 "BPCL's Rs 3000 cr investment in Bharat Oman Refineries receives Cabinet nod")
The Cabinet has given its approval to Bharat Petroleum Corporation Limited (BPCL) to enhance its investment in Bharat Oman Refineries Limited (BORL) - a joint venture between Oman Oil Company Limited (OOCL) and BPCL – to Rs 3000 crore. The investment amount could be enhanced upto a maximum of Rs 3000 crore by way of subscription of convertible warrants / other instruments giving right to convert it into equity shares to be issued by BORL, beyond DPE guidelines.
The infusion of funds by the BPCLs will enable BORL to overcome the implications on account of the erosion of the net worth. Besides, it will enhance the availability of petroleum products in the Northern and Central parts of the country, industrial development of Madhya Pradesh and substantial increase in employment and tax earnings in the state.
The BORL commissioned the 6 million metric tonne per annum (MMTPA) or 120,000 barrels per day (bpd) refinery at Bina in Madhya Pradesh in June 2011 at a project cost of about Rs 12,754 crore. Currently, the refinery is operating at 100 percent of its installed capacity.
Hence, there is a need for immediate infusion of funds in BORL by the shareholders. OOCL while expressing their support for the project, had indicated that they are not prepared to commit further funds for the project at this stage. Therefore, BPCL board has decided to infuse funds to the tune of Rs 3,000 crore for funding the debottlenecking project and for meeting the extraordinary losses suffered on account of the sharp fall in the prices of crude oil and finished products.
Government has, accordingly, decided to grant approval to the proposal of BPCL to enhance its investment in BORL by an additional amount of up to Rs 3,000 crore for completion of the de-bottlenecking project.
The infusion of funds by the BPCLs will enable BORL to overcome the implications on account of the erosion of the net worth. Besides, it will enhance the availability of petroleum products in the Northern and Central parts of the country, industrial development of Madhya Pradesh and substantial increase in employment and tax earnings in the state.
The BORL commissioned the 6 million metric tonne per annum (MMTPA) or 120,000 barrels per day (bpd) refinery at Bina in Madhya Pradesh in June 2011 at a project cost of about Rs 12,754 crore. Currently, the refinery is operating at 100 percent of its installed capacity.
More From This Section
BORL is now planning to undertake a debottlenecking project at the refinery to further increase the capacity from 6 MMTPA to 7.8 MMTPA. The estimated project cost is Rs 3,072 crore, with an overall implementation schedule of 36 months from date of receipt of environmental clearances (Zero Date). The highlights of the proposal for debottlenecking project include certain modifications to produce products in accordance to the new Auto Fuel Policy.
Hence, there is a need for immediate infusion of funds in BORL by the shareholders. OOCL while expressing their support for the project, had indicated that they are not prepared to commit further funds for the project at this stage. Therefore, BPCL board has decided to infuse funds to the tune of Rs 3,000 crore for funding the debottlenecking project and for meeting the extraordinary losses suffered on account of the sharp fall in the prices of crude oil and finished products.
Government has, accordingly, decided to grant approval to the proposal of BPCL to enhance its investment in BORL by an additional amount of up to Rs 3,000 crore for completion of the de-bottlenecking project.