PM Modi to skip oil CEO meet over scheduling issues
Prime Minister Narendra Modi is believed to have cancelled a brainstorming meeting with global oil and gas experts and CEOs, which was slated for October 14, over scheduling issues, sources said. The fourth annual meeting that coincides with the CERAWeek – the world’s premier energy event – was scheduled for Monday afternoon but was cancelled due to the Prime Minister’s engagements, they said. The meets, held under the aegis of Niti Aayog, have been a sounding board for the government to reorient policies to attract the illusive investment in finding new oil and gas reserves and bringing them to production so as to cut India’s oil import dependence. French energy giant Total SA’s Chairman and CEO Patrick Pouyanne and UK’s BP plc Group Chief Executive Bob Dudley were among the leaders who were scheduled to attend the meeting with the Prime Minister on October 14. The meeting and other such feedback mechanism had led to the government doing course corrections on some of its policies, particularly the exploration licensing policy and natural gas pricing rules. The government had, going against the industry advise, brought in a revenue sharing model for allotting oil and gas acreage. Under the 2016 policy, bidders offering highest share of oil and gas to government were allotted the blocks but the regime failed to attract big names to exploration scene as companies preferred risks to be covered. Two years later, the government reversed it and went back to allocating blocks to companies that offered largest exploration programme with a guarantee of first recovering all such cost from oil and gas found. Similarly, the 2014 policy of pricing natural gas at rates prevalent in gas exporting countries failed to enthuse any new investments, prompting it to bring in a new rate for fields in difficult areas such as deep sea. At the last edition of the brainstorming on October 15, 2018, “subjects such as expansion of oil and gas infrastructure in India; enhancing exploration and production; potential in solar energy and biofuels; and the Union government’s holistic approach to the energy sector came up for discussion,” according to an official statement issued on that day. Modi’s first meeting was on January 5, 2016, where suggestions for reforming natural gas prices were made. More than a year later, the government allowed higher natural gas price for the yet-to-be-produced fields in difficult areas like deep sea. In the second edition in October 2017, suggestions were made for giving out equity to foreign and private companies in producing oil and gas fields of state-owned ONGC and OIL. Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) this year offered dozens of small discovered field for bidding by foreign and private firms. The meeting, coordinated by the Niti Aayog, focuses on challenges posed by volatile oil prices, impacted by changing geopolitical situation. The meetings look at measures to attract investments and steps for making it easier to do business in India. The government is looking at private investment to raise domestic oil and gas production, which has stagnated for the last few years while fuel demand has been rising by 5-6 per cent annually. India is dependent on imports to meet 83 per cent of its demand, and more than half of its natural gas requirements. The Prime Minister in 2015 had set a target of reducing India’s oil dependence by 10 per cent to 67 per cent (based on import dependence of 77 per cent in 2014-15) by 2022. Import dependence has only increased since then and the government is now looking for ways to raise domestic output. Organization of the Petroleum Exporting Countries (Opec) Secretary General Mohammed Barkindo and India’s Oil Minister Dharmendra Pradhan were also scheduled to attend the Monday meeting, they said. Also slated to attend the meeting were ONGC Chairman and Managing Director Shashi Shanker, Indian Oil Corporation (IOC) Chairman Sanjiv Singh, GAIL India head Ashutosh Karnatak, Hindustan Petroleum Corp Ltd (HPCL) Chairman Mukesh Kumar Surana, and Bharat Petroleum Corp Ltd (BPCL) Chairman D Rajkumar.
