Rosneft, Saudi Aramco unlikely to bid for BPCL privatisation: Report

Joseph B. Hash

Oil majors Rosneft and Saudi Aramco are not likely to bid in the privatisation of Indian refiner Bharat Petroleum Corp, sources familiar with the subject said, as very low oil prices and weak gasoline desire curb their expense designs. Russia’s Rosneft experienced expressed interest in acquiring the federal authorities fifty […]

Oil majors Rosneft and Saudi Aramco are not likely to bid in the privatisation of Indian refiner Bharat Petroleum Corp, sources familiar with the subject said, as very low oil prices and weak gasoline desire curb their expense designs.

Russia’s Rosneft experienced expressed interest in acquiring the federal authorities fifty three.29% stake in Bharat Petroleum (BPCL) when CEO Igor Sechin visited New Delhi in February, though India’s trade minister experienced said Aramco was enthusiastic about the stake sale option.

A Rosneft supply, however, said his company will not purchase BPCL. One more supply said Rosneft would only be interested in BPCL’s advertising and marketing business comprising gasoline depots and additional than 16,800 gasoline stations. “For this, India has to sell BPCL in elements,” the supply said.

The Indian authorities – which wants resources to finance welfare techniques and bridge a fiscal deficit that has already topped the yearly concentrate on – experienced aimed to elevate $eight to $10 billion by way of the sale of its stake in BPCL. But BPCL’s share price has plunged virtually thirty% around the earlier yr to trade at close to 386 rupees a piece on Tuesday.

“This is not the time to spend in refining… desire would be there for oil to chemicals and not conventional solutions,” just one of the sources familiar with Saudi oil giant Aramco’s pondering said.

The Saudi authorities talked about BPCL’s privatisation with an Indian oil ministry formal in July, in accordance to an oil ministry doc.

Having said that, a second supply familiar with Aramco’s pondering said that immediately after displaying interest in the beginning Aramco has not submitted a formal expression of interest (EoI) even nevertheless the process was extended by two months to Sept. thirty.

A 3rd supply said that Aramco has halted most of its expense designs into India owing to the oil price crash and is not likely to bid for BPCL.

“India will not get the deserved price for the BPCL stake sale in the latest atmosphere,” a fourth supply familiar with Aramco’s pondering said.

India may perhaps have to look for other avenues to elevate resources to satisfy its paying commitments, said Kiran Jadhav, who runs his own asset management company with a 2 billion rupee ($27 million) portfolio. “If massive firms are backing out, this will absolutely damage the share price and valuation of BPCL,” he said.

Sources said that neither Rosneft nor Aramco see much price in refining as the authorities in the Indian point out of Kerala, house to BPCL’s largest refinery, might problem the privatisation in court and BPCL’s two other refineries are in metropolitan areas, leaving very little scope for revamp and enlargement.

Aramco and Rosneft did not quickly reply to requests for comment. India’s finance ministry also did not reply to a ask for for comment.

Reuters claimed final 7 days that India’s initiatives to privatise BPCL could spill around into the next fiscal yr, citing a authorities doc and sources.

“Aramco has not participated in the EoI so far. At first we experienced envisioned them to show interest. We are weighing our selections,” said a supply familiar with India’s authorities stake sale programme.

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