NEW DELHI: Indian Oil Corporation, the nation's biggest refiner and fuel retailer, is planning to spend about $5 billion (nearly Rs 32,500 crore) to expand its exploration and production business, with half the amount slated to go into acquisition of new assets that are increasingly becoming available in the wake of a global crude oil crash.

About 50% decline in crude oil prices in a year and the expectation that the prices may not go up in a hurry has shaken the faith at many oil firms, which have been redrawing plans, shelving projects and touching only those projects that are viable at current prices.

But energy-starved economies like India have been encouraging their firms to go out and buy equity, mainly in producing fields with an aim to aid the country's energy security.

State-run ONGC Videsh recently acquired 15% stake in a prolific Russian field. And now Indian Oil hopes to acquire some oil equity overseas.

"Internationally, many assets are on sale. We will look at those," said AK Sharma, director (finance) at IOC. "We will participate in auctions overseas. We also intend to participate in the NELP (domestic auction of hydrocarbon blocks) when it happens."

The company, which is in talks with potential strategic partners internationally, will prefer a producing or a near-producing asset since this eliminates much risk.

IOCBSE 0.36 % is a late entrant and still a peripheral player in the exploration and production business.

It mostly has a lower minority stake in the 10 blocks at home and seven overseas. Just three of its projects are producing today. Its biggest overseas purchase happened last year when it bought a 10% stake in the Pacific Northwest LNG, an integrated upstream and liquefied natural gas project in Canada in which it committed an investment of about $4 billion.

Sharma said $1.6 billion has already been invested in the Canadian project and another $2.4 billion will go in two-three years. The balance $2.6 billion or so, part of the $5 billion planned for the next five-seven years, will be spent on acquiring new assets in India and overseas.

"This is not a big amount. And we will continue to invest mostly as part of consortium with other state firms," he said.

The company also plans to spend about Rs 15,000 crore to upgrade all its refineries by 2022 to produce fuels compliant with Euro-VI emission norms, following a decision by the oil ministry to upgrade and a public clamour led by environment activists to improve the fuel quality to reduce pollution that is choking cities.

IOC also plans to invest Rs 50,000 crore in expanding capacity at its existing refineries in the next five-seven years. Another Rs 30,000 crore will be spent on setting up new petrochemicals plants by 2022.