The Hindu Business Line : BPCL revises Bina refinery project cost to Rs 9,100 cr

Mr Ashok Sinha (right), Chairman & Managing Director, Bharat Petroleum Corporation Ltd, and Mr S.A. Narayan, Director (Human Resources), addressing mediapersons after the company's AGM in Mumbai on Friday. — Shashi Ashiwal

Mumbai , Sept. 24

BHARAT Petroleum Corporation Ltd has revised the cost of its Bina refinery project to Rs 9,100 crore from the original estimate of Rs 6,354 crore.

The project is being set up by Bharat Oman Refineries Ltd, the joint venture company floated by BPCL and Oman Oil Company Ltd.

The BPCL Chairman and Managing Director, Mr Ashok Sinha, said that Bharat Oman Refineries would go in for an initial public offering to raise Rs 1,000 crore to finance the six-million-tonne Bina refinery in Madhya Pradesh.

The refinery, in which BPCL will hold 50 per cent stake, is expected to be completed by 2009.

The IPO would come up in two years' time, he said.

He was interacting with mediapersons after the company's annual general meeting on Friday.

Commenting on the viability of having a petrochemical complex along with refining facilities at Bina, Mr Sinha said that he welcomed the idea and that his company could produce feedstock for the petrochemical complex.

The petrochemical business is peaking and there are very high margins in this area, he said. A number of petrochemical capacities are coming up in Qatar and Iran and if the company gets a serious petrochemical partner then it could lead to synergies with refinery facilities at Bina, Mr Sinha said.

Responding to a query on BPCL's refinery margin, Mr Sinha said that the Mumbai refinery was taking a huge hit due to the three per cent octroi being charged on crude. BPCL gross refinery margin during July-September was $5.5 per barrel, he said.

"We are going to raise the issue with the Maharashtra Government," Mr Sinha said.

Mr Sinha said that the company had under recovery of Rs 4,000 crore, which would be overcome by the Government's Rs 40,000-crore relief package for the oil companies.

About Rs 14,000 crore would be the contributions to this package from companies such as ONGC and GAIL, Rs 4,000 crore would be raised from the refining companies, and the oil price hike would add another Rs 4,000 crore.

The oil bonds, which the Government wants to float, would give another Rs 12,000 crore to Rs 15,000 crore, Mr Sinha said.

BPCL also plans to market 5 million tonnes of LNG by 2010. Currently it markets 2.5 million tonnes, Mr Sinha said.

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