Indian, overseas oil giants eye HPCL stake

Tuesday, 18 March 2003, 08:00 Hrs
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A host of Indian and overseas oil majors, including Reliance Industries and Malaysia's Petronas, Monday joined the race to pick up the Indian government's stake in Hindustan Petroleum Corporation Ltd. (HPCL).

NEW DELHI: Other major companies that have expressed interest in acquiring stake in HPCL are Royal Dutch Shell, Saudi Aramco, Kuwait Petroleum, India's Essar group and U.S.-based ChevronTexco, official sources said.

The deadline for submitting initial bids for the privatisation of HPCL, India's second-largest oil refiner and retailer, ended Monday.

The government had invited bids for selling its equity in the cash-rich HPCL, which has countrywide network of petrol stations, last month as part of its ambitious privatisation agenda.

Under the guidelines laid down, the bidder should have a combined net worth higher than 25 billion as well as a good track record in the oil and petrochemicals sector.

The government, which holds a 51 percent stake in HPCL, has decided to sell a controlling 34 percent stake in the oil major.

Even as the government has begun the sell-off exercise, employees of state-run oil firms have threatened to block the privatisation by going on strike and not allowing bidders to conduct their due-diligence exercise.

The government had postponed the sell-off process of HPCL and another state-run oil firm, Bharat Petroleum Corporation Ltd. (BPCL), for three months in September in the face of intense political squabbling.

HPCL and BPCL control 40 percent of India's two million barrel-a-day oil market.

The market value of HPCL and BPCL shares had dropped over 30 percent in September after Petroleum Minister Ram Naik and Defence Minister George Fernandes forced through the three-month delay.

India's privatisation drive, projected as the cornerstone of the reforms programme, has repeatedly come under attack in recent months, with the ruling coalition's allies demanding a review of the divestment agenda.
Source: IANS

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