Leading business conglomerate Beximco has set up a joint venture with a Saudi firm to invest nearly $1 billion to upgrade Bangladesh’s sole oil refinery.
“Beximco and Marasel Company Ltd of Saudi Arabia will jointly submit interest for funding an upgradation project of the Eastern Refinery Limited,” a statement from Beximco said.
State-owned Bangladesh Petroleum Corporation (BPC) invited offers in July from international firms and financial institutions to finance the $900 million project near Chittagong port.
“The fund from Beximco and Marasel are likely to be accepted if the terms and conditions are found favourable,” a senior official of BPC told Reuters.
Beximco’s businesses range from textiles to pharmaceuticals. Its subsidiary Beximco Pharmaceuticals Ltd (BXPq.L: Quote) BXPH.DH is listed in London.
The Marasel Company Ltd is owned by Saudi Prince Salman Bin Sultan Bin Abdul Aziz Al-Saud and has large investments in different sectors, mainly in energy.
“In line with its business diversification objectives, Beximco Ltd is now poised to enter into the oil and energy sector, and has mobilised necessary resources for this purpose,” the statement said.
Beximco owns the single largest stake in a Bangladesh private bank and a local private airline, a senior executive of Beximco said. But he could not give the size of the conglomerate in terms of equity.
The refinery upgrade will increase ERL’s production capacity by 200 percent to 4.5 million tonnes per year from 2013.
It presently produces 1.5 million tonnes of petroleum products from imported crude to meet 30 percent of the country’s requirement of 3.8 million tonnes a year.
About Eastern Refinery
Eastern Refinery Limited, a subsidiary of Bangladesh Petroleum Corporation was incorporated under Companies?? Act 1913(amended in 1994) as a Public Limited Company in 1963 with 35% EPIDC??s( East Pakistan Industrial Development Corporation) shares, 30% shares held by Burmah Oil Company (BOC) and the rest 35% by private entrepreneurs. From November, 1985, Bangladesh Petroleum Corporation (BPC) became the 100% share holder of the company.
ERL plays a vital role in supplying around 40% of the country??s current petroleum products?? demand and thus maintains stability in the POL Products?? market of the country. ERL sometimes becomes the only fall back system available, to avoid products crisis in the face of disruption of products?? import.
A Board of Directors appointed by the Government, (of which Managing Director of ERL is one of the Directors) manages the company. The Managing Director is the Chief Executive Officer (CEO) of ERL.
ERL as a profitable company in the Public Sector contributes substantially to the national exchequer in the form of dividend, taxes, VAT etc.