The move is a fallout of the recent `marriage' between IOC and ONGC in the form of a 10 per cent crossholding arrangement. Prior to this, the two navratnas had set the process of working together in as host of petro-related activities both in the country and aborad. This would encompass areas like power, petrochemicals, refining, exploration, production and marketing.

ONGC will pick up up to 24 per cent in the project so that the company does not become a government entity. Sources say this was another reason for NTPC's exit from this project as it was keen on taking a 26 per cent stake, an idea which IOC was averse to.

IOC, which itself holds 26 per cent stake in this venture, has decided to offer the balance 28 per cent to leading financial institutions, foreign banks and companies. This project will have a debt equity ratio of 70:30 and is expected to go on stream by 2002.

The power project at Sawli will make use of residual fuel from IOC's nine million tonne refinery in Gujarat which will be expanded to 12 million tonnes by 2000.

Sources said the Industrial Development Bank of India (IDBI) and Larsen and Toubro (L&T) are amongst the interested candidates for the project.

However, the IOC board is yet to finalise the names as this will be done after ONGC picks up its 24 per cent share in the plan. Even then, these strategic investors will confine their stake to less than ten per cent in the venture.

IOC has also planned another 300 MW power with ONGC at Panipat, linked to its Panipat refinery with Marubeni as the third partner. IOC and Marubeni will hold 26 per cent each and ONGC will pick up a 20 per cent stake. The board of IOC and ONGC have recently approved the equity pattern for this project.

IOC has identified power as the key area and plans to put up a series of power projects based on refinery residue from its forthcoming refineries. In all these projects, IOC has decided to retain a minimum of 26 per cent and offer another 26 per cent to its foreign partner, who will get the appropriate technical know how for putting up the project. The stake of the Indian partner however will be confined to a maximum of 24 per cent.