IOC, BPCL and Essar Oil looking to buy Shell outlets in India
13 July 2010
State-run oil refining and marketing companies Indian Oil Corporation and Bharat Petroleum Corp along with private sector Essar Oil Ltd are looking to acquire the retailing outlets in India being sold by Royal Dutch Shell plc.
Shell last month announced plans to sell some of its fuel outlets and vacant land and set up new outlets in India, as part of a restructuring move. Shell is expected to sell about 20 of its 80 operational retail outlets and about 20 land sites, according to reports.
Shell has approached Indian Oil with the sale offer and the bids are in response to the offer, according to IOC chairman and managing director B M Bansal. He said IOC is willing to acquire outlets in good locations with assured sales.
Shell is also reported to have approached other state-run and private sector oil marketing companies for sale of its retail outlets.
But, with the government adopting a calibrated approach towards freeing fuel from price control, fuel retailing is expected to become profitable for private companies as well. In such a case, more companies are expected to bid for retail assets that Shell plans to sell in India. Shell also may have second thoughts before selling its outlets and vacant land.
While Indian Oil is said to have submitted bids for Shell's outlets and undeveloped land sites, private sector Essar Oil is also reported to be keen on buying the retail assets that Shell may offload in its restructuring move.