Following the multiple waves of COVID-19 and the current geopolitical strife between Russia and Ukraine, the government has called off the present expression of interest (EoI) process for strategic disinvestment of state-run refiner BPCL, the Department of Investment and Public Asset Management (DIPAM) said on Thursday.
The majority of qualified interested parties (QIPs) expressed their inability to continue with the current process due to the prevailing conditions in the global energy market, DIPAM said in a notification. ” The multiple Covid-19 waves and geo-political conditions affected multiple industries globally, particularly oil and gas industry,” it added.
“We need to go back to the drawing board on BPCL. There are issues in terms of consortium formation, geopolitical situation and energy transition aspects,” an official told PTI. The official said the transition towards green and renewable fuel has made privatisation difficult in existing terms.
“The total stake that may be offered to potential buyers too needs a rethinking in current conditions and easing of terms to help investors in forming a consortium,” the official said.
DIPAM had issued a global invitation on March 7, 2020 for EOI for strategic disinvestment of 52.98% equity share capital held by the central government in BPCL. The EoI submission date was extended multiple times to address the constraints faced by the potential bidders.
Owing to the current situation, the government called off the present EoI process, based on the decisions of the Alternative Mechanism (Empowered Group of Ministers). EoIs received from QIPs shall stand cancelled, DIPAM said.
A decision on the re-initiation of the strategic disinvestment process of BPCL will be taken in due course based on a review of the situation.
Reports last week had suggested that the government put the privatisation of BPCL on hold as it only got a single bid, the source, who did not want to be named, said.
News agency Reuters reported the government is considering selling up to a quarter of BPCL after failing to attract suitors for the whole firm.
The government has pegged disinvestment receipts at Rs 65,000 crore in the current fiscal, up from Rs 13,531 crore mopped up last fiscal.
