The Hindu Business Line : OIL not keen on joining HPCL's Bhatinda project

"The possible areas of joint co-operation that the two State-owned companies are looking at include participation in refinery projects as well as exploration"

New Delhi April 26 Oil India Ltd (OIL) has stated that it was no longer interested in Hindustan Petroleum Corporation Ltd's (HPCL) Bhatinda refinery project.

This puts at rest all speculation that OIL may join in the project at a later stage after HPCL offered stake to global steel baron Mr L.N. Mittal's group as partner in its Guru Gobind Singh Refineries Ltd at Bhatinda, Punjab.

Prior to HPCL brining in Mr Mittal as a partner, OIL had been offered 25 per cent stake in the Bhatinda refinery, which is scheduled to come up by 2011. Subsequently, it was speculated that OIL might join the project at a later stage.

Equity Participation

Indications are that OIL is not keen to join a project where it may not have a major say. The Mittal group is picking a 49 per cent stake, the same as HPCL, in the Rs 16,700 crore project for which it will invest Rs 3,300 crore.

Speaking to Business Line, Mr M.R. Pasrija, Managing Director, OIL, said, "We are not interested in Bhatinda now. As regards equity participation in HPCL's Visakhapatnam refinery expansion or the company's new refinery in Visakhapatnam we will take a decision only after undertaking a viability study."

The talk between HPCL and OIL to enter into an understanding for joint activities in both downstream and upstream segments of the hydrocarbon chain is going on, he said.

The possible areas of joint co-operation that the two State-owned companies are looking at include participation in refinery projects as well as exploration and production activities, sources told Business Line.

Joint Participation

An expert team of the two entities has examined the commercial and technical aspects of the possible joint participation of HPCL and OIL.

Before firming up the agreement, the two entities would also like to work out the finer points to avoid any conflict of interest with their other partners in various projects.

Currently, OIL, jointly with Indian Oil Corporation Ltd, bids for oil and gas equity abroad. The agreement is expected to be signed soon.

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