Govt calls off BPCL privatisation process, will do 'comprehensive review'

Decision on restarting the process to be taken in due course post review

The Centre has called off the privatisation process of Bharat Petroleum Corporation (BPCL) for now after two of the three companies that had shown interest in acquiring the public sector undertaking (PSU) withdrew their bids.

Based on the decision of the Alternative Mechanism on strategic disinvestment, which comprises Finance Minister Nirmala Sitharaman, Roads and Highways Minister Nitin Gadkari, and the head of the ministry concerned (in this case Petroleum Minister Hardeep Singh Puri), the privatisation of BPCL and the expressions of interest received from the bidders stand cancelled, the Department of Investment and Public Asset Management (DIPAM) said in a statement. The decision on its re-initiation will be taken in due course following a review, it added.

DIPAM Secretary Tuhin Kanta Pandey told Business Standard that the government would wait for a while to assess the situation and decide how to proceed further. “This would also involve restructuring the transaction after a comprehensive review,” Pandey said.

The Centre had invited bids to sell its 52.98 per cent stake in BPCL in 2020. Anil Agarwal’s Vedanta had formed a special purpose vehicle with its London-based parent Vedanta Resources and submitted an EoI to acquire BPCL. Other suitors reportedly included Apollo Management and Think Gas, promoted by I Squared Capital.

Covid-19 waves and geopolitical tensions have affected various industries globally, particularly the oil and gas industry due to the prevailing conditions in the global energy market. A majority of bidders have expressed their inability to continue in the current divestment process of BPCL, the statement said.

“Several jurisdictions have decarbonising targets that made it difficult for investors to invest in oil refining business,” the DIPAM secretary said.

The government would conduct a comprehensive study before coming up with a fresh proposal for the privatisation of the PSU refiner. Inputs would be taken from investors and advisors.