Q1 pipeline throughput at 11.7 mt v/s 11.1 mt: S Behuria

IOC disclosed its Q1FY07 numbers today. CMD of Indian Oil Corporation, IOC, S Behuria is pleased with the company's results as far as its physical performance is concerned. "We have had a growth of refinery throughput, which has been as high as 9.3 per centand we have had a pipeline throughput increase of 5.14 per cent," he says.

He further says that the company has always been very aggressive as far as our core competence, whether it is refining, marketing or pipeline, is concerned.

He discusses the company's Q1 numbers and plans, going forward. CNBC-TV18 shares with domain-b its exclusive interview with Behuria. Excerpts:

Give a sense of your refining margins and marketing margins for this quarter?
We have done well in this quarter, in terms of our physical performance. We have had a growth of refinery throughput, which has been as high as 9.3 per cent and we have had a pipeline throughput increase of 5.14 per cent.

Our sales have grown by about 0.6 per cent and we have had a very good refinery margin, net of discount at USD 6.7 per barrel as against the previous USD 6.16.

The oil ministry has also spoken about some sort of pricing freedom at the last Cabinet meeting to decide that the oil companies would be given some sort of pricing freedom once crude touches $70. Have you heard from the ministry on that?
Actually, we are not diagnosing on this. Crude oil prices have certainly gone up beyond USD 70 per barrel.

What has been the basket of crude currently?
It is about $70.62.

The finance ministry has also spoken about scrutinizing under recovery claims by oil marketing companies. There are also talks of setting up a committee, which will have representatives from the oil ministry and the finance ministry. Are oil companies actually overstating the under recovery figures?
These are purely audited accounts. They have been audited by the government audit, statutory auditors. We have a whole lot of internal controls and mechanism in place. They are fully computerised.

We have got the SAP system in place. It can audit, but the point is that the audit is relevant if we have been compensated in full. They would audit like anybody else audits. There is no issue about that and it can be done.

What are your marketing under recoveries in diesel and petrol? Talking about IOC's plans of getting into the retail venture, recently ONGC has been asked to stick to its area of competency that's exploration.
We have always been very aggressive as far as our core competence, whether it is refining, marketing or pipeline, is concerned. We have gone in forward-backward integration and have entered petrochemicals in a big way.

We have just commissioned our paraxylene purified terephthalic acid, PXPTA plant at over Rs5,000 crore. Our Paradip Refinery petrochem and our Naphtha Cracker is getting constructed. As far as core competence is concerned, apart from refining marketing or gas marketing, petrochemical is a part of our core business. This is a part of integration.

As far as backward integration into exploration and production (E&P) is concerned we have participated in NELP rounds. The government would certainly encourage more competition in NELP. We are not alone; we have done it through partnership, mostly not as an operator, but a portfolio investor.

We have participated in coal bed methane (CBM) rounds. And now, we have tied up with Oil India, which has core competence for looking at options of acquiring midsize companies overseas.