IOC will decide on bidding for BPCL after govt lays out rules: Chairman
New Delhi: Indian Oil Corp (IOC), the country's biggest oil firm, will decide on bidding to buy Bharat Petroleum Corporation Ltd (BPCL) after the government lists out rules for the stake sale, its Chairman Sanjiv Singh said Thursday.
The Cabinet Committee on Economic Affairs had on November 21, 2019 decided to sell government's entire 53.29 per cent stake in country's second-largest state refiner BPCL, but a tender for sale hasn't yet been issued.
"The expression of interest (EoI) (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 here. "I cannot comment if IOC 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 PSUs 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 November 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 the buyer ready access to 14 per cent of India's oil refining capacity and about one-fourth of the fuel marketing infrastructure in the world's fastest-growing energy market. It, however, will be sold after carving out Numaligarh Refinery from its portfolio and given to a pubic sector unit. Numaligarh Refinery Ltd is also to be sold out to a PSU, possibly through a bidding process.
Singh said he cannot comment if the company will bid for the Numaligarh Refinery unless tender conditions are revealed.
"We don't know if Numaligarh Refinery will be sold with marketing infrastructure or without its marketing infrastructure. We have to wait for details before IOC can take any decision," he said.
Numaligarh refinery was set up as per the Assam Peace Accord and the government has decided to keep it in the public sector. At the current trading price of BPCL, the government's 53.29 per cent stake is valued at around Rs 53,400 crore. On top of this, the acquirer will have to make an open offer to buy an additional 26 per cent stake from minority shareholders for about Rs 26,000 crore.