Oman Oil has returned to pick up 26 per cent equity in the Rs11,397 crore ($245.9 million) Bina Refinery project of India's Bharat Petroleum, for an additional of Rs1,220 crore, sources said.

The six-million tonne per annum refinery in Madhya Pradesh was originally conceived through Bharat Oman Refineries, a joint venture between Bharat Petroleum and Oman Oil. The joint venture was formed in 1993 but the Omanian firm did not contribute equity beyond the initial Rs 75 crore.

Bharat Petroleum has now wrested a 50 per cent premium to allow Oman Oil Company to re-enter the project now, according to a report in The Times of India.

However, following inordinate delays in the implementation of the project, Oman Oil froze its investment in the company at Rs 75 crore for a 2 per cent stake. It is now paying Rs 15 for a Rs 10 share in BORL and is picking up 26 per cent.

BPCL, which holds 50 per cent stake in the project, provided the unbridged portion of the Rs 4,000 crore equity in form of loan.

The state-run firm would get its loan back once Oman Oil makes the payment for its 26 per cent share. It will get the remaining 24 per cent equity through an initial public offering, the dates of which are yet to be finalised, the source said adding BORL has already arranged Rs 6,400 crore loan to achieve financial closure.

Oman Oil's additional investment of Rs 1,220 crore would take its stake in BORL to 26 per cent from present 2 per cent. The project is scheduled for commissioning in early 2010.