Bharat Petroleum to exit Bharat Shell

Mumbai: Bharat Petroleum Corporation (BPCL) will sell its 49 per cent stake in lubricant marketing firm Bharat Shell Ltd (BSL) to joint venture partner Royal Dutch Shell for Rs 145.8 crore.

BPCL is exiting the joint venture company as it has developed a competing product.

The petroleum ministry has moved a cabinet note for sale of BPCL's 49 per cent stake in BSL to Shell. Shell holds 51 per cent stake in BSL.

Besides paying BPCL Rs 145.8 crore in cash, Shell will also take over BSL's debt amounting to Rs 31.2 crore as of March 31, 2006. BSL incurred losses till financial year 2001-02 but after hiving off its loss-making LPG business, the company showed signs of turnaround and posted a net profit of Rs 12.12 crore in 2006-07.

Sources said the Shell board had on May 10 approved the share purchase agreement with BPCL at a price not exceeding Rs 177 crore. After the acquisition, Shell would remove the 'Bharat' name in BSL. Shell currently has operational control of BSL.

Floated in 1993 to market Shell's branded lubricants in India, BSL had helped BPCL strengthen its position in the lubricant market by availing the opportunity for blending and marketing high performance speciality lubricants.

BPCL had no production of base oil in India at that time.