NEW DELHI: Notwithstanding the government’s stance on completing the privatisation of public sector Bharat Petroleum Corporation Ltd (BPCL) by March 2020, there is a fear that few companies, including global majors, would be willing to mobilise as much as Rs 1 lakh crore to complete the transaction.
As far as the domestic fuel retailers are concerned, oil minister Dharmendra Pradhan hinted on Thursday that Indian Oil might not be allowed to bid for BPCL, while industry officials indicated that companies from Russia and the Gulf could be targeted to get the necessary investment.
“This could be done through government-to-government talks as most oil companies in the region are state-controlled,” said an oil industry official.
Sources also say the DIPAM is working out a plan to offload the entire government equity, possibly to an overseas oil entity such as Saudi Aramco, Total, ExxonMobil or Shell.
BPCL could be an attractive buy for these firms, which are vying to enter the world’s fastest-growing fuel retail market, where BPCL has a significant presence.
The new buyer will get ready access to 35.3 million tonnes of refining capacity, which is 14 per cent of India’s total refining capacity of 249.4 million tonnes.
However, the appetite for the buy may be low given that the global oil market is facing a slump. In such a scenario, industry officials say, the government may also consider a two-phased route where it may first sell half of its total stake of 53.29 per cent and later consider a complete exit from BPCL when the valuation improves after the fund infusion by the strategic investor.