Recent regional developments have impacted India’s energy security: Dharmendra Pradhan
Expressing concerns over uncertainty in the global energy market, Union Minister Dharmendra Pradhan on Sunday said the recent developments in the region have an enormous impact on India’s energy security and also on “our economic, budgetary and investment dimensions.” In his opening remarks at the third International Think Tank (ITT) meeting here, Pradhan said: “In recent times, we are facing significant uncertainty and challenge in the global energy markets.” “Since our last meeting, we have seen the most disruptive developments. US sanctions on Iran and Venezuela, attacks on Saudi oil processing units, volatile conditions in Strait of Hormuz, unrest in the Middle-East, and US-China trade war, to name a few,” he said. “These developments have an enormous impact on India’s energy security and also on our economic, budgetary and investment dimensions,” added Pradhan. The minister also noted that India’s import dependency on crude oil and LNG continues to rise unabated. He said, “It is now over 84 per cent for crude and 45 per cent for natural gas.” “It is expected to increase in the future. Such excessive import dependency does make us vulnerable to external developments more than ever before,” stressed Pradhan. He also said that today the moot question is how to make energy transition more sustainable. “The decisions and actions- in response to the changing scenario – must be less reactive and more transformative,” he added. However, the minister assured the member of the think tank that India has undertaken a transformative step by developing a gas-based economy “A lot of emphasis is being given to developing gas exploration, import and distribution infrastructure in the country. Natural gas, gradually but surely, becoming a bridging fuel for low carbon economy in India,” said Pradhan. In addition, an estimated investment of USD 60 billion has also been made for the construction of a gas pipeline and terminal infrastructure that has reached its advanced stages of completion. “India will continue to depend on hydrocarbons,” the minister noted, adding that the country will only rely on clean and more efficient technologies, alongside robust producer-consumer relations as trade volumes grow. Providing a glimpse of India’s path of the energy transition, Pradhan said that the share of renewables in the electricity mix has gone up from around 5 per cent in 2014-15 to 22 per cent at present. Also, ethanol blending percentage has risen from 0.67 per cent in 2012-13 to now close to 6 per cent. Natural Gas consumption is further witnessing 6 per cent growth since the last couple of years, the minister said. He stressed that India’s oil and gas sector can function optimally only if it is in sync with the rest of the global developments. “We have to strengthen our linkages in technologies, markets, and business models and also capitalise on the shift of the centre of gravity in the oil and gas sector from producing to consuming nations,” he added. The first meeting of the International Think Tank Meeting (ITT) was held in October 2017. Distinguished members of the International Think Tank, Petroleum Secretary MM Kutty, CMDs and CEOs of Indian oil and gas companies were present on the occasion. During the last two annual meetings, the forum did brainstorm on the prevailing dynamics in the global oil and gas sector, and its relevance to India’s hydrocarbon sector.
Total and Adani in $600 million deal to supply and market natural gas in India
French multinational integrated oil and gas company Total S A has partnered with Gautam Adani-led Adani Group to supply and market natural gas in India, Total said in a statement. The net acquisition cost of the deal stands at around $600 million for Total over 2019-20 and the two partners will invest in $1 billion in creating gas infrastructure. “As part of its strategy to develop new gas markets, Total, the world’s second-largest LNG player, expands its partnership with the Adani Group; the largest energy and infrastructure conglomerate in India, to contribute to the development of the Indian natural gas market,” the company said. The equal partnership between Adani and Total includes several assets across the gas value chain including two imports and regasification LNG terminals — Dhamra in East India and potentially Mundra in the West, as well as Adani Gas Limited. Total will acquire 37.4 per cent stake in Adani’s 74.8 per cent stake in Adani Gas. As part of this partnership, Total will bring its LNG and retail expertise and will supply LNG to Adani Gas Limited. Total and Adani will also establish a joint venture to market LNG in India and Bangladesh. “Energy needs in India are immense and the Indian energy mix is key to the climate change challenge. Firmly investing to develop the use of natural gas in India is in line with Total’s ambition to become the responsible energy major. The natural gas market in India will have a strong growth and is an attractive outlet for the world’s second-largest LNG player that Total has become,” Patrick Pouyanné, Chairman and CEO of Total said in a statement. He also said Adani will bring its knowledge of the local market and its expertise in the infrastructure and energy sectors and the partnership with Adani is a “cornerstone” to Total’s development strategy in India. In order to reach 37.4 per cent shareholding in Adani Gas in accordance with Indian stock market regulations and subject to regulatory approvals, Total will initially launch a tender offer to public shareholders to acquire up to 25.2 per cent of equity shares before buying the remaining shares from Adani. Adani Gas aims to expand its distribution of gas in the next 10 years through its 38 concessions covering 7.5 per cent of the Indian population and market natural gas to industrial, commercial and domestic customers, targeting 6 million homes through 1,500 retail outlets of natural gas for vehicles.
