Oman Oil, which had committed itself to a 26 per cent stake in BORL, has also asked BPCL to send details on the financing pattern. The original cost was pegged at around Rs 5,300 crore in 1994 but has risen to around Rs 8,000 crore. The estimated increase has been in the region of Rs 50 crore a month.Sources say that Oman Oil is exasperated with the delay in commissioning the project and could even freeze its investment of $30 million made so far. The company has, in the meantime, shifted focus to Essar Oil's 10.5 million tonne refinery in Vadinar scheduled to be operational during 2002-03.

BPCL is expected to finalise the implementation time-table for BORL during the course of this fortnight and present it to Oman Oil. The refinery was originally planned with a capacity of six million tonnes but this could be enhanced to nine million or even 12 million tonnes. Logically, the project should be commissioned within 48 months if everything goes according to plan.

Should Oman Oil decide to pick up 26 per cent in the Essar refinery, it will translate into an investment of around $200 million. It has also said that it will first need to take a 26 per cent stake in the tankages of Essar Shipping which will be hived off into a new company. This is a crucial part of its plan to participate in the equity of Essar Oil's refinery.

Essar Oil is also considering a demerger of its exploration & production (E&P) business as part of a major restructuring drive. PWC is working on the feasibility plan which will involve equity participation by an oil company from either here or abroad. Similarly, NM Raiji & Co, the Mumbai-based chartered accountants, are working on a proposal which will involve the demerger of Essar Shipping's terminals and tankages. This is the division in which Oman Oil is looking for a stake.

Sources in New Delhi say that the petroleum ministry has no objections to Oman Oil taking a stake in the Ruias-promoted refinery but is as categoric that this should not preclude it from investing in BORL also. "Central India is the ideal location for the refinery as this is a region which is in desperate need of petro-products. These can be carried via pipeline right up to Kanpur," observers say.

BPCL has, in the meantime, indicated that it is ready to go it alone for the refinery as it now needs to supplement capacity in a hurry. The PSU had made an informal offer of equity to IOC also but the Fortune 500 company was apparently not too interested as it needed to streamline investments for its own Paradip refinery. The Oil and Natural Gas Corporation was among the first to express its interest in taking a stake of around 15 per cent in BORL. This would have marked the company's foray into the downstream sector.

BORL was one of the three joint sector projects mooted by the Centre way back in 1992 as part of a plan to encourage participation by foreign companies in India's refining sector. None of these plans has seen the light of day with one - the west coast refinery in Maharashtra (a joint venture between Oman Oil and Hindustan Petroleum Corporation) - actually shelved.