New Delhi: “State-run BPCL (Bharat Petroleum Corporation Ltd) functions almost like a multinational company (MNC) and therefore has many suitors who are keen on buying it,” BJP oil expert Narendra Taneja has said in an interview. The statement comes at a time when the government is looking to sell its 53.29 percent stake in BPCL to a strategic investor.
‘BPCL is one of the most well run PSUs’
“Bharat Petroleum was a multinational company and was part of the Shell Group before it was nationalised in the 1970s. Among the oil companies that are within the control of the government, I think BPCL is one of the most well run companies. A lot of its work culture and traditions are still like that of an MNC. And that is the reason why there are a number of strategic players who either want part-ownership in the company or want to buy it,” Taneja said in an interview to a Hindi monthly magazine Nivesh Manthan.
Then why is the government divesting BPCL?
On being asked why the government is divesting a well-run company, Taneja said that the government can afford to do that because there are three major oil marketing companies (OMCs) within government control. “So, even after disinvestment of BPCL, the government will still have other oil companies within its control. In case of an emergency, like there was during the 1971 Bangladesh War when foreign oil companies had refused to supply oil to us, then we should be in a position to meet our requirements on our own… railways, armed forces, public transport etc,” the BJP leader said.
‘HPCL can be disinvested’
He said that it is important to make sure that the government owns one company each in the upstream, midstream and the downstream segments. “ONGC should be within government control. Similarly, in the midstream, the government should have at least one company like GAIL India that cannot be disinvested. But BPCL can be disinvested. Also, HPCL does not have to be within government control,” Taneja said. In the downstream, there’s scope for the government to disinvest one of the companies and therefore, the government can do that, he added. Indian Oil, which is the largest downstream company with the largest footprint and a 100 percent Indian DNA, should be retained, Taneja said.
Who are BPCL’s suitors?
While noting that India makes for an attractive destination for any global oil major to invest in, Tanjea said that in the time to come, the energy consumption in the country is only going to rise. “There aren’t many companies that have the financial wherewithal to buy BPCL. And most of these companies are national oil companies in their respective countries, the likes of Saudi Aramco and ADNOC. The rest of the companies who have shown an interest are private oil companies that are considered global oil majors in the sector,” he added.
The government announced its plan to offload its 53.29 percent stake in BPCL to a private player in November. The decision has drawn widespread opposition from employee associations and trade unions in the PSU oil sector.
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