Petrobras, Equinor tie up for natural gas projects
Brazil’s state-run oil company Petroleo Brasileiro SA said on Wednesday it has signed a memorandum of understanding with Oslo-based Equinor ASA focused on the joint development of natural gas business projects. The companies aim to maximize downstream value through thermoelectric generation as well as feasibility studies related to gas processing assets and pipelines owned by Petrobras in the Rio de Janeiro region where a natural gas processing plant is being built in Itaborai. “These locations have potential to become relevant natural gas hubs in the country in the coming years,” Petrobras said. The companies intend to combine efforts in investment in the natural gas, liquefied natural gas (LNG) and power generation segments, it said. Currently, Petrobras and Equinor are partners in the Roncador oilfield and in several exploratory blocks, including BM-C-33, Dois Irmaos and C-M-709.
EIB to discuss end to fossil fuel lending at Oct 15 meeting
The EIB will discuss its energy sector lending policy at an board meeting on Oct. 15, the bank said in an agenda on its website, possibly deciding to reduce its emission standards and bar fossil fuel projects from receiving EIB funds. If the EIB’s board, made up mostly of European Union finance ministers, decides to lower emissions standards, it could mean even the most efficient new natural gas projects would be barred from EIB funding by the end of 2020. Green EU lawmakers have been strong opponents of allowing the EIB to continue funding fossil fuel projects. Green EU lawmaker Bas Eckhout told Reuters on Thursday the EIB should stop all financing for any such projects. “For a climate neutral economy by 2050 you need to make sure your energy infrastructure is zero-carbon,” Eckhout said. An end to EIB gas funding would be opposed by Germany as it aims to use more gas as a transition fuel in its shift towards a low carbon economy. Berlin wants to use gas to help replace coal and nuclear, not just in electricity production but also in local heating. A government-appointed coal exit commission in January explicitly said in its recommendations that gas-to-power generation plants, offering half the CO2 emissions of those from coal-burning power stations, should be given incentives. Power from gas plants can be quickly increased, ideally complementing weather-driven changes in renewable output. “Investments in highly efficient gas plants are investments in success of the energy transition,” said Stefan Kapferer, managing director of Berlin-based utility industry association, BDEW, in reply to an enquiry. He cited the flexibility of gas plant operations. “This makes it all the less understandable that the EIB’s new lending guidelines should no longer allow even highly efficient gas plants to qualify for financing,” he added. “The EIB should think twice about its decisions.”
