Comments
Reliance Industries Ltd will not bid for Bharat Petroleum Corporation Ltd (BPCL), which has been put up for privatisation by the government, according to an RIL official.
“We are not interested in BPCL at all,” the executive told BusinessLine on conditions of anonymity.
Reliance narrowly missed reporting a first quarter loss last week, thanks mainly to an exceptional gain from the sale of stake in domestic fuel retailing joint venture with BP plc, and strong performance by Jio Platforms Ltd, the digital services arm.
Aramco overhang
Mukesh Ambani’s increasing focus on digital and retail businesses has led Reliance to separate its oil-to-chemicals business into a new subsidiary. But the plan to sell a 20 per cent stake in this unit to Saudi Aramco — the world’s largest oil producer — has failed to materialise so far, potentially the fallout of the recent oil market meltdown, casting doubts over the finalisation of the deal. It also raises doubts over Aramco’s interest in BPCL.
The government has sought initial bids — or expression of interest (EoI) — to privatise BPCL by selling its 52.98 per cent stake to a strategic buyer. The deadline for submission of bids has been extended twice.
While the government’s decision to extend the timeline for submitting the EoI by two months to the end of September is aimed at giving more time to potential bidders in view of the travel restrictions triggered by the pandemic, market sources indicated that this could also be due to lacklustre demand as oil firms re-work their strategies to stay profitable.
Oil sector woes
Most oil majors, which were expected to consider a bid for BPCL, have posted losses in the recent quarter as the pandemic hammered demand and oil prices. This has forced all of them to massively cut capital expenditure spends as the demand rebound timeframe remains uncertain.
For instance, ExxonMobil reported its biggest-ever quarterly loss on Friday. Global oil firms themselves are looking at asset sales to wade through the difficult times.
Reliance was seen as a strong contender for BPCL, given the synergies it would bring to the business. BPCL runs refineries in Mumbai, Kochi, Bina and Numaligarh.
Reliance staying away from the BPCL sell-off would further shorten the line-up for India’s second biggest oil marketing company and third largest by refining capacity, already weighed down by demand destruction in the wake of the pandemic. RIL declined to comment for this report.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.