British Petroleum(BP) and Total are eyeing equity stake in the Rs 12,000 crore refinery being planned by Hindustan Petroleum Corporation (HPCL) in Bhatinda, Punjab. HPCL is also planning to tap the market for the project in 2007."We are looking for partners and have talked to some multinationals. We are in advanced stages of negotiations with three companies," M B Lal, chairman and managing director of HPCL, said after the relaunch of the project."BP and Total have both (independently) expressed interest in the refinery," he added.BP and Total are keen to enter India's oil retailing market, and see Bhatinda refinery as an ideal opportunity to meet the minimum investment criteria that would give them the retail licence.HPCL and the foreign partner will hold 26% stake each in Guru Gobind Singh Refineries - the company which is implementing the nine million tonne per annum refinery."The remaining 48% would be offered to the public through an IPO in 2007," Lal said. After over two years of delay, the Punjab government today signed a deed of assurance(DoA) to provide fiscal incentives for the project. The DoA was signed in the presence of petroleum minister Mani Shankar Aiyar and Punjab chief minister Amarinder Singh.Punjab will provide interest-free loan of Rs 250 crore per year for five years in lieu of sales tax deferment. This will be repaid in five years starting from the sixth year of commercial production. HPCL was seeking sales tax deferment for 15 years.
