Essar, IOC bid for Shell outlets; BPCL in talks

Essar Oil and state-run Indian Oil Corporation (IOC) have bid for around five and 10 of Shell India’s retail outlets, respectively. Bharat Petroleum Corporation Ltd (BPCL) is negotiating to bid for nine outlets.

Shell India, the domestic arm of Royal Dutch Shell Plc, had offered for sale 20 of its 80 operational retail outlets and around 20 sites acquired earlier for setting up such outlets. The only foreign petro retailer in the country, it has approached oil marketing companies, public and private, on this.

However, despite repeated attempts, Shell India could not be asked to confirm the development.  A Shell India official had earlier told Business Standard the company was constantly reviewing retail strategy and would continue to build a desired network of retail chains. “While we are selling in some areas, we are also acquiring in other regions to scale up,” the executive had added. Essar Oil said the company had given its bid and a decision was likely by this month end. It may bag around five retail fuel outlets.

“The offer should materialise by this month end. Shell is still to revert to us on the,” said an Essar official close to the development. Essar has bid for sites in Karnataka, Maharashtra and Gujarat.

BPCL said it was still in negotiations with Shell for nine of its retail outlets in the western and southern regions. “The proposal is fairly good and we are in negotiations. The retail outlets are in urban areas and the valuation is in tandem with what it should be. They are not over-priced,” said a senior BPCL executive.

An IOC executive said the company had placed bids for 10 retail outlets, but was shortlisted to be awarded only two. “May be Shell did not agree to our bidding for the rest of the outlets,” the executive added.

IOC Chairman and Managing Director B M Bansal had earlier told Business Standard his company would like to take over outlets that had good location and sale volume. IOC is the biggest fuel retailer. Bansal said it took Rs 15-20 lakh to set up a low-cost rural outlet, while one in urban areas could cost between Rs 1 crore and Rs 4 crore.

For sale of its 20 sites, Shell is said to be considering proposals from individuals.