Public Sector Unit, Bharat Petroleum Corporation (BPCL) is planning to offload its entre holding in Numaligarh Refinery Ltd for Rs 9,878 crore ($1.3 billion) as part of its own privatisation process. The country’s second-biggest state-owned refiner will sell its 61.65% holding in Numaligarh Refinery to a consortium of Oil India Ltd. and Engineers India Ltd. and may also include the state government of Assam, according to an exchange filing.
The final sale pact will be entered into after obtaining clearances from its shareholders, Bharat Petroleum said. Oil India currently holds 26 per cent in Numaligarh Refinery Ltd., which operates a 3 million tonnes per year (MTPA) oil refinery in Assam. The refinery is being expanded threefold to meet the region’s growing fuel demand. Assam state government owns 12.35 per cent in the company.
The deal will help the central government push forward with the sale of its own holding in Bharat Petroleum in potentially the country’s biggest asset sale. India is targeting to complete the sale by September.
An EIL statement said that OIL would be the leader in the consortium, while EIL would hold a minority share. EIL said the stake buy enables the Navratna PSU, under the Ministry of Petroleum and Natural Gas, to diversify its business into downstream oil and gas operations. It is currently a leading engineering consultancy and EPC companies in the areas of hydrocarbons and petrochemicals.
An OIL statement said: “The bid will be submitted through a formal process. The exact percentage of the stake of OIL and EIL will depend on the extent of Right of First Offer (ROFO), to be exercised by the Government of Assam that already holds 12.35 per cent stake in NRL.” The acquisition is expected to improve the synergy in OIL’s portfolio.
India is speeding up the privatisation of state-owned assets to help plug the budget gap. Finance Minister Nirmala Sitharaman has targeted to raise Rs 1.75 trillion from the sale of assets in the year that starts April.
Numaligarh refinery in Assam was incorporated in 1993 and has a 3 million tonnes per annum capacity. It is the largest customer of OIL’s crude produced from its North Eastern fields