State-run Oil India (OIL) and Engineers India (EIL) have jointly submitted a bid for acquiring Bharat Petroleum Corporation's (BPCL) stake in Numaligarh Refinery (NRL). The transaction is likely to happen within March.
According to multiple sources aware of the development, the companies have submitted bids on February 20. However, there is no clarity on the Assam government’s participation in the process. OIL and EIL were setting sight on a 48 percent stake in the company, out of which EIL will hold 10 per cent. This is likely to cost around Rs 5,500 crore.
“With the bids getting submitted now, BPCL will have to approach the government of Assam. They will be having the first right of refusal,” said one of the sources. BPCL will have to approach the government of Assam now, as they may be picking up another 13.65 per cent in the project. With this, Assam’s stake in NRL will increase to 26 per cent.
On February 18, OIL and EIL had announced that they will jointly bid for NRL. The separation of NRL from BPCL is considered as the first step towards the privatisation of BPCL. At present, BPCL holds 61.65 percent and OIL another 26 percent in NRL. After the deal, OIL’s stake will be 64 percent.
The Union Cabinet had cleared the proposal for strategic sale of the government’s 53.29 percent stake in BPCL on November 20, 2019. While announcing that, the government had made it clear that the privatisation process will be excluding the company’s interests in Numaligarh Refinery, which a state-run company will take up. The refinery was set up at Numaligarh in Assam’s Golaghat district in 1993, following the provisions of the Assam Accord signed on August 15, 1985.
Plans to ramp up the capacity of NRL from the existing 3 million tonne per annum (MTPA) to 9 MTPA at an investment of Rs 22,000 crore is on track.