After facilitating LN Mittal's entry into the Indian refinery business, the petroleum ministry is now keen that the steel baron pick up stakes in two other upcoming refineries -- Hindustan Petroleum Corporation's [Get Quote] 15 million tonne per year (mtpa) refinery at Vishakapatnam and Bharat Petroleum Corporation's [Get Quote] 6 mtpa refinery at Bina in Madhya Pradesh.

"There has been some talk and the oil ministry is very eager that Mittal buy into refineries in India," said a senior official in the petroleum ministry.

The official added that the government's wanted to leverage the group's financial strength to make the refinery projects a success.

RP Singh, managing director of Bharat Oman Refineries Ltd, the special purpose vehicle implementing BPCL Bina refinery, had told Business Standard in August that the company was in talks with strategic investors to sell 15 to 20 per cent stake. He had said a final decision on the stake sale was likely by the middle of next year.

HPCL is also planning to set up a 15 mtpa refinery after expanding its present 7.5 mtpa refinery at Vishakapatnam to 15 mtpa. There have been reports that French company Total and exploration company Oil India Ltd were likely to pick up stakes in that new refinery.

The Mittal group could not be reached for comment. However, during his visit to India earlier this year, while handing over the cheque for his stake in the Bathinda refinery LN Mittal said that his group was keen on the oil sector in India. "We will keep looking at opportunities," he had said.

"Refinery margins are currently on an upswing and it makes sense to be a part of the business," the oil ministry official said. Margins are now $10 a barrel against $ 6 a barrel a year ago.

Mittal picked up 49 per cent stake in HPCL's 9 mtpa refinery at Bathinda in Punjab after companies such as British Petroleum and Kuwait Petroleum had pulled out. The refinery had been in the drawing board stage for over 10 years.

"Now that Mittal has bought into the refinery, work is going ahead. Almost all clearance have been attained and work is ready to begin," the official said.

Currently the ceiling on foreign direct investment (FDI) in government-owned refineries is 26 per cent. This ceiling was relaxed in to allow Mittal to pick up 49 per cent in the Bathinda refinery as a one-off case. "Those papers moved with immense speed. It just shows how keen the government is that Mittal enter the country's oil sector," the petroleum ministry official said.

Mittal had brought in around Rs 3,500 crore (Rs 35 billion) investment into the Bathinda refinery, the largest foreign investment in the sector.