According to an official communique, this constitutes part of the additional financial aid of Rs 1,154 crore. The financial institutions, it may be recalled, had set up a five-member panel to examine the project cost and viability. The unanimous verdict was that the figure was reasonable and commissioning of the refinery an absolute must. ABB Lummus, the EPC contractor, has committed to bringing in Rs 395 crore by way of deferred credit and bridge equity that completes the requirement of equity. The company has the single point responsibility for completing the project within the agreed time schedule. It will also provide the project completion guarantee.

Essar has completed two-thirds of work on the refinery with around $430 million worth of equipment in place and another $200 million in transit. Around 5,800 crore has been spent on the project which is scheduled to be commissioned during 2001-02.

The company is in the process of roping in a strategic partner for the refinery for which talks are on with Oman Oil. As part of this process, the exploration and production divisions of Essar Oil will be demerged as also the tankages which are currently under the umbrella of Essar Shipping. Oman will logically seek access to these tankages once it becomes a strategic partner in the refinery.

Essar's first choice was Bharat Petroleum Corporation followed by IndianOil. The two PSUs have indicated that they are not interested in participating as equity partners but ready to market the products of the refinery once it is commissioned. Oman Oil, on the other hand, views this as the most comfortable entry point to its Indian downstream plans and is expected to pump in $200 million shortly as financial closure has been achieved.