Indian Oil To Decide On A BPCL Bid After Government Lays Out Rules: Chairman
The Cabinet Committee on Economic Affairs had on Nov. 21, 2019, decided to sell government's entire 53.29 percent stake in country's second-largest state refiner BPCL, but a tender for sale hasn't yet been issued.
"The expression of interest (for BPCL stake sale) hasn't been issued yet. We don't know the conditions. We have no information whether PSUs are allowed to bid or not," Singh told reporters. "I cannot comment if Indian Oil will bid or not unless we see the conditions set out in the EoI."
He said a decision on the issue can only be taken once there is clarity on the bidding process the government intends to follow.
Soon after the cabinet decision, Oil Minister Dharmendra Pradhan had hinted that public sector undertakings will be kept out of BPCL privatisation.
"Since 2014, we have a clear vision that the government has no business to be in business," Pradhan had said on Nov. 22, 2019. "We have examples of 2-3 sectors such as telecom and aviation where ushering in private participation has led to customers benefiting from price cuts, efficiency, and better service."
Asked if the company has been told that PSUs will be kept out, Singh said there is no information on whether state-owned firms can bid or not.
BPCL will give its buyer ready access to 14 percent of India's oil refining capacity and about one-fourth of the fuel marketing infrastructure in the world's fastest-growing energy market.
At the current BPCL share price, the government's 53.29 percent stake is valued at around Rs 53,400 crore. On top of this, an acquirer will have to make a Rs 26,000-crore open offer to buy an additional 26 percent stake from minority shareholders.
State-run BPCL operates four refineries in Mumbai, Kochi, Bina (Madhya Pradesh) and Numaligarh (Assam) with a combined capacity of 38.3 million tonnes per annum—15 percent of India's total refining capacity of 249.4 million tonnes. It also owns 15,177 petrol pumps and 6,011 LPG distributor agencies in the country. Besides, it has 51 LPG bottling plants.
The government is keen to get international energy majors such as Saudi Aramco, Total SA of France and ExxonMobil to operate in the downstream fuel marketing business so as to bring in greater competition.
As on March 31, BPCL reported cash and cash equivalents of around Rs 5,300 crore against Rs 10,900 crore of debt maturing over the next 15 months.