EIL said that the stake buy enables the Navratna PSU under the Ministry of Petroleum and Natural Gas to diversify its business into downstream oil and gas operations
An EIL statement said that OIL would be the leader in the consortium, while EIL would take a minority share.
An OIL statement said: “The bid will be submitted through a formal process. The exact percentage of the stake of OIL and EIL will depend on the extent of Right of First Offer (ROFO), to be exercised by the Government of Assam that already holds 12.35 per cent stake in NRL.”
The refinery was incorporated on April 22, 1993 and has a 3-million-tonnes-per-annum capacity. It is the largest customer of OIL’s crude produced from its North-Eastern fields. The acquisition is expected to improve the synergy in OIL’s portfolio.
EIL said the stake buy enables the Navratna PSU, under the Ministry of Petroleum and Natural Gas, to diversify its business into downstream oil and gas operations. It is currently a leading engineering consultancy and EPC companies
in the areas of hydrocarbons and petrochemicals.
The stake purchase is being seen in light of the Centre’s attempt to divest its shareholding in BPCL
and privatise the Maharatna public sector undertaking (PSU). This is in line with the November 2019 decision of the Cabinet Committee on Economic Affairs (CCEA), which had announced a strategic disinvestment of 53.29 per cent government’s shareholding in BPCL.
It was then announced that BPCL’s equity shareholding in NRL would be divested to another Central Public Sector Enterprise (CPSE) operating in the oil and gas Sector.
This move was required because the refinery owes its existence to the commitment made by Government of India in the historic ‘Assam Accord’, signed on August 15, 1985.
The setting up of this refinery was among the major clauses of the accord that ended a violent six-year agitation for ousting illegal migrants from Assam.
NRL was conceived as a vehicle for speedy economic development of the region. It is popularly known as the Assam Accord Refinery and is situated in Numaligarh, Assam, with the Kaziranga National Park in its neighbourhood.
The Assam state government had red flagged any suggestions to privatise NRL and had also put in a bid to acquire a larger share of the mini ratna PSU. BPCL
currently holds a 61.65 per cent stake in NRL, Oil India
holds 26 per cent, and the Assam government owns 12.35 per cent.