Earlier, the expansion was to originally cost to INR 27,460 crore but now is estimated to cost INR 35,698 crore.

Indian Oil Corporation Limited, commonly referred as Indian Oil, has reportedly announced that it will assess the implications of the U.S. sanctions if Iran would invest in the INR 35,700 crore expansion of IOC’s subsidiary Chennai refinery.

Reportedly, IOC has plans to demolish the Nagapattinam refinery of Chennai Petroleum Corp Ltd (CPCL), a subsidiary of IOC, and construct a new 9 million tons unit in the upcoming 5-6 years.

According to reliable sources, National Iranian Oil Company (NIOC), which owns 15.4 percent shares in CPCL, is willing to join the expansion project. IOC will examine the effect of further investments of NIOC in CPCL after the U.S. decision to again enforce economic sanctions on Iran.

Indian Oil has been evaluating the impact of the U.S. sanctions on further investments of NIOC in CPCL, cited sources.

Apparently, NIOC had invested in CPCL several years back and that as such will not draw any impact of the U.S. sanctions, but latest investments of the company will need to be studied.

Sanjiv Singh, Chairman, IOC, reportedly noted that NIOC has been keen to remain committed to investing in CPCL but now the company will have to investigate the impact of U.S. sanctions on allowing a further investment. The board has not yet approved the expansion project, he further added.

India has reportedly stopped purchasing oil from Iran, one of its major crude oil suppliers, after the U.S. has reimposed economic sanctions against Iran which commenced on November 5, 2018 and closed waivers after 6 months. Before the waivers ending, India has paid in Indian currency to Iran for oil purchases. These payments in Indian currency have been transacted into the NIOC’s UCO Bank account.

For the record, Indian Oil owns 51.89 percent shares in CPCL. Earlier, the expansion was to originally cost to INR 27,460 crore but now is estimated to cost INR 35,698 crore.

Source credit: https://economictimes.indiatimes.com/industry/energy/oil-gas/indian-oil-to-examine-us-sanctions-impact-on-cpcl-expansion/articleshow/69396282.cms

https://www.khabarindia.in/indian-oil-examine-us-sanctions-impact-cpcl-expansion/