India's biggest asset sale to attract China-wary oil majors
NEW DELHI: The growing disquiet over China could see oil investors headed to India, said a top executive at a refiner that Prime Minister Narendra Modi’s government has put up for sale.
“The choices of investing in oil sector will be limited when the world becomes normal and India will be the only happening alternative,” N Vijayagopal, finance director at Bharat Petroleum Corp said in an interview from Mumbai. “Most of the Western countries will be very afraid of getting into China. So, where else they can go?”
That gives an opportunity for India to attract investments and push some of its state-run assets such as Bharat Petroleum, known as BPCL, to global investors when the world emerges from the coronavirus pandemic.
“Global companies are cutting down on capex, preserving cash now, but Exxon Mobil, Shell, BP or Saudi Aramco aren’t going to perish,” Vijayagopal said. “When they come back after demand picks up, they would have cash available with them to invest.”
India, the world’s third-biggest oil consumer with a population of over 1.3 billion, offers an attractive alternative to China for big oil companies looking for a stable market to expand. Some have already indicated interest in BPCL.
Still, almost every big oil company from Exxon Mobil Corp. to Royal Dutch Shell Plc have investments across China’s energy chain, with newer commitments coming in from companies such as Saudi Aramco to tap the world’s biggest energy consumer.
Indian refiners, which came under the twin assaults of oil price volatility and demand destruction due to the pandemic, saw their share prices tumble. The value of BPCL was about $7.4 billion in early February has now fallen to about $5.7 billion.
Vijayagopal, however, doesn’t see that as a problem. Suitors will assess the company by its assets and resilience to jump back from the crisis, he said. The government, meanwhile, has deferred the deadline for submitting initial bids for the company twice to July 31 now.
Why India wants to sell its assets which is running profitable to some other country company. This all company which our present government trying to sell was profitable and in good shape before 6 years. Now how it came non profitable. These all companies was made from Indian citizens tax and revenue. Why they are selling Indian property.
If this happens most the oil in India will be owned by foreign oil companies. Does India really want this?
Many times we heard that the Government has no business to be in business. Now the same people are asking why is the govt. not running businesses? So what exactly is the right thing? Every decision has both sides, which means one can disagree no matter what the decision.
Do anything. But give lessons to China.