MOSCOW (MRC) -- India is "treading very cautiously" in its plan to privatize state-run oil refiner Bharat Petroleum Corp Ltd (BPCL), reported Rueters with reference to Oil Minister Dharmendra Pradhan's statement, in a sign that the process could be delayed.
New Delhi's plan to sell its 53.29% stake in BPCL was first announced in November 2019, and is part of a broader program to spin off or sell stakes in dozens of state-owned companies. India had planned to sell the stake by the end of the fiscal year to March 2021.
"Bharat Petroleum divestment is very much on the cards," Pradhan told a virtual energy conference.
"But we all will appreciate looking into the net worth and looking into the size ... the government is treading very cautiously (on) how to offload (the stake) through (a) proper process".
Reuters last month reported that BPCL's privatization could spill over into the next fiscal year that begins in April 2021 and that Saudi Aramco and Russia's Rosneft may not participate in the bid as low oil prices affect their investment plans.
BPCL's shares have tumbled by about 38% from highs seen in November last year as fuel demand in India has been hit by restrictions imposed to stem the spread of the coronavirus.
Long term, India's demand for refined products is expected to rise, requiring a 40% increase in the country's refining capacity to 350 MM tons a year or 7 MM barrels per day (bpd) by 2030, Pradhan said.
India plans to build a 1.2 million bpd refinery and petrochemical plant on the country's west coast through a joint venture made up of Indian state refiners, Saudi Aramco and Abu Dhabi National Oil Co.
But the project has been held up as the joint venture has not yet acquired land after protests from farmers.
Pradhan said the local issues impacting the project would be sorted out "very soon."
The minister also said that the federal government planned to gradually end the subsidy on cooking gas.
As MRC informed before, in January 2020, BPCL said it would invest about Rs25,000 crore to set up an ethylene cracker plant at Rasayani, 50 kilometres from its Mumbai refinery, as the firm pushes further into the petrochemicals business to fuel growth.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.
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