Business

Oil turmoil ruined this mega plan of the government

Photo:BPCL

BPCL

Highlights

  • Due to non-availability of customers, the government dropped the plan of disinvestment of Petroleum Corporation.
  • Vedanta Group, Apollo Global Management and I Squared Capital Advisors show interest
  • Group of Ministers decides to stop the letter of interest process for strategic disinvestment in BPCL

The Ukraine Russia war isn’t just heavy on your pocket. Rather, due to this war, the sale plan of the government has also failed. In fact, the government was looking to sell its entire 52.98 percent stake in oil company Bharat Petroleum Corporation Ltd. (BPCL) this year. But due to lack of customers, the government has dropped the plan of disinvestment. Along with this, the government has also withdrawn the offer of sale.

After accepting the offer for sale of BPCL, the government said in a statement that most of the bidders have expressed their inability to participate in privatization due to the prevailing situation in the global energy market. The Government had invited Expressions of Interest from the bidders in March, 2020. At least three bids had come in till November 2020. But after the turmoil in the global oil market since February, two companies gave up. This left only one company in the bid.

BPCL

Image Source : FILE

BPCL

Oil turmoil ruined the plan

The Department of Investment and Public Asset Management (DIPAM) said that the global situation due to the Kovid-19 pandemic and the Russo-Ukraine war has affected industries around the world, especially the oil and gas sector. “Due to the prevailing situation in the global energy market, most of the eligible interested parties (QIPs) have expressed their inability to participate in the ongoing process of disinvestment of BPCL,” Dipam said. The Department said that in view of this, the Group of Ministers on Disinvestment has decided to discontinue the Expression of Interest process for strategic disinvestment in BPCL.

Will try again when the situation changes

For the time being, the government has put the process of disinvestment of BPCL in cold storage. But still the government is hopeful that the situation will change and once again the process of disinvestment can be taken forward. “The decision to initiate the strategic disinvestment process in BPCL will now be taken at an appropriate time based on a review of the situation,” the department said.

These three buyers came in front

Industrialist Anil Agarwal’s mining giant Vedanta Group and American venture funds Apollo Global Management and I Squared Capital Advisors had shown interest in buying the government’s 53 per cent stake in BPCL. But amidst declining interest in fossil fuels like petrol and diesel, both the entities were unable to attract global investors and withdrew from the bid. The government had not invited financial bids.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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