IOC, HPCL, BPCL look to raise funds from Aramco, Adnoc
MUMBAI: Indian Oil Corp. Ltd (IOC), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) are preparing to receive investments from Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) even as the state-run oil marketing companies ( await the Maharashtra government’s decision on providing a fresh patch of land for the $70 billion Ratnagiri Refinery and Petrochemicals Ltd project.
IOC, BPCL and HPCL will invest a total of ₹100 crore to complete preliminary work on the project, following which they intend of make a presentation to Aramco and Adnoc. While IOC will put in ₹50 crore, BPCL and HPCL will contribute ₹25 crore each, said a senior official from one of the oil marketing companies.
“We have completed the configuration study and are preparing the project report. Then, we will be able to arrive at a cost and decide how to fund the project,” said a senior official from one of the oil marketing companies. “We will be able to reach out to Aramco and Adnoc with a detailed plan.”
IOCL, HPCL and BPCL did not respond to queries emailed on January 24.
With a 60 million tonnes per annum capacity, the Ratnagiri project is a joint venture of Aramco, Adnoc, IOCL, BPCL and HPCL. Aramco and Adnoc are expected to jointly own 50% of the refinery, with the remainder split between the three Indian oil companies.
Announced in December 2015, the project was to be commissioned by 2022, but delay in acquiring land has pushed the deadline to 2025. A pre-feasibility study was completed in January last year.
Aramco and Adnoc had in July 2018 signed a memorandum of understanding to jointly develop and build an integrated refinery and petrochemicals complex in Maharashtra. It is however, unclear if either Aramco or Adnoc will invest in the project as it is expected that two could only make a crude supply assurance for the Ratnagiri refinery.
“Before Saudi Aramco and Adnoc decide to invest, they would need clarity on the cost structure and the return on investment of the project. We need to work on all these aspects and this would take a couple of months,” said another official aware of the development.
The refinery will have a capacity to process 1.2 million barrels of crude and produce 18 million tons of petrochemicals each year, and provide direct and indirect employment to over 100,000 people. Due to delay in receiving land in Ratnagiri, the project has been shifted to Roha in the neighbouring Raigad district of Maharashtra. Raigad is located in the Konkan region and Roha has a big industrial set up with the majority of the industrial units being chemical processing industries. The Maharashtra Industrial Development Corp. had secured a land bank of 10,000 acres for the project. The previous government had decided to relocate the project after protests by farmers and local landowners, who feared the project may damage the region’s flora and fauna, and affect the famous Alphonso mango and cashew plantations.