Rosneft, Aramco unlikely to bid for India BPCL privatisation

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26 Aug, 2025 12:21

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Oil majors Rosneft and Saudi Aramco are unlikely to bid in the privatisation of Indian refiner Bharat Petroleum Corporation, sources familiar with the matter said, as low oil prices and weak fuel demand curb their investment plans.

Russia's Rosneft had expressed interest in buying the federal government 53.29 percent stake in Bharat Petroleum (BPCL) when CEO Igor Sechin visited New Delhi in February, while India's trade minister had said Aramco was enthusiastic about the stake sale opportunity.

A Rosneft source, however, said his company will not buy BPCL. Another source said Rosneft would only be interested in BPCL's marketing business comprising fuel depots and more than 16,800 fuel stations. "For this, India has to sell BPCL in parts," the source said.

The Indian government - which needs funds to finance welfare schemes and bridge a fiscal deficit that has already topped the annual target - had aimed to raise $8 to $10 billion through the sale of its stake in BPCL. But BPCL's share price has plunged nearly 30 percent over the past year to trade at around 386 rupees a piece on Tuesday. "This is not the time to invest in refining... demand would be there for oil to chemicals and not conventional products," one of the sources familiar with Saudi oil giant Aramco's thinking said. The Saudi government discussed BPCL's privatisation with an Indian oil ministry official in July, according to an oil ministry document.

However, a second source familiar with Aramco's thinking said that after showing interest initially Aramco has not submitted a formal expression of interest (EoI) even though the process was extended by two months to Sept. 30.

A third source said that Aramco has halted most of its investment plans into India due to the oil price crash and is unlikely to bid for BPCL.

"India will not get the deserved price for the BPCL stake sale in the current environment," a fourth source familiar with Aramco's thinking said.

India may have to look for other avenues to raise funds to meet its spending commitments, said Kiran Jadhav, who runs his own asset management firm with a 2 billion rupee ($27 million) portfolio. "If big firms are backing out, this will definitely hurt the share price and valuation of BPCL," he said.

Sources said that neither Rosneft nor Aramco see much value in refining as the government in the Indian state of Kerala, home to BPCL's biggest refinery, might challenge the privatisation in court and BPCL's two other refineries are in cities, leaving little scope for revamp and expansion.

Aramco and Rosneft did not immediately respond to requests for comment. India's finance ministry also did not respond to a request for comment. Reuters reported last week that India's efforts to privatise BPCL could spill over into the next fiscal year, citing a government document and sources. "Aramco has not participated in the EoI so far. Initially we had expected them to show interest. We are weighing our options," said a source familiar with India's government stake sale programme.