Ending months of uncertainty, the Cabinet Committee on Divestment on Sunday cleared the way for privatisation of Hindustan Petroleum by sale of equity to a strategic partner and that of Bharat Petroleum through a public offer.

As much as five per cent of the equity has been earmarked for employees in both the oil PSUs.

According to sources, the oil major ONGC has been kept off bidding for stakes in the two oil PSUs.

Addressing mediapersons, Divestment Minister Arun Shourie said in case of HPCL, 34.01 per cent of the equity would be offloaded to a strategic partner, five per cent to the employees and the government would retain 12 per cent equity.

With regard to BPCL, the government would come out with a public issue of 35.2 per cent of the equity while five per cent would be reserved for its employees and the government would retain 26 per cent.

On the issue of the construction of the Rs 90 billion (Rs 9,000 crore) Bhatinda refinery of HPCL, where already about Rs four billion (Rs 400 crore) has been invested, Shourie said either this would be built by the strategic partner or else by the government through the IOC or ONGC.

On BPCL's Bina refinery, the minister said there was no disagreement as the public issue would be floated while construction would proceed as scheduled.