The petroleum ministry, in a revised note to the Cabinet, has suggested that the government make Bongaigaon Refinery and Petrochemicals Ltd a subsidiary of Indian Oil Corporation, instead of merging the two.
Similarly, the note says that to ensure the growth of Chennai Petroleum Corporation Ltd _earlier known as Madras Refineries Ltd_and to maintain regional balance in demand and supply, CPCL should be made a subsidiary of IOC through divestment of the 52.5 per cent government stake.
The note also suggests that to achieve a strategic and vertical alignment of Cochin Refineries Ltd with Bharat Petroleum Corporation Ltd, the entire government holding in CRL be divested to BPCL, making CRL a BPCL subsidiary.
Also on Numaligarh Refineries Ltd, the note suggests that to ensure long-term stability, Oil India acquire 10 per cent equity in NRL, while IBP Company Ltd transfer its 19 per cent to BPCL.
The valuation of the share prices for the acquisitions will be decided by the petroleum ministry in consultation with the finance ministry, the note adds.
According to the note, BRPL has a refining capacity of 2.35 million tonne a year and a paid-up capital of Rs 199.82 crore. It was incorporated in 1974.
The current government holding in BRPL is 74.46 per cent, the remaining being held by UTI (17.78 per cent), other mutual funds (1.82 per cent), banks (0.92 per cent) and others, including BRPL employees, (5.02 per cent).
The long-term viability of the company depends on crude supply and development of a marketing network. BRPL receives crude from Assam which is inadequate to
meet even the demands of other refineries in the Northeast. During 1998-99, BRPL processed 1.65 million tonnes of crude at about 70 per cent capacity utilisation. With the commissioning of the 3 mmtpa Numaligarh refinery and expansion of the IOC refinery at Guwahati, crude supply to BRPL is bound to be hit, the note points out.
