Oman Oil pays 50% premium to up stake in Bina Refinery

Oman Oil Company (OOC) has paid a full 50 per cent premium for a re-entry into the Rs 11,397-crore Bina Refinery project of the state-run Bharat Petroleum Corporation (BPCL).

The 6-million tonne per annum refinery in Madhya Pradesh was originally conceived through a joint venture company between OOC and BPCL, Bharat Oman Refineries (BORL). But OOC did not contribute equity beyond the initial Rs 75 crore.

The Omanese oil major has now come back to pick up 26 per cent stake in the project for an additional Rs 1,220 crore, a source in the know of the development said.

"It has paid Rs 15 for a Rs 10 share in BORL," he said.

The BORL was formed as an equal joint venture company way back in 1993. However, following inordinate delays in the implementation of the project, OOC froze its investment in the company at Rs 75 crore for a two per cent equity stake.

BPCL, which holds 50 per cent stake in the project, provided the unbridged portion of the Rs 4,000-crore equity in form of loan. The state-run firm would get its loan back once OOC makes the payment for its 26 per cent share.

It will get the remaining 24 per cent equity through an initial public offering, the dates of which are yet to be finalised, the source said adding BORL has already arranged Rs 6,400 crore loan to achieve financial closure.

OOC's additional investment of Rs 1,220 crore would take its stake in BORL to 26 per cent from present 2 per cent. The project is scheduled for commissioning in early 2010.