Centre trying to ‘surreptitiously sell’ BPCL: Congress
The Congress on Wednesday accused the central government of trying to “surreptitiously sell” BPCL without parliamentary approval and said it also does not make any economic sense. Addressing a press conference here, Congress spokesperson Pawan Khera also accused the government of failing to manage the economy and said that instead of addressing economic slowdown, it is trying its best to ensure that there is no discussion on it. He said navratnas and the maharatna PSUs have reached their present status of profit due decades of hard work by all governments and by the employees of these companies. “BPCL (Bharat Petroleum Corporation Ltd (BPCL) is a living example. It is a profit-making company. They have four refineries, they have 14,800 petrol pumps, they have 123 petrol depots, they have 52 LPG plants, 5,607 LPG distributors, 56 aviation service centres, and you want to sell it for Rs. 68,000 crore,” Khera said. Comparing it to the sale of Essar Oil, he said it had one refinery, one port and 3,000 petrol pumps and was sold for Rs. 78,000 crore. “Why this step-motherly treatment towards your own Maharatna company. We want to understand. Why don’t you see the faces of the lakhs and lakhs of employees who are agitated, who are worried about their future? This is one company which has registered 16 per cent high in its profits in March 2019,” Khera said. He said the party has a strong objection to selling companies like BPCL. Khera said the government had repealed some Acts of Parliament relating to the nationalisation of BPCL. “Earlier it was Burmah Shell Company. In 1976, it was nationalised through an Act. In April 2016 and again this year, you repealed several laws saying that these are archaic laws and they are not required any more. So, this is, in a way, a very surreptitious way to bring BPCL and other such PSUs out from the scrutiny of parliament and selling them. You do not want any parliament oversight on your action. Why?” he asked. Khera accused the government of trying to weaken The Container Corporation of India Ltd, saying it was another profit-making company. “The strategy is simple – first weaken your PSU, let them become loss-making from profit-making, and then just say sorry, we can’t run anymore. It is a loss-making company. The Congress leader said that demonetisation had cost more than two per cent of the country’s GDP, “faulty” implementation of Goods and Services Tax (GST) had dealt a blow to the economy and corporate tax exemption of Rs. 1,45,000 crore had also dealt another blow. “The problem is on the demand side. You are addressing the problem on the supply side. It is strange logic,” he said, adding that there have been pre-budget announcements, budget announcements, post-budget announcements. “Two budges before the actual budget and two budgets after that. So how many budgets?” he asked, taking cue from a Hindi song. “Adhocism cannot be the cornerstone of your policies, especially, when it comes to the economic policies of the country. Only then they will invest. You have seen the figures of GDP. The estimated figures during the budget were Rs 7,44,000 crore, they are now reduced to Rs. 6,44,000 lakh crore. We don’t know how much would be the actual receipts?” he said. Khera said there was Rs. 50,000 crore loss indirect tax collection and private sector investment was at a 16-year low. Referring to efforts to sell Air India, he alleged the government kept criticising the airline and went to the market but there were no buyers.
Shelf secures long-term contract offshore India, extension in the Middle East
ONGC has awarded the Shelf Drilling Ltd. jackup Trident II a three-year contract for operations in the Mumbai High, offshore India. Operations are expected to start in 1Q 2020. In addition, ADNOC Drilling has awarded the jackup High Island VII a three-year contract extension. This is in direct continuation of its current contract for drilling operations in the Arabian Gulf. The contract includes a two-year option period.
Reliance puts off gas bid to Nov 6 on bidders request
Reliance Industries has put off bidding for the new gas it plans to produce from eastern offshore KG-D6 block to next month following a request from potential bidders, sources said. Reliance and its partner BP Plc of the UK, last month had put out Notice Inviting Offer (NIO) seeking bids from potential users for the 5 million standard cubic meters per day of natural gas they plan to produce from the R-Cluster Field in KG-D6 block from the second quarter of 2020. The bidding was to happen on October 11, according to the bid document. However, the bidding has been postponed based on requests of some bidders given the holiday/festival period during October, sources said adding that bidding will now happen on November 6. Bidders have been asked to quote