India to Sell Bharat Petroleum Stake

The Indian government plans to sell its 53.29 percent stake in Bharat Petroleum Corp. Ltd., an oil and gas company that is one of the countrys largest lubricant suppliers and one of four domestic base oil producers.

Indias Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, on Wednesday approved in principle to divest from select central public sector enterprises, including BPCL, the countrys second-largest oil marketing company, according to a government statement.

BPCL operates refineries in four locations: Mumbai; Kochi, in the state of Kerala; Numaligarh; and Bina in the state of Madhya Pradesh. They have combined capacity to process 38.3 million metric tons of crude oil per year, which is 15 percent of Indias total refining capacity. The Mumbai refinery has a 180,000 t/y API Group II base oil plant, which it plans to expand.

The government will sell BPCLs 61.65 percent stake in Numaligarh Refinery - the largest producer of paraffin wax in the country - to another state-owned company operating in the oil and gas sector, according to the statement.

The resources unlocked by the strategic divestment of these CPSEs would be used to finance the social sector and developmental programs of the government benefiting the public, the statement said. Last year, the government sold its entire stake in the countrys largest base oil supplier, Hindustan Petroleum Corp., to state-owned Oil and Natural Gas Corp., Indias largest producer of crude oil and natural gas.

It is expected that the strategic buyer and acquirer may bring in new management, technology and investment for the growth of these companies and may use innovative methods for their development, the government said.

Local media, citing Petroleum Minister Dharmendra Pradhan, said the government plans to complete the privatization of BPCL in the current fiscal year ending March 2020.

BPCL, which sells MAK-branded lubricants, is one of the four largest lubricant suppliers in the country, commanding an 18.8 percent share of sales, according to the companys investor presentation in August 2019. The Mumbai-based supplier offers over 1,000 grades of products, and its retail channel consists of more than 14,800 fuel stations. It also has tie-ups with major original equipment manufacturers, such as Tata Motors, Honda and TVS.

BPCLs competitors in the finished lubricants market include national oil companies Hindustan Petroleum Corp. and Indian Oil Corp., as well as private players such as Castrol India Ltd., Tide Water Oil Co. and Gulf Oil Lubricants India Ltd.

Photo courtesy of Bharat Petroleum Corp.