Singapore-based oil firm Netoil (Singapore) (PTE) Limited has started confirmatory due diligence to acquire the entire equity capital in Nagarjuna Oil Corporation (NOCL), which is setting up a refinery of six million tons per annum capacity at Cuddalore, Tamil Nadu. Nagarjuna Oil Refinery (NORL) holds 46.78 per cent of the equity share capital. According to NOCL, the Rs 11,500-crore (excluding outsourced facilities) refinery project is the single largest private sector investment in Tamil Nadu and it has been declared an anchor unit for the proposed Petroleum Chemical and Petrochemical Investment Region in the state.

NORL on Tuesday informed the BSE that Netoil has commenced work on confirmatory due diligence and on satisfactory completion of this, the latter would acquire the entire equity capital in NOCL subject to the approval of the company's lenders and shareholders. The lenders of NOCL also commenced appraisal of Netoil's proposal for the realignment of existing debt and approval of the new debt for completion of the project, it added.

The company had, earlier this year, informed the exchanges that Netoil would take over entire debt of NOCL. The acquisition is to enable Netoil to take forward the petroleum refining project of NOCL. The Tamil Nadu government, which is also a shareholder through Tamil Nadu Industrial Development Corporation, is aware of these developments, added the company. The six-million ton refinery is the first phase of a Rs 25,000-crore project in which the total capacity is expected to be 12 million tons. The project was delayed due to damages caused by a cyclone some years ago as well as the global economic slow down. Around 15 lenders have reportedly invested in the project.

Phase-I of the project, according to the company website, is expected to be around 1,25,000 barrels per stream day, and will primarily meet the growing energy needs of southern India. The project site is spread over an area of 2,100 acres, including 300 acres of greenbelt. "Nagarjuna Group has partnered with the government of Tamil Nadu and Tata Petrodyne Ltd to implement the refinery project," says the website. The refinery is designed for producing feedstock of EURO III and EURO IV standards.