Lakshmi Mittal invests $728 M in Indian oil refinery

By SiliconIndia   |   Tuesday, 20 February 2007, 06:00 Hrs
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New Delhi: Steel tycoon Lakshmi N Mittal, is investing $728 million for 49 percent stake in Hindustan Petroleum Corporation Ltd's (HPCL) Bhatinda refinery.

The petroleum minister, Murli Deora announced that HPCL and Mittal investments, part of the group that includes Arcelor Mittal, will hold 49 percent stake while financial institutions will be given two percent stake according to a national daily.

This move will help advance the 180,000 barrel per day (bpd) Bhatinda plant, one of a host of Indian projects to turn Asia’s third-largest oil consumer into a leading world refining centre.

In March 2006, BP Plc. had quit plans to help build the new refinery, then valued at $3 billion, fearing India’s policy of keeping domestic fuel prices low would hand it losses.

Associate director, Macquarie Securities India Ltd., Jal Irani said that Mittal’s interest in the project would boost confidence in HPCL, which has been looking for a partner since 2005.

Irani added that this is a rigth step for Hindustan Petroleum as it will help get the project off the ground at least. “But at the moment we do not see any significant change in the company’s fundamentals as it needs to be seen how much value can be created from this deal.”

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