Aramco, OIL eye equity as BPCL opens Andhra refinery to partners: Report

The refinery-cum-petrochemical complex is being planned near the Ramayapatnam port in Nellore district and is aimed at meeting rising domestic fuel demand as well as boosting petrochemical exports

Saudi Aramco and Oil India Ltd (OIL) are likely to acquire stakes in Bharat Petroleum Corporation Ltd's (BPCL) proposed greenfield refinery in Andhra Pradesh, as the state-run oil major looks to dilute 30-40 per cent equity in the project, a Business Standard report said on Tuesday.

Saudi Aramco is expected to pick up a minority holding of around 20 per cent, while OIL may take close to a 10 per cent stake. BPCL could also offload an additional 4-5 per cent to banks that have shown interest in participating in the project, the executive said.

Requests for comment sent to BPCL and Oil India did not elicit a response, while Saudi Aramco declined to comment, the report added.

The refinery-cum-petrochemical complex is being planned near the Ramayapatnam port in Nellore district and is aimed at meeting rising domestic fuel demand as well as boosting petrochemical exports. The Andhra Pradesh government has already allotted about 6,000 acres of land for the project.

Investment discussions are expected to move forward once the detailed feasibility report (DFR) is completed, which will determine the final project cost, the executive said. The DFR is likely to be ready by the end of February.

BPCL has pegged the estimated investment at over Rs 96,000 crore and proposed a refining capacity of 9-12 million tonnes per annum. However, the final cost could deviate by as much as 30 per cent from initial projections due to design and configuration complexities associated with large refineries, the source noted, adding that higher petrochemical capacity is being planned in response to demand trends.

The oil marketing company has been holding discussions with overseas investors, including entities from Saudi Arabia, for participation in the proposed refinery, Business Standard reported.