Alarmed over the possibility of the refinery turning into a non-performing asset (NPA), financial institutions led by ICICI had requested the oil major to acquire a stake in the project. FIs have sunk over Rs 2,600 crore in the project and the yearly interest on loans is accumulating at a rate of Rs 400 crore per annum. ``FIs want an oil company to be associated with the project and are even offering waiver of interest, if necessary,'' BPCL officials told this newspaper, adding that the company will ask fortotal management control for a possible share purchase.

According to BPCL, the major problem areas for picking up a stake in Essar are: lack of environmental clearances for jetty, uncleared insurance claims made for cyclone last year, huge liabilities, high share price quoted by promoters and cost overrun. The jetty has been hived off as a separate company to Essar Shipping, BPCL officials say this could be another hindrance as the jetty is extremely necessary for refinery as it is needed to import crude from overseas.

Nearly 70 per cent of the civil construction work has already been completed but since January this year, work on the project has stopped due to lack of funds, BPCL officials, who have been to Jamnagar, said.

Officials say though Essar has also approached Oman Oil, until BPCL itself commits to the project, Oman Oil may not invest. Both BPCL and Oman Oil are setting up a 7 mmtpa oil refinery in Bina in Madhya Pradesh as a joint sector project. The Rs 8,000 crore Bina project would becompleted in four years from the day one.

``We will take a decision in about a month whether to pick up a stake in Essar's Jamnagar refinery project or not... we are still studying the viability of the project,'' Sundararajan earlier told a news conference.

According to BPCL director (finance) Ashok Sinha, the investment on Essar refinery could be for buying and marketing products or an equity stake.

On the six MMTPA Bharat Oman refinery at Bina in Madhya Pradesh, BPCL director (refineries) M B Lal said the Prime Minister's Office recently held a meeting with the Gujarat government for expediting clearances.