New Delhi: The list of oil marketing PSUs that the government is planning to take up for disinvestment to raise a corpus of Rs 1.05 lakh crore seems to have a new entrant. According to a source who spoke to PSU Watch on the condition of anonymity, along with BPCL disinvestment, the government is seriously considering a proposal to hive off Indian Oil Corporation's transmission business.
Indian Oil operates a network of around 15,000 km-long crude oil, petroleum product and gas pipelines with a throughput capacity of 94.79 million metric tonnes per annum (MMTPA) of oil and 9.5 million metric standard cubic meters (MMSCM) per day of gas. The source said, "The government is seriously considering a proposal to hive off Indian Oil's 15,000-km-long pipeline business, along with an additional 6,000-km-long pipeline network which is in between design and commissioning stage."
The last Indian Oil transmission project to be sold off was its 1,386-km-long pipeline from Kakinada in Andhra Pradesh to Bharuch in Gujarat. The project was acquired by Mukesh Ambani-led Reliance Industries Ltd (RIL). However, RIL sold the loss-making business off to Brookfield earlier this year for Rs 13,000 crore.
The source said, "Going by the valuation of the RIL-Brookfield deal, the valuation of Indian Oil's 15,000-km-long transmission mission should be around Rs 1,50,000 crore. If you add the 6,000-km-long network that is still coming up, the overall valuation would go up to Rs 1,80,000 crore."
Commenting on the story, the Indian Oil management said on its part that no such plan is underway. "I hereby clarify that the Indian Oil management has no plans, whatsoever, to hive off the company's pipelines. The pipelines network is one of the key strengths of Indian Oil, and has always provided a competitive advantage to the company in moving crude oil and finished petroleum products over long distances in the safest, most economical and environment-friendly manner. Hence, I would like to reiterate once again that there is no question of hiving off the Company's pipelines," said Kali Krishna, Executive Director (Corporate Communications) at Indian Oil.
The news comes in the backdrop of stiff opposition from the oil sector PSU employees against the disinvestment of BPCL, India's second-largest oil marketing company. The government is looking to offload 53.29 percent of its stake in the state-run refiner. In a written response submitted in the Rajya Sabha, Minister of State for Finance Anurag Singh Thakur presented a list of 33 PSUs slated for disinvestment. And one of the companies on the list was HPCL.
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