IBP cloud over BPCL and HPCL disinvestment

Vol 6, PW 2 (27 Mar 02) Midstream & Downstream

FOREIGN OIL COMPANIES are watching cynically as the government begins the partial privatisation process of Hindustan and Bharat Petroleum.

On 15th March the disinvestment ministry invited 'Expressions of Interest' from financial advisors. They have until 5pm Indian time on 2nd April to submit offers.

So far there's been no official announcement on how much the government wants to sell, but the disinvestment ministry is believed to favour selling 39% of BPCL and 25.01% of HPCL, leaving 26% for the government. Sadly the disinvestment ministry is not alone in deciding: this will be a consensus decision with other ministries involved.

Both ONGC and IOC are clear they will bid, despite opposition from the disinvestment ministry. "We have not received any letter (from the government) asking us not to bid," said IOC chairman Mohammad Pathan on 21st March.

"We have made our intention clear." In private foreign companies voice alarm. "The Indian government should realise the whole world is not watching and waiting for this privatisation," one company tells PETROWATCH.

"The way IOC was allowed to buy IBP has made all of us cautious and suspicious." Another company was equally blunt: "Unless ONGC and IOC are kept out, the impression will be reinforced that foreign companies are not welcome. Many of us already believe the government here prefers to deal with its own companies or with domestic private companies."