Global oil majors may also be joining race for BPCL

Global oil majors may be teaming up with investment funds that are already in the race to acquire Bharat Petroleum Corporation Ltd (BPCL). Last year, billionaire Anil Agarwal’s Vedanta group as well as two US funds — Apollo Global and I Squared Capital – had submitted initial bids to buy out the government’s entire 52.98 per cent stake in India’s third-biggest oil refiner and second-largest fuel retailer.

Bidders will now have to complete due diligence of the company and sale purchase agreement has to be finalised. Also, “security clearance” of bidders may be needed “since consortiums are being formed”, a paper on disinvestment revealed.  The bidding process allows for other interested parties to join and form a consortium with any one of the bidders which had submitted an expression of interest (EoI).

Firms run by Indian billionaires Mukesh Ambani and Gautam Adani as well as global oil majors such as Royal Dutch Shell, BP and Exxon did not submit an EoI for acquiring BPCL at the close of the deadline on November 16, 2020.

However, several top oil producers from the Middle East and Russia’s Rosneft were said to be interested in BPCL which would give the buyer access to over 14 per cent of India’s oil refining capacity and 23 per cent fuel market share. But they hadn’t submitted any bids.

Industry sources said it was possible that one of the global oil majors or a Middle East oil producer may be teaming up with the investment funds already in race. Steel magnate Lakshmi N Mittal, who runs an oil refinery in Punjab in joint venture with Hindustan Petroleum Corporation Ltd, was considered a potential candidate but sources said he was not interested in BPCL whose acquisition will cost nearly Rs 80,000 crore at current market trading price.

BPCL owns 35.30 million tonnes of oil refining capacity spread over three refineries at Mumbai, Kochi in Kerala and Bina in Madhya Pradesh. It has 18,768 petrol pumps and 6,169 LPG distributors.

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