``The move makes enormous sense as OIDB has already lent over Rs 1,000 crore to the project. The board has also reduced the lending rate from 14 per cent to 10 per cent which will result in savings of nearly Rs 50 crore for the refinery,'' sources said. The three-million tonne project is now ready for full-fledged commissioning and talks are on with the Bangladesh Government to buy half the output.

With OIDB stepping into the picture, the entire funds requirement for the project will have been sewn up which means there would be no need to go in for the public issue as planned earlier. Apart from OIDB, the board of Oil India has also given the go-ahead to pick up 10 per cent in the equity of the refinery.

Bharat Petroleum Corporation is the largest shareholder in Numaligarh with 32 per cent while IBP accounts for 19 per cent. Ten per cent apiece will be subscribed to by the Assam Government, OIDB and Oil India. Sources say there is no need to raise further funds as the cost of the project has come down from the original estimate.

IBP is, incidentally, believed to be exploring the option of selling its own stake in the refinery valued at Rs 175 crore though this could not be confirmed from company officials. The stand-alone oil marketing PSU has, otherwise, outlined other options to the petroleum ministry which include conversion of the OIDB loan into equity and waiver of the interest on the money borrowed for its stake in the refinery.

IBP has just not been able to mop up funds as its Rs 45 crore public issue has been put on hold for over two years now. The company had also sought ministry approval for a Rs 382 crore rights issue which again seems improbable. Barring dues from the Oil Coordination Committee which run into barely Rs 200 crore, IBP is in dire need of funds for various other activities.

The petroleum ministry is apparently of the view that there is no way it will allow IBP to sell its stake in the Numaligarh refinery. A section of industry, on the other hand, believes that the PSU has nothing to gain with a 19 per cent stake in a refinery which is located in the northeast. They argue that the capacity of the project at three million tonnes is also a good reason to withdraw.