The Hindu Business Line : Mittal group in talks with HPCL for stake in Bhatinda refinery

After evincing interest in steel production in India, international steel giant Mittal Group seems to be on the prowl for downstream ventures in the country's oil and gas sector.

Hectic negotiations are on between Mittal Group and state-owned Hindustan Petroleum Corporation Ltd (HPCL) for a stake in the latter's Bhatinda refinery in Punjab. Sources told Business Line that the negotiations were at an advance stage with regard to the equity structure in the project.

This development comes even as Oil India Ltd (OIL) has shown interest in participating in the project. While the market is abuzz with discussions on various equity structures, including one where the three — Oil India, Mittal and HPCL — may own 26 per cent stake each in the project, though sources indicated that the situation was still very fluid. The possibility of OIL dropping out of the project also cannot be ruled out, sources said, adding that a decision was expected soon.

HPCL has been scouting for a partner for the project for sometime now. The company has been in talks with Saudi Aramco and Total of France to name a few. According to market reports, Mittal might take 49 per cent stake, while OIL is likely to get 15 per cent and HPCL, 36 per cent. However, sources indicate that this may not be acceptable to HPCL as the project is its "baby".

Once the equity structure is finalised, Mittal Investments and HPCL are likely to sign a joint venture agreement for the joint construction of the 9 million tonnes a year Bhatinda refinery, which is being built by Guru Gobind Singh Refinery Ltd. While discussions are on over the HPCL-Mittal-OIL stake in the project, there is even a possibility that the project may go in for an IPO.

Mittal Investments is wholly owned by the Mittal family and registered in Luxembourg. It holds 38 per cent in Mittal Steel Co, the Netherlands-based flagship company of the LN Mittal Group. HPCL has already invested about Rs 500 crore in the Bhatinda project.

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