"For all practical reasons, ONGC has shelved its earlier proposal to participate in the equity of the project though a formal decision by the board has not been taken yet," top sources said. Thee upstream major had, over two years ago, indicated its willingness to take 15-20 per cent in the refinery which would have marked its first serious foray into the downstream oil sector.

Sources hinted that ONGC had decided against the plan for a variety of reasons. The crucial fact is that it has only recently entered into an agreement with the Indian Oil Corporation (IOC) for joint efforts in refining & marketing, exploration & production, petrochemicals and power. Naturally, this would indicate that each PSU would give the other the first right of refusal as co-promoter for anyproject.

The other factor that could have compelled ONGC to shelve its plans for BORL is the huge delay in commissioning the refinery. It was conceived way back in 1994 with a capital outlay of Rs 5,300 crore. Today, due to bureaucratic delays, costs have been increasing by Rs 50 crore a month and the project today stands at a whopping Rs 8,000 crore. No work has begun even after five years and it remains to be seen if there is any hope of revival either.

Hence, it makes little sense to ONGC to consider a stake in a refinery whose commissioning still remains a huge question mark, sources say.

ONGC has, for the moment, zeroed in on IOC's nine million tonne east coast refinery as a partner with a nominal stake but even this this has not found favour with the ministry of petroleum and natural gas. The apex authority is of the view that the PSU should first ensure that it has enough funds at its disposal to carry out its all important function of exploration and production. A meeting has been scheduledwith the ministry next week and sources indicate that ONGC will eventually be given the go-ahead as it has a strong case in its hands. In 1996, ONGC first approached BPCL with a proposal that involved taking a stake of around 12-15 per cent in both the Bina and Sultanpur refineries (where Shell was tipped to be the partner).

Subsequently, BPCL also offered ONGC equity of 12 per cent in the three million tonne Numaligarh refinery being commissioned in Assam shortly.

Eventually, ONGC decided to confine its participation to the Bina project but sources say the wait has been far too long for the corporation to continue keeping its interests alive. "Undoubtedly, BORL would have been the best option for ONGC given that central India is a ready market for petro-products. However, there is really little logic in waiting as there is really no guarantee when the refinery will be commissioned," sources said.

Whether the project actually sees the light of day remains to be seen as there is no immediate solutionin sight on the location of the single point mooring, the vital link to the refinery from Gujarat. ONGC has made it categoric that it is keen on a foothold in refining as it will give it ready access to the more lucrative option of marketing products.

The petroleum ministry had, at one point, intimated the PSU that it could team up with Hindustan Petroleum Corporation for the nine million tonne Bhatinda refinery consequent to Saudi Aramco walking out of the project. This finally did not materialise as Exxon Corporation entered the picture (and has since withdrawn).