a price (expressed as a percentage of the dated Brent crude oil rate), supply period and the volume of gas required. Dated Brent means the average of published Brent prices for three calendar months immediately preceding the relevant contract month in which gas supplies are made. Reliance set a floor or minimum quote of 9 per cent of dated Brent price — which means bidders would have to quote 9 or a higher percentage for seeking gas supplies. At USD 60 per barrel price, the gas price comes to USD 5.4 per million British thermal unit (mmBtu). The rate sought compares to the government-mandated USD 3.23 price that its currently producing Dhirubhai-1 and 3 fields in KG-D6 block get. The government gas pricing policy, however, provides for a higher cap price for future gas produced from difficult fields like those in deepsea. This cap currently is fixed at USD 8.43 per mmBtu. Reliance-BP is developing three sets of discoveries in KG-D6 block — R-Cluster, Satellites and MJ — by 2022 that can produce a peak of 30 mmscmd of gas. The quantity offered for bidding in the NIO is 5 mmscmd from R-Series fields which will start production in mid-2020. Sources said, peak output from R-Series is 12 mmscmd, while Satellites will produce another 7 mmscmd beginning mid-2021. MJ field, which will start production in the second half of 2022, also has a planned peak output of 12 mmscmd. The NIO said the gas price would be lower of the quoted rate or the government-mandated ceiling for the difficult fields. The formula Reliance is using to price gas for R-Series fields is different from its last price discovery it made for the coal seam gas (CBM) from its Sohagpur coal-bed methane blocks in Madhya Pradesh. For Sohagpur CBM, it had in 2012 sought bids at a benchmarked rate at 12.67 per cent of JCC, or Japan Customs-Cleared Crude, plus USD 0.26 per mmBtu. The formula was the same at which Petronet LNG, a joint venture of public sector oil companies, whose chairman is the oil secretary, used to buy long-term liquefied natural gas (LNG) from Qatar. At USD 60 per barrel oil price, CBM from its Madhya Pradesh block was to cost USD 7.8. That formula was, however, rejected by the oil ministry even though 59 valid bids seeking about 70 mmscmd of gas were received in the open tender. In 2017, it changed the formula by seeking bids in the form of a deductible from 12.67 per cent of prevailing Brent crude oil price plus USD 0.52 per mmBtu plus USD 0.26 per mmBtu, according to the bid document of CBM pricing. Reliance ended up buying the CBM gas from its block after it bid deducting USD 1.836 per mmBtu, lower than USD 3.156 bid by rival Piramal Glass and USD 3.495 bid by state-owned GAIL.
Investors get lost in Big Oil’s carbon accounting maze
Wide variations in the way oil companies report their efforts to reduce carbon emissions make it difficult to assess the risk of holding their shares as the world shifts away from fossil fuels, senior fund managers say. Investors have poured money into so-called sustainable funds, which take into account companies’ environmental, social, legal and other standards, and funds are under pressure from their customers and authorities to make those standards robust. Fund managers are also applying environmental, social and governance (ESG) criteria more widely in traditional investments to help them judge how companies will fare over the long term. There is a growing realisation that some companies’ profits will shrink faster than others as governments prioritise low-carbon energy to meet the U.N.-backed Paris agreement’s goal of cutting emissions to “net zero” by the end of the century. But oil and gas companies are among the biggest dividend payers, and major funds are reluctant to divest from them, arguing that by staying in they are in a better position to pressure companies to improve. “Do investors have the data that we need? No, I don’t think we have the data that we need at all,” said Nick Stansbury, investment strategist at British insurer Legal & General’s investment management unit, Britain’s biggest asset manager with around $1.3 trillion under management. “Disclosure is not necessarily so we can seek to change the numbers, but so we can start understanding and pricing the risks,” Stansbury said. “A THOUSAND WAYS TO PARIS” There are many voluntary initiatives and frameworks to unify carbon accounting and target setting; some overlap but none have been universally adopted. Further projects exist for other greenhouse gases such as methane. The Greenhouse Gas Protocol is one such set of standards, established by non-governmental organisations and industrial groups in the 1990s. Companies can report their progress in line with these standards through non-profit CDP, formerly known as the Carbon Disclosure Project, which then ranks them. Norway’s Equinor comes first in its list of 24 oil major