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OOC not to raise Stake in Bharat Oman Refineries

Oman Oil Company will not increase its stake in the Bharat Oman Refineries (BORL), a joint venture (JV) between state-run the Bharat Petroleum Corporation (BPCL) and Oman Oil Company.

 

Oman Oil Company has not shown interest and thus BPCL converted its warrants into shares. This has increased the stake in BORL from 50 percent to 63 percent. BORL is now a subsidiary of BPCL.

 

BPCL had made an investment in compulsorily convertible debentures and share warrants of BORL or Bina refinery in Madhya Pradesh. This was equivalent to 24 percent additional equity stake in BORL. A part of these share warrants, 13 percent, has been converted to equity.

 

In 2019, in addition to Oman Oil, national oil companies of Kuwait and Abu Dhabi were also in talks with BPCL to buy up to 24 percent stake in the refinery.

 

BORL is a key refinery for BPCL as it helps the company serve the northern and central regions in the country and receives crude supply by a cross-country pipeline from Vadinar to Bina.

 

Bina refinery has raised its refining capacity in two phases -- to 7.8 million tpa from the initial six million tpa at a cost of Rs 3,072 crore and then to 15 million tpa for an additional investment of Rs 30,000 crore in the next four-five years. The refinery will also set up a petrochemicals unit with a 1.5 million tpa naphtha cracker.

 

BPCL has cut its capital expenditure for FY21 by 36 percent from Rs 12,500 crore to Rs 8,000 crore.

 

The company has categorised its projects into minor and major projects. Any project which has an investment of less than Rs 150 crore is minor project and put on hold.

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