Exclusive | BPCL may buy Oman oil company OQ's stake in Bina refinery for Rs 2,000 crore

Divestment-bound Bharat Petroleum Corporation (BPCL) is in advanced stages of discussions to acquire Oman's state-owned oil company OQ's stake in Bina refinery project in Madhya Pradesh for around Rs 1,900-2,000 crore,  Moneycontrol has learnt.

According to a source close to the development, the deal is likely to happen before the privatisation of BPCL. The company plans to merge Bina refinery, also known as Bharat Oman Refineries (BORL), with itself. This is expected to raise the valuation of BPCL in the ongoing privatisation process and also provide tax advantage in selling petroleum products.

According to BPCL annual report, BPCL has given a loan of Rs 1,254.10 crore to BORL and subscribed to share warrants of Rs 935.68 crore. BPCL has also subscribed to zero percent compulsorily-convertible debentures of Rs 1,000 crore.

The decision to buy OQ's remaining stake in the Bina Refinery was taken by BPCL's board of directors in December.

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 talks for buying Oman’s stake comes at a time when the government is looking to offload its entire stake in BPCL. The Centre's 52.98 percent stake in BPCL is valued at around Rs 47,000 crore based on the current market cap.

Three potential bidders, including Vedanta Group and two private equity funds -- Apollo Global and I Squared Capital --have also expressed interest in BPCL.