Saudi Aramco, Rosneft, Shell among global oil majors likely to bid for govt's stake in BPCL
Stake sale in PSUs is top priority for the government in absence of which fiscal deficit is expected to widen in the next seven months.
- Oct 21, 2019,
- Updated Jun 30, 2020 3:03 PM IST
The government's stake sale in Bharat Petroleum Corp Ltd (BPCL) is likely to see bids from international oil giants such as Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co. The government plans to offload 53.29% share stake in BPCL.
In the Union Budget, the government had pegged the disinvestment target of Rs 1.05 lakh crore for the financial year 2019-20. Stake sale in PSUs is top priority for the government in absence of which fiscal deficit is expected to widen in the next seven months. Lower-than-expected goods and services tax collections and a corporate tax cut that will cost the exchequer Rs 1.45 trillion are expected to add to fiscal deficit this fiscal.
Govt stake in BPCL may cost Rs 60,000 crore for buyer
In January 1976, the Burmah Shell group of companies was taken over by the Government of India to form Bharat Refineries Limited, which was later renamed as Bharat Petroleum Corporation Limited.
This is the second time that a Bharatiya Janata Party-led government has considered the privatisation of BPCL.
In 2003, the Supreme Court rejected a similar move by the Atal Bihari Vajpayee government and said that privatisation required parliamentary approval. However, the Narendra Modi government which enjoys a majority in Lok Sabha, cleared the path for stake sale.
The total attributable refining capacity of BPCL is about 35 million tonnes (MT) annually. It operates 15,078 fuel stations, which accounts for a quarter of the retailing market share, and 6,004 LPG distributors. In the last financial year, the company posted a 13 per cent fall in consolidated profit to Rs 8,528 crore. Sales went up 22 per cent to Rs 3.4 lakh crore.
In January last year, the government sold its entire 51.11 per cent stake in HPCL to state-run Oil and Natural Gas Corp. Ltd for Rs 36,915 crore. The divestment price was at a roughly 18% premium to prevailing prices. Thereafter, HPCL became its subsidiary.
By Aseem Thapliyal
The government's stake sale in Bharat Petroleum Corp Ltd (BPCL) is likely to see bids from international oil giants such as Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co. The government plans to offload 53.29% share stake in BPCL.
In the Union Budget, the government had pegged the disinvestment target of Rs 1.05 lakh crore for the financial year 2019-20. Stake sale in PSUs is top priority for the government in absence of which fiscal deficit is expected to widen in the next seven months. Lower-than-expected goods and services tax collections and a corporate tax cut that will cost the exchequer Rs 1.45 trillion are expected to add to fiscal deficit this fiscal.
Govt stake in BPCL may cost Rs 60,000 crore for buyer
In January 1976, the Burmah Shell group of companies was taken over by the Government of India to form Bharat Refineries Limited, which was later renamed as Bharat Petroleum Corporation Limited.
This is the second time that a Bharatiya Janata Party-led government has considered the privatisation of BPCL.
In 2003, the Supreme Court rejected a similar move by the Atal Bihari Vajpayee government and said that privatisation required parliamentary approval. However, the Narendra Modi government which enjoys a majority in Lok Sabha, cleared the path for stake sale.
The total attributable refining capacity of BPCL is about 35 million tonnes (MT) annually. It operates 15,078 fuel stations, which accounts for a quarter of the retailing market share, and 6,004 LPG distributors. In the last financial year, the company posted a 13 per cent fall in consolidated profit to Rs 8,528 crore. Sales went up 22 per cent to Rs 3.4 lakh crore.
In January last year, the government sold its entire 51.11 per cent stake in HPCL to state-run Oil and Natural Gas Corp. Ltd for Rs 36,915 crore. The divestment price was at a roughly 18% premium to prevailing prices. Thereafter, HPCL became its subsidiary.
By Aseem Thapliyal