Divestment-bound Bharat Petroleum Corporation (BPCL) has signed a sales purchase agreement with Oman's state-owned oil company OQ for the purchase of the overseas company's entire stake in the Bina refinery project in Madhya Pradesh.
The value of Oman's stake in the company is around Rs 2,400 crore, BPCL said in a statement. Bharat Oman Refineries (BORL) or Bina refinery was incorporated in 1994 as a public limited company with equal equity participation of Bharat Petroleum Corporation Limited and OQ (formerly known as Oman Oil Company). Since March 2020, BPCL has been holding 63.4 per cent and OQ 36.6 per cent equity in the company. The Government of Madhya Pradesh has a minor stake in the company through compulsorily convertible warrants.
N. Vijayagopal, Director (Finance) of BPCL, said, “With the acquisition of OQ’s entire stake in BORL, BPCL will establish control over BORL. This is expected to bring immense advantages to both the companies in terms of synergies and optimisation of returns and will facilitate any future expansion or diversification in Bina.”BORL posted a net loss for the year 2019-20 of Rs 803.5 crore, as compared to a profit of Rs 106.71 crore during the previous year. In 2019-20, Bina refinery’s crude oil intake was 7,913 thousand metric tonnes (TMT) with average capacity utilization of 95 per cent. The deal for buying Oman’s stake comes at a time when the government is looking to offload its entire stake in BPCL.