BP Plc set to back out of HPCLs Bhatinda refinery

Mumbai, March 22 | Updated: Mar 23 2006, 05:41am hrs
British oil & gas major BP Plc. is likely to pull out of Hindustan Petroleum Corporation Limited's (HPCL) proposed 9 million metric tonnes per annum (MMTPA) Guru Govind Sagar Refinery (GGSR) in Bhatinda, Punjab.

The pull-out would delay the commissioning of the refinery by a year. BP was to acquire 26% equity in the refinery while it was originally scheduled for commissioning in 2009.

BP and HPCL had differences over the use of brand names on products from the $3 billion refinery. Each insisted that products from the refinery be marketed under its own brand name.

Although the original letter of intent signed between the parties in October 2005 stated that the companies would develop a 'joint marketing strategy', the details of marketing of products were not spelt out.

BP has a presence in the Indian lubes market through Castrol India.

Admitting differences with BP over marketing issue, HPCL's chairman and managing director, MB Lal told FE, BP was expected to get back to us this month to sign the final MoU for the GGSR project. However, we are yet to hear from them.

Slippery Ground

Disputes over using brand names while marketing refinery products
HPCL finding difficult to acquire BPs overseas assets
GGSR project delayed by a year
HPCL to built refinery on it own, if BP backs out
GGSR financial closure by April end