Oman Oil buys 26% in India refinery project

NEW DELHI (Trade Arabia) -- Oman Oil has returned to pick up 26 percent equity in the Rs11,397 crore ($245.9 million) Bina Refinery project of India’s Bharat Petroleum, for an additional of Rs1,220 crore, sources said.

The six-million ton per annum refinery in Madhya Pradesh was originally conceived through Bharat Oman Refineries, a joint venture between Bharat Petroleum and Oman Oil. The joint venture was formed in 1993 but the Omanian firm did not contribute equity beyond the initial Rs 75 crore.

Bharat Petroleum has now wrested a 50 percent premium to allow Oman Oil Company to re-enter the project now, according to a report in The Times of India.

However, following inordinate delays in the implementation of the project, Oman Oil froze its investment in the company at Rs 75 crore for a 2 percent stake. It is now paying Rs 15 for a Rs 10 share in BORL and is picking up 26 percent.

BPCL, which holds 50 percent stake in the project, provided the unbridged portion of the Rs 4,000 crore equity in form of loan.

The state-run firm would get its loan back once Oman Oil makes the payment for its 26 percent share. It will get the remaining 24 percent equity through an initial public offering, the dates of which are yet to be finalised, the source said adding BORL has already arranged Rs 6,400 crore loan to achieve financial closure.

Oman Oil’s additional investment of Rs 1,220 crore would take its stake in BORL to 26 percent from present 2 percent. The project is scheduled for commissioning in early 2010.

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