Bharat Oman Refineries to be dedicated on Friday

By staff - Mon May 16, 6:41 am

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The $2.4 billion refinery complex of Bharat Oman Refineries Limited (BORL), in which Oman Oil Company has a 26 per cent equity interest, will be formally dedicated this weekend.

Located at Bina in the central Indian state of Madhya Pradesh, BORL is a symbol of burgeoning economic relations between Oman and India. Underscoring the project’s significance to India’s economic growth as well as to Oman-India ties, the dedication ceremony — scheduled to take place on Friday, May 20, 2011 — will be attended by Indian Prime Minister Dr Manmohan Singh. A delegation of officials from the Sultanate is expected to attend as well.

The 120,000 barrels per day capacity refinery is capable of producing 6 million tonnes of petroleum products annually, chiefly diesel for the local market, in addition to smaller quantities of jet fuel and gasoline.

The complex was commissioned earlier this year, boosting refining capacity in the deficit-prone northern and central regions of India.

Feedstock for the project, which is set in the Indian heartland far removed from any seaport, is supplied by an overland pipeline that runs 935 kilometres from Gujarat’s Vadinar port on India’s west coast. Crude oil is primarily sourced from a number of Central Asian producers. Both crude import and pipeline facilities are owned by BORL.

Significantly, BORL represents one of Oman Oil Company’s biggest investments in the sub-continent. BORL grew out of a joint venture agreement concluded by Oman Oil with Indian energy giant Bharat Petroleum Corporation Ltd (BPCL) in 1993.

In November 2009, the wholly Omani government-owned energy investment vehicle upped its stake in BORL from two per cent to 26 per cent. The Indian government owned BPCL, which holds the remaining equity in BORL, is a global Fortune 500 company with interests in refining and marketing of petroleum products and petrochemicals, exploration of hydrocarbons and marketing of LPG.

Recently, majority shareholder BPCL outlined plans to raise the refinery’s capacity to 9 mtpa. The expansion is proposed to coincide with the plant’s first major maintenance turnaround three years from now. Subject to the availability of water and other resources, a further expansion is envisaged in the future, which will boost the plant’s overall capacity to 15 mtpa.

To help fund the Phase 1 expansion, BPCL is weighing a public offering of a 25 per cent equity share in BORL. The timing of the Initial Public Offering (IPO) will depend on market conditions, according to the company. (omanobserver)

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