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CCD defers Bina refinery stake issue

Gaurav Raghuvanshi in New Delhi

Contrary to belief, the last meeting of the Cabinet Committee on Divestment was a draw between Petroleum Minister Ram Naik and his divestment counterpart Arun Shourie.

The September 7 meeting decided to defer the issue of increasing the stake of Bharat Petroleum Corporation Ltd in the Bina Refinery to 50 per cent from the present 26 per cent.

While the meeting put strategic sale plans in BPCL and Hindustan Petroleum Corporation Ltd in abeyance for three months, it also deferred the petroleum ministry's proposal of acquiring Oman Oil Company's stake in the Rs 6,300 crore (Rs 63 billion) Central India Refinery at Bina, according to the minutes of the CCD meeting.

Petroleum Minister Ram Naik had insisted on including the proposal in the CCD agenda despite it coming under the ambit of the Cabinet Committee on Economic Affairs, as he wanted to get a clearance for the increase in equity by BPCL before or along with any decision on the sell-off of the petroleum marketing company.

Naik had pointed out that the 6 million tonnes per annum Bina refinery was a Cabinet approved project in which BPCL had already invested over Rs 220 crore (Rs 1.2 billion).

According to the proposal, that was meant to put pressure against the strategic sale in the company BPCL was to be allowed to pump in Rs 1,241 crore (Rs 12.41 billion) as equity in Bharat Oman Refineries Ltd, which is executing the Bina project, to make up for the shortfall caused with the exit of Oman Oil from the venture.

Oman Oil's equity would be restricted to the existing level of 3 per cent while BPCL's share would climb to 50 per cent from the present level of 26 per cent.

Ministry of divestment, on the other hand, had insisted that BPCL, as also HPCL should be sold to private companies and the new strategic partner be allowed to decide on future expansion and investment plans.

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