IndianOil's stake in proposed refinery tied to entry of strategic partner

State-owned Indian Oil Corporation might hold 50 per cent in a refinery being planned on the west coast if Saudi Arabia and Kuwait do not take up the offer of an equity stake.

India has offered Saudi Arabia and Kuwait strategic stakes in the refinery being planned by public sector oil companies. IndianOil’s stake might come down to about 35 per cent if a strategic partner comes on board.

The minister for petroleum and natural gas, Dharmendra Pradhan, had recently met the Saudi authorities in this regard. “We are in talks with Saudi and Kuwait also. If there is no strategic investor, IndianOil may get the majority stake of 50 per cent,” confirmed an official source close to the development.  

The other partners in the project would be Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Engineers India Ltd (EIL). A five per cent stake in the project might be offered to EIL, which will also be the project consultant and manager. The refinery project is stuck in land acquisitions, as it might need at least 5,000 acres. The overall investment for the proposed 60 million tonnes per annum refinery is about Rs 1.5 lakh crore. “The land issue is not solved yet. We are in talks with the governments of Maharashtra, Goa and Karnataka in this regard,” the official added.

The refinery complex might also have a captive port and a petrochemical unit. “We are planning to source the crude from Iran, Iraq or any Middle East country. Hence, the setting up of a port is vital for this project,” the official added.

India has refinery capacity of 230 million tonnes, out of which 80 Mt is owned by IndianOil.