MUMBAI, MAY 22: Hindustan Petroleum Corporation (HPCL) will kick off the exercise of finalising a foreign partner for its west coast project only after settling dues with the Oman Oil Company (OOC). The six-million-tonne refinery is scheduled to be commissioned in Deogarh, Maharashtra, at an estimated cost of Rs 5,500 crore.

Sources said talks were still on with Oman Oil following which merchant bankers, auditors and valuers would be appointed to work on the dues payable to the company. HPCL officials said the process would take some time but maintained that the amount payable would be well below Rs 100 crore.

The outgo will essentially involve expenditure incurred in preparing the detailed feasibility report, money spent on recruitment of staff and other related expenses. When this exercise is complete, HPCL will come to a decision on selecting an alternative partner which should not be "too much of a problem," according to officials.

While indicating that there were many interested companies, they refused to divulge any names as it would be too premature to do so. The new partner will hold a 26 per cent stake in the refinery.

Oman Oil pulled out of the west coast project for reasons largely believed to be associated with lack of funds. The company is, however, going ahead with Bharat Petroleum Corporation in a 26:26 venture for setting up a six-million-tonne refinery in Bina, Madhya Pradesh. Sources say OOC may reduce its stake here to a level of ten per cent, but this has not been confirmed.

Meanwhile, acquisition of land for HPCL's west coast refinery is nearly complete. At one point, the delay caused union minister of state for petroleum and natural gas TR Baalu to call upon Maharashtra chief minister Manohar Joshi and persuade him to speeden up the process.

HPCL officials were categoric that there would be no change in the capacity of the west coast refinery, unlike the Punjab project, which was being enhanced to nine million tonnes from six million tonnes. Aramco of Saudi Arabia is partnering HPCL in the Punjab refinery with both partners holding 26 per cent equity.

The oil company is also expanding capacity at its Vizag refinery to 7.5 million tonnes and in Mangalore Refinery and Petrochemicals, where it has a 26 per cent stake, to nine million tonnes.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.