INSUBCONTINENT EXCLUSIVE:
MUMBAI: State-run Bharat Petroleum (BPCL), which owns Bina Refinery in an equal JV with Oman Oil Company, has shelved its IPO plans for the
company as "it generates enough cash" to complete the ongoing expansion and as also "because Kuwaiti Petroleum is keen to pick up a stake",
says a senior official.
The 1,20,000 barrels-a-day Bina Refinery is shut since mid-August for 45 days to synchronise the newly set up units
with the existing facility which will raise the capacity to 1,56,000 bpd, the official said further.
The just completed expansion at Bina
Refinery, or Bharat Oman Refineries commissioned in 2011, has taken its capacity throughput to 7.8 million tonne from 6 mt now in two phases
at a cost of Rs 3,500 crore, and then to 15 mt at an additional investment of around Rs 20,000 crore over the next five years.
"Bina is
generating enough liquidity for some years now
We don't need any cash from outside to run it
In fact it has made enough cash balances to complete the just completed expansion," R Ramachandran, director-refineries at BPCL, told
PTI.
"So, the initial public offer which we had planned and worked does not happen now
At least for the next two-three years
The IPO was planned because our partner Oman Petroleum was not ready to infuse liquidity as the company for some years were losing money,"
he added.
The IPO would have given Oman Oil an exit option but now they don't want to leave the JV, he said, adding "moreover, Kuwaiti
Petroleum is keen to pick up a considerable minority stake in the company
We are in talks to work out the details."
The past chairman, S Varadarajan, had told PTI in October 2015 that "the IPO would definitely
happen next year (2016)."
In fiscal 2017, Bina refinery's net profit more than doubled to Rs 810 crore
Oil from Kuwait accounted for about 6 per cent of the country's overall imports in FY18.
Kuwait Petroleum Corporation is reportedly seeking
at least 25 per cent stake in the refinery, which may be divested from the present 50 per cent stake that Oman Oil owns in the venture.
In
2009, Oman Oil had paid 50 per cent premium for a re-entry into the Rs 11,397-crore Bina Refinery
The project was originally conceived way back in 1993 with the national Omani oil company as an equal JV.
But it agreed to put in only Rs 75
crore for a 2 per cent take, but in 2009 it came back to pick up 26 per cent stake in the project for an additional Rs 1,220 crore, which
was then increased to 50 per cent.
When worked out this will be yet another Gulf national oil company entering the country which already is
the third largest oil consuming market and the fastest growing one as well.
Saudi Aramco and the Abu Dhabi National Oil Company have already
picked up 50 per cent stake in the proposed 60 mt refinery and petchem complex planned in Ratnagiri, Maharashtra.
BPCL also operates a 14 mt
refinery in Mumbai and a 15.5 mt unit at Kochi
It also has majority stake in the 3 mt Numaligarh refinery in Assam, which will also be expanded to 9 mt over the next decade.
As of March
2018, its crude processing capacity stood at 31.35 mt, at a capacity utilisation of over 117 per cent
Its gas production stood at 1.87 million metric tonne.