companies, but not all of them report in every year. There is also the Task Force on Climate related Financial Disclosures (TCFD), created by the G20’s Financial Stability Board, as well as industry bodies, in-house models at oil firms and banks and third-party verifiers and consultants. “There are a thousand ways to Paris,” London-based BP’s Chief Executive Bob Dudley said at a Chatham House event earlier this year referring to the 2015 accord aiming to keep global warming well below 2 degrees. BP Finance Chief Brian Gilvary told Reuters BP would welcome more consistency within the sector to show what oil companies are doing about emissions and that an industry body, the Oil and Gas Climate Initiative (OGCI), was discussing carbon accounting. A plethora of third party ESG verifier companies were emerging with varying ways of measuring ESG metrics, he said, adding that some such firms would say to an oil company, “We believe your score is this, and, by the way, if you spend $50,000 we’ll show you how you can improve that score.” UBS, with $831 billion of invested assets, has $2 billion in its Climate Aware passive equity strategy, which is in part based on a company’s emissions reporting. In that strategy “we tilt towards companies that are better performing on a range of climate metrics and away from companies that do not perform so well in this respect,” Francis Condon, executive director for sustainable investing, said. “We don’t want to be accused of greenwashing or falling for it,” he said, adding that UBS regularly encouraged companies to prepare for the climate transition. Using a broad measure, global sustainable investment reached $30.1 trillion across the world’s five major markets at the end of 2018, according to the Global Sustainable Investment Review. This equates to between a quarter and half of all assets under management, due to varying estimates of that figure. Condon said most investors were still more focused on returns than wider sustainability criteria but were becoming concerned that companies may expose them to possible future climate-related financial losses. “There is a very limited appetite for giving up performance for higher ESG. The question is more: is management taking on risks it can’t manage?” To try to answer that question, the world’s biggest financial service providers are investing in companies which provide ESG-related data. This year alone, Moody’s bought Vigeo Eiris and Four Twenty Seven, MSCI bought Carbon Delta and the London Stock Exchange bought Beyond Ratings. S&P acquired Trucost in 2016. Independent climate risk advisors Engaged Tracking say they attracted two-thirds of their clients in the past year. All six companies provide data, assessments and consulting on the climate exposure of companies or bonds. HOW TO COUNT A central issue, discussed at European oil majors’ shareholder meetings this year, is how they deal with the emissions caused by the products they sell, such as gasoline or kerosene, which are known as Scope 3 emissions. Such emissions are typically around six times larger than the combined emissions from oil companies’ direct operations and power supply, also known as Scope 1 and 2 emissions, according to Reuters calculations. Even if a company publishes Scope 3 data, there are 15 different categories based on the Greenhouse Gas Protocol. These include use of sold products such as fuel alongside secondary factors such as business travel or employee commuting. Constantine Pretenteris at Engaged Tracking said some companies achieved a high score for comprehensiveness by disclosing data for most of the Scope 3 categories, but left out the key ones, such as emissions from use of their fuel. “We would love to see a general standard which makes comparisons easy,” Sven Reinke of Moody’s said. “It doesn’t fully exist these days.” RELATIVE OR ABSOLUTE The majority of climate-related targets are based on intensity measures, which means absolute emissions can rise with growing production, even if the headline intensity metric falls. Total recorded Scope 3 emissions from the world’s top public oil companies are still rising, largely
BPCL privatisation: Past challenges push govt to get fresh legal opinion
