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Our Bureau

New Delhi , Sept. 25

Oil India Ltd (OIL) has received an offer from Hindustan Petroleum Corporation Ltd (HPCL) to buy stake in the latter's Bhatinda refinery project. OIL sources told Business Line that a committee set up by the company was examining the offer.

OIL has been offered a 25-per cent stake in the refinery, which is scheduled to come up by 2011.

The sources, however, maintained that OIL has not made any commitment to HPCL.

Guru Gobind Singh Refineries Ltd (GGSRL), a subsidiary of HPCL, was incorporated for implementation of a grass root refinery of 9 million metric tonnes per annum (MMTPA) capacity at Bhatinda, Punjab, at an estimated cost of $3.5 billion. HPCL was in talks with oil majors such as British Petroleum, Saudi Aramco and Total, for partnering the project but without much success.

Earlier this year, British Petroleum walked out of the project as it found investing in refining and marketing in India unattractive. HPCL has offered OIL to become equal partners in the project, where the promoters will hold 50 per cent in GGSRL.

The OIL Board had earlier this month considered the offer and found it attractive. The promoters' equity contributions would be about Rs 6,000 crore in the Rs 14,144-crore project. After the promoters' equity is tied up, GGSRL would make an IPO for the rest of the equity.

More Stories on : Mergers & Acquisitions | Petroleum | Hindustan Petroleum Corporation Ltd

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