Oil Ministry Seeks Ccea Nod For Bpcl Stake In Bina Project

The petroleum ministry has approached the Cabinet Committee on Economic Affairs (CCEA) to seek fresh approval for the new equity structure for Bharat Petroleum Corporation Ltd's (BPCL) refinery project at Bina in Madhya Pradesh.

The ministry submitted a note to the Cabinet Secretariat on December 28, 2001, after its earlier request seeking a fresh clearance from the CCEA was found to be suffering from certain deficiencies. The Cabinet Secretariat had advised the petroleum ministry that it should first seek a fresh approval for the new equity structure before asking for project clearance.

The petroleum ministry has proposed to the Cabinet that BPCL's equity in the Bina refinery project be raised from 26 per cent to 50 per cent following the decision of Oman Oil Company (OOC) to reduce its stake from 26 per cent to 3-4 per cent. The balance would be offered to the public, financial institutions and banks.

The project was initially conceived as a joint venture between BPCL and OOC with each holding 26 per cent equity.

As BPCL does not have any refinery in central and northern India, it has pinned all its hopes on the Bina refinery for its supplies in the completed deregulated scenario in the oil sector after March 2002.

Though it was reluctant to put up the refinery on its own, it has been forced to do so with OOC refusing to participate in its equity in any significant manner.

The project was approved by CCEA in December 1995 at an estimated cost of Rs 5,277 crore. However, the cost estimates which were revised in January 2000, put the cost at Rs 6,562 crore.

The project facilities comprise a single-point mooring, crude oil terminal with connecting sub-sea and onshore pipeline at Vadinar in the Gulf of Kutch, including 935 km cross-country crude oil pipeline from Vadinar to Bina, and a six million tonne refinery at Bina for production of all normal fuels and lube base stock.