The Indian Oil Corporation will invest around Rs 400 crore (Rs 4 billion) to make the Haldia refinery in the eastern region viable, said M S Ramachandran, chairman, IOC, in Kolkata on Wednesday.

The Haldia refinery was not viable due to high transportation cost, as large crude carriers were not able to come to Haldia since it was a riverine port, Ramachandran said.

He said the only solution to the problem lay in constructing a pipeline from Paradip in Orissa to Haldia. The IOC board had already approved the project, he added.

After this was done, the refining capacity would be increased from 6 million tonnes to 7.5 million tonnes, Ramachandran said, adding petroleum products from Haldia would then be exported.

He said gross margins at most of the refineries in the country were coming down.

On the exploration front, he said IOC would be bidding along with ONGC Videsh Limited and British Petroleum for development of the oil field in Kuwait to raise production.

He said IOC was also bidding for oilfields in Iran.

When asked whether IOC was still interested in Haldia Petrochemicals Limited, Ramachandran said, "As of today, no offer had come from the promoters of the petrochemicals company."

However, he said IOC had a balance sheet, which was big enough to support such projects amounting to Rs 10,000 crore (Rs 100 billion).

IOC had already made overseas forays into countries like Mauritius and Sri Lanka.

About the Paradip refinery project, he said IOC had made huge investments in this regard. However, the Orissa government should restore fiscal incentives to keep the project running, he added.