Russian oil major Rosneft has expressed its interest to acquire state-owned BPCL as it is keen to enter the fuel retail market in India. The sttae-owned BPCL is India’s second-largest public sector oil refining and fuel retailer.
Rosneft CEO Igor Sechin during his meeting with oil minister Dharmendra Pradhan expressed his willingness to bid for the government’s 53 per cent stake in Bharat Petroleum Corp (BPCL), officials said.
Rosneft also inked a pact with India's largest fuel retailer Indian Oil Corporation (IOC) on Wednesday for importing 2 million tonnes of Urals grade crude oil during the year 2020.
Last November , the government on November 20 announced its decision to privatise BPCL by selling its entire entire 52.98% along with with management control.
Rosneft’s interest in BPCL will boost the government’s efforts to bring foreign investment. Oil ministry officials maintain that Saudi Aramco of Saudi Arabia and ADNOC of UAE have already shown their interest in BPCL.
Rosneft has already gained a foothold in the Indian market with the $12.9 acquisition of Essar Oil (now Nayara Energy) in August 2017. BPCL may fit into its scheme of things as it would help it grab a larger share of the fuel retail market in India and significantly improve its financial performance.
"An important subject of talks between Sechin and Pradhan was the issue of providing Indian consumers with quality crude and petroleum-based products, including the increase in Russian oil supplies to India. During the meeting, the parties discussed the ongoing joint projects of Rosneft and Indian companies, including Sakhalin-1, Taas-Yuryakh, the Vankor cluster (a consortium of Indian companies owns 49 per cent in the Vankor cluster field), Far East LNG, and Nayara Energy," Rosneft said in a statement.
Sourcing of Russian crude oil through long term contracts is a part of India's strategy for diversifying the country's crude oil supplies from non-OPEC countries, and a part of the five-year roadmap for bilateral cooperation in the hydrocarbons sector that was signed during Prime Minister Narendra Modi's visit to Vladivostok last September.
The addition of Russia as a new source for crude oil imports by India's largest refiner will go a long way in mitigating the risks arising out of geo-political disruptions. The new arrangement would also usher in price stability and energy security for India, which is witnessing robust growth in demand for petroleum products.
A government statement after the event said that both sides agreed to take forward mutually aligned priorities, including preparing a roadmap for Indian investments in the Eastern Cluster projects of Russia. It was noted that the four Indian oil and gas Public Sector Undertakings (PSUs) have already submitted the Expression of Interest to Rosneft to participate in the project.
In order to negotiate the terms of Indian companies entering Vostok Oil in the shortest time possible, it was agreed to create a working group of representatives of Russian and Indian companies.
During the meeting, both leaders also reviewed the ongoing investments between Indian oil and gas PSUs and Rosneft, and discussed further enhancing energy cooperation and strengthening hydrocarbons engagement, both on investment front as well as sourcing natural gas and crude oil.
The crude oil, being sourced under the contract, will be loaded in Suezmax vessels at Novorossiysk port of Russia and will come to India, bypassing Straits of Hormuz.
(With inputs from IANS)
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