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India extends BPCL privatisation deadline

FINANCE & THE Indian government’s privatisation of state- remaining three refineries stall have 35.3mn tpy
INVESTMENT run refiner Bharat Petroleum Corporation Ltd. (707,000 bpd) of refining capacity.
(BPCL) has been delayed yet again, with a new Local newswire PTI said bidding the govern-
deadline for bids set for September 30. ment’s stake would be held in two rounds, with
The deadline was extended from July 31 bidders that qualified in the first round being
owing to muted investor interest amid the global required to bid in the second round.
economic downturn and the pressures facing the The newswire cited bid documents as saying
energy sector. state-run companies were barred from the auc-
New Delhi had originally wanted expressions tion, while private companies would need a net
of interest (EoIs) to be submitted by May 2, but worth of $10bn to be eligible. Consortia consist-
was forced to extend that to June 13 following the ing of up to four firms will also be allowed to bid,
oil price collapse in March. though the lead investor must control 40% of the
“In view of the further requests received from partnership and the other members must have a
the interested bidders and the prevailing situa- minimum net worth of $1bn.
tion arising out of COVID-19, last date and time The delayed bid round comes as the coun-
for submission of EoI is extended up to Septem- try’s refinery operators reportedly mull launch-
ber 30, 2020,” the Department of Investment and ing unscheduled maintenance work in the face
Public Asset Management said on July 29. of falling local fuel demand and weak refining
The Cabinet Committee on Economic Affairs margins.
(CCEA) decided in November 2019 to sell the BPCL head of refineries R Ramachandran
government’s 52.98% stake in BPCL, after a told Reuters on July 29 that his company was
group of secretaries approved the government’s operating its three refineries at about 70% capac-
plan to privatise the stake in September that year. ity compared to 90% at the start of June. Indian
The government’s stake in BPCL is consid- fuel demand slowed down this month owing to
ered an attractive investment target, given that it a combination of higher prices, the return of tar-
has 38.3mn tonnes (770,000 barrels per day) of geted lockdowns and the monsoon season.
refining capacity, owns more than 15,000 retail Ramachandran said that while refiners did
fuel stations and has a network of over 6,000 liq- not traditionally conduct maintenance during
uid petroleum gas (LPG) distributors. the monsoon period, the pandemic had changed
India has 249.4mn tonnes (5mn bpd) of operation methods.
refining capacity, more than 65,500 fuel stations “Current low demand due to COVID, along
and 24,000 LPG distributors. with higher inventory, has given us an oppor-
While New Delhi has decided to sell BPCL’s tunity to carry out turnaround and be ready to
61.65% stake in Assam State’s Numaligarh Refin- meet higher demand in the coming festival sea-
ery to a state-controlled player, the company’s son,” he said.™

P4 www. NEWSBASE .com Week 30 30•July•2020