Govt in talks with Saudi Aramco for BPCL divestment

Govt in talks with Saudi Aramco for BPCL divestment

The Centre is holding parleys with global petrochemical major Saudi Aramco as part of its divestment plans for the state-owned Bharat Petroleum Corporation Limited (BPCL), which is likely to fetch half of its divestment target for FY20.

A delegation of officials from the Ministry of Commerce will hold meetings with the world’s largest oil company next week in New Delhi, highly-placed sources confirmed to DH.

“Yes, we are meeting the Aramco officials next week to discuss the divestment of BPCL,” sources said.

The initial negotiations in this regard were held late in the month of July, when a delegation from Commerce Ministry had travelled to West Asian country and met the Aramco CEO Amin H Nasser.

BPCL acquisition will give Aramco access to close to 15,000 retail pump stations across the country.

The successful bidder will have to pay close to Rs 60,000 crore to buy the government’s 53% stake and another Rs 30,000 crore for additional 25% stake from the public in the mandatory open offer.

Apart from Saudi Aramco, many other global oil majors such as Exxon Mobil, Chevron and ConocoPhillips (from the United States), Royal Dutch Shell and BP Plc (the United Kingdom), Rosneft and LukOil (Russia), Petro China, CNPC and Sinopec (China), Total SA (France) are likely to participate in the bidding process.

The divestment drive of BPCL and HPCL is will help the government to reduce its fiscal deficit, amid growing concerns of the revenue shortfall.

Plugging the deficit

India’s fiscal deficit stood at Rs 5.54 lakh crore in the first five months of this financial year - which is 78.7% of the budget estimates.

Earlier in August, Asia’s richest man, Mukesh Ambani announced a deal Saudi Aramco, under which the latter will buy 20% stake in Reliance Industries’ (RIL) refining and petrochemicals business, valued at $75 billion. The stake sale is expected to fetch RIL an amount in excess of Rs 1.07 lakh crore.

Saudi Ambassador Dr Saud bin Mohammed Al Sati had recently said that the Arab nation is eyeing long-term partnerships with New Delhi in key sectors such as oil, gas and mining.

“Saudi Arabia is looking at making investments in India potentially worth $100 billion in the areas of energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining,” Al Sati had said recently.

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