NEW DELHI / MOSCOW (Reuters) – Oil giants Rosneft (MCX: ROSN) and Saudi Aramco (SE: 2222) are unlikely to participate in the privatization of Indian refinery Bharat Petroleum Corp, sources familiar with the matter said as low prices for oil and weak demand for fuel limit the investment plans of the companies.
Rosneft expressed interest in buying a state stake in Bharat Petroleum (BPCL) of 53.29% during a visit by the head of the Russian company Igor Sechin to New Delhi in February. India's Commerce Minister previously said Aramco is enthusiastic about the opportunity to sell the stake.
A source at Rosneft, however, said the company would not buy BPCL. Another source said that Rosneft may only be interested in BPCL's trading business, which includes fuel depots and more than 16,800 gas stations.
The Indian government planned to raise $ 8-10 billion from the sale of its stake in BPCL. But the company's share price has dropped by almost 30% over the past year.
“Now is not the time to invest in refining,” said a source familiar with Saudi Aramco's position.
Another source said Aramco has suspended the bulk of its investment plans in India due to falling oil prices and is unlikely to qualify for BPCL.
Aramco, Rosneft and India's finance ministry did not respond to requests for comment.
($ 1 = 73.7460 Indian rupee)
(Nidi Verma, Aftab Ahmed, Vladimir Soldatkin with the participation of Rania El Gamal in Dubai. Translated by Olga Devyatiarova. Editor Marina Bobrova)