on strong fuel demand, he said.