Oil India to join Big League with NRL stake

Vol 23, PW 11 (09 Apr 20) News in Brief
       

Oil India is preparing to transform itself from a tiny oil explorer to an integrated oil company once it takes majority control of Numaligarh Refinery (NRL) in Assam.

At present Bharat Petroleum, which is on sale, holds a 61.65% stake with the rest held by Oil India (26%) and the Assam government (12.35%). But this report learns the government is offering Oil India an additional 38% in NRL, which would take up its total stake to 64%.

"EIL has also agreed to take up to 10%," says a source. In the first week of March, the Assam government set aside Rs2500cr ($328m) to increase its stake from 12.35% to 26%.

"The cost to Oil India for the takeover is estimated to be up to Rs9000cr ($1.2bn)," we hear. "Oil India is talking to the government and nearly everything is ready."

But Coronavirus and the lockdown could delay Oil India's plan to increase its stake by the middle of 2020-21. Oil India hopes that with oil prices plummeting this is an ideal time to take over the refiner.

If successful, it might even be upgraded from Navratna to Maharatna status, allowing it to invest as much as Rs5000cr ($656m) in a project.