Indian State Owned Energy Firms Not to Bid for ADB's Petronet Stake

India’s state owned energy firms IOC, ONGC and BPCL have decided not to acquire Asian Development Bank’s stake in Petronet LNG Ltd.

The move was vetoed by the government as it wanted Petronet to continue as private firm, Business Line has reported.

The boards of IOC, ONGC and BPCL, which own equal stake in Petrone,t have agreed to forego their pre-emption rights and have reversed their previous decision to acquire ADB stake.

GAIL, which had been spearheading the move to acquire ADB stake, has however not yet waived its pre-emption rights, Business Line reported.

If the ADB stake goes to state firms, PLL would come under scrutiny of official auditor CAG and CVC because of PSU holding exceeding 50 per cent, something that the company and the ministry was opposed to.

The ministry has instead asked the PSUs to offer the ADB stake to a strategic investor, like am LNG supplier.

The newspaper added that ministry is keen on offering the ADB stake to Qatar in lieu of getting an additional 4 million tons a year of LNG supplies on a long term contract.

But companies like GAIL are opposed to the idea unless Qatar agrees to sell LNG at a discount to its current asking price of an equivalent to 14.5 per cent of the ruling global oil price, which translates into over four times the predominant domestic price of $ 4.2 per million British thermal unit.

Gaz de France International (GDFI) holds a 10 per cent in Petronet and also has the right of first refusal over ADB’s stake. But the French energy giant has decided to waive this off.