New Delhi: State-run Hindustan Petroleum Corp. Ltd (HPCL) is in talks with the world’s largest oil producer Saudi Aramco and Kuwait’s national oil company Kuwait Petroleum Corp. (KPC) for joint participation in the $10 billion (Rs47,800 crore) refinery-cum-petrochemical project at Vizag in Andhra Pradesh.
The two companies, if they agree to join the venture, will replace steel tycoon Lakshmi N. Mittal who has put investment in the project on “hold” because of the global economic slowdown, an industry representative said.
Saudi Aramco and KPC may supply crude and also have equity partnership in the project, he said.
“The negotiations are at a standstill because of certain conditions put by both Saudi Aramco and KPC,” he said.
While Saudi Aramco has sought a minimum of 30% in the 15 million tonnes refinery project, KPC is insisting on being the sole crude supplier and output being sold locally. The conditions are not acceptable to HPCL.
HPCL, GAIL (India) Ltd and Oil India Ltd were to hold 49% stake in the Vizag project, while the Luxembourg-registered Mittal family firm, Mittal Investment Sarl, and French firm Total SA were to hold an equivalent stake.
The remaining 2% was to be offered to financial institutions.