Oman Oil to pick up stake in Cuddalore refinery
By A Business Correspondent
The Oman Oil Company (OOC) has signed an MoU with Nagarjuna Oil Corporation Ltd (NOCL) for 26 per cent equity, worth Rs 300 crore, in the latter's 6 million tonne refinery project at Cuddalore in Tamil Nadu.
The Rs 3,480 crore project involves relocating Mobil's refinery from Woerth in Germany to Cuddalore. The project is being implemented by NOCL, a joint venture between Nagarjuna Fertilisers & Chemicals Ltd (NFCL) and Tamil Nadu Industrial Development Corporation (TIDCO). Presently, NFCL holds 51 per cent stake in the project; TIDCO has agreed in-principle to pick up equity in the project. Others who have evinced interest in the project are PDVISA of Venezuela and American Insurance Group Investment Fund.
Mobil, which was expected to hold 15 per cent equity stake in the project, had earlier withdrawn from the project, citing the quantum of equity offered and the failure of both NFCL and TIDCO to meet long-term strategic interests as the main reasons for doing so.
Meanwhile, IOC has dropped plans to become a strategic partner in the project because of its access to petroleum products in south India following the recent acquisition of the Chennai Petroleum Corporation Ltd.
The project also envisages the setting up of a single buoy mooring to bring in crude oil through very large crude carriers and a jetty to ship out products from the refinery. These works are estimated to cost Rs 180 crore and Rs 130 crore, respectively, and will be executed by L&T Ramboll. NOCL also plans to set up a 40-mw gas-based captive power plant and water treatment plant as part of the project.
The project has been accorded mega project status and granted a seven-year tax holiday. The project was received cleared by the Union Ministry of Environment & Forests in June 2001. The project had earlier obtained both state and Central government clearances. It is expected to be completed by April 2002.