ONGC, Shell may take stake in Nagarjuna refinery
According to investment bankers, Indian Oil Corporation is also in the fray for the Cuddalore refinery
State- run Oil and Natural Gas Corporation ( ONGC), along with Shell India, is in talks with Nagarjuna Oil Corporation for a strategic stake in Nagarjuna’s Cuddalore refinery, said three people in the know of the development.
According to investment bankers aware of the deal, Indian Oil Corporation is also in the fray. Hindustan Petroleum Corporation and Bharat Petroleum Corporation, which were said to be considering the deal, are no longer in the race.
“A few strategic investors are doing the due diligence. This is expected to be finalised by October, including the stake that needs to be diluted,” said asenior official from ONGC.
ONGC’s chairman and managing director, Sudhir Vasudeva, had recently said ONGC and Shell were doing due diligence for the Nagarjuna refinery.
The total cost of the Cuddalore project — one of Tamil Nadu’s largest private sector projects — is around Rs 25,000 crore, of which Nagarjuna has already spent Rs 6,000 crore. It is for the remaining Rs 19,000 crore that the company is looking for investors.
The proposed investment is to facilitate work at the site and to expand the refinery to 12 million tonnes from the current six million tonnes. The petroleum refinery project was to commence operations 18 months ago, but due to damages caused by cyclone Thane, the project was delayed by a year-and-a-half.
To implement the refinery project, Hyderabad- based Nagarjuna Group has partnered with the Tamil Nadu government and Tata Petrodyne Ltd. Last year, Singapore- based Trafigura Pvt Ltd picked up a 24 per cent stake in Nagarjuna for around Rs 650 crore. Another Rs 600 crore was infused by Trafigura into the construction of storage facilities and associated infrastructure through another entity, Portoil Ltd, a 80: 20 joint venture between Trafigura and Nagarjuna. This will come up in a 100- acre site near the refinery’s 2,500- acre site.
In the first phase, the implementation of six million per annum capacity unit will be completed and operations are expected to commence by 2014.
State- run Oil and Natural Gas Corporation ( ONGC), along with Shell India, is in talks with Nagarjuna Oil Corporation for a strategic stake in Nagarjuna’s Cuddalore refinery, said three people in the know of the development.
According to investment bankers aware of the deal, Indian Oil Corporation is also in the fray. Hindustan Petroleum Corporation and Bharat Petroleum Corporation, which were said to be considering the deal, are no longer in the race.
“A few strategic investors are doing the due diligence. This is expected to be finalised by October, including the stake that needs to be diluted,” said asenior official from ONGC.
ONGC’s chairman and managing director, Sudhir Vasudeva, had recently said ONGC and Shell were doing due diligence for the Nagarjuna refinery.
The total cost of the Cuddalore project — one of Tamil Nadu’s largest private sector projects — is around Rs 25,000 crore, of which Nagarjuna has already spent Rs 6,000 crore. It is for the remaining Rs 19,000 crore that the company is looking for investors.
The proposed investment is to facilitate work at the site and to expand the refinery to 12 million tonnes from the current six million tonnes. The petroleum refinery project was to commence operations 18 months ago, but due to damages caused by cyclone Thane, the project was delayed by a year-and-a-half.
To implement the refinery project, Hyderabad- based Nagarjuna Group has partnered with the Tamil Nadu government and Tata Petrodyne Ltd. Last year, Singapore- based Trafigura Pvt Ltd picked up a 24 per cent stake in Nagarjuna for around Rs 650 crore. Another Rs 600 crore was infused by Trafigura into the construction of storage facilities and associated infrastructure through another entity, Portoil Ltd, a 80: 20 joint venture between Trafigura and Nagarjuna. This will come up in a 100- acre site near the refinery’s 2,500- acre site.
In the first phase, the implementation of six million per annum capacity unit will be completed and operations are expected to commence by 2014.
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