Oil India Plans Major Refinery Expansion by 2027

Oil India Ltd, a prominent state-run exploration company in India, is embarking on an ambitious journey to expand its refinery operations significantly. The company has set its sights on increasing its refining capacity in Assam to an impressive 180,000 barrels per day (bpd) by the fiscal year ending in March 2027. This strategic move, as outlined by Chairman Ranjit Rath, is not just about boosting production; it is part of a larger vision to enhance refining capabilities and delve into new energy projects.

Currently, Oil India's subsidiary, Numaligarh Refinery Ltd (NRL), is in the process of upgrading its plant, which has an existing capacity of 60,000 bpd. This upgrade is crucial as it aligns with the company's goal to meet the growing energy demands of the region. To facilitate this expansion, a new crude oil pipeline is being constructed to connect the refinery with Paradip Port in Odisha. This pipeline will ensure a steady and reliable supply of raw materials, which is essential for the refinery's operations.

Chairman Rath announced during a recent press conference that both the refinery expansion and the pipeline project are on track for completion by December 2025. To support the increased capacity, Oil India plans to import around 110,000 bpd of crude oil. This proactive approach demonstrates the company's commitment to not only expanding its operations but also ensuring that it can meet the demands of a growing market.

Beyond refining, Oil India is also making significant strides in clean energy initiatives. The company has announced plans to invest 250 billion rupees (approximately $3 billion) by 2030 across various projects, including renewable energy ventures. One notable project is the construction of a biorefinery in Assam, which will produce 50,000 tonnes of ethanol per year using bamboo as feedstock. This facility is expected to begin ethanol production by the end of September, marking a significant milestone in Oil India's clean energy transition.

In addition to serving the northeastern region of India, NRL plays a vital role in supplying diesel to Bangladesh through a pipeline with a capacity of 1 million tonnes per year. Despite the ongoing political unrest in Bangladesh, Chairman Rath has confirmed that diesel supplies remain unaffected, thanks to the necessary letters of credit that ensure continued exports.

Furthermore, Oil India holds stakes in two upstream projects in Russia—Vankorneft and Tass-Yuryakh. While the company is currently owed $250 million in dividends from these ventures, the funds are held in an Indian bank’s Moscow branch, awaiting repatriation. Other Indian firms involved in these projects are similarly waiting for a total of $600 million in dividends, highlighting the complexities of international business operations.

Oil India's ambitious plans for refinery expansion and commitment to clean energy initiatives reflect a forward-thinking approach in a rapidly changing energy landscape. As the company navigates the challenges of both domestic and international markets, its efforts to enhance refining capabilities and invest in renewable energy will not only benefit the company but also contribute to the broader goal of sustainable energy development in the region. The future looks promising for Oil India, and its strategic decisions today will likely shape the energy landscape of tomorrow.