Oman Oil Company (OOC), the Gulf nation's national oil company, has sought to increase its 2 per cent stake in Bharat Petroleum Corporation's Bina refinery project to 26 per cent, for about $250 million.
OOC has so far invested Rs75 crore in Bharat Oman Refineries Ltd (BORL), a joint venture with Bharat Petroleum, which is building a six million-tonne-a-year refinery at Bina in Madhya Pradesh, at a cost of Rs10,400 crore.
“We want to increase our equity (in the project) to 25-26 per cent. We are in discussions with BPCL,” Omani oil minister Mohammed bin Hamad Al-Rumhy said.
BORL was originally planned as a joint venture in which BPCL and OOC will hold 26 per cent stake each, with the remaining going to the public and strategic investor.
BPCL sources, however, said while it was still open to the idea of Oman Oil's participation in the joint venture, the equity offer would now be at a premium.
For BPCL, the equity issue to a prospective partner is also important for tying up loans. The project is expected to be commissioned in December 2009. “We are talking to BPCL and as far as we are concerned an agreement can be reached by next week,” Al-Rumhy said.
The Oman Oil offer of $250 million comes to around Rs1,250 crore against the par value of the 26 per cent stake in BORL of around Rs1,040 crore, it is still not clear whether the BPCL would agree to that offer.
The refinery will be able to process almost all Middle East crudes, including the Arab mix crude (65 per cent Arab Light and 35 per cent Arab Heavy).
BORL is also setting up a crude supply system consisting of a single point mooring system (SPM), oil storage terminal at Vadinar in Jamnagar district of Gujarat and a 93-km cross-country crude pipeline from Vadinar to Bina.
ABPCL official said the refinery is 94 per cent complete and it will be fully operational by the end of December.
Source: Domain B