The government has received three bids for the privatisation of Bharat Petroleum Corporation Ltd (BPCL), Union Petroleum Minister Dharmendra Pradhan said on Wednesday. “I think three parties have given their expression of interests (EoIs) for the bidding process,” the minister said during a webinar on the future of the oil and gas sector in India, noting that the government was “committed to offload its share from some of the state-owned companies” as it would bring more competition and professionalism to these companies.
Vedanta Resources had said it has submitted an EoI for the government’s 52.98 per cent stake in BPCL. Besides Vedanta, two private equity funds are reported to have also submitted bids for BPCL.
Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management, had on the last date for bidding said that the transaction advisor for the sale had received “multiple expressions of interest,” but he did not reveal the identity of the bidders.
The qualifying bidders as assessed by the transaction advisor will be asked to place financial bid in the second round. Public sector undertakings are not eligible to participate in BPCL’s disinvestment process. The sale of the government’s BPCL stake, currently valued at around Rs 44,200 crore, is a key part of its Rs 2.1 lakh crore disinvestment target for FY21.
Key for divestment target
The qualifying bidders as assessed by the transaction advisor will be asked to place financial bid in the second round. Public sector undertakings are not eligible to participate in BPCL’s disinvestment process. The sale of the government’s 52.98 per cent stake in BPCL is a key part of its Rs 2.1 lakh crore disinvestment target for this fiscal.
Pradhan also said that as an importer of crude oil, India would prefer to be able have more potential sources to purchase crude oil. “As a buyer, I would like to have more buying places. I should have more destinations to go for purchasing (of oil),” he said in response to a question on the possibility of India resuming oil imports from Iran and Venezuela under a Joe Biden presidency of the US.
India suspended crude oil imports from Iran in May 2019 and has reduced imports from Venezuela, in light of economic sanctions imposed by the Trump administration on both countries.
Pradhan said that boosting the domestic output of crude oil and natural gas was a priority for the government, which envisioned that this growth would be driven by small and mid-sized companies along with large companies. He noted that energy major Exxon Mobil was in talks with local companies to invest in Indian fields.
“Exxon Mobil is in active discussion with some of our companies to participate in some of our producing fields,” said Pradhan. Exxon Mobil had signed a memorandum of understanding with state-owned Oil and Natural Gas Corporation (ONGC) last year through which it is set to offer technical assistance and expertise for the development of ONGC’s offshore blocks.
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