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New York Stock Exchange-listed US oil giant Exxon Mobil Corp is interested in picking up a stake in Bharat Oman Refineries Ltd (BORL) which runs a refinery at Bina, Madhya Pradesh as global oil producers jostle for space in India’s expanding refinery market.
Irving, Texas-based Exxon Mobil joins Kuwait Petroleum International, the downstream arm of Kuwait Petroleum Corporation (KPC), for the stake in BORL, a joint venture of Bharat Petroleum Corporation Ltd (BPCL) and Oman Oil Company.
BORL has just completed an expansion of the refinery to 7.8 million tonnes per annum (mtpa) from 6 mtpa. But Oman Oil did not invest in this expansion.
“We are now engaged in the blue print for doubling the capacity to 15.5 mtpa. That’s where we are talking of Kuwait Petroleum and others,” said R Ramachandran, Director (Refineries) at BPCL.
“There are plenty of players. Today, the world has changed, people are looking at India. Every Middle East country wants to come to India and see some of their crude is there with us and they want to participate in our petrochemicals. Also, other parties, very surprisingly, somebody from the west like Exxon Mobil are interested,” Ramachandran said in response to a query from BusinessLine on September 11.
Exxon Mobil could not be reached immediately for comment.
BPCL Chairman and Managing Director D Rajumar said the firm was in talks with Kuwait Petroleum and others.
“We are in talks with Kuwait Petroleum International; this is in the initial stages. It will take a while before we finalise this. Whether Kuwait Petroleum is going to be there or any other oil company is secondary, but the primary part is that we have decided to enhance the capacity of the Bina refinery to 15.5 mtpa. So, we are looking at various partners to come and join us; one such partner could be Kuwait Petroleum International,” Rajkumar said..
According to Ramachandran, Oman Oil Company has decided to continue in Bina refinery after reviewing its plans. “All the initial problems they had are behind them, they also had a big slump because the crude prices went down. Now, they are buoyed up,” he said.
He said the gross refining margins of Bina refinery, in the last two years, were either ahead or just a few decimal points short of Reliance Industries, which runs the world’s biggest oil refinery complex at Jamnagar in Gujarat.
Gross refining margins is what a refiner earns by turning a barrel of crude oil into refined products.
Like other major producers, Exxon Mobil is looking to lock-in customers in the world’s third-largest oil consumer apart from a fuel retail play through the potential investment in the Bina Refinery, say industry sources. Kuwait Petroleum also is looking to invest in projects in return for getting an assured offtake of their crude oil.
This assumes significance as India’s energy needs are primarily met through imports, with the country importing 214 mt of crude oil in FY17.
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