It may still be a long road ahead for privatisation of public sector oil refiner Bharat Petroleum Corporation Ltd (BPCL). The possibility of legal challenge over any plan to sell the government stake in the oil PSU has pushed executives and government officials to seek fresh legal opinion on the proposed disinvestment move. “BPCL and HPCL were acquired through an Act of Parliament. In these two cases, the Supreme Court also gave an order restraining the government from selling its equity without Parliamentary approval. After this, several legislations were repealed by the government through the 2016 Repeal Act. We need to see what the Repeal Act says. As the narration becomes clear and legal people check whether Parliamentary approval is needed or not needed, the privatisation of BPCL can go through,” said a top executive of one of the state-owned OMCs. There is caution in going ahead with the privatisation of BPCL as in the past, especially in 2003, a similar proposal on disinvestment went through serious legal challenges that ultimately resulted in the Supreme Court axing the plan and asking the government to sell shares only after Parliament’s nod. “As of today, I don’t think the full details are available on the modalities and the methodologies which are going to be followed. Based on that only, something can be said otherwise it will be premature,” another senior executive of an OMC that faced similar issues in 2003. The Repealing and Amending Act, 2016 had quietly annulled 187 obsolete and redundant laws lying on the statute books. In the process, the laws, under which oil companies HPCL and BPCL were nationalised, were also repealed. These included the Esso (Acquisition of Undertakings in India) Act, 1974, The Burmah Shell (Acquisition of Undertakings in India) Act, 1976, and the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977. Now the 2016 Repealing Act is being cited to conclude that BPCL privatisation may not require a fresh Parliamentary nod. The plan to sell majority stake in BPCL is first serious attempt towards privatisation of non-strategic PSUs after the exercise lost steam post 2004. Under the previous BJP-led NDA regime headed by Atal Bihari Vajpayee in the late 1990s, the government had sold its stake in companies such as Videsh Sanchar Nigam Ltd, Hindustan Zinc, Balco and IPCL to private entities. With regard to BPCL, the plan is to sell entire 53.3 per cent stake held by the Centre to a strategic partner. This could either be done at one go or in parts. The government may also decide to retain some portion of the equity but a call will be taken after getting sense of investor interest for the profit-making PSU. At last Monday’s (September 30) share price of Rs 490.45 on BSE, the government’s 53.29 per cent stake in the BPCL is worth Rs 56,000 crore or around $8 billion. This is more than half of the FY20 disinvestment target of Rs 1,05,000 crore. Keeping in mind the global economic environment, the government could reduce the share sale, to say 26 per cent, to get right investor interest. While no Indian company looks like mobilizing such huge funds for BPCL’s buy, industry experts hinted that companies from Russia and the Gulf region could be targeted to get the necessary investment. This, sources said, could be done through government to government talks as most oil companies in the region are state-controlled. The BPCL, in present times, will be an attractive buy for companies ranging from Saudi Aramco of Saudi Arabia to French energy giant Total SA which are vying to enter the world’s fastest-growing fuel retail market including entry in retail space where BPCL has significant presence. Alternatively, the government could also keep other oil PSUs such as Indian Oil Corporation (IOC), or OIL India on a standby to go in for share buybacks in the event strategic sale to a private partner met with little success. Both HPCL and BPCL’s disinvestment was blocked even in 2003 when Supreme Court had ruled that the two oil companies can be privatised only after Parliament amends a law it had previously passed to nationalise the two firms. The decision came after a high-profile case was fought in the court between F.S. Nariman and Shanti Bhushan representing the petitioners including oil sector officers association and Harish Salve representing the government. Only last year, state-owned upstream major ONGC bought the government’s entire 51.11 per cent stake in HPCL. BPCL was previously Burmah Shell, which in 1976 was nationalised by an Act of Parliament. Burmah Shell, set up in the 1920s, was an alliance between Royal Dutch Shell and Burmah Oil Co and Asiatic Petroleum (India). The Supreme Court had in September 2003 cited the ESSO (Acquisition of Undertaking in India) Act and the Burmah Shell (Acquisition of Undertaking in India) Act, 1976 and Caltex (Acquisition of Shares of Caltex Oil Refining India Ltd and all the Undertakings in India for Caltex India Ltd) Act, 1977 to rule that the government cannot privatise HPCL and BPCL without approaching Parliament for changing the nationalisation act. BPCL operates four refineries at Mumbai, Kochi in Kerala, Bina in Madhya Pradesh and Numaligarh in Assam with a combined capacity to convert 38.3 million tonnes of crude oil into fuel. It has 15,078 petrol pumps and 6,004 LPG distributors. The government proposes to raise Rs 1.05 lakh crore from disinvestment in the current financial year. It had exceeded asset-sale targets of Rs 1 lakh crore in FY18 and Rs 80,000 crore in FY19.