BPCL to Close Numaligarh and Bharat Oman Refinery Deals by March

Ahead of privatization of the nation's second-largest fuel retailer, Bharat Petroleum Corporation (BPCL) is planning to complete its 61.65% stake sale in the Numaligarh Refinery (NRL) to Oil India (OIL) and the government of Assam by the end of March this year. BPCL’s director (Finance) N Vijayagopal revealed that the plan is to grant 49% stake to the consortium of OIL and Engineers India Ltd. while the rest 12.65% would lie in the hands of the government of Assam. The company board revealed on Monday that the concerned authorities have approved the share purchase agreement and if the plan goes as desired, the entire stake sale would happen by 31^st March. The personnel also added that the completion of the final transaction, however, is subject to the deal getting requisite government approvals.

NRL’s stake sale is considered to be the step towards the disinvestment of BPCL. The deadline of the privatization drive, which was anticipated to complete in March 2020, was pushed backed by several months due to pandemic-related restrictions that prevented potential buyers from participating in the bidding. The nation’s biggest privatization till date would require the central government to sell its 52.98% stake in BPCL. While the move is an important step to achieving its INR 1.75 lakh crore disinvestment target set for FY22, several private equity firms like Apollo Global, and I Squared Capital had earlier expressed their interests in the company.

Numaligarh Refinery (NRL) is looking forward to expanding its refining capacity from 3 MMTPA (million metric tonne per annum) to 9 MMTPA at an investment of around INR 22,594 crore. The project is anticipated to complete by 2024. Through the stake sale, BPCL will grant the buyer nearly 15.3 per cent of India’s oil refining capacity and 22 per cent of the fuel marketing share.

On Tuesday, BPCL revealed that it has recently concluded the discussion over buying out the remaining (36.62%) stake of Oman Oil Company's shares in the Bina refinery project in the upcoming 10 days. BPCL currently holds a 63.68% stake in Bharat Oman Refineries Ltd (BORL), which operates a 7.8 MMTPA oil refinery at Bina, Madhya Pradesh.

Shares of Bharat Petroleum Corp. Ltd (BPCL) surged after the finance minister Nirmala Sitharaman stated in the Union budget 2021, center’s plan to raise INR 1.75 lakh crore by divesting its shares in the state-owned companies despite falling short of the disinvestment target set in FY21.

As per ChemAnalyst,” The talks for buying Oman’s stake are heard at a time when the government is already trying to raise around INR 90,000 crore by offloading its entire stake in BPCL. While investors are still watching over how the story takes shape, it is being anticipated that BPCL privatization will be the key part of the Indian government’s plans to the cut its widening fiscal deficit.”