Bharat Oman Refinery (BORL) today said its joint venture partner Oman Oil has refused to raise stake in the company for its ongoing Rs 10,000-crore refinery project in Bina, Madhya Pradesh.

BORL said it is aggressively scouting for a new partner and hopes to complete this process by March.

However, Oman Oil, though still a partner in the JV, has decided against investing further in the project citing inordinate delays in obtaining various clearances as the reason.

BORL has already shelved its plan to go public to mop up Rs 2,000 crore, which was slated to open in March 2008. Earlier, the company had also negotiated with Hindustan Petroleum Corporation (HPCL). The company is setting up a 6-million-tonne refinery in Bina.

"The Oman Oil management has told us that they will not raise stake in the company. So we are holding discussions with various companies and will finalise the partner by March. But we will hold our stake around 50 per cent and are confident to start commercial production by December," U N Joshi, managing director, BORL, told Business Standard after briefing the state government about the progress of the project.

The state government has already extended commercial tax (value-added tax) deferment of Rs 250 crore per annum for a period of 15 years from the commencement of production to the company.

BORL, which has tied up for Rs 6,400 crore of funds with a consortium of banks led by SBI, has already deferred its IPO due to the sluggish market condition.

"We have filed a Draft Red Herring Prospectus (DRHP) with stock market regulator Securities and Exchange Board of India (Sebi). But work on the refinery is going at a faster pace and an amount of Rs 5,200 crore has already been invested in various works, including laying of a 900-km pipeline from Vadinar to Bina, civil and other plant-related works. We are also setting up a 99-MW captive power plant. Our parent company BPCL is making funds available to us," he said.

The company may also look for downstream projects to make the refinery viable by setting up a petro complex at the site.

"We are looking into setting up a petro complex at a later stage," Joshi said. Bina refinery will produce LPG, Euro-III and Euro-IV grade motor spirit, high speed diesel, aviation turbine fuel, sulphur and coke.

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