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Federal Government Moves Cabinet Note To Look For 100% Foreign Financial Investment In Oil Business

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Government has moved a cabinet note to look for views on foreign financial investment in state-owned oil companiesThe Commerce and Industry Ministry has drifted a draft cabinet note seeking inter-ministerial views on a proposal to allow as much as 100 percent foreign investment under automated route in oil and gas public sector undertakings (PSUs), which have an 'in-principle' approval for disinvestment, sources said.The move, if authorized by the union cabinet, would help with privatisation of India's 2nd most significant oil refiner Bharat Petroleum Corp Ltd (BPCL).

The Government is privatising BPCL and is offering its whole 52.98 per cent stake in the company.Sources said that according to the draft note, a brand-new stipulation would be included the FDI policy under the petroleum and gas sector.According to the proposition, foreign investment as much as 100 percent under the automated path would be allowed in cases where an 'in-principle' approval for disinvestment of a PSU has been granted by the government.For BPCL privatisation, mining-to-oil conglomerate Vedanta had put in an expression of interest (EoI) for purchasing the federal government's 52.98 per cent stake in the PSU.

The other 2 bidders are said to be global funds, one of them being Apollo Global Management.After collecting the views, the commerce and market ministry would seek approval of the union cabinet on the proposal.At present, just 49 per cent FDI is permitted through automatic route in petroleum refining by the public sector endeavors (PSU), with no disinvestment or dilution of domestic equity in the existing PSUs.




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