BPCL shelves Bina Refinery IPO plan

MUMBAI: State-run Bharat Petroleum (BPCL), which owns Bina Refinery in an equal JV with Oman Oil Company, has shelved its IPO plans for the company as "it generates enough cash" to complete the ongoing expansion and as also "because Kuwaiti Petroleum is keen to pick up a stake", says a senior official.

The 1,20,000 barrels-a-day Bina Refinery is shut since midaugust for 45 days to synchronise the newly set up units with the existing facility which will raise the capacity to 1,56,000 bpd, the official said further.

The just completed expansion at Bina Refinery, or Bharat Oman Refineries commissioned in 2011, has taken its capacity throughput to 7.8 million tonne from 6 mt now in two phases at a cost of Rs 3,500 crore, and then to 15 mt at an additional investment of around Rs 20,000 crore over the next five years.

"Bina is generating enough

liquidity for some years now. We don't need any cash from outside to run it. In fact it has made enough cash balances to complete the just completed expansion," R Ramachandran, director-refineries at BPCL, told PTI. "So, the initial public offer which we had planned and worked does not happen now. At least for the next two-three years. The IPO was planned because our partner Oman Petroleum was not ready to infuse liquidity as the company for some years were

losing money," he added. The IPO would have given Oman Oil an exit option but now they don't want to leave the JV, he said, adding "moreover, Kuwaiti Petroleum is keen to pick up a considerable minority stake in the company. We are in talks to work out the details." The past chairman, S Varadarajan, had told PTI in October 2015 that "the IPO would definitely happen next year (2016)."

In fiscal 2017, Bina refinery's net profit more than doubled to Rs 810 crore. Oil from Kuwait accounted for about 6 per cent of the country's overall imports in FY18.

Kuwait Petroleum Corporation is reportedly seeking at least 25 per cent stake in the refinery, which may be divested from the present 50 per cent stake that Oman Oil owns in the venture.

In 2009, Oman Oil had paid 50 per cent premium for a re-entry into the Rs 11,397crore Bina Refinery. The project was originally conceived way back in 1993 with the national Omani oil company as an equal JV.