All,
 
Oracle support was able to resolve this issue for me and I would like to share the learning. The problem was that I was unable to create stored outline for sql executing within a stored procedure after turning create_stored_outlines=true. Create outlines for sql satetements executing from sqlplus/plsql blocks was not an issue.
 
The problem is resolved by granting create any outline privilege to the user explicitly.
 
Once I again I was bit by the limitation of roles not passing privilege within stored procedures and this has to be done explicitly. Why oracle has this limitation beats me!!
 
Thanks for help Jared & Raj.
 
Shaleen

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