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A top executive at a PSU Refiner (under Public Offering) said that the thriving negative outlook on China could mean India getting good investments from Oil Majors preparing to head out of China.
Bharat Petroleum Corporation Limited’s Finance Director N. Vijayagopal said, “The choices of investing in the oil sector will be limited when the world becomes normal and India will be the only happening alternative. Most of the Western countries will be very afraid of getting into China. So, where else they can go?”
He added, “Global companies are cutting down on CAPEX, preserving cash now, but Exxon Mobil, Shell, BP or Saudi Aramco aren’t going to perish. When they come back after demand picks up, they would have cash available with them to invest.”
India which is the world’s third-biggest oil consumer offers a stable market to the companies who want to shift from China to expand their businesses. Some have already expressed their interest in Bharat Petroleum Corporation Limited which is India’s third-biggest oil refiner and second-largest fuel retailer. As in March 2019, its market share was 21 per cent. But due to recent decrease in demand owing to nationwide lockdown announced by the government to contain the spread of COVID Infection, its value went down to $5.7 billion from $7.4 billion earlier in February, this year.
However, Vijayagopal is optimistic about the company’s future. According to him, the company would be assessed by suitors based on its assets and resilience to come out from the crisis. He said, “When somebody gives a value, they are not going to give a value for six months. We have a 100-year history and we will live for another 100 years as an energy company, even if petrol and diesel are not there”. Meanwhile, the government has taken the decision to defer the date for submitting initial bids for the company to July 31.