Mumbai, Aug 17: The Indian Petrochemicals Corporation Ltd (IPCL) has decided to keep its options open on taking an equity stake in Essar Oil's 10.5 mt refinery. The Rs 6,000-crore project is scheduled to be commissioned in Vadinar, Gujarat, next year.

Sources say that IPCL is keen on participating in either of the joint sector refinery projects being promoted by Hindustan Petroleum Corporation and Bharat Petroleum Corporation. The idea is to have a ready source for naphtha - the feedstock for its petrochemicals.

While ministry sources maintain that the decision-making process will take time, corporate bankers here say that IPCL is keen on picking up to 35 per cent equity in the Essar refinery. The corporation, they add, "has already conducted preliminary studies through Bankers Trust on a possible stake in the project."

It might be noted here that Indian Oil Corporation, which has a marketing tie-up with Essar Oil, has also indicated that it may take up a 10 per cent stake in Vadinar.The Ruias have a 57 per cent stake in Essar Oil and have not taken any final stance on offloading a portion of this to another player. Sources have indicated that "IPCL, in any case, is not keen to be a leading partner in the venture."

Investment banker Morgan Stanley was given the mandate by the Ruias some months ago to locate a "strategic partner" for the refinery. The study has apparently been hampered by the crisis in the oil pool account which has "dampened" the enthusiasm of some interested parties.

The petrochemicals major is in talks with HPCL and BPCL for a stake in their refinery projects being planned in Deogarh, Maharashtra, and Bina, Madhya Pradesh, respectively. The state-run oil giants will have a 26 per cent stake each in these ventures along with their foreign collaborators. HPCL is also in talks with some leading international players while BPCL has already finalised its deal with the Oman Oil Company.

IPCL, sources say, is more inclined to go in for the Bina project as the west coast is getting increasingly saturated with refinery projects. Among these are Mangalore Refinery and Petrochemicals, Essar Oil and Reliance Petroleum. The total capacity in this region, along with the Deogarh refinery, will be nearly 50 mt by 2001-02. BPCL has not made any final plans to rope in a third party for its 6 mt Bharat Oman refinery.Apart from IPCL, the Oil and Natural Gas Corporation (ONGC) is weighing the options of picking a 12 per cent to 15 per cent stake in the project as part of its endeavour to get into downstream activities.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.