BPCL, HPCL may share Bina equity

State-run Bharat Petroleum Corp has offered to take Hindustan Petroleum Corp as equal partner in the Rs 6,354 crore (Rs 63.54 billion) Bina refinery in Madhya Pradesh.

"We are willing to offer HPCL equal stake in Bina refinery. We are in dialogue with HPCL but nothing has been finalised as yet," BPCL chairman and managing director S Behuria said.

Of the six million tonne products Bina refinery will produce annually, HPCL has indicated a requirement of 1.4 to 1.6 million tonnes of petrol, diesel, LPG and kerosene for marketing in Madhya Pradesh.

Bina refinery, in which BPCL holds 51 per cent stake, is slated for completion in the second half of 2008. Oman Oil Company holds about two per cent interest in Bharat Oman Refinery Ltd (the company executing the Bina refinery project) and the remaining equity is being offered to HPCL.

"We both (BPCL and HPCL) need a refinery in central India to meet the demand there. The project is beneficial to both of us," he said.

Behuria said BORL has sought fiscal concessions including sales tax deferment from Madhya Pradesh government to make the refinery project economically viable.

"Fiscal concessions are a must in order to ensure that the grassroot refinery gives an acceptable rate of return on investment," he said.

The company is seeking deferment of sales tax on refinery products for 15 years, waiver of entry tax on crude oil, relief in electricity duty and royalty on construction material and cut in customs duty on capital equipment.