Mumbai: British oil major BP is having second thoughts on proceeding with its plans proposed 50-50 joint venture with PSU Hindustan Petroleum Corp. Ltd to build a Rs13,000-crore refinery at Bhatinda. BP and HPCL had agreed in October 2005 to build a 180,000 bpd refinery in India.

Though no reasons were given for the decision to withdraw from the venture, it is speculated that the decision may have something to do with the governments refusal to raise prices of domestic LPG and diesel to global levels.

PSU oil refining companies are keen to enter into joint investment collaborations to tap funds for expansion, as India hopes to emerge an oil refining hub in Asia Pacific.

ONGC formed a strategic partnership with Royal Dutch Shell in January this year explore for reserves in India and abroad. The two companies have also talked about the possibility of jointly entering refining.