Jindal Steel & Power Ltd, India’s second-biggest maker of the alloy by market value, plans to build its first oil refinery to expand its energy business in the domestic and overseas markets.
Unit Jindal Petroleum Ltd. may set up the refinery with a capacity of 1 million metric tons near fields it’s exploring in Georgia to “test waters,” Sushil K Maroo, group chief financial officer, said in an interview in New Delhi yesterday.
Jindal Steel, controlled by law maker Naveen Jindal, joins Indian Oil Corp, the country’s largest refiner, in seeking to build a processing plant overseas to sell fuels. The group has five oil and gas blocks in Georgia and one in Bolivia and is looking for more areas in and around Kazakhstan, Maroo said.
“It will show the company’s commitment in Georgia and improve its chances of getting more oil and gas assets there,” said Niraj Shah, an analyst at Fortune Equity Brokers in Mumbai.
Jindal Steel shares gained 0.2 per cent to Rs 722.85 at 9.21 am in Mumbai trading after declining as much as 0.4 per cent. The stock has climbed 3 per cent this year compared with a 17 per cent increase in the benchmark Sensitive Index.
The five blocks in Georgia have combined estimated recoverable reserves of 141 million barrels of oil and 592 billion cubic feet of natural gas, according to Jindal Steel’s website. Current production is about 550 barrels a day from one field.