OIL wants 26% stake in HPCL Bathinda facility

The LN Mittal-controlled Mittal Investment may have cornered a large 49 per cent chunk of the revived Bathinda refinery project but the other contender for the stake "" government-owned Oil India (OIL) "" has asked for the Petroleum ministry's intervention to secure 26 per cent ownership of the project.

OIL has written to its parent ministry seeking the transfer of a part of refinery promoter HPCL's 49 per cent stake in the project being executed by Guru Gobind Singh Refinery.

"We are keen on picking up half of HPCL's stake. Our recent communication to the petroleum ministry has not evoked a response as yet," a senior OIL official said.

As of now, the proposed equity structure for the refinery which will have an annual capacity of processing 9 million tonnes of crude oil, sets aside 2 per cent for financial institutions and 49 per cent each for Mittal Investment and Hindustan Petroleum Corporation (HPCL). The project cost is estimated at Rs 16,700 crore.

M R Pasrija, CMD, OIL, declined comment on the issue. Petroleum ministry sources, however, said OIL was unlikely to be brought into the project in the near future, although, it was certain that the upstream company would be offered a stake in the later stages of the project.

"Bringing in a third partner into the project just now would result in reworking the financials for the project. That would again delay the project," the oil ministry official said.

During the announcement of HPCL's deal with Mittal Investments, Petroleum Secretary M S Srinivasan had said the government did not want Bathinda refinery project to be delayed, so the deal with Mittal had been forged. The project was approved in 2000.

"Mittal will bring in huge finances, and a brand value for raising debt for HPCL's new refinery and expansion plans. The government did not want to wait for OIL. Moreover, we want OIL to focus of its core competency as well," the petroleum ministry official said.

Conflicting the core competency issue set by the government, there have been reports that HPCL has offered OIL stake in the expansion of its refinery at Vishakapatnam. HPCL CMD Mahesh Lal had previously said that Total, in collaboration with Kuwait Petroleum, was also likely to pick up 50 per cent stake in the refinery expansion for Rs 6,000 crore.

An OIL official confirmed that Pasrija would meet HPCL officials this week. However, both HPCL and OIL spokesperson declined to comment on the issue an Petroleum Corporation Limited.