India moves stakes in four refineries to state firms

In a bid to pave the way for possible future privatization, the Indian government has decided to sell its four stand-alone refineries to state firms Indian Oil Corp. (IOC) and Bharat Petroleum Co. Ltd. (BPCL) for an estimated 18 billion rupees ($393 million). This will make the two public-sector units stronger and ensure that they fetch more when the government privatizes them.


NEW DELHI�In a bid to pave the way for possible future privatization, the Indian government has decided to sell its four stand-alone refineries to state firms Indian Oil Corp. (IOC) and Bharat Petroleum Co. Ltd. (BPCL) for an estimated 18 billion rupees ($393 million). This will make the two public-sector units stronger and ensure that they fetch more when the government privatizes them.

According to Petroleum Minister Ram Naik, IOC would take over the 130,000 b/d Chennai (formerly Madras) refinery, where the government has 52.5% equity worth 6.0138 billion rupees. IOC will also take over the 27,000 b/d Bongaigon refinery, where the government's equity of 74.46% is worth an estimated 4.6097 billion rupees.

BPCL will take over the 150,000 b/d Kochi (formerly Cochin) refinery in Kerala, where the government has a 55.04% stake worth 7.0115 billion rupees, and its 19% equity (1.730 billion rupees) in the 60,000 b/d Numaligarh refinery in Assam.

Naik said the take-overs would enable these refineries to have better marketing arrangements.

The restructuring will be completed by 2002, when the state-administered pricing mechanism is to come to an end.

More in Refining