Kuwait Petroleum International (KPI) is in talks to buy 24% of the Bina joint venture refinery in central India, two Indian and two foreign sources said, as the West Asian nation wants to increase its South Asian market share.
Global oil producers are vying to gain entry into India’s expanding refining sector. The world’s third-biggest oil importer plans to raise its refining capacity by 77% to about 8.8 million barrels per day (bpd) by 2030 to meet rising fuel demand.
‘Preliminary stage’
“Talks with KPI are at a preliminary stage,” said one of the Indian sources. KPI is the international downstream unit of state-owned Kuwait Petroleum Corporation.
The 1,20,000-bpd Bina plant is operated by Bharat Oman Refineries Ltd (BORL), a 50-50 joint venture between Oman Oil Co. and Bharat Petroleum Corp.
Kuwait Petroleum International CEO Nabil Bourisli said in April his company intends to sign a deal soon to buy a stake in an Indian refinery and petrochemical project and supply as much as 2,00,000 bpd of oil.
BPCL, Oman Oil and KPI did not respond to Reuters e-mails seeking comment on any discussions.
BPCL has funded an expansion of the Bina refinery to 1,56,000 bpd that is to be completed later this year. Oman Oil did not invest in the upgrade. BPCL has an option to convert its additional spending into equity that would raise its overall share in BORL to 74%.
Indian sources said BPCL would like to retain at least 50% in BORL, mirroring an equity structure for a planned west coast refining project co-financed by Saudi Aramco in which Indian and foreign ownership is evenly split.
Saudi Aramco had last month signed a deal to buy a 50% stake in the $44-billion planned project in Maharashtra, with an option to share a part of its equity with a new foreign partner. Abu Dhabi National Oil Co. may join Aramco for the project, sources said last month.
‘Half for BPCL’
For Bina, the plan would be for BPCL to retain half of the refinery, while KPI and Oman Oil would share the remaining 50% stake, the Indian sources said.
An Oman Oil Co. source said participation of KPI is one of the proposals being discussed among the three parties — BPCL, Oman Oil Co and KPI — but that nothing is finalised yet.
BORL has plans to double its expanded refining capacity to 3,10,000 bpd and build a petrochemical project.
